Good morning. It's 930 a .m. on Friday, February
20, 2026. We're here in case number 26 -90103,
SACS Global, for second day hearings. Why don't
we get appearances of counsel and then we can
proceed. Good morning, Your Honor. Sepp or Sinclair
will keep bar and calendar for the debtors. Good
morning. Good morning, your honor. Jared Martin
for the answer five digital letters. Good morning,
your honor. Bob Britton, Paul Weiss on behalf
of the DIP lenders. I'm joined in the room, your
honor, by my partner Chris Hopkins. Good morning.
Good morning, your honor. Lorenzo Maranusi, Morrison
and Forster on behalf of the DIP lenders. I'm
joined by my partner Ben Butterfield and others.
Good morning. Good morning, your honor. Daniel
Fiorello. uh... from otterberg pc i'm joined
by my partner david kasselman and uh... my co
-counsel from morton lewis uh... council for
bank of america agent for the adl morning thank
you for calling i'm going to activate the hand
raising feature so please hit five star because
there's just too much background noise Conference,
muted. Good morning, Your Honor. Joseph Schiffer
of Prior Cashman on behalf of David Ehrman, Kering,
LVMH, Montclair, Richemont, and SMCP. Good morning.
Good morning, Your Honor. Chris Carter of MLS
and Bacchus on behalf of Caledon Commercial Finance
as the pre -conditioning agent to the SO5 digital
debtors. Good morning. Good morning, Your Honor.
Ian Winters on behalf of Vendors, BH Multitom
Corp, BH Multicolor Corp, Richline Group, Inc.,
United Unique Designs, Inc., Graph Diamonds,
New York, Inc., 64 Facets, Inc., and MSeru USA
Corp. Good morning. Good morning, Your Honor.
Sid Scheinberg, along with my associate, Naomi
Cheney, on behalf of Margaret McLean -Jeweler.
Good morning. Good morning, Your Honor. Good
morning, I think, Trustee. Good morning, Mr.
Wynne. Good morning, Your Honor. John Higgins,
Her Hedges, appearing with Shane Johnson and
Nepal Weiss Group on behalf of the Ad Hoc Group
of DIP lenders and secured note holders. All
right. Good morning, Your Honor. Robert Lee Haynes,
Kelly Dryen, Warren, on behalf of Landlords,
Aventura Fashion Island, Grixmoor Parkshore,
TGP Retail LLC, Regency Centers, Brookfield Office,
and Turnberry. Thank you very much, Your Honor.
Thank you. Good morning, Judge. Gary Vist for
the Vendor 2 source. Good morning. Good morning,
Your Honor. John. Go ahead. Good morning, Your
Honor. John Dodd of Baker McKenzie on behalf
of Balanchina USA, Balmain USA, and Prada USA.
Good morning. Good morning, Your Honor. Greg
Hess with Hunt and Andrews Group on behalf of
Capital One. Good morning. Good morning. Amine
Borty on behalf of Exxon and Capital Management
from Stidley. All right. All right. Good morning,
Your Honor. Go ahead. Bethany Simmons, Loeb &
Loeb LLP on behalf of Donnie Ink, Roberto Coyne,
Gigi USA, Dulce & Gabbana USA, and Dulce & Gabbana
Beauty USA. Good morning, Your Honor. Leslie
Heilman, Ballard Spar on behalf of Centennial
Waterford Willow Bend LLC, Street Retail LLC,
the Forbes Company, the Irvine Company LLC, and
the May Search Company, all landlords of the
debtors. All right. Thank you. All right. Anyone
else wish to make an appearance that hasn't made
one hit five -star, Mr. Sutherland? Good morning,
Your Honor. Courtney Birnbaum on behalf of International
Diamond Importers Inc. and Tasteberry Corp. vendors.
Good morning, Your Honor. Lisa Norman from Andrews
-Meyers on behalf of David Yermann Enterprises,
Delta Galil Industries, GMBSA, Valley, Billiard,
NM Chicago, Caring America, Louis Vuitton, Leclerc
USA, Reichmont, North America, SMCP, Yermann
Retail North America, and Zimmerman Ware Party.
Also on the line, Joe Schiffer from Prior Cashman.
We're at our local council. Good morning. Good
morning, Your Honor. Leslie Dirkhoff, Marth Hockenhamer,
on behalf of Valentin and Kalich Jewelry Manufacturing,
LLTV. Thank you. Good morning. Good morning,
Your Honor. David Kozlowski with Morrison Cohen,
representing S Rothschild and Company Inc. Comark
LLC, MMJ Apparel, Major Major LLC, Santomi, North
America, Camilla, Australia, Party Limited, and
Camilla Corporation. Good morning, Your Honor.
Jason Angelo of Reed Smith, representing Citibank
in its capacity as a trustee and collateral agent.
Good morning. Good morning, Your Honor. Jason
Keele of Silk, Cummins, and Gross on behalf of
Skipporami USA, Inc. and Deva, Inc. Mr. Sutherland
Yes, your honor Mike Sutherland Carrington Coleman
per AJD platinum and vivid blue All right Does
anyone else wish to make an appearance hit five
star one time? Good morning, your honor. Can
you hear me? Yes. Jerry Lee Miller for the Austin
LLP for Simon Property Group. Good morning. All
right, Ms. Sinclair. Yes, your honor. Are you
able to hear me? I can hear you fine. Great.
Good morning, your honor. Again, Zepport, Sinclair,
Wilkie, Barr, and Gallagher for the global debtor.
We have a relatively short agenda today, if your
honor has granted most of our second day relief
ahead of today's hearing, which we're very appreciative
of. And if it pleases the court, we know that
the SACS offset digital debtors do have something
on the agenda, but we'd like to go slightly out
of order and start with the global debtors matter,
because the only matter that we'll be going forward
today is our final ZIP order. And before I move
into the presentation on the ZIP, I'd like to
give the court a brief status update. So as you
know, we've been in Chapter 11 for a little over
a month. The company has spent that time working
around the clock to rebuild its relationships
with vendors. and those efforts have been very
fruitful. As of today, we have more than 100
brands that have either executed or are coming
close to executing trade agreements with the
company. Our brand partners needless to say,
Your Honor, are at the heart of our business
and we're generating great momentum with them.
The debtors have also been using this time to
refocus on their core commitment to luxury retail.
As Your Honor knows, the company has started
closures of around 60 sacks off this brick and
mortar location. Those closures are proceeding
ahead of schedule and proceeds of the sales have
been better than expected. The company has also
commenced nine full -line store closures and
has recognized significant cost savings already
through contract rejection. Overall, Your Honor,
it's a positive report. The company has been
outperforming the DIP budget in terms of top
line revenue and merchandise receipts and we've
also been working actively with our lenders.
We did admit the declarations of Mr. Baird of
PJT and Mr. Weinstein of BRG at the first date
hearing in support of the dip motion. We do not
intend to admit any new evidence today, but both
witnesses are here in the physical conference
room with me and in the virtual courtroom with
us today. As I alluded to, Carl? Yeah, just to
make sure, does anyone object to using the testimony
from the first dip hearing that went on for about
seven and a half hours as testimony in connection
with the second day hearing. All right. Hearing
no objections, we'll use that testimony, obviously
subject to cross -examination to the extent necessary.
Thank you, Your Honor. As I alluded to earlier,
we are pleased to come before you today with
a largely consensual proposed final DIP order.
We have come a very long way since the first
day hearing. Notably, we've reached a resolution
with the Official Committee of Unsecured Creditors
largest brand partners. We've reached an agreement
with Exonic regarding the dip. Amazon is no longer
pursuing an objection to the dip. And we've resolved
almost all of the formal objections and informal
comments that we've received to date. We believe
that the revised form of order we filed last
night at docket number 890 should either resolve
all of the remaining limited objections on the
docket or otherwise that those objections should
now be overruled in light of the resolution that
we've reached with the committee and which is
supported by our our largest brands. And in fact,
Your Honor, we've seen that some of the limited
objections have been withdrawn prior to the hearing.
We understand that others of them are resolved.
But again, if any of them aren't, we would now
request that they be overruled. Your Honor, to
please the court, I'd like to walk through some
of the material elements of our resolution with
the committee, because I think that summary of
that deal is also going to serve to address...
Here is the marshal. And so I'll spend a little
more time here just to explain those to the court.
In summary, the resolution that we reached, which
is embodied in paragraphs 27 and 28 of the final
zip order, is intended to protect the vendors
that provide goods to the company on either a
consignment basis or a concession basis. Again,
this resolution is supported by the company's
largest brand partners, who also provide goods
in the post -petition period. The new language
is our brand partners. a lien on those proceeds
of those goods that is senior to the DIP obligation
other than the ABL obligation and is senior to
the pre -petition obligation, again, other than
the ABL obligation. In a similar vein, the debtor's
506C surcharge rights are not being waived with
respect to post -petition merchandise and those
vendors and the committee would have the ability
to seek standing to a surcharge if we ended up
in a remote scenario. The new language reserves
everybody's rights if there is a dispute in the
future over the pre - or post -petition, the
proposed final DIP order clarifies that the consignor
had a senior lien in those goods. The order also
recognizes that the vendors have valid and perfected
liens to goods in the company's possession during
the Chapter 11 cases, regardless of whether they
took any formal steps to perfect those liens.
The final DIP order... any sales proceeds on
prepetition amounts that those can be paid in
the ordinary course of business to the concession
and the consignment. So there's no, it's not
treated as prepetition debt so they can just
be sold in the ordinary course of business. I
thought I understood that that was also in there,
correct? I think they can be paid for a concession
and consignment under different vehicles. does
not otherwise impact the vendor's existing contracts
with the debtors. I want to make that point on
the record because the vast majority of these
concession and consignment vendors do have contracts
with the debtors. So those will continue to govern
the relationship absent the new post -petition
agreement or an amendment to an agreement being
negotiated. And finally, nothing in the DIP order
impacts any vendor's the overall... Thank you.
I had no questions. Let me hear first from the
committee and then I'll hear from anyone else.
Hold on a second, Mr. Butterfield. Hold on. All
right. Did I unmute you? I think so. Good morning,
Your Honor. Can you hear me? I can hear you fine.
Go ahead, Mr. Butterfield. Great. Ben Butterfield,
Morrison and Forster propose counsel to the committee.
Your honor, I don't know if you've had a chance
to review the statement we filed last night,
but I did. You did? Okay, great. So look, as
Ms. Sinclair explained, the committee's resolved
its concerns with the DIP financing. And in our
filing, we tried to explain the benefits of this
for the company's vendors and unsecured creditors
and landlords and really everyone. And look,
DIPs are hard fought, right? This was no exception.
Very hard fought. Came down to the wire. But
I think from the committee's perspective, we've
absolutely gotten to the right place. This facility
provides a billion dollars, over a billion dollars
in new liquidity to the company. Nearly $600
million of that is slated to go out to clean
up pre -petition claims owed to vendors. We've
taken a very close look at the budget, which
we understand will be agreed in the next few
days. And the company is getting the cash it
needs. That was really our primary focus and
concern. We want the company to be on solid footing
going forward, and this facility does that. It's
also going a long way, this facility, to restore
your relationships with vendors, between facts
and incentives. Really, it's partners. Like I
said, there's almost $600 million available to
pay pre -finition claims to critical vendors,
to concession vendors, to consignment vendors.
And that's absolutely what this company needs
to do to bring everyone back on sides. And from
what we're hearing, the company is doing it.
So we're very, very proud of that. Of the 600,
we understand that 330, it's been represented
to us, that 330 million of that will be going
out the door in the next two weeks. And we understand
that there's a statement that betters will lead
into the record to that effect at some point
during this hearing. Another focus of the committee
was making sure that vendors... And really, everyone
who does business with this company on a go -forward
basis is protected. And I think we've achieved
that. Like Ms. Sinclair said, we preserved the
company's surcharge rights, not just for good
delivered during bankruptcy, but also for sub
rent. And while we're talking about sub rent,
this company's landlords are very important.
These are premium locations. And they've been
very patient with the company. And the committee's
position is that they should not be waiting until
the end of the case to have sub rent paid. And
we're very pleased that the companies agreed
to pay sub rent within 10 business days. It's
the right thing to do, and it was a very important
point for the committee. Back to vendors. As
everyone knows, this business doesn't exist without
its vendor community. And there was a concern
from concessionary consignment vendors. are we
acknowledging our rights, the dip priming our
interests? And so we made it very, very clear
that this dip does not prime the rights of concession
vendors or consignment vendors, and that applies
both for goods delivered pre -bankruptcy and
post -bankruptcy. The company and the dip lenders
have agreed that regardless of when goods are
delivered, the rights of each vendor to their
goods are sacrosanct. They have priority and
they're not primed. Now once goods are sold,
The vendors' right to payment from the company
for concession and consignment goods will sit
ahead of the DIP term loan and ahead of a billion
dollars in new money. And from our perspective,
look, no case is perfect, but this is really
the gold standard for protecting these vendors
sitting ahead of the DIP term loan. We're very
pleased that the DIP lenders agree to that. We
think it was the right thing to do. And I can
tell you from the committee's perspective, we
think vendors should feel very comfortable doing
business with this company going forward. We've
also negotiated, we haven't had a lot of conversations,
not just with the committee, but also with the
broader vendor community. We've been hosting
calls where we've talked to vendors and heard
their concerns and tried to explain what the
facility does and what it doesn't do, and see
where the pressure points are. As a result of
those conversations, we've negotiated for an
extended challenge period for confession and
confinement vendors across the board, not just
the committee, and also a reservation of set
-off rights, which is another thing I believe
that... companies council will lead into the
record at some point during this hearing. So
those were asked from the broader vendor community
and we are very happy that we were able to deliver
them. So look, is this a perfect dip facility?
No, no facility is. But I think we set the bar
really high, especially for vendors and for landlords
in a retail case. And we're happy with what we've
achieved and we're supportive of entry of the
dip order. Thank you. All right, who else wishes
to be heard? Anyone hit five star if you wish
to be heard? All right. Are there any remaining
objections? All right. Can you hear me? Yes,
I can. Oh, I'm sorry. Good morning. Justice Schiffer
again, prior Cashman on behalf of David Gurman,
Kerry, LVMH, Montclair, Leishmont, and SMCP,
and their various affiliated brands. As your
honor may recall, at the first day hearing, we
had identified that there were significant issues
in the interim order as it relates to concession
and consignment vendors. Since then, we've been
working with the debtors, the dip lenders, the
committee, and counsel for dozens of other vendors
to bridge the gap into the final order that's
before your honor. We follow the reservation
of rights at document number 856. indicating
that we're still working on reaching a deal for
the form of the final order. And Your Honor,
with the modifications that have been presented
to you, we are fully supportive of the financing.
Your Honor, my clients are some of the debtor's
largest vendors and most iconic fashion brands,
and they want to continue doing business with
the debtors and see them all the way through
to a successful reorganization. And Your Honor,
I really want to thank committee council, particularly
Mr. Butterfield and Mr. Mantle, for taking up
the vendor issues at the committee level. after
it was formed and bringing us to where we are
today in terms of the final order. And I'd like
to thank counsel for the other vendors. I think
we worked very constructively together, as well
as the folks at Wilkie and Spiegel and the folks
at Paul Weiss, Mr. Brigham and Mr. Hopkins. Your
Honor, we think this is as good of a deal as
the parties can reach. And while not everyone
is getting everything they're looking for, we
take that as a sign that it's a good deal. And
we look forward to partnering with the company
to bring these cases to a successful conclusion.
Thank you, Your Honor. All right, thank you.
Anyone else wish to be heard? Five star. Your
Honor, Mike Southerland, can you hear me? I can
hear you, sir. Oh, first of all, I want to really
appreciate Mr Schiffer and Mr Butterfield for
dialing us into the discussion. I think it's
very just productive. Our objection was, as Mr.
Schiffer said, because the interim order left
a lot of issues open. I think this version covers
most of those. One housekeeping thing, Your Honor,
I think our objection also somehow got linked
to the digital debtors cash collateral motion,
and I think that was in error. I don't want to
de -link from this one, but I think if you can
de -link this from that one, that would be appropriate.
The only comment I would have on the final order,
and I think it's one that Your Honor could do
without damage to the bargain, at the end of
paragraph 18f, where the deadline has been extended,
And let me say, my client hopes that it will
be a critical vendor with a trade agreement and
that we'll not have to get involved in anything
like a challenge of any sort. They just want
to get back to business. But in the event that
a vendor, a consignor does have to resort to
that, Your Honor, and I can see that arising
either if they're not selected as a critical
vendor or they've chosen not to do business or
Maybe they have a trade agreement and the payments
have started, but there is a world where good
plans go awry. I think if the court reserved
to itself the right to re -extend that deadline
for cause, I think that would create some more
comfort in the consignor community. And I'll
leave that to your honor. All right. Thank you.
Your honor, Ian Winters from Claystatt Winters,
Durello Shudders, and Stevens. We filed a reservation
of rights on behalf of the clients that we represent
and mentioned in our appearance. We're pleased
to report that we're happy to withdraw our reservation
of rights and limited objection. We're pleased
with the efforts of all the parties that have
taken part in the negotiations over the last
several weeks. to come up with comprehensive
language that protects concessionaires and consignors
to the fullest extent possible under the circumstances.
This wasn't an easy negotiation, but we are pleased
with where things have ended at the end of the
day. We echo the comments mentioned earlier about
the efforts of the committee and committee council,
Mr. Butterfield in particular, and are extremely
appreciative of those efforts. We fully support
entry of the dip order. All right, thank you.
All right, Mr. Gravante, do you wish to be heard?
Yes, thank you, Your Honor. John Gravante, I
represent certain consignment and concession
vendors whose claims are primarily for pre -petition
sale proceeds. Your Honor, like the vendor said,
we are not here to block the financing. We have
a limited objection. We understand that the vendor
stays acquitted to operate, but the state order
as drafted does not preserve our clients secured
collateral in the proceeds of the sale of their
pre -petition sale or merchandise. It preserves
language, and there's a difference. For our clients
alone, the pre -petition proceeds at issue exceed
over $10 million. And the problem is not the
priority language. The problem is preservation.
And if you look at the debtor's reply, which
they filed last night, nearly all the protections
they describe for consignment vendors and concession
vendors relate to post -petition consignment
agreements, post -petition concession merchandise,
post -petition priority fees, and post -petition
payments. This is forward -looking. Our objection
is backward -looking. And it concerns pre -petition
merchandise that has already been sold and the
proceeds of those sales. And so when you strip
away the post -petition protections, the only
protection for the pre -petition consignors and
concession vendors is nothing primes your lien,
all your rights are reserved. But that's not
adequate protection, particularly here, where
our clients' rights are attached to identifiable
merchandise and identifiable proceeds. Those
proceeds were required to be preserved. They
were required to be segregated and sent aside.
They were not. Instead, they were commingled
at operating counts and likely have been used
in operations. So once these proceeds have been
commingled and or spent, my client's secure position
becomes practically unenforceable. And I better
say, well, we're reserving all your rights. But
reserving rights if they're failing to preserve
the collateral at issue, it makes those rights
a livery. So you can't mean to reserve a right
and property that's not been preserved. And so
this is basically what we consider as a constructive
stripping of our rights. Now, the debtor said,
well, we didn't prime you. You're still ahead
of the debt lenders and your proceeds. But priming
is the issue. Because if proceeds have been aborted
with a general operating cash with no segregation
and no accounting, that's our secure interest.
It's impossible to enforce now. in any practical
way. So basically they're saying, we've domingled
the proceeds, we may have used the cash, we can't
identify your proceeds, but don't worry, your
lien still exists and your rights are reserved.
Exists on what? What property? What segregated
proceeds? So a reservation of rights doesn't
create collateral. Your clients did everything
right, they protected their security interests,
they had true consignment relationships. The
only thing they couldn't control was the debtor's
own internal handling of their proceeds. And
because they failed to segregate and instead
commended those proceeds, our rights are basically
gone. So when they say you still have your rights,
your right to reserve, but there's nothing identifiable
left to attach them to. So Your Honor, it's pretty
straightforward. I would also say there's another
issue you should be aware of, and that's this
supply chain consequences of what's been going
on. Our vendors are hesitant. We've heard from
others that other vendors are hesitant to engage
with the vendors because of this uncertainty
and these issues with the pre -petition collateral.
And I just want to raise the issue with the courts
that this is going to maybe run into operational
problems because it's not going to be able to
get enough vendors to participate in post -petition
business. So we're not asking you again. We're
not asking you to deny the dip. We're asking
for one thing. We want a meaningful carve -out.
for our pre -petition consignment and concession
proceeds. And we want that money, our money to
be set aside and for it to be carved out from
users collateral in any way by the dip order.
Thank you, Your Honor. All right, thank you.
All right, does anyone else wish to be heard?
Your Honor, Amane Borty from Sidley Austin on
behalf of Exxonix. Yes, ma 'am. Thank you, Your
Honor. I would like to echo other parties and
give our thanks to the debtors and to the DIP
lenders for hard -fought negotiations over Exxonix's
position. We did reach agreement on a stipulation
that reserves issues for another day. We're hopeful
that we can resolve those issues without coming
back to your honor, but we believe that the stipulation
does preserve those issues in a way that is meaningful
for Exxonix and also helpful for the debtors
and the DIP lenders for today. We just have one
very small point which we did raise with the
debtors just before the hearing but weren't able
to connect with them, understandably so. In reviewing
the order overnight, we noticed that the notice
provision with respect to changes on the order
has been limited and we would like to be included
in the list of parties that would receive notice
for those changes. Thank you, Your Honor. All
right. Anyone else wish to be heard? Your honor,
this is Robert Lee Hing, Kelly Dry and Warren.
Can you hear me? Yes, I can hear you, Mr. Lee
Hing. Thank you, your honor. Very briefly, on
behalf of numerous landlords, we absolutely agree
with the comments from committee council and
are deeply appreciative of the efforts of Wilkie
Barr, Lenders Council across the board. This
is the benchmark. This is the right result with
respect to stub rent and are hopeful that it
is something that will be carried forward into
numerous cases going forward. Again, thanks to
everyone involved for the hard work you got us
in this place. All right. There are several other
people who have raised their hands, but if you
want to speak, just hit five star if you're not
unmuted. Good morning, Your Honor. Go ahead.
Good morning, Your Honor, Leslie Heilman. Yes,
Ms. Farr. On behalf of a number of landlords
as well, I echo Mr. Lee Heen's comments on the
record and will not duplicate, but I would like
to say I appreciate the efforts of debtors council,
lenders council, and communities council in reaching
the result of the final dip order. Just for clarity,
you know, we advised them yesterday that we were...
signed off on the form of final dip order, but
in case it was not clear, we do believe that
our objection filed at Docket 703 is resolved
as a result of the form of final order that's
been submitted to Your Honor. All right, thank
you. All right. Thank you. Mr. Scheinberg. Oh,
good morning, Your Honor, again. Real briefly,
on behalf of Margo McKinney, we would like some...
some sort of a more formal procedure as to how
to be determined to be a critical vendor. It
seems like that's kind of a certain counsel and
it's like call your buyer, call this person,
but there's no simple procedure on how to go
about that so we can determine if we're going
to be able to continue doing business and if
we're going to be able to receive payments for
the free petition sales, which in my case is
fairly substantial for a small company. And that's
the only way to ask for some sort of clarification
as to how that procedure works as opposed to
this mystery, yes. Thank you. All right. Anyone
else wish to be heard? Good morning, Your Honor.
Bob Britton, Paul Weiss, I'll be off the dip
line. Just very briefly, Your Honor. First, I'd
like to just echo Ms. Sinclair's comments and
affirm them. Over the last month, we've come
very, very far, not only with the debtors, but
with all parties of interest who reached out
and had comments on the diploma. I want to take
a moment to thank the debtors, the UCC, and all
of its members, individual vendors who reached
out, and landlords, as well as Ethonic for working
with us and fighting with us, but ultimately
getting to the right place over the course of
the last month. And briefly, Your Honor, and
I'm sure Ms. Sinclair will address that, but
since I look at the floor, just briefly in response
to Mr. Gravanti's comments, Mr. Gravanti told
you, Your Honor, that he's got a pre -petition
claim, a pre -petition claim, which he asserts
he has a lien in or an ownership interest in
or ought to have a lien in or an ownership interest
in. But with respect, Your Honor, I think Mr.
Gravanti went on to repeat his own argument.
And he told you that all those funds were commingled,
that a secured interest was unenforceable, and
that his liens have gone away. And that's sort
of the whole point, Your Honor. What we've done
in the debt is we've preserved his rights to
assert whatever legal interests or rights he
may have down the road. But it's not clear, based
on his own statements, that he has anything.
to adequately protect the day, therefore, the
reservation of rights ought to be more than sufficient.
With that, Your Honor, I thank you for your time,
and I'll see the podium. All right, does anyone
else wish to be heard before I go back to Ms.
Sinclair? All right, Ms. Sinclair. Thank you,
Your Honor. I'll address these in no particular
order, but I'll start where Mr. of Britain ended
with the statements of Mr. Gravanti. Respectfully,
Your Honor, we aren't hearing any sort of uncertainty
about operational issues from vendors in the
vein that Mr. Gravanti is mentioning. We're getting
plenty of inventory. As I understand, we're actually
well ahead of where we expected to be for the
first quarter of 2026 following the month of
January alone. So I just want to make it clear
on the record that we're not experiencing the
types of problems that he's mentioning. On his
point. about liens on proceeds. Mr. Britton took
the words out of my mouth. His right to assert
any preposition claim is fully preserved. But
we agree with Mr. Britton that it's not necessarily
true that he has the type of claim he thinks
he has today. But again, the point is his right
to assert that at any time in the case is fully
preserved. Our brands know how we operate. There
are sophisticated parties who are aware of the
reasons they were entering into. To respond to
Margo McKinney's counsel, A vendor process, obviously,
is in the debtor's discretion. It's set forth
in the terms of the interim and final orders
governing the critical vendor process. So we're
happy to engage with Ms. McKinney on the terms
of our arrangements with her. But there is no
particular process that we'll be implementing
other than what's set forth in the orders that
have been entered by this court. With respect
to Ms. Borty's request on notice in the exonic
stipulation, we're fine with... Does anyone else
wish to be heard? Someone keeps raising their
hand, but if you hit five star, if you want to
speak. All right, go ahead. We can't hear you.
Get closer to the phone 4 -0 -1, we was formally.
Your Honor, I'm review with objection to the
current proceedings. We have and assume regress
of forensic audit of data ex -global which has
uncovered systematic spread of acid stripping,
including inventory forgery of 412 million plus
ghost talks and discrepancies with the Salesforce
ledger and physical reality. For the record,
Your Honour, we have already engaged with the
United States FTC and the UK Insolvency Regulant
Patents and the data councils have been silenced
and we contacted before the filing of... 13th
January, we contact the email on 7th January
and the board but they don't reply and they give
the speech and notice from Mark Spencer, Wilke
Parr and Gallagher. And I wish to direct the
force to my evidence that I provided to the assistant
US trustee. We are here on the dip financing
motion, so to the extent that you want to file
something. But we're focused here on the dip
motion. Thank you. I'm going to mute your line
because I'm getting a lot of background noise.
All right, does anyone else wish to be heard
on the dip? Hit five star one time All right,
thank you First of all, I really appreciate all
the party's hard work on this. It seems it that
You know, we've got a solution that resolves
99 97 percent of the issues as it relates to
the issue regarding the comments raised by Mr.
Gravante. Obviously, I'm not, there's nothing
in front of me to make a decision, you know,
tracing assets is something that people can do,
you know, under the appropriate pleadings, and
you have all kinds of tests to be able to do
that. I think that Me ordering a carve out or
anything like that is really beyond the scope
of what I can do I think that with the preservation
of rights Whatever the status was on on the date
of the petition is preserved and and to the extent
that that you know to the extent funds were commingled
after the Petition date You know, that has different
consequences than before the petition date. So
I'm going to overrule that objection. And with
respect to the other matters, really weren't
objections. They were comments. And I always
reserve the right to address deadlines if motions
are appropriately filed before any deadline comes
to pass. So with that, again, I appreciate everyone's
efforts. And I will enter the order. I don't
know if the order that is in front of me needs
to be tweaked, but otherwise I'm prepared to
enter that order. All right, that order has been
signed and sent to docketing. Thank you very
much, Your Honor. We'll cede the podium to Cal
Folk for SACS Office Digital to address their
matter. Mr. Martin? Oh, hold on. Let me unmute
you. Yep. All right. Good morning, Your Honor.
Jared Martin from Bradley -Aaron -Bolt Cummings
on behalf of the SO5 digital debtors. We're here
this morning on approval of final use of cash
collateral. The debtors have been working hard
to negotiate those terms over the last month
with the global debtors, their vendors and certain
vendors and consignment counterparties. We believe
we have reached a resolution of all outstanding
issues. Earlier today we uploaded a proposed
order which is at 903. 903, thank you. And an
amended witness and exhibit list at 902. The
witness and exhibit list consists of the first
aid declaration of Andrew Heade at exhibit four,
which the court has already entered, and then
an approved final cash collateral budget at exhibit
number seven. Your Honor, I'm happy to walk through
the key terms to the final cash collateral order
and answer any questions along the way. I understood
that kind of the key changes were both in how
you treat the administrative expense claims,
if you will, as between the global debtors and
the digital debtors. That's number one. And then
number two, the process with respect to both
consignment and concession is kind of now identical
for both. But that was a different order. identical
programs. Those I thought were the main changes.
Was there anything else of significance? The
other primary change relates to the proceeds
of the interchange settlement. The court is aware
that there's been a 90 -19 motion filed and there's
just a process and procedure that relates to
those funds that allows a party to come before
this court on an emergency basis. to determine
the application of those funds and moves up the
challenge deadline to kind of coincide with that
timeline. And that can be found in paragraph
32. But for the importance of doubt, that doesn't
impact the debtor's abilities to use net consignment
proceeds sort of in the ordinary course. The
language in paragraph 32 references unencumbered
collateral, but that doesn't hinder our ability
to use. net after payment of consignment funds
to consignment counterparties. All right. Does
anyone wish to be heard with respect to the digital
debtors cash final cash collateral order? You're
under Ben Butterfield, Morrison and Forster for
the committee. Go ahead, Mr. Butterfield. Thank
you, Your Honor. Look, I'll just say we appreciate
everyone's efforts on this. It wasn't just because
it was a little bit smaller than the billion
dollar did doesn't mean it wasn't less complicated.
There were a number of concerns with the order.
They've now been resolved and we support entry
of the order. All right. Thank you. Anyone else
wish to be heard? Yes, Your Honor. Ian Winters,
Clay Stat Winters, Jereller, Sutherland Stevens.
We filed a limited objection and reservation
of rights on behalf of BH Multi -Color Com Corp,
BH Multi -Color Corp, Richline Group Inc., and
Unique Designs Inc. Pleased to report to the
court, as we did with respect to the global debtors
matter, that our issues have been resolved through
the revised proposed form of final cash collateral
order. We're fully supportive of that order.
And we thank Mr. Butterfield, Mr. Carter, Mr.
Bailey, and Mr. Martin for their hard work and
honest negotiations in getting us to this point.
All right. Thank you. All right. Anyone else?
All right. So I had an opportunity to review
the form of order that was filed at Docket 903,
the red line of that order that was filed at
Docket 903. And I think this is proper exercise
of the debtor's business judgment. And I'm pleased
that it's largely, if not entirely, consensual.
So I will go ahead and approve the final use
of cash collateral. So just give me a minute.
All right. That has been signed and sent to docketing.
All right. Is there anything further we can do
today? Nothing further from the digital letters,
Your Honor. Thank you. Ms. Sinclair? Oh, Your
Honor, thank you. All right. All right. Thank
you. All right. We'll be in recess to my 11 o
'clock hearing. Thank you all.