Good morning. It's nine o 'clock on Friday, February
13, 2026. We're here in case number 26 -90103.
It tracks global enterprises. There are several
matters set for hearing. Why don't we get appearances
and then we can proceed. Good morning, Your Honor.
Betsy Feldman. I'm going to go ahead and activate
the hand -raising feature, so hit five star one
nine, please. Line unmuted. Line muted. Line
muted. Good morning, Your Honor. Jesse Feltman
from Wolfie Farr and Gallagher on behalf of the
Global Debtors. I'm joined today by my colleagues
Jennifer Hardy and Nathaniel Ward. Good morning.
Good morning, Your Honor. Michael Bearden on
behalf of the SO5 Digital Debtors. Joining me
online is my colleague, Jared Martin. And also
joining us today online to ask any questions
the court may have are Andrew Heade, SO5 Digital
Debtors. My understanding is Mr. Heade is under
the weather this morning, so he is on the phone,
but he is not currently on camera. And Timothy
J. Schilling, President of GA Retail Solutions
LLC, a post -lipidation consultant. All right.
Thank you. All right. Yes, officially. All right.
Go ahead. Good morning, Your Honor. Did I unmute
you? OK. Yeah, you're muted. Good morning, Your
Honor. We're in Zimbabwe using Morrison and Forrester
to propose co -counsel for the Official Committee
of Unsecured Creditors. I believe I'm joined
by my partner, Ben Butterfield. All right. All
right. Mr. Wynne. Yep, there you go. Good morning,
Your Honor. I went to the U .S. Trustee. All
right. Mr. Hess. Good morning, Your Honor. Greg
Hess on behalf of Capital One. All right. And
Ms. Miller? Well, I don't think I've unmuted
you. Hold on. Try again. Good morning, Your Honor.
Sherry Lee Millers from Sibley Austin on behalf
of Simon Property Group. All right. And Mr. Mayor?
Good morning, Your Honor. Simon Meyer on behalf
of Utica Square Shopping Center, Inc. All right.
Anyone else wish to make an appearance? A five
star, Mr. Hopkins. All right. Good morning, Your
Honor. Chris Hopkins with Paul Weiss on behalf
of the ad hoc group of bondholders and deadblenders.
All right. All right. Your Honor, if I may proceed.
There's a couple of more people that are getting
five star. Let's just make sure we get all the
appearances. Good morning, Your Honor. This is
James Richards on behalf of the city of Dallas.
I intend just to listen. All right. Thank you,
sir. Good morning, your honor. Kelly, I'm sorry.
It's okay, your honor. Good morning, Robert Lee,
Kelly dry and Warren on behalf of G. G. P. Retail
L. L. C. And several other landlords. Thank you.
All right. All right, Mr Lynn, go ahead. Thank
you, your honor. The debtors filed an amended
agenda this morning at docket number 776. In
terms of process, we were thinking that it made
sense to go down the agenda in order. And with
that, Your Honor, I will turn it over to counsel
for the SO5 digital debtors to begin with item
1A. All right, go ahead. Thank you, Your Honor.
This morning on the SO5 digital debtors liquidation
sale motion at ECF 400. We filed a witness and
exhibit list a little bit earlier this week at
ECF 756. We have five exhibits. Exhibit one at
756 -1 is the decoration of Andrew D .J. Heade
in support of the first day decoration, or the
first day pleadings, rather. At exhibit two at
756 -2 is a consulting agreement. At 756 -3 is
Mr. Heade's decoration in support of the liquidation
motion. At 756 -4, we have the declaration of
Timothy E. J. showing in support of the liquidation
motion. And at 756 -5, we have the supplemental
declaration of Timothy E. J. showing in support
of the liquidation cell motion. We do ask that
all exhibits be admitted. Exhibits 1 to 4 have
already been admitted in the interim. We ask
to have that carried forward. All right. Does
anyone? object to the admission of, well, the
consulting agreement, anybody object to the admission
of the consulting agreement at 756 -2? All right,
here an objection that will be admitted. With
respect to, wasn't Mr. Heath's declaration also
admitted before 756 -3? It was, Your Honor. That
appeared from hearing. OK. So does anyone object
to the admissions of the declarations that were
previously admitted at the interim hearing being
used in connection with this hearing? I hear
no objections. The declarations at 756 -1, 756
-3, and 756 -3. or will be admitted. Now, the
new declaration, does anyone object to the declaration
of Mr. Schilling, the supplemental declaration
of Mr. Schilling, at 756 -5, used as his direct
testimony in connection with this hearing? All
right, hearing no objection, that will be admitted
subject to cross -examination. So all these are
admitted to Mr. Reardon. Okay, thank you, Your
Honor. And last bit of housekeeping. We did file
a proposed final order on the motion last night
at ECF 773. I apologize for getting in so late.
We were working hard up until the last minute
to try to incorporate comments. We do anticipate
filing a slightly revised form of order after
the hearing. We did receive a couple of comments
shortly before the hearing that we weren't able
to incorporate yet, but we think we'll be able
to upload an agreed order after the hearing,
no problem. No formal objections have been filed.
Sorry, Your Honor. No, go ahead. Go ahead. No
formal objections have been filed. As I mentioned,
we have been in discussions to incorporate informal
comments, a number of parties. First off, starting
with the UCC. This is our first opportunity to
work with the UCC on substantive relief. And
I think we've had good discussions with them
about, you know, we've talked here in just broader
discussions about the SO5 digital estates that
were sort of a little cul -de -sac in the greater
Satch neighborhood and how the finances, the
dynamic are a little different because we are
doing a liquidation. And we also have a smaller
universe of vendors, so it's a little bit easier
to keep track and directly communicate with them.
And I do think I mentioned at some point during
our discussion that I would make a similar statement
to the statement I made on the record at the
interim, regarding consignment and concession
goods, things of that nature. And that is just
to say, this order is without prejudice any party's
rights with respect to that sort of inventory,
and that includes any rights to the SO5 digital
debtor to sell that inventory. Everyone's rights
are preserved. Key changes from our discussions
with the UCC, we've included language provided
for procedure for modifying consulting agreement,
sub -notice, and an opportunity to object. That's
at paragraph 15. We also included language dealing
with sensitive vendor information, what it can
be used for, how it should be handled, and so
on. And we also included various notices and
consulting rights for the UCC. If we didn't resolve
all the UCCs and formal comments, I don't know
if we've gotten an official sign off from them.
So I'll give them up to speak up and say if they
have anything left. I think we can provide formal
approval of the form of order. Obviously, changes
are being made to them. But I think council is
correct. We worked very closely to try to get
some provisions modified. and additions made
to the order, and the company's done that, and
we're appreciative of that. All right, thank
you. Does anyone else wish to be heard with respect
to the digital debtors motion? All right, thank
you. So I'm going to go ahead and grant final
approval of the digital debtors motion, and I'll
wait for... any comments. I did have a chance,
although yours was filed late, it was the first
of the three orders that was filed for the hearing
today. So, I did have a chance to review yours.
So, I'm fine approving it. Obviously, this is
the strategy that the digital debtors have set
forth, and I think it's supported by both the
declaration of Mr. Heath. as well as the declarations
of Mr. Schilling. So with that, I'll approve
it and I'll wait for the new order. All right.
Thank you. Thank you, Your Honor. Thank you,
Your Honor. For the record, I'm Betsy Feldman
from Wilkie Farren Gallagher on behalf of the
Global Debtors. I think that brings us to item
1B on the agenda, which is the Global Debtors
Store Closing Procedures Motion for certain of
their sacks off fifth and Neiman Marcus last
call stores. Like with the Office of Digital
Business, this is the hearing for final approval
of that motion. And since we were before you
last time a couple weeks ago, I understand that
store closings have gotten underway and everything
is going smoothly on that front. In connection
with the interim hearing, Your Honor had admitted
four exhibits into evidence at the time, including
the declaration of Mr. Mark Weinstein in support
of the emergency motion, the store closing procedures
themselves, and the consulting agreement with
GA retail group. Your Honor had also taken judicial
notice of the declaration of Mr. Mark Weinstein
in support of the first days on a background
basis. And for all of those items, we would respectfully
request that Your Honor enter. these three items
again into evidence and then take judicial notice
of the first day declaration once again. All
right, does anyone object to me carrying the
evidence from the interim hearing to the final
hearing? All right, here are no objections. Those
exhibits will be admitted and I'll take judicial
notice of Mr. Weinstein's first day declaration.
Thank you, Your Honor. And Mr. Weinstein is in
the virtual courtroom, as is Mr. Schilling. Thank
you, Your Honor. We also filed a form of final
order on Wednesday evening at docket number 762.
And we've worked hard with a number of parties
since the interim order was entered to address
their concerns. And we filed a revised form of
order this morning at docket number 775. With
these changes, I also believe that we are before
you with a consensual form of order, but I'll,
of course, let anyone chime in if they disagree.
The order seeks final approval of the release
granted on an interim basis a couple weeks ago,
including authority to enter into and perform
under the consulting agreement with GA Group,
authority to conduct the store closing sales
pursuant to agreed procedures, and then also
seeking certain modifications of their customer
program. In addition, the order features three
bonus and severance programs for non -insiders
that had not been up for approval at the interim
hearing. Bucket number one was an aggregate amount
of up to $2 million for up to 475 employees of
the closing stores. Bucket number two is an aggregate
amount of up to $3 million for up to 326 non
-insider corporate employees that support the
store closing function. And bucket number three
is an incentive bonus to be fully funded by a
provider of augment merchandise that would be
sold through the clothing stores. On that last
piece, Your Honor, I figured it might be helpful
just to clarify for the record the terms of that
last incentive program. The program has certain
sales goals for each of the clothing stores such
that if the goals are achieved or exceeded, The
store will qualify for a payout of certain incentive
bonuses, which would be allocated to employees
that sell the augment merchandise at the conclusion
of the store closing sale. Amounts would be determined
based on their CRE. Although the global debtors
themselves will pay the incentive bonuses, at
the conclusion of the process, they will be fully
refunded from the augment provider when the amounts
are deducted from the amount that the global
debtors owe that augment merchandise provider
under their existing revenue sharing arrangement.
Unless your honor has any questions for me or
would like me to walk your honor through the
changes that we made to the form of order, we
would respectfully request entry of the final
order. I did look at the red line. That was about
it. Does anyone else wish to be heard with respect
to the off price, uh, store closing final order.
Your honor, um, Lorenzo Marinese again on behalf
of the committee. As with the prior order, we
worked very closely with the company to make
modifications to the form of order in particular,
recognizing that concession and consignment vendors
have unique interests in their merchandise and
wanting to ensure that their products weren't
sold during the going out of business sales without
their consent. We also wanted to facilitate separate
negotiations between the company and their vendors
or individual vendors and individual landlords
because they may not all have the same concerns.
So that's to the extent procedures need to be
slightly modified to benefit a vendor or a particular
landlord, that the company was free to do that.
Obviously, we'd like consultation and notice
and the company agreed to that, so. We're very
appreciative once again for the modifications
that were made to the order. All right. Anyone
else wish to be heard with respect to? All right.
So I've reviewed the motion, obviously, in the
order from the time of the interim hearing. And
with the modifications and the lack of any objection,
Again, I think this is a proper exercise of the
debtor's business judgment, and I'm going to
go ahead and approve it. So give me a minute
since I can actually sign this order. All right,
that order's been signed and sent to documenting.
Thank you very much, your honor. The final item
on today's agenda is item 1C, which is the global
debtors store closing procedures motion for eight
Saks Fifth Avenue stores and one Neiman Marcus
store. Your honor may be wondering, as well as
a number of other parties in the virtual courtroom,
why we didn't just seek approval of this relief
in a single motion a couple of weeks ago when
we were last before you. The rationale for closing
the off -price stores in our last motion was
very different than the rationale for closing
these nine full -price stores. First, the debtors
needed time to review their lease portfolio and
create a targeted plan to further their restructuring
efforts. Also, it was very important from a brand
perspective to not shock the market with misleading
headlines that SAX was closing. That was certainly
not what was happening, and it continues to be
true. Instead, thanks to the extraordinary efforts
of the management team, the communications team,
and frankly the entire enterprise that fuels
SACS, we use the first month of the case to stabilize
the businesses and begin rebuilding trust among
the company's key constituents. Before I get
too far along, I do want to seek admission of
four exhibits into evidence. We filed a witness
and exhibit list at docket number 755 on Wednesday,
and we would seek admission of the consulting
agreement at docket number 755 -5, the store
closing procedures at 755 -6, the declaration
of Mr. Mark Weinstein in support of this motion
at docket 755 -7, and the declaration of Mr.
Schilling in support of the emergency motion
at docket number 755 -8. In addition, there is
the declaration of Mr. Mark Weinstein in support
of the first days again at docket number 755
-1. And same to request, Your Honor, we would
ask that the first four documents I noted be
admitted into evidence and that the court take
judicial notice of Mr. Weinstein's declaration
as background for the release requested. one
at a time. So with respect to 755 -5, which is
the consulting agreement, anyone object to the
admission of the consulting agreement? Okay,
hearing no objections, that will be admitted.
With respect to 755 -6, which is the store closing
procedures, does anyone object to the admission
of that exhibit. All right, hearing no objection,
that will be admitted. With respect to 755 -7,
which is Mr. Weinstein's declaration, does anyone
object to the admission of Mr. Weinstein's declaration
as his direct testimony in connection with this
hearing? subject to cross -examination. All right,
here are no objections that will be admitted
as his direct testimony subject to cross -examination
to the extent anyone wants to cross him. And
then 755 -8 is Mr. Schilling's declaration in
connection with this motion. Does anyone object
to the admission of Mr. Schilling's declaration
as his direct testimony in connection with this
motion subject to cross -examination? Right,
they will be admitted as this direct testimony
subject to cross -examination at the appropriate
time and I will take judicial notice of the first
day declaration that Mr. Weinstein filed earlier.
So all the exhibits are admitted as either as
direct testimony or for the truth of the matter,
the consulting agreement and the storm procedures.
Thank you very much, Your Honor. Turning to the
relief requested. The motion seeks authority
for four points of relief. First, authority to
enter into and perform under the consulting agreement
with GA Retail Solutions LLC, a copy of which
is attached as exhibit one to the proposed form
of interim order. Second, authority to conduct
store closing sales pursuant to the proposed
procedures that were just admitted into evidence
and that are attached as exhibit two to the proposed
form of interim order. Third, approval of modifications
to certain customer programs. And then on a final
basis, not for purposes of this interim order,
authority to pay severance for non -insider employees.
I'll skip over that last one, since it's not
up for consideration today. And the first three,
Your Honor, should seem familiar based on what
Your Honor approved a couple weeks ago. I do
want to highlight a couple key differences. First,
we requested similar modifications to the customer
programs as we did for the off -price stores.
Unlike the prior motion, though, we are not joined
today by the SO5 digital debtors in that aspect
of the motion. Also, there were some minor changes
stemming from the fact that the programs here
are different than they were for the off -price
stores. Second, this motion seeks to preserve
the ability to add stores to the closing list
if the global debtors in their business judgment
decide that doing so is in the best interest
of their estate. There are some procedures that
are outlined in the motion and I'm happy to walk
your honor through that to the extent it's helpful.
How much notice are you going to be giving on
that? So your honor, we will be seeking to provide
seven days notice prior to the commencement of
the sale. We would file a notice on the docket
that outlines the stores that we're seeking to
add, the timeframe on which the stores would
be closing, any additional severance that we
would seek to pay in connection with those closing
stores, and any other material changes. All right.
Thank you. Otherwise, Your Honor, this order
reflects the changes that we negotiated over
the past several days. constructively with the
committee and other interested parties in the
case in advance of this hearing, many of which
appear in large part in the final order that
Your Honor just entered. We did file an updated
form of the order this morning at docket number
774, and I'd be happy to walk Your Honor through
the changes, answer any questions you have, or
proceed on the merits. Otherwise, we would ask...
No, go ahead and proceed on... Yeah, go ahead
and proceed on the merits. Thank you, your honor.
With respect to the consulting agreement, the
global debtors are seeking authorization to enter
into the consulting agreement with Great American.
The global debtors believe that this is a sound
business, sound exercise of their business judgment.
The consulting agreement contains market terms
that were negotiated at arm's length. And we
believe that the consultant is the right party
for this job, given its extensive experience
in conducting retail liquidation sales, including
liquidations of luxury goods, as well as certain
other aspects, as Your Honor is aware, of these
particular cases. The agreement gives the global
debtors sufficient flexibility to control the
process and maintain their brand relationships.
On the store closing procedures themselves, the
global debtors are seeking authorization of their
proposed store closing sales for eight Saks Fifth
Avenue stores, and one Neiman Market store on
the terms of their proposed store closing procedures.
This includes seeking customary relief from certain
local and state laws that would restrict the
conduct of those store closing sales, of course,
subject to certain dispute resolution procedures.
We're also seeking authority to abandon certain
FF &E, furniture, fixtures, and equipment at
closing stores. that the debtors, the global
debtors are not able to remove themselves. With
respect to the customer programs, the global
debtors are seeking to get approval of certain
modifications to their customer programs relating
to returns, gift cards, the use of credit cards,
and their rewards programs. These changes were
carefully thought through by the global debtors
management team. in an effort to provide finality
to themselves while also giving customers an
efficient grace period where possible. These
changes are all imperative to preserving customer
goodwill in order to maximize the value of the
liquidation sales. And again, Your Honor, since
severance is not on for this hearing, I will
skip over that piece. All right. Does anyone
else wish to be heard with respect to the...
full store or the full line closing. Your honor,
just briefly, Lorenzo Marinuzzi again, co -counsel
for the official committee. The interim order
reflects some changes requested by the committee.
We're still obviously reserving rights to the
final. The bigger issues are really around notice.
The merchandise mix in these stores is very different
from the other stores that are liquidating. And
so you have a number of concession vendors and
consignment vendors, but concession vendors in
particular that may in fact be the employer for
employees at these locations. And so if the company
determines that they want to close a store and
a vendor has actual employees there, the vendors
obviously would like more notice, not less notice,
to advise the employees that they might be looking
for other employment. I think we'll get there
ultimately. And again, we encourage the company,
as they have done, and with respect to the other
motions that they did there, to negotiate side
agreements where necessary and appropriate with
other vendors and landlords to allow them to
be accommodated for their particular needs. And
we encourage that. I think, I'm confident, we'll
get to a final order that works for the committee.
But we're not quite there yet. Thank you, Your
Honor. Anyone else wish to be heard? Your Honor,
Simon Meier from Trauma Good For Walk. Can you
hear me okay? I can hear you fine. Okay, Your
Honor, I represent Utica Square Shopping Center.
It is one of the SACS locations, the SACS location
in Tulsa, Oklahoma. My client just received the
motion, so we're still digesting it a little
bit. However, at an initial point, we're dealing
with a lot of different contacts from SACS, and
so what we would ask is if Debtors Council could
send us a single point of contact that has authority
to negotiate and find the debtor on one of these
side letter agreements, that would be very helpful
because what we don't want to do is talk with
the consultant or the consulting group and then
get switched off to somebody else. So if there's
somebody with the debtors who could provide us
with that information, that would be very helpful.
Your Honor, Betsy Feldman, for the record, we'd
be happy to. All right. Anyone else wish to be
heard? In terms of a final hearing, Do you want
one in a month from now? Your Honor, if possible
to be heard sooner than a month, we would certainly
appreciate that. No, no. I'm really just asking.
OK. So let me just look at the calendar. To the
extent, Your Honor, has any availability the
week of March 2nd, perhaps? Yeah, that's exactly
what I'm looking at. Why don't we do 1 o 'clock
on March 2nd? Thank you very much, Your Honor.
We will upload the form of order with that date
inserted. I can insert it. If there's no changes
to the order, I can insert that. There are no
changes to the order. All right. Hold on a second.
Right, I have. Signed the order. Objection deadline
of the week before the 23rd of February and in
the hearing on March 2nd at 1 o 'clock. So let
me just. Right, it's been signed and sent to
documenting. Thank you, Your Honor. That concludes
our agenda for today. All right, anything further
from anyone? All right, we'll be in recess.