Good morning. It is 9 a .m. on Friday, February
6, 2026. We're here on two matters in case number
26 -90103, Sachs Global Enterprises. So two things.
One, please mute your lines when you're not speaking
so I don't have to activate the hand raising
feature. Second, everyone make sure to go to
my webpage and note your appearance because that's
the way we... Keep track of formal appearances
in the case. So I'll start with a Council in
the courtroom and then I'll go to council online
Good morning, your honor Kathy Patrick at Gibbs
and Bruns. I'm counsel for the plaintiffs and
the interchange litigation that are here on the
motion to see All right, let's start mr. Ice
Einstein Einstein Hello your honor Matt Eisenstein
From Arnold and Porter on behalf of visa Inc.
All right, mr. Michael Good morning, your honor
William Michael for non -party MasterCard as
part as a defendant in the interchange litigation
and I'm here for Limited purpose of addressing
any questions. The court may have in connection
with the debtors motion to seal Miss Spiegel
On your honor Robin people will keep far and
Gallagher counsel for the debtors. Mr. Ward is
also looking he's going to be presenting I I
actually appeared because his camera wasn't working.
So I'm going to go off camera. Thank you. Good
morning, your honor Chris for outings of Paul
Weiss for the ad hoc group of bondholders and
DIP lenders. Mr. Ward. Good morning, your honor.
Nathaniel Ward from Rokey Fire and Gallagher
on behalf of the debtors. All right, Mr. Kesselman.
Mr. Kesselman, I don't have anyone muted. Oh,
okay. Sorry, your honor. David Kasselman from
Rockenburg. I'm a Bank of America SABO agent.
All right. Why don't we take up the interim cash
collateral first? Thank you, Aaron. Jared Martin
again for the SO5 digital debtors. We resolved
all objections to the third interim order. We
filed a red line at primary changes were to release
the funds and to the, which amount to approximately
$700 ,000. And then to increase the escrow to
350 on a go forward basis. And then we'd ask
to set the final hearing contemporaneous for
the other secondary hearings in the built in
administered cases, which I believe is going
to be February 20. But to the extent that date
changes, just have it match with those dates.
All right. All right. That's That's fine. Does
anyone else wish to be heard with respect to
the third interim cash collateral order for the
digital debtors? Your Honor, if I could briefly.
Yes. If I could ask, it was very difficult to
hear the Council speaking. I don't know if people
are not on mute, but I would like to just spend
a little bit of time, Your Honor. This is the
first opportunity to appear before you in this
matter and maybe perhaps say a few things to
introduce. the unscathed creditors committee
and then remark on the cash flow order. Sure,
go ahead. Okay. Thank you, Your Honor. Since
its appointment on January 27th, the unscathed
creditors committee has engaged my firm, as well
as the Cole Shops firm as local counsel, Alex
Partners as financial advisor, and Hulahan Lokey
as investment banker. And Your Honor, you may
be aware that the committee is comprised of 11
members. It makes up some of the debtor's largest
vendors, including luxury brand Chanel, LVMH,
Xenia, Kearing, and Rosenex, as well as the debtor's
major landlord, GDP, the union, PBDC, as well
as Amazon and ComputerShare, and finally the
service provider, Teller Mayor. In other words,
Your Honor, the committee is representative of
the lifeblood of this business. It has representatives
from the vendors, from labor, and from real estate.
It's been an extremely busy week, Your Honor,
and the committee members have been fully engaged,
and we truly appreciate their efforts here. We
are getting up to speed. We have reviewed some
financial information as we expect more. We've
had numerous calls, both with debtors as well
as the lender's professionals. And we are actively
engaged with them regarding the debtor and possession
financing and the second day relief. And we very
much appreciate the brief adjournment to hopefully
get us on the same page before the second day
hearing. In addition, Your Honor, we've had an
in -person meeting very early, since we were
just appointed recently, Your Honor, with management
and members of the committee. And we look forward
to continuing the discussion between the principals
regarding partnering with the debtors on a business
plan going forward. But, Your Honor, what is
front and center today on everyone's mind And
as a particular focus for the Insure Predators
Committee is the need to repair the debtor's
relationships with the brands and the vendors,
and without whom there simply is no business.
Your Honor, the debtors have made significant
progress in their efforts, and they have attained
significant debtor possession financing, and
you have awarded them authority to make those
payments that are critical to the debtor's success.
Your Honor, that money needs to start going out
the door immediately. We are hopeful that the
debtors understand this, we got the message,
and we are optimistic, Your Honor, that when
we get back before you in a few weeks, we'll
be able to report back that those payments have
actually been made. We look forward to continuing
our efforts to find common ground, both for the
debtors and the admiral's group, and to avoid
a contested second day hearing, but of course,
we're not shy, we'll let the court know if issues
arise. With respect to the issue of the cash
collateral war, Your Honor, the committee has
no objection. to the interim order being stopped.
A lot of the committee's issues have been preserved
for the final hearing. And we back before your
honor if we can't work things out with the debtors
and the lenders on this. All right. All right.
Anyone else wish to be heard? All right. I had
obviously I've reviewed the first, the second,
and now the third interim order. And in connection
with the digital debtors and what they're trying
to accomplish, I think the proper exercise of
the business judgment preserves the issue of
the inter -company relationship and there is
a payment being made. So I'm going to go ahead
and approve that order. And I'm going to mute
the lines. So hit five star if you want to be
heard. Thank you. There's just a lot of people
on and a lot of background noise. All right,
that order has been signed and sent to documenting.
Thank you. One housekeeping item. I understand
that the second day hearing has been or will
be adjourned to the 20th. I think we would like
to keep the 13th for the final hearing on the
liquidation motion, just based on the pace of
the liquidation of the assets on the website.
I think pushing that one to the 20th puts it
a little bit further into the timeline for the
liquidation. I think for all parties and interests,
it should still go forward on the 13th. And we'll
be in touch with Mr. Laws about that. All right.
And just make sure you're coordinated with the
committee. of course on that and we we do obviously
have time on the 13th it would be the 13th would
be a virtual hearing of course and the 20th will
be a virtual hearing both of them would be thank
you all right thank you all right i've unmuted
uh a six four six number is that you mr ward
yes Yes, your honor six four six two four eight
is mine Doug mantle. Sorry. Yeah got it. Okay
And mr. Ward is you are you two one two nine
oh five number No, all right I've unmuted someone
at two one two nine. Oh five just hit five star
one time and I will unmute your line Thank you.
Mr. Ward, I don't see anyone showing up. Can
you hit just five star one time on your phone?
If you hit it the second time, it lowers your
hand. Can you say something? No. I can't hear
you. Five star. Conference un -muted. Yeah, I
think I just got un -muted, Your Honor. Yeah,
no, I un -muted everybody. Go ahead. Great. It
was being hand -raised and lured. But I'll proceed.
Are we ready to proceed then, Your Honor, with
the un -muted seal? Yes. Great. Well, thank you,
Your Honor. For the record, again, the fan award
from Multifar and Gallagher, representing the
Global Debtors. Your Honor, we're here on the
debtor's emergency motion to seal, which is docket
number 641, filed in connection with our rule
90 -19 motion seeking approval of settlements
arising from the underlying litigation related
to interchange fees charged by VFED MasterCard.
For the record, the sealed version of the 90
-19 settlement motion is at docket number 637,
and the redacted version is at 642. Before you
go on, so under our local rules, the way that
the motions to seal work is you can file a motion
to seal, and it will be heard on 21 days notice.
And it's automatically granted for that 21 days.
The purpose for the hearing today is. to unseal
it as to some as to some people while that 21
days runs because at the end of the day we're
going to need to have you know if there's an
objection to the ceiling after 21 days we'll
have a hearing on that as well so the relief
today that I'm considering is just really limited
to your ability to provide the committee subject
to whatever confidentiality agreements may exist
in a case that was filed, I believe, in 2014
allowing them to do that. So that's the limited
relief I'm considering today, which is what I
understood your order to be asking for. Correct.
Yes, that's exactly right. So, Your Honor, I
think it's worth just to be outside recognizing
that this probably gets to what you're saying,
but it is a bit of an unusual motion in a few
respects. First, it's a new rule in that the
information that the debtors seek to seal and
permit some limited disclosures of, as you mentioned,
is extraordinarily sensitive. They relate to
settlements that arise from the multi -district
litigation involving interchange fees, rolling
claims by millions of merchants, and disclosure
of that information could directly affect Visa,
MasterCard negotiations, ongoing negotiations
with other participants in that litigation. Second,
the confidential information that we're seeking
to redact and do the limited disclosure of, it
doesn't belong to the debtors. It belongs to
Visa and MasterCard. As a result, the debtors
can't choose to disclose that confidential information
without risking a violation of the underlying
protective order in the interchange litigation
or of the terms of the settlement agreements
and the other agreements themselves. And then
last, and exactly what you hit on, Your Honor,
is that because we can't disclose those terms
to the parties in interest for the 1990 settlement
motion until, or we can't do that until we have
an order of the court, we risk sort of a procedural
hiccup where we end up with 42 days of notice,
or 42 days before we can really have a hearing
on the 1990 settlement motion. Your Honor, it
sounds like you're obviously very up to speed
on all of this, and I have argument I can walk
through, but it may make more sense if you have
specific questions or things that you'd like
me to address. No, just two concerns. I just
want to make sure that nothing that I do invades
the province of the court in the underlying litigation.
That's number one, and then number two. I'd like
to hear from people. I understand this is a really
a practical issue that needs to be resolved in
order for the debtor to be able to proceed with
the settlements. And obviously, the settlements
have to be evaluated on their merits. And at
a minimum, I think the committee is entitled
to know exactly what the settlement is. They're
in a state fiduciary. And I'm not sure that the
that the members of the committee have to know,
but certainly committee council and committee
professionals likely need to know. So we've got
a practical problem, and my question is, you
know, how can we best solve it? Great. Yeah,
and I think on the first question, from our perspective,
and it may be helpful also to hear from Council,
from VCR MasterCard, But from our perspective,
if we're able to obtain the relief we seek in
the motion, then we're not going to have any
comedy concerns or inconsistent rulings, that
sort of thing with the court in the underlying
litigation. And then on the practical concern,
too, I think what we're approaching here, what
we're trying to do here is to you know, navigate
the balance between observing the confidentiality
requirements and the protective order and the
underlying litigation, and at the same time,
make the level of disclosures we need to in order
to have a full and fair hearing on the 1990 motion.
We're asking, as you know, from the order, that
the council committee itself get access subject
to confidentiality agreements and requirements.
Obviously, the U .S. trustee as well. It's our
position that individual members of the committee,
given the nature of the underlying litigation,
it just really wouldn't make sense for the individual
members of the committee to get access to this
highly sensitive information, frankly, related
to litigation that some of them have themselves
participated in. So I think that's how I would
probably answer those two questions. All right.
Who else wishes to be heard with respect to this?
Ms. Patrick. Your Honor, I would, Kathy Patrick,
we're plaintiff's counsel in the underlying litigation.
I would simply echo some of what Mr. Ward said,
but give you a little bit of color, particularly
as it pertains to the consideration for the settlement,
which is monetary and non -monetary. That is
highly sensitive information, not just for Visa
and MasterCard, but in my view, for the debtors
themselves. The rates they pay to accept Visa
and MasterCard payment cards are competitive
information for them. You should know that we
treat this so sensitively that none of our other
clients, all of whom have now settled their claims,
knows the rates that the other clients got in
the settlement. We were assiduous in keeping
that separate because it was so sensitive and
because they are also competitors. And so there
is a reason why, and as long as the committee
is willing to accept it on a professional size
only basis, We don't have an issue, but there
are merchants on the committee and that's the
sensitivity and I know that mr. Eisenstein and
mr. William would have the same Bill Michael
would have the same concern for these and MasterCard.
All right. Thank you. Thank you All right, anyone
else mr. Hawth mr. Wayne Thank you honor I did
had a chance to take a look at the ceiling motion
and I also looked at the redaction I I know today
is not the day, but we do have some problems
with it. In the motion, it says that the ceiling
is narrowly tailored to protect the sensitive
information that are on the settlement. But the
entire sheet is redacted. And this is an asset
of the state. And there is a public interest
in terms of inspections and copy of judicial
records that we need to balance. to provide to
us and the committee, that's a significant step
in disclosure, but there's also a balance and
a case where there's press, there are customers,
there are thousands of creditors from the state.
They should have access to information. I'm not
saying go out and disclose the rates that the
debtors are paying, but at the very least, we
need to know what the assets are. We need to
know how much of the money's coming in. So in
terms of the redaction, I think there's a way
we can work it out instead of redacting the whole
term sheet. So in the next 21 days, I hope to
work with the debtors and the plaintiffs to come
up with some sort of solution that bounds the
disclosure required under both Section 107 and
the common law interest, the common law right
of the public to access judicial records. That's
under the Supreme Court case Nix. So I'm hoping
to have this resolved. I don't want to fight
this, but... I'm mindful of the fact that we're
already dealing with a confidentiality of order
that has been in place since 2015 in another
case. So I don't want to do anything that would
in any way run afoul of that order. That's correct,
Your Honor. I've seen some of those. I've tried
looking it up. I mean, there was like two cases
site within, so I was trying to look for that
confidentiality. It's attached to the exhibit.
Okay. I will take a look at it. Thank you. Well,
yeah, they usually want you to do it and date
them the very day of the loan. All right. Can
everyone please mute their line? You mute your
lines. We're getting a lot of background noise.
All right. Who else wishes to be heard? Thank
you, Your Honor. Jared Martin for the SO5 digital
debtors. I just wanted to note for the court
that the digital debtors are also parties to
the 90 -19 motion and the motion to seal. This
settlement is material to our estates and we
are very much in favor of the sealing motion.
I wanted to flag one thing. We'll work with the
committee and our lenders on this issue, but
to the extent that our cash collateral budget
contemplates settlement proceeds, we'll work
to either redact that or find some work around
so that that is also complying with the protective
order in the ceiling motion. Understood. Thank
you. Thank you. All right. Who else wishes to
be heard? Are you on it? Two things, Your Honor.
First, briefly, the proposed order talks about
council having access, and I would ask that that
be revised to have all professionals. I became
a lawyer because I'm not very good at math, so
I really appreciate being able to share it with
my financial advisors. The second thing is we
just haven't had time to fully discuss this with
the members of the committee, so we have all
of our rights to the final hearing, if one is
necessary with respect to this matter. But I
appreciate the debtors' efforts here. Anyone
else? All right, Mr. Ward, obviously I've reviewed
the motion. I think this is a good solution to
address a practical problem that has significant
commercial implications. you know and I'm prepared
to enter the order and you all do you want to
discuss with Mr. Manil the all professionals
or should I just interline that in the order?
This is just an odd feature of this case. As
in many bankruptcy matters, there are people
who are investing in claims or proceeds of claims.
We would need a representation from the committee's
professionals that they would have an ethical
wall between whoever, I don't even know who their
professionals are. Uh, Alex. Okay. That they
would just not be advising anybody on the purchase
of claims or investment in claim proceeds because
that then blurs the line and creates that issue.
Assuming we can have that modification. We have
worked that out with the ad hoc lenders advisor,
Lazard. They made that the representation. It's
just fine. I just wanted to flag that. All right.
All right. So, Mr. Manal, can you work with Mr.
Ward just to make sure we have that? I know it
has to be in the order, but it can just be a
representation. I'm happy to work with Mr. Ward
as well as Ms. Patrick. Absolutely, Your Honor.
And Your Honor, if I may, William Michael from
MasterCard. Yes, sir. That is fine. MasterCard
is not object to the financial advisors having
access subject to the limitation outlined by
Ms. Patrick. I would just add that that would,
from our perspective, also need to be subject
to an undertaking to be... order in the underlying
litigation. All right. Understood. All right.
So I'm going to grant the motion, Mr. Ward. And
would you please just let work with Mr. Mantle
and the others to see if the language in the
order addresses it or if we need to have a change
to the order. And then once that gets done, just
have Some would contact my chambers and I'll
get that order entered as soon as possible. I
would hope that by Monday this is all cleared
up so the committee has a couple of weeks to
look at this. Just one question. I'm just really
confused about the committee itself and what
sort of confidentiality obligations we're considering
having them sign up to. You were anticipating
them. Yeah, the committee, the committee, we're
talking only about Alex Houlahan and counsel.
All right. And, and, and, you know, you need
to address Mr. Michaels. Ms. Patrick's concern
was that Houlahan and Alex, and presumably the
lawyers, would not be advising anyone on claims
purchasing with respect to this. which I think
is reasonable and frankly I wouldn't have thought
that a financial advisor to the company would
be advising that another branch arm of it would
be advising you know trading and claims in the
company but that's a different issue. So I think
that the concern is that we don't want to do
something that runs afoul of the you know, confidentiality
order, the protective order in the underlying
case. So I think this is all, in my mind, plumbing
just to make sure that we have it all correct.
I don't think it's a substantive issue and I
agree that, you know, hopefully we'll get this
resolved today and I'll enter the order and Monday
the information will be able to be shared. Okay,
I think that sounds good. We'll make sure that
we're not going to be contrary to existing underlying
agreements, but I just, so that these from MasterCard
are, have an opportunity to object to this if
they want to. I don't think that the council
representing the committee would be actually
signing the underlying protective order. They
would be bound by their gifting confidentiality
obligations, not signing up to some additional
order. I should just stay up here. What we have
done with prior professionals and firms is the
firms and their advisors have given an undertaking
to abide by the restrictions. They don't sign
the protective order. Nobody does. It's Judge
Brody's order. Right. Exactly. Yeah. Yeah. It's
just we'll abide by those terms. All right. Right.
If the committee is good with that, then I think
we're good. Thank you, Judge. I don't think anyone
has a choice that there's an order out there
that governs this already before I ever came
on the scene. Your Honor, in fairness, I have
not seen a protective order. I presume that it
should be fine, but we'll come back to the court
if there's any other issues. I think it's attached...
The actual order itself is a minute entry. There
is a long stipulation in a letter that in a letter
like the practice in New York where you send
a letter and attach it and then That's I think
at docket. Well, yeah 277 in the MDL case. Okay,
and then there's a there's a two -sentence Docket
entry that says the order is approved. So it's
so it's not assigned order. It's a. It's just
ordered on the docket. It's ordered on the docket,
so you have to look at both of those and it and
they are at. Judge, I think it's attached to
our exhibit list. Yeah, that's what I'm looking
for. 680, your honor. Yeah, 680, 680 -1. Yes,
it's 680 -1. It's 680 -1 is the letter with the
protective order submitted and then 680 -2 is
the minute entry. Where the judge approves that
letter so six in our docket 680 -1 is 680 -2.
Okay, we'll follow up with Mr. Ward and Ms. Patrick.
All right. Thank you so much. All right. Thank
you, Ms. Patrick. Yes, ma 'am. All right, anything
further today? All right, we'll be in recess
to my 10 o 'clock.