All right, we're back on the record in case number
26 -90103. So what I would suggest is that rather
than have Mr. Harris cross examine the witness
at this point, why don't we Go on to some of
the other motions and so that you'll have time,
Mr. DiPompeo, to address the questions, the arguments
that were made in the motion. And that way I
think we'll have a better presentation because
otherwise I think we would do the cross -examination
and then take additional time. And I read it.
Quickly, so I really didn't have a chance to
to really study it So I'd like to come back to
that after we do You know we take another break
and we go through some of the motions. I think
that probably makes the most sense I'm glad that's
the case, but I'd just like to finish to be able
to read the objection a little bit more carefully
than just, you know, a quick perusely through.
So why don't we go through the other ones? We'll
take it up right after the next break. Okay.
Thank you, Your Honor. Your Honor, this is Chris
Harris. We just confirmed that the witness is
on the stand, and so no one will be speaking
to him in the interim on these topics. I don't
think he's been sworn yet. He hasn't been sworn
yet, Mr. Harris. Okay. All right. So why don't
we move on to some of the other items on the
agenda and then, you know, we'll take a break.
Mr. Hawkins, did you want to say something? Did
you hit five star, Mr. Hawkins? Yes. There we
are. Thank you so much. Two things I hope to
raise as an objection, but maybe could be helpful.
Both of the clients that I just mentioned have
consignment arrangements with the SACS companies.
And it was not clear to us that consignment,
both goods and proceeds, were clearly set forth
as being some of the permitted prior liens, which
I believe the DIP facility in this case, I think
would be ABL, was not intending to touch. That
was an objection or a request for a clarification.
Then with regards to Dolce & Gabbana, they have,
from HOSCO 2, an obligation for their indebtedness.
It's unsecured. HOSCO 2 appears to not have much
debt and to please solve them going into these
cases. And so we would join with the concerns
that were expressed by them and brought about
putting a lot of debt on that entity when right
now we understand it can pay everything it owes.
That's all, Your Honor. Thank you. Thank you.
All right. Anyone else wish to be heard? Your
Honor. Yes. Jonathan. John, again, for Gorski
Group. Gorski Group is also a consignment vendor,
and we just got to agreement with the debtors
and, I believe, the lenders as to language that
they were going to put on the record on a consignment
point. So I think it's going to wait until the
consignment stuff came up, if that makes sense.
I'll let the debtor speak to that. Is this not
a good time for it? That's fine. That probably
makes sense, because that's probably somebody.
I did not, Mr. Hawkins, I did not read the order
to do anything with the consignments, but if
there's clarifying language on the record, that
would probably makes more sense. I don't know.
Your Honor, can you hear me? Yes. This is Seth
Lieberman from Prior Cashman. May I be heard
briefly? Yes, sir. Thank you, sir. Your Honor,
as you may recall, we alongside our co -counsel,
Andrew Meyers, represent a number of vendors
in these bankruptcy cases. LVMH, Caring, Richemont,
among their affiliated brands, along with David
Yearman, SMCP, and Goyard. And we filed a reservation
of rights today, which I believe is at docket
number 130. And I'm only raising that right now,
Your Honor, because this seems to dovetail well.
into Mr. Covery and Mr. Hawkins' remarks. And
if I may be heard, I just wanted to raise two
points for the record. The first is my clients
have no issues with the debtors' financing. It
appears there's a need for financing for the
debtors to operate in Chapter 11 to pay claims
of certain third -party vendors, such as my clients.
And to that end, we're supportive of our continued
and long -standing relationship among Sachs and
my clients. and trust that that will continue
both during and after the Chapter 11 cases. However,
the second point I want to raise for the Court,
Your Honor, and while we're on the topic, I just
want to be crystal clear on this, is that while
the dip papers and related proposed orders certainly
allude to these issues, both my clients have
various consignment and concession arrangements.
And to be very clear on this, Your Honor, the
debtor should be explicitly carved out from any
type of collateral pledge. vis -a -vis concession
or consignment. We believe that that's certainly
the intention. That seems to be the language.
But just to state the obvious for the court,
Your Honor, the company can't pledge what's not
there. If there are goods or proceeds which don't
belong to the debtors, or my clients have superior
rights with respect to those goods or proceeds,
then those concessions and consigned goods should
be carved out from any collateral that's pledged.
Like the other parties here, we've only had a
few hours to really dive into this. And so we're
still looking at it. But I just rise to not only
reserve my client rights vis -a -vis concession
and consignment, but also to make the point abundantly
clear on the record and request that the DIP
order reflects that none of those good, again,
concession, consignment, or the proceeds thereof
will be pledged as part of the DIP. And my team
is happy to work with the Wilkie team on proposed
language. to be inserted on the dip order to
that effect. And with that reservation, Your
Honor, I'm going to let everyone get to their
seats. Actually, that reservation of rights is
a test of the confinement vendor's property interest
and deserves rights on behalf of Stepa Lellie
in exactly the same way Mr. Lieberman did, and
we also would be willing to work with that as
counsel to correct the language for the dip order
around that issue. Thank you. Your Honor, if
I may be heard briefly. Yes, and would people
please mute their lines, because we're still,
although there's a lot less people than are on
the line, there's still a lot of background noise.
So if you're not speaking, mute your own line,
please. Right, go ahead, sir. Thank you, Your
Honor. I'm Christian Jensen, Sullivan and Cromwell,
appearing on behalf of Xenia Group by the appending
Prohok. if i think they've uh... people to speak
now you saw this briefly going the comments made
by mister lieberman with respect to reservation
of rights my client and their you know it's affiliated
subsidiaries are party to similar concession
agreement before we agree that the death cannot
grant lian fund on the inventory that the debtor
does not own uh... but that you know for avoidance
of doubt any concession inventory should be fully
carved out of any uh... any debt lian Additionally,
my clients are creditors at HoldCode2, and we
join the comments made by Mr. Hawkins and others
with respect to the financing at that entity.
All right. Thank you. Your Honor, may I be heard?
Yes. Brendan Scott placed at Winters, Drillers,
Sutherland, Stevens on behalf of BH Multicom,
BH Multicolor, Richline Designs, and East Designs,
also a group of consignment vendors. Rather than
duplicating the argument, I'd just like to say
that we do echo the sentiment of Mr. Lieberman
and we join his reservation with respect to consignment,
reservation with respect to consignment, because
we have sent over some proposed language to the
debtors earlier today and hadn't received a response.
We're happy to hear what the debtors are proposing
on the record now. Thank you. Right. Anyone else
wish to be heard? Yes, sir. Go ahead, Mr. Billenberg.
Thank you, Your Honor. Again, for the record,
Justin Birnbrock, Shepard Mullinwick, and Hampton
Council, to Chanel, Akras, and Ralph Lauren.
We'll have notices of appearance and PROHACs
filed soon. Your Honor, I join Mr. Lieberman's
comments with respect to concession and consignment.
As the others have mentioned, Chanel in particular
has a significant concession relationship with
these debtors. a relationship that has been strained,
as is evident by the top 30 list of unsecured
creditors. But nevertheless, Chanel is very encouraged
by the commitment by Mr. Britton's clients. Nice
to see Mr. Britton. And Chanel stands by these
debtors, Your Honor, and is prepared to support
them through these Chapter 11 cases to the greatest
extent that they can. With respect to ACRIS,
ACRIS also has a hold code to guarantee. ACRIS
does not join the comments made by Council to
adulterate. And indeed ACRIS and Ralph Lauren
and Chanel would like to see this approved today.
Thank you, Your Honor. Anyone else wish to be
heard? Your Honor, can you hear me? It's Greg
Gallardi. Yes, it's Greg Gallardi. Go ahead.
Your honor just very briefly Representing centric
and Vince. I just wanted to again express our
concerns about the disk. We are creditors given
credit support by the hold code to entity and
we're reserving rights to Potentially cross mr.
Weinstein if we think it necessary. Thank you.
Thank you Right if any if anyone else wishes
to speak hit five star one time Yes, I can hear
you, Ms. Heilman. like to raise that objection
on the record. And I would imagine that it would
be more after Mr. Weinstein's testimony. But
we do have one open issue. And since parties
have been stating on the record their concerns
with respect to the dip, I just wanted to make
sure that at the appropriate time we could do
that. All right. And what issue is that? The
issue is with respect to the debtors, the dip
lenders are seeking a waiver of the 506C, 552,
and marshaling waivers on the first day of the
case, Your Honor. All right. Anyone else wish
to be heard? Your Honor, if I may? Yes. Good
afternoon or good evening, Your Honor. Dan Fiorello
from Ottawa, DC, with me, Dave Castleman. We're
co -counseled to Bank of America, the administrative
agent for the ABL bank group that provides the
ABL revolving line of credit and proposed Zip
lender. Your Honor, I'll defer to the Debtors'
Council to read on the record language that we've
agreed prior to the hearing with regard to the
reservation of rights on the consignment and
concession goods. And we support the reservation
of rights. Your Honor, today we're not trying
to adjudicate the priorities of the consignment
vendors or the concession vendors. We're merely
looking to reserve rights for today's hearing.
As evidenced by the appearances by multiple counsel
on the first day, we anticipate that between
now and the final hearing, we'll have a lot of
conversations and engage with the company and
the consignment and concession vendor counsel.
to reach acceptable language that will get folks
comfortable. But, Your Honor, we are, in fact,
a bank of over 10 banks providing significant
liquidity and proposed liquidity in the Chapter
11, and we're merely looking to continue the
same ABL revolving line of credit that the company
has access to. for years prior to the bankruptcy
filing, and we're just trying to preserve the
status quo for now, Your Honor, and to the extent
that parties cannot reach a resolution on consensual
language that would be reflected in the order
submitted for final approval, then we would obviously,
everyone's rights are reserved with respect to
the final hearing on the matters concerning consignment
and the concession priorities and interests.
Why don't we hear from the debtor and then let's
let's try to move on to some of the other Matters
and then we'll come back to the dip in in short
order Good evening, your honor of Robin Steagall.
We'll keep our in Gallagher. You can hear me.
Okay, I can hear you fine. Yes Great. Thank you
The vendors whether their wholesale consignment
or confession are obviously very important to
the debtors business Ms. Sinclair went through
that in her opening remarks. In anticipation
of potential objections, at least on the interim
order, we have included paragraph 27 and 28 of
the DIP order. In paragraph 27, it talks to the
consignment inventory and specifically reserves
rights of consignors. We did agree during, just
before I got up, with one of the consignors that
we would read on the record, that the party's
rights as to the priority of their liens, including
purchase money, interest, security interest,
and consigned goods as against its collateral
are preserved. So that, combined with 27, is
intended to preserve the rights of consignment
vendors. And as Mr. Fiorello said, we will work
in the interim with all of the consignment vendors
that reach out to us to try to come up with some
consensual language to include in the final dip
order. With respect to the concessionaires, we
did include language in paragraph 28, which we
think should address their concerns. We've heard
them on the record. They'll have a chance to
look at it. But if there are issues, we will
work consensually with them going forward. All
right. Thank you. Thank you. Good evening, Your
Honor. Jessica Graper, for the record, will keep
on Gallagher as co -counsel for the global debtor.
Can you hear me okay? I can hear you fine, yes.
Thank you, Your Honor. I will be starting with
agenda item number six, which is document number
13. This is the global debtor's motion for authorities
to continue using their existing cash management
system, including bank accounts and business
forms, to honor certain related pre -petition
obligations and to continue intercom money transactions
in accordance with their pre -petition practices.
As noted by my colleague, the global debtors
refers to all of the debtors except for debtors
that comprise the SAC Office digital debtors.
As Your Honor has heard, the SAC Office digital
debtors who maintain their own cash management
system will be seeking relief pursuant to their
own separate cash management motion. As described
in the motion, the global debtors utilize and
maintain a global cash management system that
is comparable to centralized cash management
systems used by other large retail companies.
The global system is actually comprised of two
largely separate systems that interact in a centralized
matter. First is the SACS legacy cash management
system, and the second is the Neiman Marcus cash
management system. Although the entire system
is comprised of almost 227 bank accounts across
11 banks, the movement of cash throughout the
global system is not overly complex. The global
cash management system generally involves the
flow of funds through various and Neiman Marcus
receipts, and deposit accounts. There are also
accounts that serve other specific purposes,
such as investment accounts, accounts that make
disbursements specifically related to real estate
obligations, master funding accounts that receive
and transfer funding distribution that debtors
receive under their legacy revolving credit facility
as well. Finally, the vast majority of the global
debtors with each other, and also with certain
of their non -global debtor affiliates. The nature
of these intercompany transactions are described
in more detail in the motion, but they relate
to payments of rent obligations to the SACS flagship
location, a sharing arrangement between the global
debtors and the SACS self -conditional debtors,
and the payment of certain rent obligations.
As described in the motion, if these ordinary
court intercompany transactions were discontinued,
would be severely disrupted to the detriment
of the global debtors, their states, and their
creditors. Accordingly, the debtors are seeking
authority to continue engaging in the intercompany
transactions consistent with their pre -petition
practices. And as set forth in the motion and
as required under the proposed order, the global
debtors will maintain detailed and accurate records
with respect to all intercompany transactions
and transfers. A final point on the cash management
motion. The global debtors are requesting 45A
extension of the requirements under Section 345B
and the trustee guidelines with respect to their
bank accounts so that they can work with the
U .S. trustee to confirm compliance of the global
debtors' bank accounts. We do have a handful
of revisions that we plan to make to the cash
management order and related Exhibit 2 that was
filed with the motion. It appears that certain
language pertaining to the global debtors and
the SACS -LF -IT digital debtors' payment arrangement
was stripped from the Ag Files order. As a result,
we plan to... to this effect, which I'm happy
to read for your honor. Well, just make sure
to file a red line, and I'll review the red line
as well. Thank you, will do. Additionally, there
were a few bank account numbers that were inadvertently
excluded from the list of bank accounts set forth
in Exhibit 2, which we will fix as well. Prior
to filing the motion, the debtors previewed the
requested relief with the U .S. Trustee's office,
answered certain questions, and I understand
that we are resolved on the questions they posed
and the U .S. the fee does not object to the
order. Unless Your Honor has any questions, we
respectfully request that the court approve the
cash management motion and enter the order. All
right. Does anyone wish to be heard with respect
to the cash management order? Yes, go ahead.
Your Honor, Amane Bordy from Exonic. Absolutely
no objection to cash management, other than we
would like to reserve rights, which you'll hear
in connection with our DIC presentation about...
debtor separateness. So, as long as all of the
first days are going to be without prejudice
to our rights and arguments in that regard, I
won't raise my hand again until we get to the
dip. All right. Ms. Reckler. Thank you, Your
Honor. Caroline Reckler on behalf of Amazon.
Your Honor, before the hearing, we had asked
the debtor to include some language in the order
that said that the debtor shall maintain a report
setting forth all the inter -company transactions.
involving SACS, the Babineau Hold Co. 2 LLC,
SACS flagship real property LLC, and or 12 East
49th Street LLC and to provide us with a copy
of that report on a weekly basis in addition
to providing it to our creditors committee. And
we just ask that the debtor include that language
in the revised proposed form of order. All right.
And we would join in that request. All right,
any objection? The debtors do not believe that
there is any basis for Amazon and Axonic to be
receiving those type of reporting. So we do object
to that inclusion. All right. So I think subject
to a appropriate confidentiality agreement that
it can only be used for purposes of monitoring
the cash management, I think that so long as
there is an appropriate confidentiality agreement
that they can't use it other than for purposes
of monitoring it and they can't disclose it except
subject to further court order. I don't think
that's a bridge too far. But I'm going to draw
the line at that. To the extent everyone else
asked for it, then we're going to go back and
just give it to the creditors committee and they
can inform creditors appropriately. Go ahead,
Mr. Rod. Yes. I'm sorry. Again, Dan Cerelo from
Otterberg PC, Council for Bank of America, the
agent for the ABL lenders. Your Honor, some of
the banks in the ABL bank group also provide
cash management services. I just raised a concern
regarding disclosing information relative to
the cash management systems that some of these
banks have with the debtors insofar as there
may be confidential or proprietary information
that may not be in handy. but may be in violation
of the bank's arrangements with the company.
And so I don't want to have an agreement on the
record that might put the company in jeopardy
in violation of their arrangements with the bank.
And I think all we're talking about is not so
much the inner companies, but the transfers between
debtors. And it doesn't have to show what bank
or anything. It's just... you know debtor one
to debtor two debtor two to debtor three and
and it's all with respect to eight you know the
the debtors that that uh miss recler has a concern
about i mean that that's all we're talking about
it's just a a limited universe of those of those
transactions i don't believe obviously to the
extent that there's an issue with that i mean
this is not a an issue with respect to the form
of order It's just something that can be worked
out in the ordinary course. So, you know, there's
going to have to be a confidentiality that we
entered into and everything. Thank you, Your
Honor. All right. Anyone else wish to be heard
on cash management? Mr. Nguyen, are you? Your
Honor, briefly, William. Can you hear me, Your
Honor? Yes. Yes, sir. William Hawkins again,
briefly. We just wanted to make sure that nothing
that is brought forth in the cash -managing order
compromises the ability to keep cash proceeds
traceable and identifiable from the various consigned
goods. Either money they may have now, especially
because after the holiday season there will be
a lot of sales, but well as going forward. That's
a great substance of that. Yes, so with respect
to the cash management I view that is strictly
as a Procedural order that continues to allow
them to implement. You know the bankruptcy court
requires that You close all bank accounts and
open up new bank accounts and this allows the
debtor You know the cash flows of the debtor
to continue uninterrupted. I don't view this
as a substance consolidation or anything other
than you know, allowing the debtor to continue
to operate in the ordinary course, and now that
they're in bankruptcy, and I'm sure they did
before, is account for all of the receipts and
all of the intercompany amounts. So I don't view
this as in any way impacting the concerns that
you have. But I'll let the debtor address that,
but that's the way I read the order. All right,
so let's, should we talk about the final hearing?
Sure, Your Honor. My understanding is, February
13th? Yes, I'm sorry. February 13th. I think
that's what was discussed with Mr. Laws. Yes,
I believe that's correct, Your Honor. So February
13th at 9 a .m. Central Time. And that hearing
will be a virtual hearing as well? Thank you,
Your Honor. All right. And so the objection deadline
would be the Friday before, the February 6th.
If you could just work that into the proposed
form of order that you upload. Will do, thank
you, Your Honor. All right. So based on the testimony,
provided in Mr. Weinstein's declaration regarding
the cash management system. I'm going to go ahead
and approve the order, you know, subject to the
comment I made with respect to the accounting
for the inner company and the amounts. And with
that, once the order is uploaded, I'll enter
it and go. Go forward. All right. So that order
is granted subject to the presentation of the
new form of order. All right. Where do we go
next? Thank you, Your Honor. Next up is agenda
item number seven, which is the wages motion.
This appears at docket number 10. Through the
wages motion, the debtors are seeking authority
to continue certain employee benefits in the
ordinary court and pay certain pre -petition
claims owed to their workforce, both subject
to the terms of the proposed order. The debtors
currently employ almost 17 ,000 employees across
the United States and abroad, all of whom are
vital to the debtor's continued operations. The
motion describes the debtor's employee obligations
and programs in detail. This information is set
forth and summarized in paragraph 18. A large
portion of the cap accounts for health and welfare
benefits, including medical and other benefit
plans offered to employees. pay time off and
outstanding leave obligations as well as retirement
benefits. A significant yet smaller portion of
the amounts requested relate to pre -petition
compensation obligations owed to the debtor's
workforce including temporary employees and commissioned
employees. And the remaining portion of the amounts
requested relate to withholding obligations including
union deductions. Approximately 6 ,000 of the
debtor's hourly -based employees are eligible
to earn a commission, which makes up a large
majority of those individuals' wages. The commission
program is primarily available for certain employees
in sales and sales support roles, and the amounts
earned are paid as part of the employee's regular
payroll disbursement. As part of the relief requested,
the debtors are seeking authority to make pre
-petition payments on account of their non -insider
severance program. that constitute priority treatment
under Section 507A of the Bankruptcy Code as
well as to honor post -petition non -insider
severance obligations in the ordinary court solely
as required by applicable law. As indicated,
the debtors are not seeking authorization to
pay severance to any court -of -law insider as
such term is defined under Section 10131 of the
Bankruptcy Code. In connection with those payments,
the proposed order now includes reporting requirements,
and this information will be provided on a monthly
basis to the U .S. Trustee, any secured creditors
committee appointed in these cases, as well as
the DIP lenders. Prior to filing the motion,
the debtors previewed the request of relief with
the U .S. Trustee's office and answered certain
questions. And I also understand that we are
resolved on the questions they posed and that
the U .S. Trustee does not object to the order.
Unless your honor has any questions, we respectfully
request that the court approve the wages motion
and enter the order. All right. Does anyone wish
to be heard with respect to the wages motion?
Your honor, this is how it went through the U
.S. Justice Office. Yes. Council is correct.
We are resolved. But I just want to make this
reservation on the record. I don't want to put
a stop to people's retirement plan. at this time,
but there are certain supplemental executive
retirement plans within the wages motion. We
just want to reserve rights. Once we get more
information, it is in violation of what we see.
We want to take a look at it and preserve those
rights. But in terms of the income orders, we
don't oppose entry of the order today. All right.
Thank you. All right. Anything further? All right.
I've reviewed the I've reviewed the motion and
obviously there's a lot of employees and the
numbers are big, but obviously keeping the employees
is a key part of preserving value in this company.
So I think this is proper exercise of debtor's
business judgment. I'm going to go ahead and
approve the wages motion. So if you give me a
minute. All right, that has been signed and sent
to docketing. Thank you, Your Honor. Next is
agenda item number eight, which is the customer
program motion. This appears at docket number
15. Like many large retailers, the debtors have
historically implemented certain customer programs
to promote customer satisfaction, create goodwill
for their businesses, and enhance the value of
their brand. The debtor's specific customer programs
are described in detail in the motion and include
refund and exchange programs, gift card programs,
credit cards, and loyalty and rewards programs
among others. The debtors are seeking authority
to honor pre -petition obligations related to
their customer programs subject to the amounts
set forth in the motion and to continue their
customer programs in the ordinary course. Honoring
these customer program obligations and continuing
the program, in the ordinary course is critical
to preserving the ongoing value of the debtor's
operations during these cases. Prior to filing
the motion, the debtors previewed the requested
release with the U .S. Trustee's office. We incorporated
requested language into the proposed form of
order, which appears in paragraph four of the
order, noting that in the event that the debtors
choose to terminate any gift cards, they will
provide sufficient notice to parties in interest,
including by posting a notice on their website
and at the store's location. For the avoidance
of doubt, the debtors seek to continue their
gift card program pursuant to the relief requested
in the motion. With this inclusion, we understand
that the U .S. trustee does not object to the
order. Unless your honor has any questions, we
respectfully request that the court approve the
customer program's motion and enter the order.
All right. Mr. Hess, I think you filed the reservation
of rights. On behalf of Capital One, Capital
One is a party to Neiman and Bergdorf Goodman
with regard to the private label credit agreement.
As a general matter, Capital One does not object
to the continuation of the program. There is
kind of a nuance that they have objections to
if that relates to what's described in our objection
as the big force credit obligation. that the
program that provides their customers that purchase
goods in excess of their credit lines, that Neyman's
has the obligation to backstop those guarantees
and agree to repurchase them. Will that be suspended
for the time being so that there's no further
increase in the recourse obligations of Neyman's?
and that we can wind down the existing outstating
obligations. We have submitted to the debt of
proposed language before the hearing, but there's
a lot going on that we have not heard back from
them, and so we're hoping that that be inserted
into the order. So subject to that limited objection,
we stand by that objection. Your Honor, we did
miss it, but we will review after the hearing
and get back to Mr. Hess. All right. All right.
So again, anyone else wish to be heard? All right.
So I've reviewed the customer program motion.
Obviously, the employees and customers are key
participants in making this case a success. So
I've reviewed the motion and form of order, and
I'm going to go ahead and approve the form, the
motion to the customer programs motion at docket
number 15. So I'll wait for the revised form
of order. Just make sure to contact Mr. Laws
once that gets filed. Thank you, Your Honor.
That is granted. Thank you, Your Honor. The next
item on the agenda is item number nine, which
is the taxes motion, and this appears at docket
number eight. By this motion, the debtors are
requesting authority to pay taxes and fees that
they owe to relevant state, local, or federal
taxing authorities. And set forth in further
detail in the motion, given the sheer size of
the debtors' operations, the debtors are responsible
for a variety of taxes and fees, including sales
and use, income and franchise, license and regulatory,
property, and customs duties, among others. As
of the petition date, the debtors estimate that
they owe approximately $134 million in taxes
and fees, which includes amounts incurred on
behalf of audits. None of the taxes that the
debtors are seeking authority to pay represent
old, unpaid taxes. Prior to filing the motion,
the debtors previewed the requested relief with
the U .S. Trustee's office and incorporated requested
language into the proposed form of order. This
language appears in paragraph 13 and notes that
the debtors will provide reporting to the U .S.
trustee's office and on a professionalized only
basis counsel to the DIP lenders and any committee
appointed in these chapter 11 cases. With this
inclusion we understand that the U .S. trustee
does not object to the order and unless your
honor has any questions we respectfully request
that the court approve the taxes motion and answer
the order. All right does anybody else wish to
be heard on the taxes motion? I'm going to go
ahead and approve the taxes motion. I think that
obviously most of the taxes are priority claims
and in effort to avoid penalties and potential
implications for responsible persons, it's a
debtor's business judgment to go ahead and pay
the taxes. So give me a minute here. has been
signed and sent to docking. Thank you your honor.
Next up is agenda item number 10 which is the
insurance motion and this appears at docking
number 9. Through this motion the global debtors
are seeking authority to maintain their insurance
policies in the ordinary court, pay any pre -petition
amounts they're under, and honor the current
surety bonds and letters of credit. As set forth
in the motion, the debtors maintain 154 insurance
policies administered by various carriers, which
includes coverage for property damage, general
liability, D &O liability, cybersecurity, and
among other coverage. The debtors are also party
to four premium financing agreements. All but
one of these policies has been paid in full as
of the petition date. The debtor's next payment
under the cyber policy premium financing agreement
is due at the end of this month. The debtors
maintain 40 surety bonds in the approximate amount
of 11 .6 million, and these relate to utilities,
customs, taxes, different securities deposits,
and liquor licenses. The global debtors also
maintain various letters of credit for the benefit
of third parties to support their obligations
related to, among other things, workers' compensation,
property leases, inventory, and transportation
logistics. that the maintenance of insurance
coverage is not only essential to continued operation
of the debtor's businesses and preservation of
the debtor's estate, but also required under
the trustee's operating guidelines. Prior to
filing the motion, the debtors previewed the
requested release of the U .S. trustee's office,
and we incorporated language into paragraph seven
of the proposed order. This language notes that
the debtors will notify the U .S. trustee if
they seek to renew, supplement, or modify their
insurance policies, maturity bonds, or letters
of and seek to obtain replacement covers during
the cases. I understand that we are resolved
and that the U .S. trustee does not object to
the order. Unless your honor has any questions,
we respectfully request that the court approve
the insurance motion and enter the order. All
right. Does anyone wish to be heard on the insurance
motion? All right. Again, the insurance motion
obviously is required. Insurance is required
by the U .S. trustee guidelines. In addition,
it's a proper exercise of the debtor's business
judgment. So, I'll go ahead and approve the order
allowing you to proceed with the insurance program.
So, give me a minute. That order has been signed
and sent to docketing. Thank you, Your Honor.
I will now feed the podium to my colleagues.
Just to make sure I want to... So, with respect
to the... So the cash management order you had,
you're gonna upload a new order, is that right?
Yeah, that's correct. Okay. I think that's the
only one, right? Yeah, that's right. Oh, and
the customer program. Okay, got it. All right,
thank you. Thank you, Your Honor. Hi, good evening,
Your Honor. For the record, Allison Smith, Wilkie
Barton Gallagher, proposed counsel to what we've
been referring to as the global debtors. I'll
pick up right where Ms. Graver left off with
agenda item number 11. It's the global debtors'
critical vendors' motion. It was filed at socket
number 14. The global debtors are seeking authority
to make payments to trade and 5039 claimants.
in an aggregate amount up to $126 million on
an interim basis and approximately $337 .4 million
on a final basis. I do recognize, Your Honor,
that on its face, these numbers do air on the
higher end of the scale. But as I'm sure you
can appreciate both from our documents and the
statements that have been made on the record
already today, these relationships and these
creditors are very, very important to the debtor's
business. And it's a business who's... success
is directly influenced by their ability to stop
to carry inventory. It is critical to this process
and to go forward operations more generally that
the global debtors be able to restart those vendor
payments and shipments to ensure that they can
continue providing the diverse and uniquely curated
inventory assortment to which their customers
have become accustomed. We did engage with the
U .S. Trustee's office prior to filing. I understand
that we have addressed and resolve their concerns
largely by the inclusion of the standard reporting
matrices obligation. I'm happy to address any
point in particular but unless the court has
any questions would submit that the specific
facts and circumstances of these cases do justify
and support the release being sought and the
motion be approved on an interim basis. All right
anyone else wish to be heard? The you know, the
vendors are just as important in this case as
the customers and the and the employees And so
I think this is a proper exercise of debtors
business judgment. I'm gonna go ahead and approve
the order Let me just give me a moment That order
has been signed and sent to docketing. Thank
you, Your Honor. Moving to the next item on the
agenda, the lien claimants motion at agenda item
number 12. This motion was brought to docket
number 16. Similar to the critical vendors, the
parties contemplated by this motion are those
parties that are necessary to maintain an uninterrupted
flow of inventory of other goods to the debtors'
networks and to their stores and customers, in
addition to ceasing services, which would cause
disruption and delay to the debtors' operations.
These parties may be entitled to assert liens
on the debtor's property as a result of non -payment.
Accordingly, the debtors are seeking authority
to pay up to approximately $114 million. Again,
these payments are crucial to turning the spigot
back on, so to speak, so the debtors can redo,
excuse me, ordinary course operations and inventory
sourcing as they transition into these proceedings.
Unless your honor has any questions for me, I
would ask that the court enter this order. uh,
lien claimants, uh, order. Your Honor, this is
how it went to the U .S. Trustee's office. Can
I be heard? Yes, sir. My only concern with this
motion, I think I agree with the debtors, is
that you're granting on a final basis of approximately
114 million on day one. I'm very concerned about
that. It's a big case and I understand it's a
big number, but in terms of having not having
a committee, not having more eyes on the amount.
The critical vendor motion is also a big number,
but then you get trade agreements, you get a
final, and there's procedures to actually look
into the numbers. But once the order is entered,
$114 million of the state assets will be leaving,
and I don't doubt that there are needs for it,
but my only concern is I don't have a committee
in place that can take a look at these numbers.
My suggestion was to bifurcate the process in
a way that's what they need in the next, I don't
know, three weeks until we get into a second
day hearing, as opposed to having final approval
of $114 million today, less than 24 hours of
notice. The only thing I'll say to that, Your
Honor, is that a number of these claims subject
to this motion do give rise to security claims
that would be paid out later in the case, as
regardless. And we have incorporated the same
matrix in scheduling reporting obligations. And
of course, we're happy to provide that to any
committee that is appointed in these cases. All
right. So I'm going to go ahead and grant the
motion on a final basis. But obviously, the debtor
is going to pay these. They're not going to pay
these all at once. And to the extent that the
committee wants to raise a question with respect
to the timing of the payment or the necessity
of the payment, I'll allow them to raise that
at the second day hearings. But I think these
are different than critical vendors. Critical
vendors, you have to negotiate a trade agreement,
you have to do those kinds of things. To the
extent these are lien claimants that can actually
hold your, disrupt your supply chain. I think
that I'm inclined to grant the relief. I don't
think, in fact, that the debtor doesn't have
sufficient cash in order to be able to pay these
all on day one. They're authorized to do it,
but they're authorized but not directed. So I
think they will be paid in the ordinary course.
I'm sure the debtors will act prudently in terms
of how they're going to handle this. So on that
basis, I'm going to approve it. But again, to
the extent the committee sees this differently
than the debtor, obviously they're going to have
the opportunity to raise that issue. So on that
base, I'm going to go ahead and grant the order
as drafted. Thank you, Your Honor. I'll allow
my colleague to take you to the remainder of
the motion. All right. Good afternoon, Your Honor.
Zachary Charlton. For the record, Floyd Farn
Gallagher proposed council to the global debtors.
Can you hear me okay? I can. Perfect. I'm going
to be addressing agenda number 13, which is docket
number 12, the automatic stay motion. The debtors
operate as a global enterprise and importantly
as reference in connection with the critical
vendors here. The debtors have regular dealings
with foreign customers, contract counterparties,
be severely disrupted. It's likely that these
foreign vendors are unfamiliar with the automatic
stay and its application, and as such, various
interested parties may attempt to seize assets
located outside of the United States to the detriment
of the debtors, their states, and creditors,
or otherwise attempt to contravene the provisions
of the Code. This order seeks to notify parties
of the stay. We believe the motion and the proposed
order simply restates and does not expand the
protections under Section 362 of No comment to
the form of order. Unless the court has any questions,
we respectfully request entry of the automatic
stay order filed at Docket Number 12. All right.
Does anyone object to the entry of the comfort
order? All right. I've reviewed the proposed
form of order. I think it does restate what the
automatic stay indicates. And to the extent that
you have a global enterprise, I think it's important
to make sure that all of the assets of the estate
are protected, so I'm going to go ahead and enter
the comfort order. Thank you, Your Honor. All
right, that's been signed and sent to docketing.
Thank you, Your Honor. Next up, we have agenda
item number 14 at docket number 6, which is the
utilities motion. By the utilities motion, adequate
assurance of future utilities, prohibiting utility
companies from discontinuing, altering, or abusing
service, and approving the proposed adequate
assurance procedures. Utility companies provide
services vital to the operation and management
of the debtor's brick and mortar locations and
distribution and fulfillment centers. Further,
the debtor's contract with various third -party
administrators to process the debtor's utility
invoices and payments. Any interruption of the
utility services would significantly disrupt
this case and impact the debtor's ability to
sell merchandise and operate as a growing concern
during these Chapter 11 cases. Adequate assurance
has been provided in the form of the debtor's
newly established utility deposit account, which
holds $2 .9 million, representing 50 percent
of the debtor's estimated monthly cost of free
petition services. Your Honor, we believe the
relief requested is proper under Section 366
of the Code and is standard in cases of similar
size. We do have a few revisions we plan to make
to the proposed utilities order. Anyone else
wish to be heard on the utilities motion? All
right. I have reviewed the motion and the proposed
form of order. I will approve the motion. I think
under 366, the way I read 366, you have to have
somebody request additional adequate assurance
within the first 30 days. You have to have a
hearing. So what I'm going to do is, and this
is not, I'm going to say since the first case
was filed on the 13th, 30 days would be January
12th. I mean, I'm sorry, February 12th, 30. Yeah.
So I have a. A hearing hearing starting that
day at nine. So I'm just going to schedule a
30 minute at 830 to the extent just limited to
to the extent anyone requests additional adequate
assurance during between now and that date so
that we could come in. I anticipate that it won't
happen. But I think 366 says we have to do it
within 30 days. and so I'm gonna go ahead and
and just pencil that in to have it but otherwise
I'll go ahead and grant the proposed form of
order. The proposed form of motion and then I'll
wait I'll wait for your order. Thank you your
honor. Next on the agenda we have item number
15. the Schedules and Sofas Extension Motion,
which was filed at Docket Number 4. By this motion,
the debtors seek entry of an order extending
the debtor's deadline to file their schedules
and statements and 2015 .3 reports by 45 days
to March 13, that being 59 days after the petition
date. The global debtors submit that cause exists
to extend the schedule and statements deadline
and the 2015 .3 reports deadline, given the voluminous
number of books, records, and documents. that
the debtor's complex accounting systems across
various legal entities located in numerous jurisdictions.
Finally, the global debtors submit that good
and sufficient cons exist to modify the requirements
of Local Rule 2015 -3 to permit the global debtors
to file their 2015 .3 reports every six months
rather than monthly as required under the Local
Rule. A monthly compilation of these materials
for all non -subsidiary operations Notably, the
global debtors do not seek a full waiver of their
obligations to file the 2015 reports. Rather,
the global debtors seek permission to file the
2015 .3 reports every six months instead of every
month. Accordingly, there will be no harm to
any parties in interest here, as they will still
receive the necessary information. We would know,
Your Honor, that the release requested herein
is consistent with the release typically granted
by courts in this district in complex That's
been entered. You requested release. Mr. Nguyen?
No objection, Your Honor. I would not require
them to file their scheduled rooms within 14
days. I think the extension makes sense for these
centers. All right. All right. So again, I've
reviewed the proposed form of order. I think
in the case of this size, I think the The requests
are appropriate. So let me Mr. Wynn would normally
require you to do that within 14 days, but he's
being nice today. Thank you, Mr. Wynn. All right,
that order has been signed and sent about. Thank
you, Your Honor. With that, I will feed the podium
to our colleagues at Haynes and Boone to continue
with the agenda. All right. Thank you. Good evening,
Your Honor. David Crouch, Haynes and Boone, proposed
co -counsel for the global debtors. The next
item on the agenda is item 16. The creditor matrix
or redaction motion files a docket number seven.
In this procedural motion, the debtors seek approval
of three things. Using a single top 30 list and
consolidated creditor list, the form and manner
of notice of commencement of these cases, and
the redaction of personally identifiable information.
For the first, using a single top 30 list and
consolidated creditor list is consistent with
the complex procedures and customary practice
in this district for large cases like these.
For the second, the debtors submit that the form
of notice attached to the proposed order is Exhibit
1. It complies with complex case procedures and
is also customary for cases like these in this
district. And then lastly, we seek authorization
to redact personally identifiable information.
As the court knows, privacy concerns a paramount
in today's world. And the request of relief is
narrowly tailored to balance the competing interests
between transparency in these cases. and privacy
concerns of individuals that are brought to these
cases involuntarily. We incorporate comments
received from the U .S. Trustee in the proposed
order, and I believe they're signed off on the
proposed order, so unless the Court has any questions,
we request entry of the proposed order filed
at docket number 7 -1. All right, does anyone
wish to be heard with respect to the redaction
motion? I've reviewed the motion and the proposed
form of order. And again, I believe this is a
proper exercise of the debtor's business judgment.
I think the concerns raised by Mr. Truss are
genuine concerns, especially with respect to
the privacy issues and the administrative convenience.
I think that's being done with no similar. There's
no harm to any of the creditors as a result of
this. All right, I've signed that order and sent
it to docketing. Thank you, Your Honor. The next
item on the agenda is item number 17, the debtor's
joint NOL and record date motion, which was filed
to docket number 11. This is also a procedural
motion, Your Honor, which the debtors seek approval
of two things. Procedures governing certain transfers
of equity interest in the debtors and declarations
of worthlessness for tax purposes. with respect
to equity in debtor's tax global holdings LLC,
and then also a record date for potential sell
-down procedures applicable to transfers of debt
claims against the debtors. The purposes of these
procedures and the record date is to ensure that
the debtors can adequately protect against the
loss of their substantial tax attributes, which
are property of the debtors of states. Trading
of equity interests in the debtors during these
cases could cause an ownership change. to occur
that would adversely affect the debtor's ability
to use their tax attributes. The procedures detailed
in the motion set forth restrictions on the transfers
of stock in the debtors and the declarations
of worthlessness with respect to equity in Debtors
Tax Global Holdings LLC to avoid a transaction
that would be irreversible for tax purposes and
destroy the debtor's valuable tax attributes.
The motion also seeks approval of a record date
to put parties on notice that the debtors may
need to seek a sell -down order for any debt
claims acquired after the record date. We're
not seeking a sell -down order today, Judge.
We're only seeking to establish the record date
so that if the debtors have to seek a sell -down
order, the debt claimholders are already aware
of the record date for purposes of the sell -down
order. Because certain changes to the debtor's
equity structure and post -record date debt claims
trading could threaten the debtor's valuable
tax attributes, the debtors believe that this
relief is in the best interest of their estates
and all parties' interests. The proposed procedures
are customary practice in large Chapter 11 cases
that balance notice and latitude for trading
stock and the debt claims while at the same time
protecting valuable estate assets. We previewed
the motion and proposed order with the U .S.
trustee and did not receive any comments. So
unless the court has any questions, we respectfully
request entry of the proposed order. File the
docket number 11 -1. All right. Does anyone wish
to be heard on the NOL motion? All right. So
again, I reviewed the proposed form of order
and the motion. The debtor has billions of dollars
of tax attributes. And I think this is only prudent
for the debtor in the exercise of its business
judgment to protect those assets, which are in
fact property of the estate. So I'm going to
go ahead and approve the motion. Thank you, Your
Honor. That concludes my portion and I'll pass
the virtual podium to the Bradley team. All right.
So that order has been signed and sent to documenting.
All right, Mr. Martin. Tell them not to put you
last. I'd say the best flash you are. Before
I begin, a few housekeeping items. First, we'll
have to move to exhibit two exhibits. First is
exhibit 12, which is the declaration of Andrew
D .J. Heade in support of SO5 digital letters,
chapter 11 petitions, and first state pleadings.
All right. Anyone object to the declaration of
Mr. Heade? And that is at docket number 12. No,
I'm sorry. It's not. It's docket number. It's
docket number 37. Docket number 37 in connection
with the two matters for the, what I call the
digital debtors. All right, hearing none, I'll
admit that it is direct testimony. In the second
exhibit you honor be the admission of exhibit
14, which is our initial cash collateral budget.
Does anyone object to the admission of the initial
cash collateral budget? It's a two, it's a three
week budget, right? Yes, your honor, but we'll
be asking to come back in two weeks. Okay. All
right. So it's a three week budget. Does anyone
object to the admission of the budget for the,
what I would call the digital debtors? So that,
Exhibit which is attached to exhibit number 14
is admitted. I just wanted to note for the record
that as the Wilkie team went through their first
-day motions, much of the relief that was requested
in those motions is joint relief. As it relates
to the SFI digital bettors, it would be very
unusual for a case of this size to only have
two first -day motions. That's because we, for
efficiency purposes, joined in much of the relief
that was being requested by SACS Global. The
first motion I'd like to go through is the cash
collateral motion. The SO5 digital debtors need
to be used of cash collateral to avoid irreparable
harm. After the use of cash collateral, they
would not be able to continue on in their business
in the ordinary course. The debtors secured Creditors
are represented by Kaledine Commercial Finance
LLC as pre -petition agents and Morgan Willis
as their counsel. I'd like to go through some
of the provisions of the order and if the court
has any questions as I go through it, I'd be
happy to answer them. All right, why don't you
go ahead I had I just want to make sure I understand
paragraph number nine In paragraph number 17
You know that the amount for the challenge is
50 ,000 I don't know whether that's an appropriate
amount obviously that's going to be in And it's
also 50 ,000 in the dip motion, which is probably
not an appropriate amount. But I don't know whether
this is it. Obviously, that's without prejudice
to the committee coming in and asking. And then
I don't I really the only question I had was
really, I want to understand, make sure I understand
paragraph nine. But other than that, I really
didn't have it. Any questions? All my other tabbies
I answered myself. Understood, Your Honor. I
think just for the benefit of everyone, because
some of these terms were negotiated, I would
like to get that on the record if the Court is
okay with that. Absolutely. The primary item
I wanted to note for everyone relates to the
cash flow of the budget during interim period.
The budget contemplates establishing an escrow
of $350 ,000 relating to amounts that may be
paid to the SACS global debtors as it relates
to fees and expenses that they may be covering
that are for the benefit of the SO5 digital debtors.
As the court is aware, through the first day
declarations of Mr. Weinstein and Mr. Headey,
the SO5 digital debtors consolidated their operations
with the global debtors back in 2021 and since
that time have been operating under a sharing
agreement. That sharing agreement contemplated
the certain expenses to be reimbursed to the
SACS global debtors and now that we're in bankruptcy
the analysis now needs to change to whether those
expenses are leaving or unnecessary under 503b
and so what this does is it creates a framework
or funds to be set aside so that if there is
an administrative expense claim between the estates
that there's a mechanism to um to tee that off
and this is i think the the first agreement relating
to that and i'm sure we'll be revisiting that
again in the next interim order and in a final
order so i just wanted to preview that for the
court where is that in the budget it's uh it's
uh the tsa payment at 175 000 dollars per week
All right. Was there an updated budget? Because
the budget I have, I know you filed a revised
form of order. Is it attached to that? If it's
not, I'll make sure it is. I don't have it up
in front of me right now. OK. Because the SACS
Global TSA payment is zero. There's no amount
in the budget that I have. Then that must not
have been updated. So we'll make sure that the
updated budget gets attached to the final proposed
order. That's been filed with the court. All
right. Thank you. All right. Does anyone else
wish to be heard with respect to the SO5 digital
debtors? All right. So again, obviously these
debtors need to have cash collateral, access
to cash collateral. I think the form of order
is is perfectly appropriate. I think it has the
with respect to both the events of default and
the challenge period. I think it has the standard
language with respect to those. So I'm going
to go ahead and approve the cash collateral for
the 50 digital debtors. I did get a revised form
of order at docket number 77. And let me just
see. And then you and I believe there's another
revised from the boarder at socket 141. Well,
that must have started. That must have been.
And then I see that the approved budget wasn't
attached. So we will re -apply that order with
the approved budget. All right. So I'm going
to go ahead and grant them. Yes. Yes. Yes. We
have no objection to that. And the intent is
to preserve our right to consignment parties.
Thanks. To the extent, I think that resolves
any objection you would have with respect to
pre -petition consignment goods, because delivered
pre -petition. But we also proposed some language
related to post -petition delivery of consignment
goods that was designed really to try to prevent
the interruption in the debtor supply chain.
We have proposed language that would give consignment
vendors comfort that goods delivered post petition
are not going to be challenged and there's going
to be some certainty that those goods are not
going to be viewed as property to the state and
that otherwise consignment vendors would have
perfected consignment rights on those goods.
We don't want to be in a situation where we're
delivering goods and then we get to a final hearing
on how to find that somebody wants to challenge.
our rights with respect to goods that were delivered
post -petition. Pre -petition, I think, is a
different story. Whatever rights we have are
the rights we have. My clients are happy to and
hoping to support these debtors in the post -petition
period. But I think they're also looking for
some comfort that to the extent they do deliver
goods, they're going to have protection. And
they're not going to have someone coming in and
challenging their rights. So we have presented
some language to the debtor that would provide
uh, for essentially automatic perfection of consignment
rights to the extent people were delivering goods
on consignment, and it was clear that they were
delivering goods on consignment. Um, we hadn't
received a response from the debtors. I know
that we've gathered a lot of falls, but, um,
I don't know how to deal with that, um, at the
moment. You know, typically in the old days you
might step outside and try to talk through something
in the hallway, but, um, is it possible, Ryan,
we could just put this on hold for a few minutes
and we could resend that language to debtor council?
So I'm happy to review any proposed language.
Yeah, this is an interim order. I think your
request is a reasonable request. So they're going
to have to upload another order anyway. So I'm
going to go ahead and approve it. And then to
the extent there's an issue with respect to the
language, I'll take that up. And it would be
as of when we go to the final hearing. And then
when did you want a final hearing on this? You
said two weeks. Yes, you are. Do you have anything
available on or around January 27th, 28th? about
a second, let me see. I'm just communicating
with Mr. Laws. Just give me a minute. Thank you.
Could you go out to the 23rd? Or is that too
long? I defer to Mr. Carter as to whether the
budget can be extended to the 23rd. Are you talking
about February 23 or January 23? I'm talking
about January 23rd. Okay. That's within our two
-week period, and that works for the days. All
right, so we're going to do January 23rd. And
that will be a virtual setting. Thank you, Mark.
Before we go off the topic of cash collateral,
I wanted to make sure I answered any questions
that the court had regarding paragraph 9, which
is the application of proceeds of post -petition
collateral. No, no, I think I understood kind
of what's going on now. OK, thank you. All right.
All right, so I'll go ahead and grant the motion,
subject to the language that we're going to get.
with respect to making clear that with respect
to consignment those assets post on a post petition
basis are are not becoming part of the collateral
base and and that it on the pre petition everybody's
reserving their rights thank you honor and with
that I'll turn the podium over to Jay Billy relating
to the SO5 digital debtors cash management motion
which tracks generally with the cash management
motion that the court already approved for the
global debtors. All right. Go ahead, Mr. Bailey.
Thank you. Good evening, Your Honor. James Bailey
with Bradley Rambo Cummings, proposed counsel
for the SO5 digital debtors. Your Honor, much
like the global debtors, the digital debtors
just need this straightforward relief to ensure
continuity of operations, maintain control and
transparency over cash, and avoid disruption
on the first day of these Chapter 11 cases. Your
Honor, prior to the petition date, the SF5 digital
debtors operated a cash management system using
established bank accounts and ordinary course
collection and disbursement procedures. That
system has been in place for a significant period
of time. It's well understood by management and
includes internal controls designed to safeguard
state funds. Your Honor, there is a request to
continue to intercompete transactions in the
cash management order. That would be in... the
discretion of the SO5 digital debtors, of course,
with any payments being consistent with the cash
flow out of order and budget. Your Honor, we
also requested certain waivers of the U .S. trustee
operating guidelines and the timeline to comply
with section 345. Your Honor, these are customary
reasonable and necessary relief to ensure a smooth
transition in these cases. We have previewed
the order, motion and order, with the U .S. trustee,
who I understand has no objections. Your Honor,
I think this would go out to the February 13
second hearing date with the same objection deadline
tracking the global debtors motion. I'm glad
to answer any questions, Your Honor. All right.
Does anyone wish to be heard on the S05 debtors
cash management motion? All right. I reviewed
the motion of proposed form of order and again
I think this is a proper exercise of the debtor's
business judgment in allowing them to have the
uninterrupted use of their cash as opposed to
shutting everything down and starting all over
again. So I'm going to go ahead and grant the
motion. So give me a minute. All right, I've
signed that and send it to docketing. All right,
why don't we come back and just take a 10 minute
break. Why don't we come back at 6 .50 and we'll
proceed with the dip at that time.