WEBVTT 00:00:00.270 --> 00:00:04.009 Good morning. It's nine o 'clock on Friday, February 00:00:04.009 --> 00:00:11.710 13, 2026. We're here in case number 26 -90103. 00:00:12.070 --> 00:00:14.949 It tracks global enterprises. There are several 00:00:14.949 --> 00:00:17.469 matters set for hearing. Why don't we get appearances 00:00:17.469 --> 00:00:21.530 and then we can proceed. Good morning, Your Honor. 00:00:21.690 --> 00:00:33.210 Betsy Feldman. I'm going to go ahead and activate 00:00:33.210 --> 00:00:35.829 the hand -raising feature, so hit five star one 00:00:35.829 --> 00:00:41.869 nine, please. Line unmuted. Line muted. Line 00:00:41.869 --> 00:00:48.670 muted. Good morning, Your Honor. Jesse Feltman 00:00:48.670 --> 00:00:50.729 from Wolfie Farr and Gallagher on behalf of the 00:00:50.729 --> 00:00:52.929 Global Debtors. I'm joined today by my colleagues 00:00:52.929 --> 00:00:57.609 Jennifer Hardy and Nathaniel Ward. Good morning. 00:00:59.429 --> 00:01:01.009 Good morning, Your Honor. Michael Bearden on 00:01:01.009 --> 00:01:03.950 behalf of the SO5 Digital Debtors. Joining me 00:01:03.950 --> 00:01:06.469 online is my colleague, Jared Martin. And also 00:01:06.469 --> 00:01:08.790 joining us today online to ask any questions 00:01:08.790 --> 00:01:12.010 the court may have are Andrew Heade, SO5 Digital 00:01:12.010 --> 00:01:14.409 Debtors. My understanding is Mr. Heade is under 00:01:14.409 --> 00:01:16.230 the weather this morning, so he is on the phone, 00:01:16.290 --> 00:01:19.010 but he is not currently on camera. And Timothy 00:01:19.010 --> 00:01:21.230 J. Schilling, President of GA Retail Solutions 00:01:21.230 --> 00:01:25.250 LLC, a post -lipidation consultant. All right. 00:01:25.250 --> 00:01:31.109 Thank you. All right. Yes, officially. All right. 00:01:32.510 --> 00:01:38.629 Go ahead. Good morning, Your Honor. Did I unmute 00:01:38.629 --> 00:01:41.989 you? OK. Yeah, you're muted. Good morning, Your 00:01:41.989 --> 00:01:43.849 Honor. We're in Zimbabwe using Morrison and Forrester 00:01:43.849 --> 00:01:45.609 to propose co -counsel for the Official Committee 00:01:45.609 --> 00:01:47.390 of Unsecured Creditors. I believe I'm joined 00:01:47.390 --> 00:01:54.069 by my partner, Ben Butterfield. All right. All 00:01:54.069 --> 00:02:09.330 right. Mr. Wynne. Yep, there you go. Good morning, 00:02:09.349 --> 00:02:13.590 Your Honor. I went to the U .S. Trustee. All 00:02:13.590 --> 00:02:18.909 right. Mr. Hess. Good morning, Your Honor. Greg 00:02:18.909 --> 00:02:24.169 Hess on behalf of Capital One. All right. And 00:02:24.169 --> 00:02:31.680 Ms. Miller? Well, I don't think I've unmuted 00:02:31.680 --> 00:02:37.879 you. Hold on. Try again. Good morning, Your Honor. 00:02:38.039 --> 00:02:39.919 Sherry Lee Millers from Sibley Austin on behalf 00:02:39.919 --> 00:02:44.219 of Simon Property Group. All right. And Mr. Mayor? 00:02:45.379 --> 00:02:47.180 Good morning, Your Honor. Simon Meyer on behalf 00:02:47.180 --> 00:02:53.319 of Utica Square Shopping Center, Inc. All right. 00:02:53.340 --> 00:02:57.159 Anyone else wish to make an appearance? A five 00:02:57.159 --> 00:03:07.639 star, Mr. Hopkins. All right. Good morning, Your 00:03:07.639 --> 00:03:09.699 Honor. Chris Hopkins with Paul Weiss on behalf 00:03:09.699 --> 00:03:11.819 of the ad hoc group of bondholders and deadblenders. 00:03:13.879 --> 00:03:22.979 All right. All right. Your Honor, if I may proceed. 00:03:24.439 --> 00:03:26.560 There's a couple of more people that are getting 00:03:26.560 --> 00:03:29.080 five star. Let's just make sure we get all the 00:03:29.080 --> 00:03:32.159 appearances. Good morning, Your Honor. This is 00:03:32.159 --> 00:03:34.180 James Richards on behalf of the city of Dallas. 00:03:34.349 --> 00:03:38.050 I intend just to listen. All right. Thank you, 00:03:38.050 --> 00:03:45.169 sir. Good morning, your honor. Kelly, I'm sorry. 00:03:46.150 --> 00:03:48.169 It's okay, your honor. Good morning, Robert Lee, 00:03:48.289 --> 00:03:50.830 Kelly dry and Warren on behalf of G. G. P. Retail 00:03:50.830 --> 00:03:54.289 L. L. C. And several other landlords. Thank you. 00:03:54.569 --> 00:04:00.150 All right. All right, Mr Lynn, go ahead. Thank 00:04:00.150 --> 00:04:03.659 you, your honor. The debtors filed an amended 00:04:03.659 --> 00:04:07.379 agenda this morning at docket number 776. In 00:04:07.379 --> 00:04:09.439 terms of process, we were thinking that it made 00:04:09.439 --> 00:04:12.199 sense to go down the agenda in order. And with 00:04:12.199 --> 00:04:14.379 that, Your Honor, I will turn it over to counsel 00:04:14.379 --> 00:04:16.899 for the SO5 digital debtors to begin with item 00:04:16.899 --> 00:04:21.860 1A. All right, go ahead. Thank you, Your Honor. 00:04:22.459 --> 00:04:26.500 This morning on the SO5 digital debtors liquidation 00:04:26.500 --> 00:04:30.350 sale motion at ECF 400. We filed a witness and 00:04:30.350 --> 00:04:32.189 exhibit list a little bit earlier this week at 00:04:32.189 --> 00:04:38.250 ECF 756. We have five exhibits. Exhibit one at 00:04:38.250 --> 00:04:41.730 756 -1 is the decoration of Andrew D .J. Heade 00:04:41.730 --> 00:04:43.930 in support of the first day decoration, or the 00:04:43.930 --> 00:04:46.949 first day pleadings, rather. At exhibit two at 00:04:46.949 --> 00:04:53.370 756 -2 is a consulting agreement. At 756 -3 is 00:04:53.370 --> 00:04:56.529 Mr. Heade's decoration in support of the liquidation 00:04:56.529 --> 00:05:00.610 motion. At 756 -4, we have the declaration of 00:05:00.610 --> 00:05:02.829 Timothy E. J. showing in support of the liquidation 00:05:02.829 --> 00:05:07.310 motion. And at 756 -5, we have the supplemental 00:05:07.310 --> 00:05:09.569 declaration of Timothy E. J. showing in support 00:05:09.569 --> 00:05:12.569 of the liquidation cell motion. We do ask that 00:05:12.569 --> 00:05:14.689 all exhibits be admitted. Exhibits 1 to 4 have 00:05:14.689 --> 00:05:16.769 already been admitted in the interim. We ask 00:05:16.769 --> 00:05:24.310 to have that carried forward. All right. Does 00:05:24.310 --> 00:05:32.459 anyone? object to the admission of, well, the 00:05:32.459 --> 00:05:34.600 consulting agreement, anybody object to the admission 00:05:34.600 --> 00:05:39.240 of the consulting agreement at 756 -2? All right, 00:05:39.259 --> 00:05:44.879 here an objection that will be admitted. With 00:05:44.879 --> 00:05:50.519 respect to, wasn't Mr. Heath's declaration also 00:05:50.519 --> 00:05:56.129 admitted before 756 -3? It was, Your Honor. That 00:05:56.129 --> 00:06:00.629 appeared from hearing. OK. So does anyone object 00:06:00.629 --> 00:06:04.050 to the admissions of the declarations that were 00:06:04.050 --> 00:06:09.470 previously admitted at the interim hearing being 00:06:09.470 --> 00:06:13.689 used in connection with this hearing? I hear 00:06:13.689 --> 00:06:20.529 no objections. The declarations at 756 -1, 756 00:06:20.529 --> 00:06:28.199 -3, and 756 -3. or will be admitted. Now, the 00:06:28.199 --> 00:06:30.959 new declaration, does anyone object to the declaration 00:06:30.959 --> 00:06:33.319 of Mr. Schilling, the supplemental declaration 00:06:33.319 --> 00:06:38.139 of Mr. Schilling, at 756 -5, used as his direct 00:06:38.139 --> 00:06:42.779 testimony in connection with this hearing? All 00:06:42.779 --> 00:06:44.660 right, hearing no objection, that will be admitted 00:06:44.660 --> 00:06:47.139 subject to cross -examination. So all these are 00:06:47.139 --> 00:06:49.800 admitted to Mr. Reardon. Okay, thank you, Your 00:06:49.800 --> 00:06:52.970 Honor. And last bit of housekeeping. We did file 00:06:52.970 --> 00:06:55.389 a proposed final order on the motion last night 00:06:55.389 --> 00:06:58.870 at ECF 773. I apologize for getting in so late. 00:06:58.889 --> 00:07:00.649 We were working hard up until the last minute 00:07:00.649 --> 00:07:03.689 to try to incorporate comments. We do anticipate 00:07:03.689 --> 00:07:05.410 filing a slightly revised form of order after 00:07:05.410 --> 00:07:07.970 the hearing. We did receive a couple of comments 00:07:07.970 --> 00:07:09.649 shortly before the hearing that we weren't able 00:07:09.649 --> 00:07:11.529 to incorporate yet, but we think we'll be able 00:07:11.529 --> 00:07:13.269 to upload an agreed order after the hearing, 00:07:13.290 --> 00:07:16.750 no problem. No formal objections have been filed. 00:07:16.910 --> 00:07:21.139 Sorry, Your Honor. No, go ahead. Go ahead. No 00:07:21.139 --> 00:07:23.360 formal objections have been filed. As I mentioned, 00:07:23.399 --> 00:07:26.139 we have been in discussions to incorporate informal 00:07:26.139 --> 00:07:29.660 comments, a number of parties. First off, starting 00:07:29.660 --> 00:07:32.060 with the UCC. This is our first opportunity to 00:07:32.060 --> 00:07:35.639 work with the UCC on substantive relief. And 00:07:35.639 --> 00:07:37.399 I think we've had good discussions with them 00:07:37.399 --> 00:07:40.139 about, you know, we've talked here in just broader 00:07:40.139 --> 00:07:42.240 discussions about the SO5 digital estates that 00:07:42.240 --> 00:07:44.860 were sort of a little cul -de -sac in the greater 00:07:44.860 --> 00:07:47.420 Satch neighborhood and how the finances, the 00:07:47.420 --> 00:07:49.519 dynamic are a little different because we are 00:07:49.519 --> 00:07:52.259 doing a liquidation. And we also have a smaller 00:07:52.259 --> 00:07:53.860 universe of vendors, so it's a little bit easier 00:07:53.860 --> 00:07:56.220 to keep track and directly communicate with them. 00:07:57.600 --> 00:08:00.959 And I do think I mentioned at some point during 00:08:00.959 --> 00:08:03.019 our discussion that I would make a similar statement 00:08:03.019 --> 00:08:04.759 to the statement I made on the record at the 00:08:04.759 --> 00:08:06.839 interim, regarding consignment and concession 00:08:06.839 --> 00:08:09.839 goods, things of that nature. And that is just 00:08:09.839 --> 00:08:11.720 to say, this order is without prejudice any party's 00:08:11.720 --> 00:08:13.699 rights with respect to that sort of inventory, 00:08:14.180 --> 00:08:16.079 and that includes any rights to the SO5 digital 00:08:16.079 --> 00:08:18.139 debtor to sell that inventory. Everyone's rights 00:08:18.139 --> 00:08:22.379 are preserved. Key changes from our discussions 00:08:22.379 --> 00:08:24.920 with the UCC, we've included language provided 00:08:24.920 --> 00:08:27.279 for procedure for modifying consulting agreement, 00:08:27.819 --> 00:08:31.360 sub -notice, and an opportunity to object. That's 00:08:31.360 --> 00:08:34.639 at paragraph 15. We also included language dealing 00:08:34.639 --> 00:08:38.340 with sensitive vendor information, what it can 00:08:38.340 --> 00:08:40.620 be used for, how it should be handled, and so 00:08:40.620 --> 00:08:44.360 on. And we also included various notices and 00:08:44.360 --> 00:08:48.139 consulting rights for the UCC. If we didn't resolve 00:08:48.139 --> 00:08:51.440 all the UCCs and formal comments, I don't know 00:08:51.440 --> 00:08:53.639 if we've gotten an official sign off from them. 00:08:54.440 --> 00:08:56.519 So I'll give them up to speak up and say if they 00:08:56.519 --> 00:09:05.500 have anything left. I think we can provide formal 00:09:05.500 --> 00:09:07.700 approval of the form of order. Obviously, changes 00:09:07.700 --> 00:09:10.379 are being made to them. But I think council is 00:09:10.379 --> 00:09:12.820 correct. We worked very closely to try to get 00:09:12.820 --> 00:09:15.889 some provisions modified. and additions made 00:09:15.889 --> 00:09:17.490 to the order, and the company's done that, and 00:09:17.490 --> 00:09:20.690 we're appreciative of that. All right, thank 00:09:20.690 --> 00:09:23.009 you. Does anyone else wish to be heard with respect 00:09:23.009 --> 00:09:29.889 to the digital debtors motion? All right, thank 00:09:29.889 --> 00:09:34.470 you. So I'm going to go ahead and grant final 00:09:34.470 --> 00:09:37.389 approval of the digital debtors motion, and I'll 00:09:37.389 --> 00:09:40.720 wait for... any comments. I did have a chance, 00:09:41.600 --> 00:09:44.120 although yours was filed late, it was the first 00:09:44.120 --> 00:09:46.960 of the three orders that was filed for the hearing 00:09:46.960 --> 00:09:51.700 today. So, I did have a chance to review yours. 00:09:54.240 --> 00:09:58.080 So, I'm fine approving it. Obviously, this is 00:09:58.080 --> 00:10:02.240 the strategy that the digital debtors have set 00:10:02.240 --> 00:10:04.879 forth, and I think it's supported by both the 00:10:04.879 --> 00:10:08.000 declaration of Mr. Heath. as well as the declarations 00:10:08.000 --> 00:10:11.059 of Mr. Schilling. So with that, I'll approve 00:10:11.059 --> 00:10:13.679 it and I'll wait for the new order. All right. 00:10:13.799 --> 00:10:19.539 Thank you. Thank you, Your Honor. Thank you, 00:10:19.539 --> 00:10:21.480 Your Honor. For the record, I'm Betsy Feldman 00:10:21.480 --> 00:10:23.419 from Wilkie Farren Gallagher on behalf of the 00:10:23.419 --> 00:10:25.759 Global Debtors. I think that brings us to item 00:10:25.759 --> 00:10:28.519 1B on the agenda, which is the Global Debtors 00:10:28.519 --> 00:10:30.779 Store Closing Procedures Motion for certain of 00:10:30.779 --> 00:10:33.039 their sacks off fifth and Neiman Marcus last 00:10:33.039 --> 00:10:36.919 call stores. Like with the Office of Digital 00:10:36.919 --> 00:10:39.340 Business, this is the hearing for final approval 00:10:39.340 --> 00:10:42.220 of that motion. And since we were before you 00:10:42.220 --> 00:10:45.500 last time a couple weeks ago, I understand that 00:10:45.500 --> 00:10:47.779 store closings have gotten underway and everything 00:10:47.779 --> 00:10:51.600 is going smoothly on that front. In connection 00:10:51.600 --> 00:10:55.139 with the interim hearing, Your Honor had admitted 00:10:55.139 --> 00:10:59.279 four exhibits into evidence at the time, including 00:10:59.279 --> 00:11:01.879 the declaration of Mr. Mark Weinstein in support 00:11:01.879 --> 00:11:06.250 of the emergency motion, the store closing procedures 00:11:06.250 --> 00:11:09.029 themselves, and the consulting agreement with 00:11:09.029 --> 00:11:13.409 GA retail group. Your Honor had also taken judicial 00:11:13.409 --> 00:11:16.169 notice of the declaration of Mr. Mark Weinstein 00:11:16.169 --> 00:11:18.710 in support of the first days on a background 00:11:18.710 --> 00:11:23.870 basis. And for all of those items, we would respectfully 00:11:23.870 --> 00:11:27.700 request that Your Honor enter. these three items 00:11:27.700 --> 00:11:31.539 again into evidence and then take judicial notice 00:11:31.539 --> 00:11:35.379 of the first day declaration once again. All 00:11:35.379 --> 00:11:37.379 right, does anyone object to me carrying the 00:11:37.379 --> 00:11:39.360 evidence from the interim hearing to the final 00:11:39.360 --> 00:11:43.899 hearing? All right, here are no objections. Those 00:11:43.899 --> 00:11:46.620 exhibits will be admitted and I'll take judicial 00:11:46.620 --> 00:11:50.379 notice of Mr. Weinstein's first day declaration. 00:11:51.259 --> 00:11:54.100 Thank you, Your Honor. And Mr. Weinstein is in 00:11:54.100 --> 00:11:59.220 the virtual courtroom, as is Mr. Schilling. Thank 00:11:59.220 --> 00:12:02.240 you, Your Honor. We also filed a form of final 00:12:02.240 --> 00:12:06.000 order on Wednesday evening at docket number 762. 00:12:06.279 --> 00:12:08.659 And we've worked hard with a number of parties 00:12:08.659 --> 00:12:10.820 since the interim order was entered to address 00:12:10.820 --> 00:12:13.480 their concerns. And we filed a revised form of 00:12:13.480 --> 00:12:17.480 order this morning at docket number 775. With 00:12:17.480 --> 00:12:19.860 these changes, I also believe that we are before 00:12:19.860 --> 00:12:22.100 you with a consensual form of order, but I'll, 00:12:22.100 --> 00:12:24.139 of course, let anyone chime in if they disagree. 00:12:25.120 --> 00:12:27.440 The order seeks final approval of the release 00:12:27.440 --> 00:12:30.019 granted on an interim basis a couple weeks ago, 00:12:30.519 --> 00:12:32.899 including authority to enter into and perform 00:12:32.899 --> 00:12:35.120 under the consulting agreement with GA Group, 00:12:35.740 --> 00:12:39.779 authority to conduct the store closing sales 00:12:39.779 --> 00:12:42.840 pursuant to agreed procedures, and then also 00:12:42.840 --> 00:12:45.539 seeking certain modifications of their customer 00:12:45.539 --> 00:12:49.700 program. In addition, the order features three 00:12:49.700 --> 00:12:52.240 bonus and severance programs for non -insiders 00:12:52.240 --> 00:12:54.620 that had not been up for approval at the interim 00:12:54.620 --> 00:12:58.100 hearing. Bucket number one was an aggregate amount 00:12:58.100 --> 00:13:03.279 of up to $2 million for up to 475 employees of 00:13:03.279 --> 00:13:07.139 the closing stores. Bucket number two is an aggregate 00:13:07.139 --> 00:13:12.059 amount of up to $3 million for up to 326 non 00:13:12.059 --> 00:13:14.740 -insider corporate employees that support the 00:13:14.740 --> 00:13:17.779 store closing function. And bucket number three 00:13:17.779 --> 00:13:21.399 is an incentive bonus to be fully funded by a 00:13:21.399 --> 00:13:23.720 provider of augment merchandise that would be 00:13:23.720 --> 00:13:26.899 sold through the clothing stores. On that last 00:13:26.899 --> 00:13:28.840 piece, Your Honor, I figured it might be helpful 00:13:28.840 --> 00:13:31.980 just to clarify for the record the terms of that 00:13:31.980 --> 00:13:35.879 last incentive program. The program has certain 00:13:35.879 --> 00:13:39.700 sales goals for each of the clothing stores such 00:13:39.700 --> 00:13:42.730 that if the goals are achieved or exceeded, The 00:13:42.730 --> 00:13:46.250 store will qualify for a payout of certain incentive 00:13:46.250 --> 00:13:49.409 bonuses, which would be allocated to employees 00:13:49.409 --> 00:13:52.570 that sell the augment merchandise at the conclusion 00:13:52.570 --> 00:13:55.730 of the store closing sale. Amounts would be determined 00:13:55.730 --> 00:13:59.350 based on their CRE. Although the global debtors 00:13:59.350 --> 00:14:02.370 themselves will pay the incentive bonuses, at 00:14:02.370 --> 00:14:05.149 the conclusion of the process, they will be fully 00:14:05.149 --> 00:14:09.669 refunded from the augment provider when the amounts 00:14:09.669 --> 00:14:12.500 are deducted from the amount that the global 00:14:12.500 --> 00:14:14.940 debtors owe that augment merchandise provider 00:14:14.940 --> 00:14:17.679 under their existing revenue sharing arrangement. 00:14:19.299 --> 00:14:21.159 Unless your honor has any questions for me or 00:14:21.159 --> 00:14:22.679 would like me to walk your honor through the 00:14:22.679 --> 00:14:25.419 changes that we made to the form of order, we 00:14:25.419 --> 00:14:29.200 would respectfully request entry of the final 00:14:29.200 --> 00:14:35.440 order. I did look at the red line. That was about 00:14:35.440 --> 00:14:39.799 it. Does anyone else wish to be heard with respect 00:14:39.799 --> 00:14:44.860 to the off price, uh, store closing final order. 00:14:50.600 --> 00:14:53.399 Your honor, um, Lorenzo Marinese again on behalf 00:14:53.399 --> 00:14:56.500 of the committee. As with the prior order, we 00:14:56.500 --> 00:14:58.159 worked very closely with the company to make 00:14:58.159 --> 00:15:01.139 modifications to the form of order in particular, 00:15:01.139 --> 00:15:04.590 recognizing that concession and consignment vendors 00:15:04.590 --> 00:15:06.610 have unique interests in their merchandise and 00:15:06.610 --> 00:15:08.110 wanting to ensure that their products weren't 00:15:08.110 --> 00:15:09.909 sold during the going out of business sales without 00:15:09.909 --> 00:15:13.110 their consent. We also wanted to facilitate separate 00:15:13.110 --> 00:15:15.769 negotiations between the company and their vendors 00:15:15.769 --> 00:15:17.669 or individual vendors and individual landlords 00:15:17.669 --> 00:15:19.549 because they may not all have the same concerns. 00:15:20.070 --> 00:15:22.129 So that's to the extent procedures need to be 00:15:22.129 --> 00:15:24.809 slightly modified to benefit a vendor or a particular 00:15:24.809 --> 00:15:27.250 landlord, that the company was free to do that. 00:15:27.710 --> 00:15:29.769 Obviously, we'd like consultation and notice 00:15:29.769 --> 00:15:31.950 and the company agreed to that, so. We're very 00:15:31.950 --> 00:15:33.649 appreciative once again for the modifications 00:15:33.649 --> 00:15:39.629 that were made to the order. All right. Anyone 00:15:39.629 --> 00:15:47.730 else wish to be heard with respect to? All right. 00:15:48.450 --> 00:15:51.590 So I've reviewed the motion, obviously, in the 00:15:51.590 --> 00:15:55.350 order from the time of the interim hearing. And 00:15:55.350 --> 00:15:59.950 with the modifications and the lack of any objection, 00:16:00.479 --> 00:16:02.919 Again, I think this is a proper exercise of the 00:16:02.919 --> 00:16:04.659 debtor's business judgment, and I'm going to 00:16:04.659 --> 00:16:07.960 go ahead and approve it. So give me a minute 00:16:07.960 --> 00:17:07.059 since I can actually sign this order. All right, 00:17:07.099 --> 00:17:08.740 that order's been signed and sent to documenting. 00:17:10.339 --> 00:17:13.039 Thank you very much, your honor. The final item 00:17:13.039 --> 00:17:17.440 on today's agenda is item 1C, which is the global 00:17:17.440 --> 00:17:20.819 debtors store closing procedures motion for eight 00:17:20.819 --> 00:17:23.599 Saks Fifth Avenue stores and one Neiman Marcus 00:17:23.599 --> 00:17:27.079 store. Your honor may be wondering, as well as 00:17:27.079 --> 00:17:29.059 a number of other parties in the virtual courtroom, 00:17:29.559 --> 00:17:32.779 why we didn't just seek approval of this relief 00:17:32.779 --> 00:17:34.980 in a single motion a couple of weeks ago when 00:17:34.980 --> 00:17:38.490 we were last before you. The rationale for closing 00:17:38.490 --> 00:17:41.109 the off -price stores in our last motion was 00:17:41.109 --> 00:17:43.890 very different than the rationale for closing 00:17:43.890 --> 00:17:47.410 these nine full -price stores. First, the debtors 00:17:47.410 --> 00:17:50.150 needed time to review their lease portfolio and 00:17:50.150 --> 00:17:52.730 create a targeted plan to further their restructuring 00:17:52.730 --> 00:17:56.690 efforts. Also, it was very important from a brand 00:17:56.690 --> 00:17:59.690 perspective to not shock the market with misleading 00:17:59.690 --> 00:18:02.470 headlines that SAX was closing. That was certainly 00:18:02.470 --> 00:18:04.529 not what was happening, and it continues to be 00:18:04.529 --> 00:18:08.250 true. Instead, thanks to the extraordinary efforts 00:18:08.250 --> 00:18:11.009 of the management team, the communications team, 00:18:11.250 --> 00:18:13.329 and frankly the entire enterprise that fuels 00:18:13.329 --> 00:18:16.869 SACS, we use the first month of the case to stabilize 00:18:16.869 --> 00:18:19.829 the businesses and begin rebuilding trust among 00:18:19.829 --> 00:18:23.490 the company's key constituents. Before I get 00:18:23.490 --> 00:18:27.950 too far along, I do want to seek admission of 00:18:27.950 --> 00:18:31.299 four exhibits into evidence. We filed a witness 00:18:31.299 --> 00:18:34.920 and exhibit list at docket number 755 on Wednesday, 00:18:35.579 --> 00:18:37.819 and we would seek admission of the consulting 00:18:37.819 --> 00:18:42.220 agreement at docket number 755 -5, the store 00:18:42.220 --> 00:18:46.380 closing procedures at 755 -6, the declaration 00:18:46.380 --> 00:18:49.240 of Mr. Mark Weinstein in support of this motion 00:18:49.240 --> 00:18:53.839 at docket 755 -7, and the declaration of Mr. 00:18:54.000 --> 00:18:56.680 Schilling in support of the emergency motion 00:18:56.680 --> 00:19:02.269 at docket number 755 -8. In addition, there is 00:19:02.269 --> 00:19:04.450 the declaration of Mr. Mark Weinstein in support 00:19:04.450 --> 00:19:07.490 of the first days again at docket number 755 00:19:07.490 --> 00:19:10.930 -1. And same to request, Your Honor, we would 00:19:10.930 --> 00:19:14.109 ask that the first four documents I noted be 00:19:14.109 --> 00:19:16.650 admitted into evidence and that the court take 00:19:16.650 --> 00:19:19.210 judicial notice of Mr. Weinstein's declaration 00:19:19.210 --> 00:19:29.259 as background for the release requested. one 00:19:29.259 --> 00:19:35.640 at a time. So with respect to 755 -5, which is 00:19:35.640 --> 00:19:37.759 the consulting agreement, anyone object to the 00:19:37.759 --> 00:19:42.980 admission of the consulting agreement? Okay, 00:19:43.059 --> 00:19:44.759 hearing no objections, that will be admitted. 00:19:46.240 --> 00:19:56.700 With respect to 755 -6, which is the store closing 00:19:56.700 --> 00:19:59.769 procedures, does anyone object to the admission 00:19:59.769 --> 00:20:04.470 of that exhibit. All right, hearing no objection, 00:20:04.509 --> 00:20:15.690 that will be admitted. With respect to 755 -7, 00:20:15.690 --> 00:20:18.750 which is Mr. Weinstein's declaration, does anyone 00:20:18.750 --> 00:20:22.349 object to the admission of Mr. Weinstein's declaration 00:20:22.349 --> 00:20:26.369 as his direct testimony in connection with this 00:20:26.369 --> 00:20:32.160 hearing? subject to cross -examination. All right, 00:20:32.240 --> 00:20:33.700 here are no objections that will be admitted 00:20:33.700 --> 00:20:36.680 as his direct testimony subject to cross -examination 00:20:36.680 --> 00:20:40.799 to the extent anyone wants to cross him. And 00:20:40.799 --> 00:20:46.519 then 755 -8 is Mr. Schilling's declaration in 00:20:46.519 --> 00:20:48.960 connection with this motion. Does anyone object 00:20:48.960 --> 00:20:51.539 to the admission of Mr. Schilling's declaration 00:20:51.539 --> 00:20:55.279 as his direct testimony in connection with this 00:20:55.279 --> 00:20:58.920 motion subject to cross -examination? Right, 00:20:59.220 --> 00:21:01.420 they will be admitted as this direct testimony 00:21:01.420 --> 00:21:04.519 subject to cross -examination at the appropriate 00:21:04.519 --> 00:21:07.920 time and I will take judicial notice of the first 00:21:07.920 --> 00:21:10.819 day declaration that Mr. Weinstein filed earlier. 00:21:11.500 --> 00:21:15.599 So all the exhibits are admitted as either as 00:21:15.599 --> 00:21:19.920 direct testimony or for the truth of the matter, 00:21:20.059 --> 00:21:21.940 the consulting agreement and the storm procedures. 00:21:24.019 --> 00:21:26.420 Thank you very much, Your Honor. Turning to the 00:21:26.420 --> 00:21:30.309 relief requested. The motion seeks authority 00:21:30.309 --> 00:21:33.750 for four points of relief. First, authority to 00:21:33.750 --> 00:21:36.470 enter into and perform under the consulting agreement 00:21:36.470 --> 00:21:40.029 with GA Retail Solutions LLC, a copy of which 00:21:40.029 --> 00:21:42.450 is attached as exhibit one to the proposed form 00:21:42.450 --> 00:21:46.529 of interim order. Second, authority to conduct 00:21:46.529 --> 00:21:48.910 store closing sales pursuant to the proposed 00:21:48.910 --> 00:21:51.089 procedures that were just admitted into evidence 00:21:51.089 --> 00:21:54.309 and that are attached as exhibit two to the proposed 00:21:54.309 --> 00:21:58.720 form of interim order. Third, approval of modifications 00:21:58.720 --> 00:22:02.279 to certain customer programs. And then on a final 00:22:02.279 --> 00:22:05.160 basis, not for purposes of this interim order, 00:22:05.700 --> 00:22:08.880 authority to pay severance for non -insider employees. 00:22:09.640 --> 00:22:11.799 I'll skip over that last one, since it's not 00:22:11.799 --> 00:22:14.720 up for consideration today. And the first three, 00:22:14.740 --> 00:22:16.720 Your Honor, should seem familiar based on what 00:22:16.720 --> 00:22:19.299 Your Honor approved a couple weeks ago. I do 00:22:19.299 --> 00:22:22.470 want to highlight a couple key differences. First, 00:22:22.690 --> 00:22:26.430 we requested similar modifications to the customer 00:22:26.430 --> 00:22:28.710 programs as we did for the off -price stores. 00:22:29.589 --> 00:22:33.269 Unlike the prior motion, though, we are not joined 00:22:33.269 --> 00:22:36.269 today by the SO5 digital debtors in that aspect 00:22:36.269 --> 00:22:40.509 of the motion. Also, there were some minor changes 00:22:40.509 --> 00:22:42.630 stemming from the fact that the programs here 00:22:42.630 --> 00:22:45.089 are different than they were for the off -price 00:22:45.089 --> 00:22:49.180 stores. Second, this motion seeks to preserve 00:22:49.180 --> 00:22:51.980 the ability to add stores to the closing list 00:22:51.980 --> 00:22:54.619 if the global debtors in their business judgment 00:22:54.619 --> 00:22:57.079 decide that doing so is in the best interest 00:22:57.079 --> 00:22:59.900 of their estate. There are some procedures that 00:22:59.900 --> 00:23:02.299 are outlined in the motion and I'm happy to walk 00:23:02.299 --> 00:23:04.299 your honor through that to the extent it's helpful. 00:23:05.460 --> 00:23:07.440 How much notice are you going to be giving on 00:23:07.440 --> 00:23:11.720 that? So your honor, we will be seeking to provide 00:23:11.720 --> 00:23:14.819 seven days notice prior to the commencement of 00:23:14.819 --> 00:23:18.460 the sale. We would file a notice on the docket 00:23:18.460 --> 00:23:21.460 that outlines the stores that we're seeking to 00:23:21.460 --> 00:23:24.279 add, the timeframe on which the stores would 00:23:24.279 --> 00:23:27.180 be closing, any additional severance that we 00:23:27.180 --> 00:23:29.619 would seek to pay in connection with those closing 00:23:29.619 --> 00:23:34.980 stores, and any other material changes. All right. 00:23:35.059 --> 00:23:39.319 Thank you. Otherwise, Your Honor, this order 00:23:39.319 --> 00:23:41.539 reflects the changes that we negotiated over 00:23:41.539 --> 00:23:44.099 the past several days. constructively with the 00:23:44.099 --> 00:23:46.279 committee and other interested parties in the 00:23:46.279 --> 00:23:49.140 case in advance of this hearing, many of which 00:23:49.140 --> 00:23:51.700 appear in large part in the final order that 00:23:51.700 --> 00:23:56.019 Your Honor just entered. We did file an updated 00:23:56.019 --> 00:23:58.299 form of the order this morning at docket number 00:23:58.299 --> 00:24:02.019 774, and I'd be happy to walk Your Honor through 00:24:02.019 --> 00:24:04.940 the changes, answer any questions you have, or 00:24:04.940 --> 00:24:07.720 proceed on the merits. Otherwise, we would ask... 00:24:07.720 --> 00:24:10.259 No, go ahead and proceed on... Yeah, go ahead 00:24:10.259 --> 00:24:13.380 and proceed on the merits. Thank you, your honor. 00:24:14.000 --> 00:24:16.200 With respect to the consulting agreement, the 00:24:16.200 --> 00:24:19.019 global debtors are seeking authorization to enter 00:24:19.019 --> 00:24:21.240 into the consulting agreement with Great American. 00:24:22.160 --> 00:24:24.420 The global debtors believe that this is a sound 00:24:24.420 --> 00:24:27.099 business, sound exercise of their business judgment. 00:24:28.099 --> 00:24:30.900 The consulting agreement contains market terms 00:24:30.900 --> 00:24:34.019 that were negotiated at arm's length. And we 00:24:34.019 --> 00:24:36.480 believe that the consultant is the right party 00:24:36.480 --> 00:24:38.839 for this job, given its extensive experience 00:24:38.839 --> 00:24:42.250 in conducting retail liquidation sales, including 00:24:42.250 --> 00:24:45.809 liquidations of luxury goods, as well as certain 00:24:45.809 --> 00:24:48.549 other aspects, as Your Honor is aware, of these 00:24:48.549 --> 00:24:52.390 particular cases. The agreement gives the global 00:24:52.390 --> 00:24:54.809 debtors sufficient flexibility to control the 00:24:54.809 --> 00:24:57.089 process and maintain their brand relationships. 00:24:59.230 --> 00:25:01.809 On the store closing procedures themselves, the 00:25:01.809 --> 00:25:04.309 global debtors are seeking authorization of their 00:25:04.309 --> 00:25:08.170 proposed store closing sales for eight Saks Fifth 00:25:08.170 --> 00:25:11.450 Avenue stores, and one Neiman Market store on 00:25:11.450 --> 00:25:14.369 the terms of their proposed store closing procedures. 00:25:15.230 --> 00:25:19.190 This includes seeking customary relief from certain 00:25:19.190 --> 00:25:22.210 local and state laws that would restrict the 00:25:22.210 --> 00:25:25.170 conduct of those store closing sales, of course, 00:25:25.369 --> 00:25:27.569 subject to certain dispute resolution procedures. 00:25:28.869 --> 00:25:32.069 We're also seeking authority to abandon certain 00:25:32.069 --> 00:25:34.869 FF &E, furniture, fixtures, and equipment at 00:25:34.869 --> 00:25:37.480 closing stores. that the debtors, the global 00:25:37.480 --> 00:25:40.839 debtors are not able to remove themselves. With 00:25:40.839 --> 00:25:43.880 respect to the customer programs, the global 00:25:43.880 --> 00:25:48.000 debtors are seeking to get approval of certain 00:25:48.000 --> 00:25:50.940 modifications to their customer programs relating 00:25:50.940 --> 00:25:54.599 to returns, gift cards, the use of credit cards, 00:25:54.640 --> 00:25:57.859 and their rewards programs. These changes were 00:25:57.859 --> 00:26:00.039 carefully thought through by the global debtors 00:26:00.039 --> 00:26:04.079 management team. in an effort to provide finality 00:26:04.079 --> 00:26:06.920 to themselves while also giving customers an 00:26:06.920 --> 00:26:09.759 efficient grace period where possible. These 00:26:09.759 --> 00:26:12.980 changes are all imperative to preserving customer 00:26:12.980 --> 00:26:15.480 goodwill in order to maximize the value of the 00:26:15.480 --> 00:26:18.660 liquidation sales. And again, Your Honor, since 00:26:18.660 --> 00:26:20.400 severance is not on for this hearing, I will 00:26:20.400 --> 00:26:27.119 skip over that piece. All right. Does anyone 00:26:27.119 --> 00:26:30.759 else wish to be heard with respect to the... 00:26:31.450 --> 00:26:36.390 full store or the full line closing. Your honor, 00:26:36.529 --> 00:26:38.809 just briefly, Lorenzo Marinuzzi again, co -counsel 00:26:38.809 --> 00:26:40.950 for the official committee. The interim order 00:26:40.950 --> 00:26:43.109 reflects some changes requested by the committee. 00:26:43.390 --> 00:26:46.269 We're still obviously reserving rights to the 00:26:46.269 --> 00:26:49.150 final. The bigger issues are really around notice. 00:26:49.849 --> 00:26:52.569 The merchandise mix in these stores is very different 00:26:52.569 --> 00:26:55.859 from the other stores that are liquidating. And 00:26:55.859 --> 00:26:58.799 so you have a number of concession vendors and 00:26:58.799 --> 00:27:00.700 consignment vendors, but concession vendors in 00:27:00.700 --> 00:27:04.200 particular that may in fact be the employer for 00:27:04.200 --> 00:27:07.480 employees at these locations. And so if the company 00:27:07.480 --> 00:27:10.900 determines that they want to close a store and 00:27:10.900 --> 00:27:13.220 a vendor has actual employees there, the vendors 00:27:13.220 --> 00:27:15.579 obviously would like more notice, not less notice, 00:27:16.039 --> 00:27:18.019 to advise the employees that they might be looking 00:27:18.019 --> 00:27:20.440 for other employment. I think we'll get there 00:27:20.440 --> 00:27:22.460 ultimately. And again, we encourage the company, 00:27:22.500 --> 00:27:24.400 as they have done, and with respect to the other 00:27:24.400 --> 00:27:26.799 motions that they did there, to negotiate side 00:27:26.799 --> 00:27:28.660 agreements where necessary and appropriate with 00:27:28.660 --> 00:27:31.160 other vendors and landlords to allow them to 00:27:31.160 --> 00:27:33.160 be accommodated for their particular needs. And 00:27:33.160 --> 00:27:36.140 we encourage that. I think, I'm confident, we'll 00:27:36.140 --> 00:27:38.539 get to a final order that works for the committee. 00:27:38.779 --> 00:27:42.839 But we're not quite there yet. Thank you, Your 00:27:42.839 --> 00:27:45.640 Honor. Anyone else wish to be heard? Your Honor, 00:27:45.839 --> 00:27:47.980 Simon Meier from Trauma Good For Walk. Can you 00:27:47.980 --> 00:27:51.170 hear me okay? I can hear you fine. Okay, Your 00:27:51.170 --> 00:27:53.309 Honor, I represent Utica Square Shopping Center. 00:27:53.430 --> 00:27:57.069 It is one of the SACS locations, the SACS location 00:27:57.069 --> 00:28:00.269 in Tulsa, Oklahoma. My client just received the 00:28:00.269 --> 00:28:02.009 motion, so we're still digesting it a little 00:28:02.009 --> 00:28:06.269 bit. However, at an initial point, we're dealing 00:28:06.269 --> 00:28:09.609 with a lot of different contacts from SACS, and 00:28:09.609 --> 00:28:11.829 so what we would ask is if Debtors Council could 00:28:11.829 --> 00:28:15.369 send us a single point of contact that has authority 00:28:15.369 --> 00:28:19.680 to negotiate and find the debtor on one of these 00:28:19.680 --> 00:28:23.059 side letter agreements, that would be very helpful 00:28:23.059 --> 00:28:25.059 because what we don't want to do is talk with 00:28:25.059 --> 00:28:28.500 the consultant or the consulting group and then 00:28:28.500 --> 00:28:30.119 get switched off to somebody else. So if there's 00:28:30.119 --> 00:28:31.500 somebody with the debtors who could provide us 00:28:31.500 --> 00:28:33.920 with that information, that would be very helpful. 00:28:35.720 --> 00:28:37.660 Your Honor, Betsy Feldman, for the record, we'd 00:28:37.660 --> 00:28:42.180 be happy to. All right. Anyone else wish to be 00:28:42.180 --> 00:28:50.349 heard? In terms of a final hearing, Do you want 00:28:50.349 --> 00:29:00.569 one in a month from now? Your Honor, if possible 00:29:00.569 --> 00:29:03.490 to be heard sooner than a month, we would certainly 00:29:03.490 --> 00:29:07.650 appreciate that. No, no. I'm really just asking. 00:29:08.250 --> 00:29:18.119 OK. So let me just look at the calendar. To the 00:29:18.119 --> 00:29:19.819 extent, Your Honor, has any availability the 00:29:19.819 --> 00:29:23.640 week of March 2nd, perhaps? Yeah, that's exactly 00:29:23.640 --> 00:29:43.619 what I'm looking at. Why don't we do 1 o 'clock 00:29:43.619 --> 00:29:48.660 on March 2nd? Thank you very much, Your Honor. 00:29:49.240 --> 00:29:52.279 We will upload the form of order with that date 00:29:52.279 --> 00:29:56.119 inserted. I can insert it. If there's no changes 00:29:56.119 --> 00:29:59.380 to the order, I can insert that. There are no 00:29:59.380 --> 00:30:02.279 changes to the order. All right. Hold on a second. 00:32:11.279 --> 00:32:18.480 Right, I have. Signed the order. Objection deadline 00:32:18.480 --> 00:32:25.059 of the week before the 23rd of February and in 00:32:25.059 --> 00:32:29.559 the hearing on March 2nd at 1 o 'clock. So let 00:32:29.559 --> 00:32:35.759 me just. Right, it's been signed and sent to 00:32:35.759 --> 00:32:39.480 documenting. Thank you, Your Honor. That concludes 00:32:39.480 --> 00:32:42.779 our agenda for today. All right, anything further 00:32:42.779 --> 00:32:47.960 from anyone? All right, we'll be in recess.