Please be seated. Mr. Gricher. Good morning,
Your Honor. Sean Gricher from Young Conaway for
the debtors. Your Honor, it has been a little
bit of time since we've been in front of you.
And I thought that I might provide the court
with a brief update, if Your Honor would like,
before we get to the main event. So Your Honor,
I'll start with operations in the United States.
transfer was subject to a couple of things. One
was the transfer of the animals from Seaquarium
elsewhere and also final commission approval
from Miami Dade commissioners who are the landlords.
With respect to the animals, the animals have
been transferred from Miami Seaquarium successfully
and healthily. We're happy to have completed
that process and we thank with those. Today,
Your Honor, is hearing the request for approval
of the final transfer of animals from the U .S.
out of the Dolphin Connection Facility. Ms. Milkie
will walk through that with Your Honor. And then,
assuming that we are able to complete those transfers,
in shorter order, we would be filing a motion
to reject that license agreement. Overseas, we
continue to make good progress on transactions
in various other jurisdictions. In fact, we believe
that Iran will be seeing documentation regarding
transaction for sale of the company's Italian
business in the coming days. and continued defiance
of this court's orders. We have continued to
successfully defend against those challenges
in Mexico, but they are continuing to be a challenge.
There are a number of significant operational
and tax liability issues resulting from prior
management's conduct of the business pre -petition
that need to be navigated in connection with
completing a transaction here. We think we do
have a path now through those various issues
and challenges. We're optimistic that we will
be able to effectuate a transaction and are working
hard to document that structure with counterparties
in hopes that we can bring all of that. set the
stage, and then we did get three responses, so
I'll go through where those all stand and then
make a few arguments if that works for you. This
is the time set aside for consideration of the
transfer of the eight bottlenose dolphins that
currently reside at the debtors dolphin connection
facility. That's located in the Keys in Florida.
And we filed, the debtors filed a miscellaneous,
a notice under the miscellaneous asset cell procedures
in December. to approve that transfer to SeaWorld
LLC. As I'm sure that you read from the debtors'
reply in support of the transfer, the debtors
leased their facility from the Hawke's Bay Resort
and therefore do not own the real property associated
with the facility. The term of the lease expires
in approximately nine months, which was a factor
that significantly affected the market value
of the facility. The debtors and their advisors
worked for months to secure an actionable bid
for the Dolphin Connection Facility but were
ultimately unsuccessful and in December decided
that they should focus on finding a suitable
home for the dolphins. After a significant effort,
the debtors negotiated a transfer agreement with
SeaWorld for the transfer of all of the dolphins
together at the Dolphin Connection Facility and
we did seek approval of that transfer. We received
three responses to the requested relief. The
first was an informal response from Dolphin Plus
Bayside Incorporated, which was a bidder for
the assets. Dolphin Plus and the debtors engaged
in extensive discussions, but were ultimately
unable to come to an agreement on an actionable
proposal for the assets. Dolphin Plus has confirmed
that it does not object to the requested relief.
In addition, two individuals filed correspondence
with the court. and also Kelly Fishback. Ms.
Boyles is represented by Council, although she
did file her correspondence in a pro se capacity.
Her attorney confirmed last week that Ms. Boyles
is not objecting to the requested relief and
does not require a hearing today. And that leaves
the correspondence filed by Ms. Fishback. I have
been in contact with her who conveyed to me last
night that she stands by her concern for the
animals, but she does not intend to provide any
further comments. She also wants to explicitly
clarify, and I believe she's on, so if I'm mischaracterizing,
I'm sure she will chime in, that she's not in
any way impugning SeaWorld or its reputation
or ability to care for the animals. In addition,
Your Honor, throughout this process, the debtors
have been in contact with the landlord for the
property, Hawke's Cay Resort. Mr. Gold is here
today. The landlord filed a statement in support
of the requested relief, which is at docket number
919. Finally, we confirmed with the UCC's counsel
yesterday, Mr. Fransela is here today, that it
also does not object to the transfer request
and supports the debtor's requested relief. With
that introduction, if it pleases the court, Your
Honor, I will seek to admit the declarations
in support of our requested relief today. We
have two witnesses, Mr. Giles and Mr. Wagstaff.
With the court's permission, Mr. Wagstaff is
appearing via Zoom. The debtors have filed three
corresponding declarations. The first is exhibit
C to docket number 832. The second is docket
number 893. And the third is docket number 894.
Mr. Giles is with Green Hill and Company, which
is the debtor's investment banker. Mr. Wagstaff
is with Riveron and is the debtor's chief restructuring
officer. I've actually forgotten two other documents.
There's an affidavit of service illustrating
the service of the notice itself and then the
license agreement that governs the Hawks Kay
facility is also included in the exhibit binder
that we have included. My understanding is that
there is no objection to the admission of these
documents and we've asked that they be admitted.
Let me just take them one by one. Is there any
objection to the declaration, there's two declarations,
of Mr. Wagstaff coming into evidence? I hear
no one. Is there any objection to the declaration
of Mr. Giles coming into evidence? objection
to the license agreement between Keys Hotel Operator
Inc. and Dolphin Connection coming into evidence.
I hear no one. Is anyone going to want to cross
examine either Mr. Wattstaff or Mr. Vass? I hear
no one. Thank you, Your Honor. I'll keep my comments
brief under the circumstances. Court has heard
on prior occasions, the debtors began a sale
and marketing process for all of their assets
approximately seven months ago. As detailed in
the Geisel's declaration, Greenhill went out
to almost 300 parties and received outreach from
additional interested parties. 21 parties executed
confidentiality agreements and engaged in further
diligence. Greenhill and the debtors responded
to bidder inquiries, facilitated site visits,
and communicated with the landlord in other parties
all in an effort to identify a transaction structure
and bid proposal that would yield value to the
estates. Unfortunately, due to practical and
legal constraints, including the limited remaining
lease term, the bid proposals received by the
original bid deadline were not actionable. The
debtors extended the bid deadline to facilitate
additional discussions, but ultimately the debtors
were unable to negotiate bids on terms that would
yield value to the estates. Facing the original
365D4 deadline, the debtors determined that additional
time was unlikely to create value and determined
to wind down their dolphin connection facility.
The debtors worked with the landlord to secure
an extension of the 365D4 deadline to facilitate
those transfers. The debtors had long been in
discussions with various third -party recipients
in connection with the transfer of the animals
for the Seaquarium facility. and therefore had
been engaging in advanced discussions with such
third parties regarding the placement of the
animals. After months of discussions, the debtors
negotiated the agreement with SeaWorld for the
transfer of the eight dolphins that reside at
the facility and then filed the fifth transfer
notice on December 22nd. I'll just note briefly,
Your Honor, that by all accounts, including all
of the people that reached out to us informally
and formally, SeaWorld has been described as
a highly reputable organization that is very
capable of taking care of and transferring these
animals. The debtors considered, among other
things, the timing of the transfers, the suitability
of the transferees that we were in discussions
with, and animal welfare, among other factors.
As I mentioned, we did hear from several parties
after we filed the fifth notice. The debtors
engaged in extensive discussions with those parties.
We responded to certain additional diligence
requests, and we ultimately further extended
the bid deadline to provide parties with additional
time to participate. Ultimately, however, such
parties either declined to further participate,
citing the short lease term, or were unable to
participate at values that would cover the debtor's
transaction and other costs. The debtors have
negotiated with the landlord, as I mentioned,
for an extension through of the 365D4 deadline
through this Friday. I believe that the landlord,
although we are in current discussions with the
landlord, are willing to be cooperative about
the debtor's transfer timeline insofar as a quarterly
transfer to SeaWorld is concerned. Under the
circumstances, we ask that your owner approve
the transfer. As I mentioned, the debtors have
run a comprehensive sale and marketing process.
and that was significantly extended beyond the
court approved deadlines. The debtors need to
ensure a safe and timely transition of the animals
to a responsible third party. And by all accounts,
SeaWorld is a responsible third party. And the
debtors are constrained by the limits of the
lease terms applicable law and practical concerns
related to their liquidity. In sum, the debtors
have reasonably exercised their business judgment
and determining that the transfer of the Dolphins
to Sea World is in the best interests of the
debtors or states and should be approved. We
have submitted a form of order which we have
uploaded, Your Honor. It is in the same form
as the other sales that we have proposed, and
so it's essentially the same order that you have
previously entered, I think maybe seven times
now. So we'd ask that that be entered. If Your
Honor has any questions. Hawks Cave Resort. The
legal entity name is Keys Hotel Operator LLC.
Obviously based on the statement that we filed.
Earlier this week, we wholeheartedly agree with
the debtor. I actually disagree with one thing.
Miss Melki said she referred to it as a comprehensive
sale process. I think that understates it. It
was an exhaustive sale process because the deadlines
that were contemplated were extended or. In some
cases, I'll say we're revived. We work with the
debtors. My client itself had expressed some
interest, but we had regulatory hurdles, so we
weren't actionable. But there were a number of
other parties, as is outlined in the debtors'
papers, but nothing came to fruition. The simple
fact is at this point, obviously we did not challenge
the debtors' business judgment. We wholeheartedly
support it. It's not only in the best interest
of the estate to approve this transaction, it's
in the best interest of the eight bottom -most
dolphins that are presently at Hawke's Cay. to
see if the sales process could keep rolling.
And that was through 1231. And with that, with
the sale process... felt the need to interject
themselves at the last minute. We have had conversations
with Council for Dolphins Plus as recently as
yesterday. So I want to assure the court. No
further questions, thank you. The Dolphin Connection
Inc. seeks to transfer to SeaWorld LLC eight
bottlenose dolphins as dolphins are currently
at the Dolphin Connection Hawke's Cave Resort.
I will approve that transfer of the eight bottlenose
dolphins based on the evidence that was admitted.
in the record today, which is uncontested that
consists of the declaration of mr. Wagstaff and
the declaration of mr. Geisel and They detail
the marketing efforts the extensive marketing
efforts that were undertaken with respect to
this particular property in efforts to see if
there was an actionable deal for the property
itself and or a going concern. There are constraints
on this particular property in both the 365D4
period in which the landlord has already extended
twice consensually. and the term of the lease
itself, which, my recollection is, ends at the
end of October. So that there would have to have
been agreement and a deal with the landlord in
order for anything to realize in terms of a going
concern. That did not happen, notwithstanding
the significant efforts and the participation
of the landlord. So there really is quite frankly
no option. The debtor has exercised its business
judgment. The animals need to be to find a home
somewhere else and they need to be safely transported
to that home. My understanding is that the dolphins
are being kept together in their current grouping
and that SeaWorld is an appropriate transferee,
new owner to facilitate the transfer and the
welfare of the animals in the new place. So for
all of those reasons I will approve this particular
transfer. I do appreciate the comments that I
receive in different forms from individuals who
are concerned about the welfare of the animals,
as is the court. But in these circumstances,
this is the best, if not the only option, for
the dolphins. And it's an appropriate one going
to a reputable new owners. So for all those reasons,
I will approve. This sale is requested and I
will enter the form of order that I have entered
in other circumstances. Thank you. I think that's
it for today. Okay, thank you. Thank you. We're
adjourned.