All right. Good morning. It is Friday, January
23rd, 2026. We're here in the Sachs office Avenue
digital on a motion to an interim for an interim
order with respect to a consulting agreement
with the GA group. So if you want to speak, please
hit five star. There were a lot of people on
the line and it was just too much background
noise. And also, to the extent you want to make
an appearance, please make sure to go to my web
page and note your appearance there. That's how
we keep track of appearances. So Mr. Reardon.
Good morning, Your Honor. Michael Reardon on
behalf of the SO5 Digital Letters. Also joining
me today virtually are Andrew Heed. CRO of the
SO5 digital debtors and committee Jay Schilling,
president of GA Retail Solutions LLC, the proposed
liquidation consultant. All right. Does anyone
else wish to make an appearance? Good morning,
Mr. Hede and Mr. Schilling. Why don't you both
hit five star one time on your phone and I'll
unmute you. Hello. Good morning. I would like
to make an appearance. My name is Beatrice Montaniga.
Okay. All right. Thank you. You're welcome. All
right. Mr Schilling, are you for the Are you
from the 617 area code? Yes, Your Honor. Good
morning. All right, Mr. Reardon, go ahead. Thank
you, Your Honor. I just wanted to reiterate our
thanks for giving us our time this morning on
this emergency motion. I know you have a fairly
busy day lined up, so I'll be quick about it.
We filed last night an amended witness and exhibit
list at ECF 419. Yes. Go ahead. And you just
asked, we have four exhibits of Mr. Heade's declaration
in support of first days, a copy of the consulting
grievance at exhibit two. Mr. Heade's declaration
support of the liquidator motion at ECF 400,
and Mr. Schilling's declaration support of the
liquidation motion as well. At this point, we
would ask that that be entered into evidence.
All right. So let's take them one at a time.
I think with respect to Mr. Heade's declaration
with respect to the Hold on a second. All right,
with respect to Mr. Headey's declaration with
respect to the first days, that's already been
admitted, so I'll admit it again for purposes
of this hearing. With respect to the consulting
agreement, which is 419 -2, anyone object to
the admission of the consulting agreement at
4 -0. 419 -2. All right, that will be admitted.
With respect to Mr. Headey's declaration in support
of this motion at 419 -3, does anyone object
to the admission of Mr. Headey's declaration
at 419 -3 as his direct testimony in connection
with this motion? Okay, that will be admitted
as his direct testimony subject to cross -examination.
and as it relates to Mr. Schilling's declaration
at 419 -4. Does anyone object to the admission
of Mr. Schilling's declaration at 419 -4 as his
direct testimony in connection with this motion?
Having heard no objection, that will be admitted
as his direct testimony subject to cross -examination.
All right, Mr. Reardon, you can proceed. Thank
you, Your Honor. We last time I checked this
morning, no objections have been filed. We did
have a vendor reach out yesterday, and we have
agreed to make a statement on the record relating
to consignments, bailments, or other inventory
subject to similar arrangements, essentially
inventory where the vendor may assert that it
does not constitute property of the estate. Our
statement is, this order, the proposed interim
order is without prejudice to any party's rights
with respect to such inventory. and that includes
any rights of the SO5 digital debtors to sell
such inventory. Essentially, this order is not
intended to diminish any vendors' rights in any
such inventory, and likewise, the SO5 digital
debtors' rights in such inventory. Understood,
yes. That has been a common theme. Yes. I probably
would have made a similar statement even if someone
hadn't reached out. We're not aware of any other
informal objections or comments, but... I do
want to note that we were affected by the outlook
disruption that happened last night that apparently
affected a lot of people across the country.
So my apologies to anybody who did try to reach
out and we didn't respond. I did try to review
my inbox this morning and didn't see anything
further though. All right. Okay. I won't spend
too much time reiterating Mr. Martin's comments
from yesterday's cash collateral hearing about
the path to where we've reached this point and
our foreseeable path forward. But as explained
in the first state declaration, at the outset
of the case, the SO5 digital debtor is intended
to conduct an orderly sale process to maximize
value for stakeholders. And that's based on preliminary
market feedback and the operational structure
of the business. We believe that an inventory
monetization strategy like this liquidation sale
is most likely to optimize recoveries in the
case. And I do want to specify here for people
who are listening in. This order pertains to
the SO5 digital debtors and only the SO5 digital
debtors. It does not affect the SACS Office brick
and work stores. Yeah, and as noted in the motion,
we've also received expressions of interest in
potential alternative transactions. And those
appear to have enough substance to them to merit
pursuing a bid procedures process in parallel
with this liquidation sale. But continuing to
pursue this inventory liquidation unless and
until when a position where an alternate transaction
emerges that justifies halting it in the exercise
of business judgment. And another consideration,
pursuing this course of liquidation, there are
several milestones in the interim cash collateral
orders that require us to move forward with a
liquidation as a condition to authorization to
use cash collateral. And loss of access to that
cash collateral would have devastating consequences
for our restructuring efforts. We've been in
regular contact with our term loan lender agent,
Paladine, about these matters, and it has approved
the motion, proposed liquidation sale procedures.
So, as a result, we're asking the court to, on
an interim basis, authorize the SO5 digital bettors
to enter into the performance consulting agreements,
attest to the first form of interim order as
exhibit one, and grant -related relief as set
out in the interim order. And in the interest
of time, Your Honor, I will ask if you have any
questions or if you'd like me to go proceed on
merits. Otherwise, we would ask that the court
enter the interim order. I don't have any particular
questions. I'm familiar with Great America's
consulting agreements. So this is not something
that I haven't seen before. So in terms of the
final hearing, what are you looking for? Will
you be looking something in the range of 21 days?
All right. Now you're asking me to do math now.
Oh, my apologies, Your Honor. I did mean to put
right down a date for you. But I did not get
to that. So the 21 days from today is the 13th,
which is when basically it's an all -SACS day.
Should we just put it there on the 13th or do
you want to have this separate from that? I think
that makes a lot of sense, Your Honor. All right.
Just tell them to put you guys first on the agenda.
Thank you, Your Honor. We will. All right. All
right. Okay. Does anyone else wish to be heard
with respect to the consulting agreement? All
right. I've reviewed the motion, the proposed
form of order. I understand that the Sachs digital
debtors are different. than the other SACS entities,
and that they're pursuing a different strategy
than the other SACS entities. As I indicated,
during my time in practice, I've reviewed, I
wouldn't say a lot, but I've reviewed several
consulting agreements from Great America and
others, and I think this is a standard form.
agreement that has been negotiated. So I'm going
to go ahead and approve the consulting agreement
on an interim basis and we will set a hearing
for February 13th at 9 a .m. and the objection
deadline will be February the 6th. All right,
so let me just do that. All right. That order
has been signed and sent to docketing. It should
be entered shortly so you all can get started.
All right. Thank you very much, Your Honor. All
right. Anything further we can do this morning?
Nothing for us. All right. Thank you. We'll be
in recess till the 9 o 'clock hearing. Thank
you. Thank you, Your Honor.