WEBVTT 00:00:00.779 --> 00:00:04.860 Good morning. It is 9 a .m. on Friday, February 00:00:04.860 --> 00:00:09.820 6, 2026. We're here on two matters in case number 00:00:09.820 --> 00:00:16.780 26 -90103, Sachs Global Enterprises. So two things. 00:00:16.859 --> 00:00:19.820 One, please mute your lines when you're not speaking 00:00:19.820 --> 00:00:21.879 so I don't have to activate the hand raising 00:00:21.879 --> 00:00:24.940 feature. Second, everyone make sure to go to 00:00:24.940 --> 00:00:27.600 my webpage and note your appearance because that's 00:00:27.600 --> 00:00:31.339 the way we... Keep track of formal appearances 00:00:31.339 --> 00:00:35.079 in the case. So I'll start with a Council in 00:00:35.079 --> 00:00:39.179 the courtroom and then I'll go to council online 00:00:57.229 --> 00:00:59.570 Good morning, your honor Kathy Patrick at Gibbs 00:00:59.570 --> 00:01:01.950 and Bruns. I'm counsel for the plaintiffs and 00:01:01.950 --> 00:01:03.829 the interchange litigation that are here on the 00:01:03.829 --> 00:01:11.750 motion to see All right, let's start mr. Ice 00:01:11.750 --> 00:01:17.810 Einstein Einstein Hello your honor Matt Eisenstein 00:01:17.810 --> 00:01:22.489 From Arnold and Porter on behalf of visa Inc. 00:01:23.689 --> 00:01:27.040 All right, mr. Michael Good morning, your honor 00:01:27.040 --> 00:01:30.780 William Michael for non -party MasterCard as 00:01:30.780 --> 00:01:33.560 part as a defendant in the interchange litigation 00:01:33.560 --> 00:01:37.140 and I'm here for Limited purpose of addressing 00:01:37.140 --> 00:01:39.859 any questions. The court may have in connection 00:01:39.859 --> 00:01:45.560 with the debtors motion to seal Miss Spiegel 00:01:45.560 --> 00:01:47.980 On your honor Robin people will keep far and 00:01:47.980 --> 00:01:50.859 Gallagher counsel for the debtors. Mr. Ward is 00:01:50.859 --> 00:01:54.060 also looking he's going to be presenting I I 00:01:54.060 --> 00:01:56.659 actually appeared because his camera wasn't working. 00:01:57.180 --> 00:02:24.560 So I'm going to go off camera. Thank you. Good 00:02:24.560 --> 00:02:26.240 morning, your honor Chris for outings of Paul 00:02:26.240 --> 00:02:28.419 Weiss for the ad hoc group of bondholders and 00:02:28.419 --> 00:02:34.280 DIP lenders. Mr. Ward. Good morning, your honor. 00:02:34.360 --> 00:02:36.180 Nathaniel Ward from Rokey Fire and Gallagher 00:02:36.180 --> 00:02:40.199 on behalf of the debtors. All right, Mr. Kesselman. 00:02:45.479 --> 00:02:49.580 Mr. Kesselman, I don't have anyone muted. Oh, 00:02:49.580 --> 00:02:53.289 okay. Sorry, your honor. David Kasselman from 00:02:53.289 --> 00:02:56.150 Rockenburg. I'm a Bank of America SABO agent. 00:02:57.770 --> 00:03:01.830 All right. Why don't we take up the interim cash 00:03:01.830 --> 00:03:09.750 collateral first? Thank you, Aaron. Jared Martin 00:03:09.750 --> 00:03:13.770 again for the SO5 digital debtors. We resolved 00:03:13.770 --> 00:03:18.590 all objections to the third interim order. We 00:03:18.590 --> 00:03:45.379 filed a red line at primary changes were to release 00:03:45.379 --> 00:03:50.430 the funds and to the, which amount to approximately 00:03:50.430 --> 00:03:55.949 $700 ,000. And then to increase the escrow to 00:03:55.949 --> 00:03:59.849 350 on a go forward basis. And then we'd ask 00:03:59.849 --> 00:04:02.949 to set the final hearing contemporaneous for 00:04:02.949 --> 00:04:05.629 the other secondary hearings in the built in 00:04:05.629 --> 00:04:07.689 administered cases, which I believe is going 00:04:07.689 --> 00:04:11.430 to be February 20. But to the extent that date 00:04:11.430 --> 00:04:13.590 changes, just have it match with those dates. 00:04:13.990 --> 00:04:16.439 All right. All right. That's That's fine. Does 00:04:16.439 --> 00:04:19.019 anyone else wish to be heard with respect to 00:04:19.019 --> 00:04:21.639 the third interim cash collateral order for the 00:04:21.639 --> 00:04:25.519 digital debtors? Your Honor, if I could briefly. 00:04:25.639 --> 00:04:28.319 Yes. If I could ask, it was very difficult to 00:04:28.319 --> 00:04:32.019 hear the Council speaking. I don't know if people 00:04:32.019 --> 00:04:37.639 are not on mute, but I would like to just spend 00:04:37.639 --> 00:04:39.920 a little bit of time, Your Honor. This is the 00:04:39.920 --> 00:04:42.360 first opportunity to appear before you in this 00:04:42.360 --> 00:04:44.740 matter and maybe perhaps say a few things to 00:04:44.740 --> 00:04:46.949 introduce. the unscathed creditors committee 00:04:46.949 --> 00:04:49.910 and then remark on the cash flow order. Sure, 00:04:50.050 --> 00:04:53.350 go ahead. Okay. Thank you, Your Honor. Since 00:04:53.350 --> 00:04:56.930 its appointment on January 27th, the unscathed 00:04:56.930 --> 00:04:59.110 creditors committee has engaged my firm, as well 00:04:59.110 --> 00:05:02.009 as the Cole Shops firm as local counsel, Alex 00:05:02.009 --> 00:05:04.529 Partners as financial advisor, and Hulahan Lokey 00:05:04.529 --> 00:05:06.959 as investment banker. And Your Honor, you may 00:05:06.959 --> 00:05:08.879 be aware that the committee is comprised of 11 00:05:08.879 --> 00:05:10.980 members. It makes up some of the debtor's largest 00:05:10.980 --> 00:05:14.879 vendors, including luxury brand Chanel, LVMH, 00:05:15.220 --> 00:05:18.879 Xenia, Kearing, and Rosenex, as well as the debtor's 00:05:18.879 --> 00:05:23.040 major landlord, GDP, the union, PBDC, as well 00:05:23.040 --> 00:05:26.040 as Amazon and ComputerShare, and finally the 00:05:26.040 --> 00:05:29.420 service provider, Teller Mayor. In other words, 00:05:29.500 --> 00:05:31.319 Your Honor, the committee is representative of 00:05:31.319 --> 00:05:33.939 the lifeblood of this business. It has representatives 00:05:33.939 --> 00:05:37.579 from the vendors, from labor, and from real estate. 00:05:38.459 --> 00:05:40.540 It's been an extremely busy week, Your Honor, 00:05:40.600 --> 00:05:42.560 and the committee members have been fully engaged, 00:05:42.819 --> 00:05:46.019 and we truly appreciate their efforts here. We 00:05:46.019 --> 00:05:48.199 are getting up to speed. We have reviewed some 00:05:48.199 --> 00:05:51.519 financial information as we expect more. We've 00:05:51.519 --> 00:05:53.560 had numerous calls, both with debtors as well 00:05:53.560 --> 00:05:56.800 as the lender's professionals. And we are actively 00:05:56.800 --> 00:05:58.839 engaged with them regarding the debtor and possession 00:05:58.839 --> 00:06:01.180 financing and the second day relief. And we very 00:06:01.180 --> 00:06:03.860 much appreciate the brief adjournment to hopefully 00:06:03.860 --> 00:06:06.060 get us on the same page before the second day 00:06:06.060 --> 00:06:08.980 hearing. In addition, Your Honor, we've had an 00:06:08.980 --> 00:06:12.060 in -person meeting very early, since we were 00:06:12.060 --> 00:06:14.740 just appointed recently, Your Honor, with management 00:06:14.740 --> 00:06:17.519 and members of the committee. And we look forward 00:06:17.519 --> 00:06:19.939 to continuing the discussion between the principals 00:06:19.939 --> 00:06:22.959 regarding partnering with the debtors on a business 00:06:22.959 --> 00:06:25.519 plan going forward. But, Your Honor, what is 00:06:25.519 --> 00:06:29.410 front and center today on everyone's mind And 00:06:29.410 --> 00:06:31.569 as a particular focus for the Insure Predators 00:06:31.569 --> 00:06:33.829 Committee is the need to repair the debtor's 00:06:33.829 --> 00:06:36.649 relationships with the brands and the vendors, 00:06:37.189 --> 00:06:40.389 and without whom there simply is no business. 00:06:41.569 --> 00:06:43.550 Your Honor, the debtors have made significant 00:06:43.550 --> 00:06:46.949 progress in their efforts, and they have attained 00:06:46.949 --> 00:06:49.490 significant debtor possession financing, and 00:06:49.490 --> 00:06:51.829 you have awarded them authority to make those 00:06:51.829 --> 00:06:54.189 payments that are critical to the debtor's success. 00:06:54.949 --> 00:06:56.990 Your Honor, that money needs to start going out 00:06:56.990 --> 00:07:00.100 the door immediately. We are hopeful that the 00:07:00.100 --> 00:07:02.139 debtors understand this, we got the message, 00:07:02.240 --> 00:07:05.240 and we are optimistic, Your Honor, that when 00:07:05.240 --> 00:07:07.560 we get back before you in a few weeks, we'll 00:07:07.560 --> 00:07:09.439 be able to report back that those payments have 00:07:09.439 --> 00:07:12.519 actually been made. We look forward to continuing 00:07:12.519 --> 00:07:14.660 our efforts to find common ground, both for the 00:07:14.660 --> 00:07:17.240 debtors and the admiral's group, and to avoid 00:07:17.240 --> 00:07:19.439 a contested second day hearing, but of course, 00:07:20.319 --> 00:07:22.160 we're not shy, we'll let the court know if issues 00:07:22.160 --> 00:07:24.639 arise. With respect to the issue of the cash 00:07:24.639 --> 00:07:26.639 collateral war, Your Honor, the committee has 00:07:26.639 --> 00:07:29.649 no objection. to the interim order being stopped. 00:07:31.089 --> 00:07:33.389 A lot of the committee's issues have been preserved 00:07:33.389 --> 00:07:35.910 for the final hearing. And we back before your 00:07:35.910 --> 00:07:38.689 honor if we can't work things out with the debtors 00:07:38.689 --> 00:07:43.870 and the lenders on this. All right. All right. 00:07:43.870 --> 00:07:51.209 Anyone else wish to be heard? All right. I had 00:07:51.209 --> 00:07:53.509 obviously I've reviewed the first, the second, 00:07:53.569 --> 00:07:57.740 and now the third interim order. And in connection 00:07:57.740 --> 00:08:00.420 with the digital debtors and what they're trying 00:08:00.420 --> 00:08:02.240 to accomplish, I think the proper exercise of 00:08:02.240 --> 00:08:05.740 the business judgment preserves the issue of 00:08:05.740 --> 00:08:08.279 the inter -company relationship and there is 00:08:08.279 --> 00:08:10.720 a payment being made. So I'm going to go ahead 00:08:10.720 --> 00:08:15.120 and approve that order. And I'm going to mute 00:08:15.120 --> 00:08:19.500 the lines. So hit five star if you want to be 00:08:19.500 --> 00:08:22.120 heard. Thank you. There's just a lot of people 00:08:22.120 --> 00:09:23.480 on and a lot of background noise. All right, 00:09:23.480 --> 00:09:25.039 that order has been signed and sent to documenting. 00:09:25.179 --> 00:09:27.659 Thank you. One housekeeping item. I understand 00:09:27.659 --> 00:09:30.200 that the second day hearing has been or will 00:09:30.200 --> 00:09:32.379 be adjourned to the 20th. I think we would like 00:09:32.379 --> 00:09:34.700 to keep the 13th for the final hearing on the 00:09:34.700 --> 00:09:37.179 liquidation motion, just based on the pace of 00:09:37.179 --> 00:09:39.419 the liquidation of the assets on the website. 00:09:39.639 --> 00:09:42.559 I think pushing that one to the 20th puts it 00:09:42.559 --> 00:09:44.960 a little bit further into the timeline for the 00:09:44.960 --> 00:09:46.460 liquidation. I think for all parties and interests, 00:09:46.659 --> 00:09:48.360 it should still go forward on the 13th. And we'll 00:09:48.360 --> 00:09:50.340 be in touch with Mr. Laws about that. All right. 00:09:50.600 --> 00:09:52.279 And just make sure you're coordinated with the 00:09:52.279 --> 00:09:55.509 committee. of course on that and we we do obviously 00:09:55.509 --> 00:09:59.450 have time on the 13th it would be the 13th would 00:09:59.450 --> 00:10:02.029 be a virtual hearing of course and the 20th will 00:10:02.029 --> 00:10:04.169 be a virtual hearing both of them would be thank 00:10:04.169 --> 00:10:17.230 you all right thank you all right i've unmuted 00:10:17.230 --> 00:10:21.289 uh a six four six number is that you mr ward 00:10:21.289 --> 00:10:24.899 yes Yes, your honor six four six two four eight 00:10:24.899 --> 00:10:29.740 is mine Doug mantle. Sorry. Yeah got it. Okay 00:10:29.740 --> 00:10:36.840 And mr. Ward is you are you two one two nine 00:10:36.840 --> 00:10:45.539 oh five number No, all right I've unmuted someone 00:10:45.539 --> 00:10:48.200 at two one two nine. Oh five just hit five star 00:10:48.200 --> 00:11:04.710 one time and I will unmute your line Thank you. 00:11:09.889 --> 00:11:13.889 Mr. Ward, I don't see anyone showing up. Can 00:11:13.889 --> 00:11:16.830 you hit just five star one time on your phone? 00:11:17.230 --> 00:11:19.330 If you hit it the second time, it lowers your 00:11:19.330 --> 00:11:40.850 hand. Can you say something? No. I can't hear 00:11:40.850 --> 00:12:06.139 you. Five star. Conference un -muted. Yeah, I 00:12:06.139 --> 00:12:07.799 think I just got un -muted, Your Honor. Yeah, 00:12:07.799 --> 00:12:13.639 no, I un -muted everybody. Go ahead. Great. It 00:12:13.639 --> 00:12:17.779 was being hand -raised and lured. But I'll proceed. 00:12:18.019 --> 00:12:19.700 Are we ready to proceed then, Your Honor, with 00:12:19.700 --> 00:12:23.820 the un -muted seal? Yes. Great. Well, thank you, 00:12:23.820 --> 00:12:26.799 Your Honor. For the record, again, the fan award 00:12:26.799 --> 00:12:28.960 from Multifar and Gallagher, representing the 00:12:28.960 --> 00:12:32.320 Global Debtors. Your Honor, we're here on the 00:12:32.320 --> 00:12:35.820 debtor's emergency motion to seal, which is docket 00:12:35.820 --> 00:12:40.139 number 641, filed in connection with our rule 00:12:40.139 --> 00:12:43.019 90 -19 motion seeking approval of settlements 00:12:43.019 --> 00:12:47.120 arising from the underlying litigation related 00:12:47.120 --> 00:12:50.799 to interchange fees charged by VFED MasterCard. 00:12:51.279 --> 00:12:53.440 For the record, the sealed version of the 90 00:12:53.440 --> 00:12:56.440 -19 settlement motion is at docket number 637, 00:12:56.440 --> 00:13:01.149 and the redacted version is at 642. Before you 00:13:01.149 --> 00:13:07.230 go on, so under our local rules, the way that 00:13:07.230 --> 00:13:11.149 the motions to seal work is you can file a motion 00:13:11.149 --> 00:13:15.210 to seal, and it will be heard on 21 days notice. 00:13:16.629 --> 00:13:20.129 And it's automatically granted for that 21 days. 00:13:20.409 --> 00:13:25.149 The purpose for the hearing today is. to unseal 00:13:25.149 --> 00:13:29.029 it as to some as to some people while that 21 00:13:29.029 --> 00:13:33.450 days runs because at the end of the day we're 00:13:33.450 --> 00:13:35.409 going to need to have you know if there's an 00:13:35.409 --> 00:13:37.889 objection to the ceiling after 21 days we'll 00:13:37.889 --> 00:13:40.350 have a hearing on that as well so the relief 00:13:40.350 --> 00:13:42.889 today that I'm considering is just really limited 00:13:42.889 --> 00:13:45.990 to your ability to provide the committee subject 00:13:45.990 --> 00:13:50.789 to whatever confidentiality agreements may exist 00:13:50.789 --> 00:13:54.389 in a case that was filed, I believe, in 2014 00:13:54.389 --> 00:13:58.370 allowing them to do that. So that's the limited 00:13:58.370 --> 00:14:01.330 relief I'm considering today, which is what I 00:14:01.330 --> 00:14:05.370 understood your order to be asking for. Correct. 00:14:05.590 --> 00:14:09.490 Yes, that's exactly right. So, Your Honor, I 00:14:09.490 --> 00:14:11.610 think it's worth just to be outside recognizing 00:14:11.610 --> 00:14:14.649 that this probably gets to what you're saying, 00:14:14.730 --> 00:14:16.990 but it is a bit of an unusual motion in a few 00:14:16.990 --> 00:14:21.519 respects. First, it's a new rule in that the 00:14:21.519 --> 00:14:25.080 information that the debtors seek to seal and 00:14:25.080 --> 00:14:27.200 permit some limited disclosures of, as you mentioned, 00:14:27.240 --> 00:14:31.340 is extraordinarily sensitive. They relate to 00:14:31.340 --> 00:14:33.399 settlements that arise from the multi -district 00:14:33.399 --> 00:14:36.919 litigation involving interchange fees, rolling 00:14:36.919 --> 00:14:40.059 claims by millions of merchants, and disclosure 00:14:40.059 --> 00:14:42.679 of that information could directly affect Visa, 00:14:42.899 --> 00:14:45.279 MasterCard negotiations, ongoing negotiations 00:14:45.279 --> 00:14:49.769 with other participants in that litigation. Second, 00:14:49.990 --> 00:14:53.070 the confidential information that we're seeking 00:14:53.070 --> 00:14:56.529 to redact and do the limited disclosure of, it 00:14:56.529 --> 00:14:59.029 doesn't belong to the debtors. It belongs to 00:14:59.029 --> 00:15:01.970 Visa and MasterCard. As a result, the debtors 00:15:01.970 --> 00:15:04.450 can't choose to disclose that confidential information 00:15:04.450 --> 00:15:06.830 without risking a violation of the underlying 00:15:06.830 --> 00:15:09.549 protective order in the interchange litigation 00:15:09.549 --> 00:15:12.450 or of the terms of the settlement agreements 00:15:12.450 --> 00:15:16.620 and the other agreements themselves. And then 00:15:16.620 --> 00:15:18.740 last, and exactly what you hit on, Your Honor, 00:15:18.899 --> 00:15:21.500 is that because we can't disclose those terms 00:15:21.500 --> 00:15:24.639 to the parties in interest for the 1990 settlement 00:15:24.639 --> 00:15:30.340 motion until, or we can't do that until we have 00:15:30.340 --> 00:15:33.159 an order of the court, we risk sort of a procedural 00:15:33.159 --> 00:15:37.220 hiccup where we end up with 42 days of notice, 00:15:37.720 --> 00:15:40.039 or 42 days before we can really have a hearing 00:15:40.039 --> 00:15:43.690 on the 1990 settlement motion. Your Honor, it 00:15:43.690 --> 00:15:46.730 sounds like you're obviously very up to speed 00:15:46.730 --> 00:15:49.070 on all of this, and I have argument I can walk 00:15:49.070 --> 00:15:51.610 through, but it may make more sense if you have 00:15:51.610 --> 00:15:53.429 specific questions or things that you'd like 00:15:53.429 --> 00:15:58.750 me to address. No, just two concerns. I just 00:15:58.750 --> 00:16:03.250 want to make sure that nothing that I do invades 00:16:03.250 --> 00:16:06.690 the province of the court in the underlying litigation. 00:16:06.830 --> 00:16:09.620 That's number one, and then number two. I'd like 00:16:09.620 --> 00:16:12.399 to hear from people. I understand this is a really 00:16:12.399 --> 00:16:19.480 a practical issue that needs to be resolved in 00:16:19.480 --> 00:16:21.840 order for the debtor to be able to proceed with 00:16:21.840 --> 00:16:23.879 the settlements. And obviously, the settlements 00:16:23.879 --> 00:16:26.620 have to be evaluated on their merits. And at 00:16:26.620 --> 00:16:29.679 a minimum, I think the committee is entitled 00:16:29.679 --> 00:16:33.379 to know exactly what the settlement is. They're 00:16:33.379 --> 00:16:36.879 in a state fiduciary. And I'm not sure that the 00:16:36.879 --> 00:16:39.440 that the members of the committee have to know, 00:16:39.639 --> 00:16:42.019 but certainly committee council and committee 00:16:42.019 --> 00:16:46.720 professionals likely need to know. So we've got 00:16:46.720 --> 00:16:49.179 a practical problem, and my question is, you 00:16:49.179 --> 00:16:54.220 know, how can we best solve it? Great. Yeah, 00:16:54.220 --> 00:16:58.659 and I think on the first question, from our perspective, 00:16:58.700 --> 00:17:01.679 and it may be helpful also to hear from Council, 00:17:01.840 --> 00:17:04.460 from VCR MasterCard, But from our perspective, 00:17:05.039 --> 00:17:08.400 if we're able to obtain the relief we seek in 00:17:08.400 --> 00:17:10.579 the motion, then we're not going to have any 00:17:10.579 --> 00:17:13.220 comedy concerns or inconsistent rulings, that 00:17:13.220 --> 00:17:15.299 sort of thing with the court in the underlying 00:17:15.299 --> 00:17:20.839 litigation. And then on the practical concern, 00:17:20.960 --> 00:17:24.880 too, I think what we're approaching here, what 00:17:24.880 --> 00:17:28.049 we're trying to do here is to you know, navigate 00:17:28.049 --> 00:17:31.009 the balance between observing the confidentiality 00:17:31.009 --> 00:17:32.890 requirements and the protective order and the 00:17:32.890 --> 00:17:35.410 underlying litigation, and at the same time, 00:17:35.450 --> 00:17:38.670 make the level of disclosures we need to in order 00:17:38.670 --> 00:17:41.490 to have a full and fair hearing on the 1990 motion. 00:17:42.390 --> 00:17:45.509 We're asking, as you know, from the order, that 00:17:45.509 --> 00:17:49.430 the council committee itself get access subject 00:17:49.430 --> 00:17:53.750 to confidentiality agreements and requirements. 00:17:54.109 --> 00:17:57.170 Obviously, the U .S. trustee as well. It's our 00:17:57.170 --> 00:18:00.670 position that individual members of the committee, 00:18:00.890 --> 00:18:03.069 given the nature of the underlying litigation, 00:18:03.329 --> 00:18:05.809 it just really wouldn't make sense for the individual 00:18:05.809 --> 00:18:07.890 members of the committee to get access to this 00:18:07.890 --> 00:18:10.869 highly sensitive information, frankly, related 00:18:10.869 --> 00:18:13.490 to litigation that some of them have themselves 00:18:13.490 --> 00:18:17.710 participated in. So I think that's how I would 00:18:17.710 --> 00:18:22.089 probably answer those two questions. All right. 00:18:23.410 --> 00:18:25.670 Who else wishes to be heard with respect to this? 00:18:26.990 --> 00:18:33.930 Ms. Patrick. Your Honor, I would, Kathy Patrick, 00:18:34.069 --> 00:18:35.890 we're plaintiff's counsel in the underlying litigation. 00:18:36.069 --> 00:18:39.569 I would simply echo some of what Mr. Ward said, 00:18:39.769 --> 00:18:43.930 but give you a little bit of color, particularly 00:18:43.930 --> 00:18:47.269 as it pertains to the consideration for the settlement, 00:18:47.910 --> 00:18:52.430 which is monetary and non -monetary. That is 00:18:52.430 --> 00:18:54.630 highly sensitive information, not just for Visa 00:18:54.630 --> 00:18:57.869 and MasterCard, but in my view, for the debtors 00:18:57.869 --> 00:19:02.710 themselves. The rates they pay to accept Visa 00:19:02.710 --> 00:19:04.690 and MasterCard payment cards are competitive 00:19:04.690 --> 00:19:09.099 information for them. You should know that we 00:19:09.099 --> 00:19:12.779 treat this so sensitively that none of our other 00:19:12.779 --> 00:19:15.500 clients, all of whom have now settled their claims, 00:19:15.920 --> 00:19:18.440 knows the rates that the other clients got in 00:19:18.440 --> 00:19:20.980 the settlement. We were assiduous in keeping 00:19:20.980 --> 00:19:23.359 that separate because it was so sensitive and 00:19:23.359 --> 00:19:26.420 because they are also competitors. And so there 00:19:26.420 --> 00:19:30.160 is a reason why, and as long as the committee 00:19:30.160 --> 00:19:33.200 is willing to accept it on a professional size 00:19:33.200 --> 00:19:36.420 only basis, We don't have an issue, but there 00:19:36.420 --> 00:19:39.000 are merchants on the committee and that's the 00:19:39.000 --> 00:19:41.859 sensitivity and I know that mr. Eisenstein and 00:19:41.859 --> 00:19:44.240 mr. William would have the same Bill Michael 00:19:44.240 --> 00:19:46.859 would have the same concern for these and MasterCard. 00:19:46.859 --> 00:19:52.059 All right. Thank you. Thank you All right, anyone 00:19:52.059 --> 00:19:57.900 else mr. Hawth mr. Wayne Thank you honor I did 00:19:57.900 --> 00:20:00.000 had a chance to take a look at the ceiling motion 00:20:00.000 --> 00:20:03.609 and I also looked at the redaction I I know today 00:20:03.609 --> 00:20:06.470 is not the day, but we do have some problems 00:20:06.470 --> 00:20:09.910 with it. In the motion, it says that the ceiling 00:20:09.910 --> 00:20:12.490 is narrowly tailored to protect the sensitive 00:20:12.490 --> 00:20:15.589 information that are on the settlement. But the 00:20:15.589 --> 00:20:19.650 entire sheet is redacted. And this is an asset 00:20:19.650 --> 00:20:23.410 of the state. And there is a public interest 00:20:23.410 --> 00:20:26.009 in terms of inspections and copy of judicial 00:20:26.009 --> 00:20:31.039 records that we need to balance. to provide to 00:20:31.039 --> 00:20:34.579 us and the committee, that's a significant step 00:20:34.579 --> 00:20:37.259 in disclosure, but there's also a balance and 00:20:37.259 --> 00:20:40.200 a case where there's press, there are customers, 00:20:40.380 --> 00:20:42.940 there are thousands of creditors from the state. 00:20:43.440 --> 00:20:45.640 They should have access to information. I'm not 00:20:45.640 --> 00:20:47.339 saying go out and disclose the rates that the 00:20:47.339 --> 00:20:49.359 debtors are paying, but at the very least, we 00:20:49.359 --> 00:20:51.259 need to know what the assets are. We need to 00:20:51.259 --> 00:20:53.740 know how much of the money's coming in. So in 00:20:53.740 --> 00:20:55.559 terms of the redaction, I think there's a way 00:20:55.559 --> 00:20:58.519 we can work it out instead of redacting the whole 00:20:58.519 --> 00:21:01.630 term sheet. So in the next 21 days, I hope to 00:21:01.630 --> 00:21:03.730 work with the debtors and the plaintiffs to come 00:21:03.730 --> 00:21:06.430 up with some sort of solution that bounds the 00:21:06.430 --> 00:21:11.029 disclosure required under both Section 107 and 00:21:11.029 --> 00:21:15.849 the common law interest, the common law right 00:21:15.849 --> 00:21:18.589 of the public to access judicial records. That's 00:21:18.589 --> 00:21:22.190 under the Supreme Court case Nix. So I'm hoping 00:21:22.190 --> 00:21:25.250 to have this resolved. I don't want to fight 00:21:25.250 --> 00:21:29.950 this, but... I'm mindful of the fact that we're 00:21:29.950 --> 00:21:32.769 already dealing with a confidentiality of order 00:21:32.769 --> 00:21:36.730 that has been in place since 2015 in another 00:21:36.730 --> 00:21:41.349 case. So I don't want to do anything that would 00:21:41.349 --> 00:21:45.289 in any way run afoul of that order. That's correct, 00:21:45.390 --> 00:21:47.390 Your Honor. I've seen some of those. I've tried 00:21:47.390 --> 00:21:49.589 looking it up. I mean, there was like two cases 00:21:49.589 --> 00:21:51.529 site within, so I was trying to look for that 00:21:51.529 --> 00:21:55.430 confidentiality. It's attached to the exhibit. 00:21:57.259 --> 00:22:01.160 Okay. I will take a look at it. Thank you. Well, 00:22:01.619 --> 00:22:04.200 yeah, they usually want you to do it and date 00:22:04.200 --> 00:22:08.859 them the very day of the loan. All right. Can 00:22:08.859 --> 00:22:13.579 everyone please mute their line? You mute your 00:22:13.579 --> 00:22:15.279 lines. We're getting a lot of background noise. 00:22:18.180 --> 00:22:20.619 All right. Who else wishes to be heard? Thank 00:22:20.619 --> 00:22:22.799 you, Your Honor. Jared Martin for the SO5 digital 00:22:22.799 --> 00:22:24.039 debtors. I just wanted to note for the court 00:22:24.039 --> 00:22:27.519 that the digital debtors are also parties to 00:22:27.519 --> 00:22:31.099 the 90 -19 motion and the motion to seal. This 00:22:31.099 --> 00:22:34.880 settlement is material to our estates and we 00:22:34.880 --> 00:22:37.660 are very much in favor of the sealing motion. 00:22:38.000 --> 00:22:40.319 I wanted to flag one thing. We'll work with the 00:22:40.319 --> 00:22:42.720 committee and our lenders on this issue, but 00:22:42.720 --> 00:22:45.619 to the extent that our cash collateral budget 00:22:45.619 --> 00:22:49.200 contemplates settlement proceeds, we'll work 00:22:49.200 --> 00:22:52.599 to either redact that or find some work around 00:22:52.599 --> 00:22:54.900 so that that is also complying with the protective 00:22:54.900 --> 00:22:57.319 order in the ceiling motion. Understood. Thank 00:22:57.319 --> 00:23:00.019 you. Thank you. All right. Who else wishes to 00:23:00.019 --> 00:23:07.039 be heard? Are you on it? Two things, Your Honor. 00:23:07.099 --> 00:23:09.440 First, briefly, the proposed order talks about 00:23:09.440 --> 00:23:11.880 council having access, and I would ask that that 00:23:11.880 --> 00:23:16.200 be revised to have all professionals. I became 00:23:16.200 --> 00:23:18.059 a lawyer because I'm not very good at math, so 00:23:18.059 --> 00:23:19.640 I really appreciate being able to share it with 00:23:19.640 --> 00:23:23.279 my financial advisors. The second thing is we 00:23:23.279 --> 00:23:25.839 just haven't had time to fully discuss this with 00:23:25.839 --> 00:23:28.000 the members of the committee, so we have all 00:23:28.000 --> 00:23:30.700 of our rights to the final hearing, if one is 00:23:30.700 --> 00:23:33.380 necessary with respect to this matter. But I 00:23:33.380 --> 00:23:37.950 appreciate the debtors' efforts here. Anyone 00:23:37.950 --> 00:23:53.650 else? All right, Mr. Ward, obviously I've reviewed 00:23:53.650 --> 00:23:57.930 the motion. I think this is a good solution to 00:23:57.930 --> 00:24:01.390 address a practical problem that has significant 00:24:01.390 --> 00:24:06.250 commercial implications. you know and I'm prepared 00:24:06.250 --> 00:24:12.950 to enter the order and you all do you want to 00:24:12.950 --> 00:24:15.410 discuss with Mr. Manil the all professionals 00:24:15.410 --> 00:24:18.049 or should I just interline that in the order? 00:24:22.840 --> 00:24:26.640 This is just an odd feature of this case. As 00:24:26.640 --> 00:24:29.039 in many bankruptcy matters, there are people 00:24:29.039 --> 00:24:32.640 who are investing in claims or proceeds of claims. 00:24:33.079 --> 00:24:37.119 We would need a representation from the committee's 00:24:37.119 --> 00:24:38.740 professionals that they would have an ethical 00:24:38.740 --> 00:24:40.500 wall between whoever, I don't even know who their 00:24:40.500 --> 00:24:44.819 professionals are. Uh, Alex. Okay. That they 00:24:44.819 --> 00:24:47.319 would just not be advising anybody on the purchase 00:24:47.319 --> 00:24:50.900 of claims or investment in claim proceeds because 00:24:50.900 --> 00:24:53.900 that then blurs the line and creates that issue. 00:24:53.920 --> 00:24:56.579 Assuming we can have that modification. We have 00:24:56.579 --> 00:24:58.640 worked that out with the ad hoc lenders advisor, 00:24:58.740 --> 00:25:00.779 Lazard. They made that the representation. It's 00:25:00.779 --> 00:25:03.119 just fine. I just wanted to flag that. All right. 00:25:03.200 --> 00:25:06.160 All right. So, Mr. Manal, can you work with Mr. 00:25:06.319 --> 00:25:08.220 Ward just to make sure we have that? I know it 00:25:08.220 --> 00:25:10.380 has to be in the order, but it can just be a 00:25:10.380 --> 00:25:14.430 representation. I'm happy to work with Mr. Ward 00:25:14.430 --> 00:25:17.029 as well as Ms. Patrick. Absolutely, Your Honor. 00:25:17.809 --> 00:25:20.210 And Your Honor, if I may, William Michael from 00:25:20.210 --> 00:25:25.609 MasterCard. Yes, sir. That is fine. MasterCard 00:25:25.609 --> 00:25:30.670 is not object to the financial advisors having 00:25:30.670 --> 00:25:34.549 access subject to the limitation outlined by 00:25:34.549 --> 00:25:37.130 Ms. Patrick. I would just add that that would, 00:25:37.190 --> 00:25:39.269 from our perspective, also need to be subject 00:25:39.269 --> 00:25:43.539 to an undertaking to be... order in the underlying 00:25:43.539 --> 00:25:49.619 litigation. All right. Understood. All right. 00:25:49.680 --> 00:25:53.319 So I'm going to grant the motion, Mr. Ward. And 00:25:53.319 --> 00:25:58.339 would you please just let work with Mr. Mantle 00:25:58.339 --> 00:26:02.160 and the others to see if the language in the 00:26:02.160 --> 00:26:05.480 order addresses it or if we need to have a change 00:26:05.480 --> 00:26:08.019 to the order. And then once that gets done, just 00:26:08.019 --> 00:26:11.359 have Some would contact my chambers and I'll 00:26:11.359 --> 00:26:14.799 get that order entered as soon as possible. I 00:26:14.799 --> 00:26:17.200 would hope that by Monday this is all cleared 00:26:17.200 --> 00:26:20.299 up so the committee has a couple of weeks to 00:26:20.299 --> 00:26:26.240 look at this. Just one question. I'm just really 00:26:26.240 --> 00:26:30.700 confused about the committee itself and what 00:26:30.700 --> 00:26:32.960 sort of confidentiality obligations we're considering 00:26:32.960 --> 00:26:36.039 having them sign up to. You were anticipating 00:26:36.039 --> 00:26:39.920 them. Yeah, the committee, the committee, we're 00:26:39.920 --> 00:26:44.480 talking only about Alex Houlahan and counsel. 00:26:44.559 --> 00:26:48.900 All right. And, and, and, you know, you need 00:26:48.900 --> 00:26:52.200 to address Mr. Michaels. Ms. Patrick's concern 00:26:52.200 --> 00:26:57.880 was that Houlahan and Alex, and presumably the 00:26:57.880 --> 00:27:02.819 lawyers, would not be advising anyone on claims 00:27:02.819 --> 00:27:06.529 purchasing with respect to this. which I think 00:27:06.529 --> 00:27:13.250 is reasonable and frankly I wouldn't have thought 00:27:13.250 --> 00:27:16.750 that a financial advisor to the company would 00:27:16.750 --> 00:27:19.970 be advising that another branch arm of it would 00:27:19.970 --> 00:27:23.829 be advising you know trading and claims in the 00:27:23.829 --> 00:27:28.049 company but that's a different issue. So I think 00:27:28.049 --> 00:27:31.890 that the concern is that we don't want to do 00:27:31.890 --> 00:27:36.269 something that runs afoul of the you know, confidentiality 00:27:36.269 --> 00:27:38.789 order, the protective order in the underlying 00:27:38.789 --> 00:27:44.109 case. So I think this is all, in my mind, plumbing 00:27:44.109 --> 00:27:47.710 just to make sure that we have it all correct. 00:27:47.730 --> 00:27:50.670 I don't think it's a substantive issue and I 00:27:50.670 --> 00:27:54.549 agree that, you know, hopefully we'll get this 00:27:54.549 --> 00:27:57.150 resolved today and I'll enter the order and Monday 00:27:57.150 --> 00:28:02.400 the information will be able to be shared. Okay, 00:28:02.619 --> 00:28:05.220 I think that sounds good. We'll make sure that 00:28:05.220 --> 00:28:08.240 we're not going to be contrary to existing underlying 00:28:08.240 --> 00:28:12.720 agreements, but I just, so that these from MasterCard 00:28:12.720 --> 00:28:15.859 are, have an opportunity to object to this if 00:28:15.859 --> 00:28:20.180 they want to. I don't think that the council 00:28:20.180 --> 00:28:22.059 representing the committee would be actually 00:28:22.059 --> 00:28:26.019 signing the underlying protective order. They 00:28:26.019 --> 00:28:28.819 would be bound by their gifting confidentiality 00:28:28.819 --> 00:28:31.059 obligations, not signing up to some additional 00:28:31.059 --> 00:28:41.470 order. I should just stay up here. What we have 00:28:41.470 --> 00:28:44.309 done with prior professionals and firms is the 00:28:44.309 --> 00:28:47.730 firms and their advisors have given an undertaking 00:28:47.730 --> 00:28:50.490 to abide by the restrictions. They don't sign 00:28:50.490 --> 00:28:52.630 the protective order. Nobody does. It's Judge 00:28:52.630 --> 00:28:55.009 Brody's order. Right. Exactly. Yeah. Yeah. It's 00:28:55.009 --> 00:28:59.730 just we'll abide by those terms. All right. Right. 00:29:01.390 --> 00:29:03.470 If the committee is good with that, then I think 00:29:03.470 --> 00:29:06.430 we're good. Thank you, Judge. I don't think anyone 00:29:06.430 --> 00:29:09.170 has a choice that there's an order out there 00:29:09.170 --> 00:29:11.849 that governs this already before I ever came 00:29:11.849 --> 00:29:17.769 on the scene. Your Honor, in fairness, I have 00:29:17.769 --> 00:29:20.069 not seen a protective order. I presume that it 00:29:20.069 --> 00:29:21.930 should be fine, but we'll come back to the court 00:29:21.930 --> 00:29:29.450 if there's any other issues. I think it's attached... 00:29:29.450 --> 00:29:33.490 The actual order itself is a minute entry. There 00:29:33.490 --> 00:29:40.170 is a long stipulation in a letter that in a letter 00:29:40.170 --> 00:29:42.009 like the practice in New York where you send 00:29:42.009 --> 00:29:45.369 a letter and attach it and then That's I think 00:29:45.369 --> 00:29:50.730 at docket. Well, yeah 277 in the MDL case. Okay, 00:29:51.089 --> 00:29:56.569 and then there's a there's a two -sentence Docket 00:29:56.569 --> 00:30:01.049 entry that says the order is approved. So it's 00:30:01.049 --> 00:30:05.859 so it's not assigned order. It's a. It's just 00:30:05.859 --> 00:30:07.839 ordered on the docket. It's ordered on the docket, 00:30:07.839 --> 00:30:11.059 so you have to look at both of those and it and 00:30:11.059 --> 00:30:25.660 they are at. Judge, I think it's attached to 00:30:25.660 --> 00:30:28.329 our exhibit list. Yeah, that's what I'm looking 00:30:28.329 --> 00:30:37.630 for. 680, your honor. Yeah, 680, 680 -1. Yes, 00:30:38.529 --> 00:30:45.569 it's 680 -1. It's 680 -1 is the letter with the 00:30:45.569 --> 00:30:50.190 protective order submitted and then 680 -2 is 00:30:50.190 --> 00:30:54.859 the minute entry. Where the judge approves that 00:30:54.859 --> 00:31:00.259 letter so six in our docket 680 -1 is 680 -2. 00:31:04.039 --> 00:31:06.880 Okay, we'll follow up with Mr. Ward and Ms. Patrick. 00:31:07.259 --> 00:31:08.920 All right. Thank you so much. All right. Thank 00:31:08.920 --> 00:31:11.640 you, Ms. Patrick. Yes, ma 'am. All right, anything 00:31:11.640 --> 00:31:16.920 further today? All right, we'll be in recess 00:31:16.920 --> 00:31:17.960 to my 10 o 'clock.