WEBVTT 00:00:08.210 --> 00:00:11.169 Good afternoon. This is judge Lopez today is 00:00:11.169 --> 00:00:18.269 December 16th I call the 1 p .m. Case 25 906 00:00:18.269 --> 00:00:22.649 for to Cleopatra I'll take appearances in the 00:00:22.649 --> 00:00:24.410 courtroom parties wish to make an appearance 00:00:24.410 --> 00:00:28.030 on the line Please hit five star, and I will 00:00:28.030 --> 00:00:31.129 unmute your line. Good afternoon Thank you honor 00:00:31.129 --> 00:00:33.670 Jack lose from Kirkland Ellis here on behalf 00:00:33.670 --> 00:00:36.390 of the debtors along with some of my colleagues 00:00:36.390 --> 00:00:43.600 from Kirkland Ellis Good afternoon. Good afternoon, 00:00:43.679 --> 00:00:45.920 your honor. Michael J. Cohen, Gibson Dunn and 00:00:45.920 --> 00:00:49.240 Crutcheron. I'm with my colleague, Robert Fitzgerald. 00:00:49.420 --> 00:00:51.719 We're here on behalf of the ad hoc group of DIP 00:00:51.719 --> 00:00:57.200 lenders and first lenders. Good afternoon. Good 00:00:57.200 --> 00:00:58.939 afternoon, your honor. Eric English and Megan 00:00:58.939 --> 00:01:01.320 Youngjohn from Porter Hedges LLP. We're a local 00:01:01.320 --> 00:01:06.280 council for the debtors. Good afternoon. OK. 00:01:06.840 --> 00:01:09.680 I'm going to unmute a few lines. Here is a 212 00:01:09.680 --> 00:01:16.400 number. Good afternoon, Your Honor. Can you hear 00:01:16.400 --> 00:01:19.840 me? Just fine. Good afternoon. Great. Daniel 00:01:19.840 --> 00:01:22.760 Saval from Cobray and Kim. I'm here on behalf 00:01:22.760 --> 00:01:25.959 of the Special Committees of the Boards of Directors 00:01:25.959 --> 00:01:29.680 of Debtors, Cleopatra Senior Holdings, GP, and 00:01:29.680 --> 00:01:32.939 Cleopatra Cinco. And I'm joined by my colleague, 00:01:33.140 --> 00:01:36.680 Martine Forneray. Perfect. Good afternoon. Here's 00:01:36.680 --> 00:01:42.280 a 516 number. Hi. Good afternoon, Your Honor. 00:01:42.340 --> 00:01:44.040 Can you hear me okay? Good afternoon. Good to 00:01:44.040 --> 00:01:46.739 see you again. Good to see you again. And yes, 00:01:46.780 --> 00:01:48.599 I'm in the right place. This is what I hear for 00:01:48.599 --> 00:01:51.780 me. For the record, Frank Collier of Mofo, on 00:01:51.780 --> 00:01:54.079 behalf of Mazuma Capital Corporation, Mazuma 00:01:54.079 --> 00:01:57.560 is a subsidiary of Onset Financial, a name you 00:01:57.560 --> 00:01:59.780 may recognize from another case that fell before 00:01:59.780 --> 00:02:02.500 this one and will be here long after. Our leases 00:02:02.500 --> 00:02:04.099 are being assumed under the plan. I'm just here 00:02:04.099 --> 00:02:08.620 as a creditor. Good afternoon. Here's a 3 1 2 00:02:08.620 --> 00:02:17.199 number Mr.. Scott. I think you can you check 00:02:17.199 --> 00:02:20.159 your line make sure that you're I Was double 00:02:20.159 --> 00:02:23.460 muted sorry your honor Good afternoon. Good to 00:02:23.460 --> 00:02:25.259 see you again. This is Sean Scott of mayor Brown 00:02:25.259 --> 00:02:29.400 on behalf of co -poss and on gmbh Which is one 00:02:29.400 --> 00:02:31.759 of the factoring parties here good afternoon 00:02:31.759 --> 00:02:38.639 and a 2 0 2 number Good afternoon, your honor. 00:02:38.680 --> 00:02:41.419 Andrew Jimenez for the United States. Good afternoon, 00:02:41.500 --> 00:02:43.280 Mr. Jimenez. Anyone else wish to make an appearance, 00:02:43.460 --> 00:02:48.080 please hit five star and I will unmute your line, 00:02:48.379 --> 00:02:54.500 a 713 number. Good afternoon, your honor. Good 00:02:54.500 --> 00:02:56.659 afternoon, your honor. Casey Dory, Denton's U 00:02:56.659 --> 00:02:59.759 .S. LLP here on behalf of Factors France, one 00:02:59.759 --> 00:03:04.819 of the factoring parties. Good afternoon. Okay. 00:03:05.870 --> 00:03:08.629 Council turn it over to you sleuth. Thank you 00:03:08.629 --> 00:03:11.550 your honor today. We are here on confirmation 00:03:11.550 --> 00:03:15.330 of the debtors prepackaged chapter 11 plan We 00:03:15.330 --> 00:03:18.189 filed our confirmation papers over the weekend 00:03:18.189 --> 00:03:21.289 as well as an order and revised plan yesterday 00:03:21.289 --> 00:03:26.689 your honor We had one objection From the office 00:03:26.689 --> 00:03:29.849 of the United States trustee focused primarily 00:03:29.849 --> 00:03:34.280 on the third party releases we did work with 00:03:34.280 --> 00:03:36.800 Mr. Jimenez to at least narrow their issues, 00:03:36.919 --> 00:03:39.120 but were unable to fully resolve their issues 00:03:39.120 --> 00:03:41.039 specifically as it relates to the third party 00:03:41.039 --> 00:03:44.520 release and injunction, which we're prepared 00:03:44.520 --> 00:03:52.120 to argue today. Your honor, I would start by 00:03:52.120 --> 00:03:56.639 just housekeeping the evidentiary support for 00:03:56.639 --> 00:03:59.300 today's hearing is contained in the declarations. 00:04:00.219 --> 00:04:03.500 Mr. Herlihy, Mr. Hickman, Mr. Begum and as well 00:04:03.500 --> 00:04:07.180 as our voting declaration those are at docket 00:04:07.180 --> 00:04:14.120 numbers 230 231 232 and 233 So to start things 00:04:14.120 --> 00:04:16.519 out I would request that those declarations be 00:04:16.519 --> 00:04:18.339 entered into the record all of the witnesses 00:04:18.339 --> 00:04:23.839 are appearing remotely Okay, anyone Have any 00:04:23.839 --> 00:04:25.439 objection to the admission of these documents 00:04:25.439 --> 00:04:28.180 for purposes of today's hearing and declaration 00:04:30.150 --> 00:04:32.750 Okay, they're admitted. Thank you, Your Honor. 00:04:33.810 --> 00:04:37.430 So what I would propose to do, Your Honor, is 00:04:37.430 --> 00:04:41.069 to focus our argument primarily on the issues 00:04:41.069 --> 00:04:44.529 that are open and rest on our papers for the 00:04:44.529 --> 00:04:46.850 sort of general factors as it relates to approval 00:04:46.850 --> 00:04:50.329 of the disclosure and the confirmation. I would 00:04:50.329 --> 00:04:52.949 note at the outset, Your Honor, consistent with 00:04:52.949 --> 00:04:55.050 what we'd said at the first day, we did go out. 00:04:55.759 --> 00:04:58.939 In complete solicitation, the voting deadline 00:04:58.939 --> 00:05:02.259 was last week. We had the vast majority of voting 00:05:02.259 --> 00:05:04.600 creditors and the vast majority of those entitled 00:05:04.600 --> 00:05:07.980 to vote did submit ballots to accept. In the 00:05:07.980 --> 00:05:10.519 neighborhood of $1 .6 billion of the first lien 00:05:10.519 --> 00:05:12.759 claims voted to accept, in the neighborhood of 00:05:12.759 --> 00:05:16.360 $280 million of the second lien holders voted 00:05:16.360 --> 00:05:18.779 to accept. In both classes, there was a single 00:05:18.779 --> 00:05:22.500 no vote. But obviously, we clear the thresholds 00:05:22.500 --> 00:05:25.779 for voting by a significant margin. All of this 00:05:25.779 --> 00:05:29.959 is set forth in more detail in the voting declaration. 00:05:30.240 --> 00:05:32.600 In addition, Your Honor, as is relevant to what 00:05:32.600 --> 00:05:35.759 will actually be argued today, we did proceed 00:05:35.759 --> 00:05:38.680 with a comprehensive noticing program to all 00:05:38.680 --> 00:05:42.519 affected parties of this hearing, including providing 00:05:42.519 --> 00:05:45.399 notices of non -voting status as relevant, along 00:05:45.399 --> 00:05:48.000 with the full solicitation package to those who 00:05:48.000 --> 00:05:52.100 are entitled to vote, inclusive of the opt -out 00:05:52.100 --> 00:05:56.410 forms that will be the subject of argument today. 00:05:57.350 --> 00:06:00.889 As relates to the opt -outs, we did receive 132 00:06:00.889 --> 00:06:06.050 opt -outs. So your honor, unless your honor has 00:06:06.050 --> 00:06:09.970 any questions as it relates to approval of the 00:06:09.970 --> 00:06:13.790 disclosure statement and the 1129 factors outside 00:06:13.790 --> 00:06:17.329 of Release provisions I would propose to rest 00:06:17.329 --> 00:06:20.649 on the papers there but happy to answer any questions 00:06:20.649 --> 00:06:23.470 your honor might have as relates to the Argument 00:06:23.470 --> 00:06:26.310 or evidentiary support you just point me to the 00:06:26.310 --> 00:06:32.470 voting declaration that is at docket number 233 00:06:57.730 --> 00:07:01.990 Got it. That's what I need to see okay Hey, I 00:07:01.990 --> 00:07:03.410 knew I had seen it somewhere, and I couldn't 00:07:03.410 --> 00:07:05.649 find it and you pointed me right to where it 00:07:05.649 --> 00:07:07.370 need to be so perfect That's all I needed to 00:07:07.370 --> 00:07:18.230 see okay That is To voting yeah, that's It's 00:07:18.230 --> 00:07:21.230 quite a lot of support yes, we were pleased to 00:07:21.230 --> 00:07:24.970 see that your honor And it's consistent with 00:07:24.970 --> 00:07:26.889 the restructuring support agreement We signed 00:07:26.889 --> 00:07:29.490 up ahead of these cases that was supported by 00:07:29.490 --> 00:07:32.230 the vast majority of firstly and secondly and 00:07:32.230 --> 00:07:35.709 holders That provided for the plan that's before 00:07:35.709 --> 00:07:38.970 your honor today There haven't been any substantive 00:07:38.970 --> 00:07:41.389 changes to the plan We did file a revised version 00:07:41.389 --> 00:07:43.589 of the plan that included primarily cleanup as 00:07:43.589 --> 00:07:46.490 well as a few comments that were responsive to 00:07:46.490 --> 00:07:48.769 Comments we received from the United States trustee 00:07:48.769 --> 00:07:52.610 to narrow those issues where we could So as we 00:07:52.610 --> 00:07:55.949 sit here today, we're poised to confirm a plan 00:07:55.949 --> 00:07:58.649 that would de -leverage the debtors by approximately 00:07:58.649 --> 00:08:01.490 1 .3 billion, provide for a transition of ownership 00:08:01.490 --> 00:08:05.129 of the companies to the existing first lien lenders, 00:08:05.610 --> 00:08:09.430 and provide incremental funding. The DIP was 00:08:09.430 --> 00:08:11.870 fully funded, Your Honor, following the entry 00:08:11.870 --> 00:08:15.649 of the final order. That funding is sized to 00:08:15.649 --> 00:08:18.350 fill the entire capital need of the debtors, 00:08:18.350 --> 00:08:20.930 inclusive of providing sufficient capital to 00:08:20.930 --> 00:08:24.170 meet the obligations under the plan, namely payment 00:08:24.170 --> 00:08:27.230 of general unsecured claims in the ordinary course 00:08:27.230 --> 00:08:30.230 of business, a significant portion of which, 00:08:30.470 --> 00:08:32.250 as Your Honor might imagine, were paid during 00:08:32.250 --> 00:08:35.789 the course of this case. So that leaves us with 00:08:35.789 --> 00:08:38.029 the United States trustee's objection, Your Honor. 00:08:38.509 --> 00:08:42.970 The trustee raises a few points in their objection, 00:08:43.230 --> 00:08:45.669 primarily as it relates to the third -party release, 00:08:45.929 --> 00:08:48.610 which I'll spend a little bit of time on. The 00:08:48.610 --> 00:08:51.889 United States trustee also objects to the injunction 00:08:51.889 --> 00:08:55.429 provision. The United States trustee requested 00:08:55.429 --> 00:08:57.409 in their objection some language as it relates 00:08:57.409 --> 00:08:59.190 to government claims, which we did include in 00:08:59.190 --> 00:09:01.509 the plan. And then the United States trustee 00:09:01.509 --> 00:09:04.330 has raised an objection to waiver of the 14 day 00:09:04.330 --> 00:09:07.509 stay. I think based primarily on, you know, did 00:09:07.509 --> 00:09:10.269 we carry our burden to show that that's actually 00:09:10.269 --> 00:09:13.149 necessary here? So I'll spend a bit of time on 00:09:13.149 --> 00:09:17.309 the three points that are open. Um, and, and 00:09:17.309 --> 00:09:19.350 I won't belabor it, your honor, because your 00:09:19.350 --> 00:09:21.669 honor has heard this argument before and it's 00:09:21.669 --> 00:09:23.769 come up in a number of cases. And it's obviously 00:09:23.769 --> 00:09:26.830 a developing area of case law, especially in 00:09:26.830 --> 00:09:30.529 the wake of Purdue. Um, but in this circuit, 00:09:30.529 --> 00:09:35.649 um, it has been clear for some time from, you 00:09:35.649 --> 00:09:37.850 know, the, the, the, the Zale decision in the 00:09:37.850 --> 00:09:39.690 mid nineties and then Pacific lumber, which is 00:09:39.690 --> 00:09:42.169 most frequently cited that non -consensual releases 00:09:42.169 --> 00:09:48.250 are. at best frowned upon, but have been not 00:09:48.250 --> 00:09:51.450 allowed in this circuit for some time, even prior 00:09:51.450 --> 00:09:53.830 to the Purdue decision. The Purdue decision makes 00:09:53.830 --> 00:09:57.690 that clear across all circuits. And so the analysis 00:09:57.690 --> 00:09:59.450 in this circuit for a long time has been what 00:09:59.450 --> 00:10:02.769 constitutes consent. And there is a body of case 00:10:02.769 --> 00:10:06.769 law on this. And the US trustee focuses a lot 00:10:06.769 --> 00:10:10.649 on their brief about consent being interpreted 00:10:10.649 --> 00:10:13.110 under sort of state law contract provisions. 00:10:14.529 --> 00:10:16.970 And as this court has recognized and other courts 00:10:16.970 --> 00:10:20.090 in this district and circuit have recognized, 00:10:20.470 --> 00:10:22.649 that's not necessarily the case. That's not the 00:10:22.649 --> 00:10:25.309 way that your honor has interpreted in the past 00:10:25.309 --> 00:10:27.470 and other courts in this district have interpreted 00:10:27.470 --> 00:10:32.379 in the past. Instead, what you've looked to is 00:10:32.379 --> 00:10:34.559 the way that the Fifth Circuit and some lower 00:10:34.559 --> 00:10:37.240 courts interpreting that guidance have viewed 00:10:37.240 --> 00:10:39.759 this question of consent. It's not necessarily 00:10:39.759 --> 00:10:43.679 that must it be a contract under state law. It's 00:10:43.679 --> 00:10:46.860 that the Fifth Circuit has provided guidance 00:10:46.860 --> 00:10:49.639 that non -consensual releases are not allowed, 00:10:50.019 --> 00:10:53.220 but you can give a consensual release under a 00:10:53.220 --> 00:10:56.080 bankruptcy plan. And so it's really about what 00:10:56.080 --> 00:11:01.639 provides what is sufficient for consent. The 00:11:01.639 --> 00:11:03.559 Fifth Circuit obviously has not ruled directly 00:11:03.559 --> 00:11:06.399 on the type of opt -out provisions that we have 00:11:06.399 --> 00:11:11.379 here, but in Republic Supply and a handful of 00:11:11.379 --> 00:11:13.700 Fifth Circuit cases that have followed from that 00:11:13.700 --> 00:11:16.429 decision as well as lower court decisions. Courts 00:11:16.429 --> 00:11:19.289 have looked at, are the releases specific and 00:11:19.289 --> 00:11:21.529 disclosed? Are the releases integral to the plan? 00:11:21.970 --> 00:11:23.490 Is it a condition to settlement, or are they 00:11:23.490 --> 00:11:26.610 given for consideration? Here, we satisfy all 00:11:26.610 --> 00:11:29.690 of those factors. The releases are incredibly 00:11:29.690 --> 00:11:32.129 detailed. They were disclosed and provided to 00:11:32.129 --> 00:11:35.509 all parties in interest. And it was clearly indicated 00:11:35.509 --> 00:11:37.450 that you have an opportunity to opt out. We have 00:11:37.450 --> 00:11:39.289 evidence that the process worked because we got 00:11:39.289 --> 00:11:44.269 132 opt -outs through this process. and we had 00:11:44.269 --> 00:11:46.090 inbounds and we worked with parties to make sure 00:11:46.090 --> 00:11:48.429 that they understand this was also a fairly lengthy 00:11:48.429 --> 00:11:51.950 solicitation process it was about 37 days from 00:11:51.950 --> 00:11:53.789 launch to the deadline obviously we had some 00:11:53.789 --> 00:11:56.370 holidays in there but it was a good amount of 00:11:56.370 --> 00:11:58.470 time for parties to receive and consider the 00:11:58.470 --> 00:12:02.350 notice these releases taken as a whole and including 00:12:02.350 --> 00:12:05.350 the third party release are integral to the plan 00:12:05.350 --> 00:12:09.009 in a condition to the overall settlement embodied 00:12:09.009 --> 00:12:11.830 in the plan obviously there's substantial benefits 00:12:12.850 --> 00:12:15.429 to the plan in terms of the deleveraging and 00:12:15.429 --> 00:12:18.490 new capital provided. They will set the company 00:12:18.490 --> 00:12:22.370 on firmer footing to continue to be a counterparty 00:12:22.370 --> 00:12:25.210 and an employer and will now be owned by the 00:12:25.210 --> 00:12:29.450 lenders and we anticipate a source of value for 00:12:29.450 --> 00:12:34.110 the recovery going forward. And the releases 00:12:34.110 --> 00:12:37.129 were of course given for consideration. The releasing 00:12:37.129 --> 00:12:41.509 parties made significant contributions. It's 00:12:41.509 --> 00:12:45.049 easy to point at things like agreeing to a significant 00:12:45.049 --> 00:12:48.769 deleveraging, agreeing to cancellation of equity, 00:12:48.830 --> 00:12:52.289 agreeing to provide substantial new money. Other 00:12:52.289 --> 00:12:57.529 parties have provided significant personal time 00:12:57.529 --> 00:13:01.529 investment into ensuring that these cases go 00:13:01.529 --> 00:13:04.570 smoothly. The U .S. trustee often points to the 00:13:04.570 --> 00:13:07.600 related parties provision, but The related parties 00:13:07.600 --> 00:13:11.100 provision, while broad, is meant to be protective 00:13:11.100 --> 00:13:14.000 of the parties making the primary contributions 00:13:14.000 --> 00:13:17.919 to the success of the restructuring. These entities 00:13:17.919 --> 00:13:21.019 have people that carry out actions on their behalf, 00:13:21.039 --> 00:13:23.740 and if those people are not protected in the 00:13:23.740 --> 00:13:26.039 same way that the actual entities are, then it 00:13:26.039 --> 00:13:29.919 blows a pretty big hole in the release. And it's 00:13:29.919 --> 00:13:34.179 been acknowledged that this is the best way to 00:13:34.179 --> 00:13:36.639 provide protection for those parties and in any 00:13:36.639 --> 00:13:41.279 event it was disclosed clearly to all parties 00:13:41.279 --> 00:13:43.039 who were affected and they had an opportunity 00:13:43.039 --> 00:13:47.539 to opt out of those releases if they would like 00:13:47.539 --> 00:13:51.759 to. One other point that I thought worth noting 00:13:51.759 --> 00:13:55.720 in the U .S. trustee's papers is that the U .S. 00:13:55.840 --> 00:14:00.039 trustee talks about contractual consent under 00:14:00.039 --> 00:14:03.440 state law and that there only should be a deviation 00:14:03.440 --> 00:14:05.759 from that rule in extraordinary circumstances. 00:14:05.860 --> 00:14:08.940 They cited some case law to that effect. And 00:14:08.940 --> 00:14:13.159 I thought that was interesting because it can 00:14:13.159 --> 00:14:17.320 be easy to think that because we make the same 00:14:17.320 --> 00:14:20.100 argument in all of these cases that these aren't 00:14:20.100 --> 00:14:22.100 extraordinary circumstances that's just like 00:14:22.100 --> 00:14:27.500 any other, but large complex chapter 11 restructurings, 00:14:27.500 --> 00:14:29.120 even though the people in this room see them 00:14:29.120 --> 00:14:32.019 all the time, are extraordinary transactions, 00:14:32.659 --> 00:14:34.559 the types of commitments that the parties are 00:14:34.559 --> 00:14:37.019 making here to make this restructuring work, 00:14:37.600 --> 00:14:41.340 I think do warrant a specific rule. And that's, 00:14:41.340 --> 00:14:44.460 I think, why the Fifth Circuit has interpreted 00:14:44.460 --> 00:14:46.980 it this way. I don't think the Fifth Circuit's 00:14:46.980 --> 00:14:49.919 interpretation of how third party releases should 00:14:49.919 --> 00:14:54.500 work is necessarily a commentary on broader contracting 00:14:54.500 --> 00:14:58.500 principles. It's an acknowledgement that these 00:14:58.500 --> 00:15:02.940 are very specific circumstances and specific 00:15:02.940 --> 00:15:05.919 provisions tied to these types of transactions 00:15:05.919 --> 00:15:09.639 in Chapter 11 plans, and that's why they've sort 00:15:09.639 --> 00:15:11.720 of laid out the factors that they believe support 00:15:11.720 --> 00:15:14.700 those types of provisions being approved. As 00:15:14.700 --> 00:15:16.620 it relates to the injunction provision, Your 00:15:16.620 --> 00:15:21.440 Honor, the U .S. Trustee cites the ZAIL, and 00:15:21.440 --> 00:15:27.470 ZAIL does say that... non -consensual third -party 00:15:27.470 --> 00:15:30.409 releases and injunctions that support such types 00:15:30.409 --> 00:15:32.490 of releases are not allowed in the Fifth Circuit. 00:15:32.889 --> 00:15:34.429 I think it's important to note that the Zale 00:15:34.429 --> 00:15:36.690 Court was specifically referencing injunctions 00:15:36.690 --> 00:15:38.850 to support a third -party release and I think 00:15:38.850 --> 00:15:41.269 that's correct because the court was probably 00:15:41.269 --> 00:15:43.730 saying, you know, you can't do through an injunction 00:15:43.730 --> 00:15:46.529 that which you could not do through enforcing 00:15:46.529 --> 00:15:50.149 a specific type of release. And the court was 00:15:50.149 --> 00:15:52.070 just, I think, acknowledging that a permanent 00:15:52.070 --> 00:15:54.919 injunction has the same effect as... a release 00:15:54.919 --> 00:15:57.799 itself, but it was tied to the specific type 00:15:57.799 --> 00:15:59.279 of release that the court was considering, which 00:15:59.279 --> 00:16:01.279 would be a non -consensual third party release, 00:16:01.340 --> 00:16:06.440 which we don't have here. I think Judge Perez 00:16:06.440 --> 00:16:10.240 acknowledged in the container store bench ruling, 00:16:10.419 --> 00:16:13.799 which I thought was instructive, is this is more 00:16:13.799 --> 00:16:16.379 of an administrative function of the plan than 00:16:16.379 --> 00:16:18.919 a substantive provision. The substance is in 00:16:18.919 --> 00:16:21.100 the releases themselves. The injunction is just 00:16:21.100 --> 00:16:24.799 meant to carry out. the court's release, that 00:16:24.799 --> 00:16:27.659 the court has already approved, and provide a 00:16:27.659 --> 00:16:29.720 mechanism for enforcement of those releases. 00:16:29.840 --> 00:16:33.120 I do think it's appropriate that this court effectively 00:16:33.120 --> 00:16:35.860 retain jurisdiction to interpret its own order 00:16:35.860 --> 00:16:40.519 and enforce its own releases, as opposed to compelling 00:16:40.519 --> 00:16:43.480 the debtors to raise the release as a defense 00:16:43.480 --> 00:16:46.519 in whatever court an action is brought. The best 00:16:46.519 --> 00:16:49.360 venue for interpretation and enforcement of the 00:16:49.360 --> 00:16:51.360 releases through the injunction provision is 00:16:51.360 --> 00:16:55.759 this court. As it relates to the 14 -day stay, 00:16:55.919 --> 00:17:00.360 Your Honor, here we are looking to emerge as 00:17:00.360 --> 00:17:02.500 efficiently as possible, which isn't necessarily 00:17:02.500 --> 00:17:04.880 to say that we'll emerge within 14 days, although 00:17:04.880 --> 00:17:08.519 we're trying to work as expeditiously as we can. 00:17:09.279 --> 00:17:12.200 The confirmation order also provides broader 00:17:12.200 --> 00:17:14.720 authority to start taking steps toward emergence. 00:17:15.559 --> 00:17:17.839 This is a privately held company with a fairly 00:17:17.839 --> 00:17:20.539 complex holding structure from both a corporate 00:17:20.539 --> 00:17:24.740 and tax perspective, and it takes It will take 00:17:24.740 --> 00:17:28.779 a series of complicated steps to transition ownership 00:17:28.779 --> 00:17:30.759 from the current owners of the company to the 00:17:30.759 --> 00:17:33.500 lenders and certain of those steps we'd like 00:17:33.500 --> 00:17:37.099 to ensure that we have authority to do immediately 00:17:37.099 --> 00:17:39.859 after confirmation so that we can stay on a path 00:17:39.859 --> 00:17:42.819 toward emerging as quickly as possible. We did 00:17:42.819 --> 00:17:47.170 provide some support for that in. our declarations. 00:17:47.630 --> 00:17:50.089 And that's why, Your Honor, we believe that the 00:17:50.089 --> 00:17:53.630 waiver of the 14 -day stay is appropriate here. 00:17:54.829 --> 00:17:56.829 Those are my relatively brief comments, Your 00:17:56.829 --> 00:17:58.849 Honor. Happy to answer any questions Your Honor 00:17:58.849 --> 00:18:02.710 has. Otherwise, I would reserve for any response 00:18:02.710 --> 00:18:05.130 to the arguments of the US trustee. Thank you. 00:18:05.309 --> 00:18:08.549 Let me ask if anyone else who supports the plan 00:18:08.549 --> 00:18:18.660 wishes to be heard. Thank you honor and good 00:18:18.660 --> 00:18:21.220 afternoon Rob Fitzgerald of Gibson Dun & Crutcher 00:18:21.220 --> 00:18:23.259 on behalf of the ad hoc group of first lien lenders 00:18:23.259 --> 00:18:28.079 and dip lenders I'll be brief your honor Stepping 00:18:28.079 --> 00:18:31.039 back. We really view this case and this plan 00:18:31.039 --> 00:18:33.880 as the product of extensive consensus building 00:18:33.880 --> 00:18:36.140 Through the hard work of the participants around 00:18:36.140 --> 00:18:38.519 the table and we thank all the parties around 00:18:38.519 --> 00:18:41.359 the table for building this consensus We believe 00:18:41.359 --> 00:18:44.099 as you noted that this consensus is amply reflected 00:18:44.099 --> 00:18:47.730 in the voting declaration and the largely consensual 00:18:47.730 --> 00:18:52.990 nature of today's hearing. We do support the 00:18:52.990 --> 00:18:54.829 approval, the confirmation of the debtors plan 00:18:54.829 --> 00:18:57.089 that was filed yesterday evening with the changes 00:18:57.089 --> 00:19:00.089 that were reflected in that filing. And we're 00:19:00.089 --> 00:19:02.950 in agreement with the form of order that reflects 00:19:02.950 --> 00:19:05.890 those revisions. As it relates to the releases, 00:19:05.970 --> 00:19:09.130 which as Mr. Lews noted is, frankly, one of the 00:19:09.130 --> 00:19:12.329 only major points that's open at this time. We 00:19:12.329 --> 00:19:14.589 can confirm from the lender's perspective and 00:19:14.589 --> 00:19:17.150 from the RSA party's perspective that the releases 00:19:17.150 --> 00:19:20.410 were extensively negotiated They were a critical 00:19:20.410 --> 00:19:23.730 part of the global Deal and global transaction 00:19:23.730 --> 00:19:26.130 that is embodied in the plan and was reflected 00:19:26.130 --> 00:19:30.250 in the RSA We support the debtors position in 00:19:30.250 --> 00:19:33.769 respect of the non debtor releases and with that 00:19:33.769 --> 00:19:36.089 Unless your honor has anything else for me. We 00:19:36.089 --> 00:19:37.890 would respectfully request that the court and 00:19:37.890 --> 00:19:41.539 of the confirmation order. Thank you Anyone else 00:19:41.539 --> 00:19:47.759 wishes to be heard? Mr. Jimenez? Oh, Mr. Scott, 00:19:47.900 --> 00:19:49.579 I just want, or anyone else, just let me kind 00:19:49.579 --> 00:19:53.640 of go in once. Yes, Your Honor. Again, for the 00:19:53.640 --> 00:19:55.779 record, Sean Scott of Mayor Brown on behalf of 00:19:55.779 --> 00:19:59.019 COFAS. Your Honor, we are supportive of the plan, 00:19:59.240 --> 00:20:02.680 including as noted in paragraph 81 of the confirmation 00:20:02.680 --> 00:20:05.950 order. that it does not propose confirmation 00:20:05.950 --> 00:20:08.690 order, that it does not alter or modify the rights 00:20:08.690 --> 00:20:11.650 of the factors under the program documents. I 00:20:11.650 --> 00:20:14.269 just wanted to denote for the record we do continue 00:20:14.269 --> 00:20:17.269 to work with the debtor on certain post -petition 00:20:17.269 --> 00:20:19.990 amendments that were contemplated by our agreements, 00:20:20.450 --> 00:20:24.009 and we hope and expect those will be finalized 00:20:24.009 --> 00:20:26.069 well in advance of the effective date, but just 00:20:26.069 --> 00:20:28.809 wanted to reserve rights around those ongoing 00:20:28.809 --> 00:20:31.700 discussions and negotiations, but. That's for 00:20:31.700 --> 00:20:33.859 another time date, and we hope to get that done 00:20:33.859 --> 00:20:36.160 in advance of effectiveness. So with that, we 00:20:36.160 --> 00:21:02.750 are supportive of the proposed plan. Thank you 00:21:02.750 --> 00:21:04.509 honor and your human and for the United States 00:21:04.509 --> 00:21:08.609 trustee Your honor before going into arguments. 00:21:08.609 --> 00:21:11.230 I would like the opportunity to growth examine 00:21:11.230 --> 00:21:16.549 regarding this credo tribulation declaration 00:21:16.549 --> 00:21:23.049 You wish to the the voting declaration Yes, okay 00:21:23.049 --> 00:21:28.970 sure Let's turn cameras on and cross examine 00:21:34.319 --> 00:21:38.220 See I see you there mr.. Can you hit five -star? 00:21:50.579 --> 00:21:53.640 Have I unmuted your miss Sanchez have I can you 00:21:53.640 --> 00:21:55.660 hit five -star? I may have unmuted your line 00:21:55.660 --> 00:22:02.160 already just if you just to make sure There you 00:22:02.160 --> 00:22:11.500 are All righty, good afternoon. Can you, you're 00:22:11.500 --> 00:22:13.339 already, your declaration's in, but let me just 00:22:13.339 --> 00:22:17.200 go ahead and doubly swear you in for purposes 00:22:17.200 --> 00:22:19.700 of this examination. Can you raise your right 00:22:19.700 --> 00:22:23.180 hand? Do you swear to tell the truth, the whole 00:22:23.180 --> 00:22:26.859 truth and nothing but the truth? We do. Okay, 00:22:27.000 --> 00:22:29.000 and you understand the oath that you took is 00:22:29.000 --> 00:22:30.519 the same that you would take if you were live 00:22:30.519 --> 00:22:34.460 in the courtroom with us here? Correct. Can you 00:22:34.460 --> 00:22:36.579 confirm whether there's anyone in the room with 00:22:36.579 --> 00:22:41.589 you? Okay, and I'd ask that you please put aside 00:22:41.589 --> 00:22:45.190 any papers or any notes just to answer the questions 00:22:45.190 --> 00:22:49.170 that are presented to you and If there is an 00:22:49.170 --> 00:22:51.269 objection that is raised if you hear it, just 00:22:51.269 --> 00:22:53.269 please give me a moment to resolve the objection, 00:22:53.470 --> 00:23:02.910 okay Okay, mr. Jimenez you may proceed Hold on 00:23:02.910 --> 00:23:04.970 before I before I begin is there who's gonna 00:23:04.970 --> 00:23:08.680 handle who's the lawyer? That will handle any 00:23:08.680 --> 00:23:11.460 objections here. I just want to make sure that 00:23:11.460 --> 00:23:13.740 I've hit far sore. Your honor, that would be 00:23:13.740 --> 00:23:16.880 Sarah Kimmer, who's on camera there. Ms. Kimmer, 00:23:16.960 --> 00:23:19.400 I didn't want you to have to throw your hands 00:23:19.400 --> 00:23:23.680 up for an objection to get a record there. Are 00:23:23.680 --> 00:23:27.180 you there? Can you check your line? I think I've 00:23:27.180 --> 00:23:32.259 unmuted you. Can you hear me now? OK, perfect. 00:23:32.380 --> 00:23:35.549 I apologize. Mr. Jimenez, sorry. That was the 00:23:35.549 --> 00:23:37.329 one question I forgot to ask. You may proceed 00:23:37.329 --> 00:23:40.890 with cross -examination. Thank you, Your Honor. 00:23:41.789 --> 00:23:43.890 Miss Sanchez, good afternoon. My name is Andrew 00:23:43.890 --> 00:23:46.950 Jimenez. Are you able to hear me? Good afternoon, 00:23:47.109 --> 00:23:50.589 Mr. Jimenez. Yes, I can hear you. Thank you. 00:23:51.089 --> 00:23:55.210 Miss Sanchez, could you please tell the court 00:23:55.210 --> 00:24:00.150 how many classroom ballots were sent out to members 00:24:00.150 --> 00:24:07.329 of such class? Sure. Uh, is it okay for my declaration 00:24:07.329 --> 00:24:10.089 just to get the exact number for him? Mr. Jimenez, 00:24:10.170 --> 00:24:14.329 are you okay with that? I am. Also, Your Honor, 00:24:14.470 --> 00:24:17.809 I have it right here. I can also put it on the 00:24:17.809 --> 00:24:20.410 screen if you do that at the center row. Yep. 00:24:20.890 --> 00:24:51.480 Let's do that. Thank you, Your Honor. Can you 00:24:51.480 --> 00:24:53.420 can you can you see the screen or do you need 00:24:53.420 --> 00:25:00.079 me to enlarge it? That makes one of us all right, 00:25:00.079 --> 00:25:08.980 I'm the old man Hold on go ahead Is that better 00:25:08.980 --> 00:25:18.859 Oh Okay, and your honor is better for you as 00:25:18.859 --> 00:25:25.240 well, yes Okay. Okay, Ms. Sanchez, this is your 00:25:25.240 --> 00:25:28.960 declaration. Tell me where you want me to go. 00:25:29.700 --> 00:25:32.119 If you wouldn't mind just putting it to the chart, 00:25:32.359 --> 00:25:35.059 Exhibit A, the beginning of Exhibit A, please. 00:25:37.940 --> 00:25:43.980 Thank you. So for Class 3, we received a total 00:25:43.980 --> 00:25:50.160 of 538 ballots, of which 537 were accepting and 00:25:50.160 --> 00:25:54.140 rejecting. And then for class four, we received 00:25:54.140 --> 00:26:00.119 a total of 79. OK. But for class? I'm sorry. 00:26:00.220 --> 00:26:04.759 Sorry to interrupt you. Go ahead. Yes. So for 00:26:04.759 --> 00:26:10.019 class four, we received 70 total ballots. OK. 00:26:10.059 --> 00:26:12.160 And my question is, for class three, how many 00:26:12.160 --> 00:26:15.140 ballots were sent out? Oh, how many ballots? 00:26:16.119 --> 00:26:19.099 As part of the solicitation process. Of course, 00:26:19.099 --> 00:26:22.039 yes. So as you will see, we actually have it 00:26:22.039 --> 00:26:25.339 as unknown due to the fact that the first clean 00:26:25.339 --> 00:26:28.980 secure note is a publicly traded security. It's 00:26:28.980 --> 00:26:32.839 really hard to quantify that amount, which is 00:26:32.839 --> 00:26:36.140 kind of why you see that unknown. We know the 00:26:36.140 --> 00:26:38.839 total world of dollars, not the total holders. 00:26:39.599 --> 00:26:43.599 It's the way that they are hit. And the same 00:26:43.599 --> 00:26:49.839 will be true for class four? Correct. Okay. And 00:26:49.839 --> 00:26:53.000 then also as part of the solicitation process, 00:26:53.200 --> 00:26:58.279 the debtor sent out notices of non -voting status 00:26:58.279 --> 00:27:03.559 and upheld forms to those parties not entitled 00:27:03.559 --> 00:27:09.480 to vote. How many notices of non -voting status 00:27:09.480 --> 00:27:13.839 were sent out by the debtors? We sent out approximately 00:27:13.839 --> 00:27:19.420 16 ,640. So essentially any party that would 00:27:19.390 --> 00:27:22.150 not already being served a ballot thought that 00:27:22.150 --> 00:27:25.009 out that form. So the entire world is predators. 00:27:26.130 --> 00:27:32.049 Okay. How many were returned on Deliverable? 00:27:33.990 --> 00:27:37.089 Deliverable we received, I believe, is around 00:27:37.089 --> 00:27:40.789 300. I can pull up an exact number if you need 00:27:40.789 --> 00:27:52.220 that, but that was the total estimate. Okay. 00:27:52.220 --> 00:27:53.740 Thank you, Ms. Sanchez. Those are other questions 00:27:53.740 --> 00:28:00.599 I have for you. Okay. Any further redirect? No, 00:28:00.619 --> 00:28:03.359 Your Honor. Thank you. Okay. Ms. Sanchez, you 00:28:03.359 --> 00:28:06.579 are officially off the virtual witness stand. 00:28:06.640 --> 00:28:10.920 Thank you very much. Thank you, Your Honor. All 00:28:10.920 --> 00:28:14.960 right. Mr. Jimenez, any further argument? Any 00:28:14.960 --> 00:28:17.779 argument, I should say? Yes. Yes, Your Honor. 00:28:17.779 --> 00:28:21.880 Thank you. So, Your Honor, I'll start with the 00:28:21.880 --> 00:28:23.980 third party releases and the opt -out mechanism. 00:28:26.960 --> 00:28:28.839 This argument, Your Honor, is fully briefing 00:28:28.839 --> 00:28:32.460 our objection, and I know the Court is familiar 00:28:32.460 --> 00:28:34.579 with our argument, because this is not the first 00:28:34.579 --> 00:28:37.740 time we've refreshed the argument. So I don't 00:28:37.740 --> 00:28:40.960 want to take too much of the Court's time arguing 00:28:40.960 --> 00:28:42.759 something that we have already briefed to the 00:28:42.759 --> 00:28:45.599 Court. However, Your Honor, I do want to point 00:28:45.599 --> 00:28:57.759 out that This issue is evolving. And I know that 00:28:57.759 --> 00:29:03.019 here in the Fifth Circuit, this issue is under 00:29:03.019 --> 00:29:05.740 appeal. So we're waiting on that too. But I just 00:29:05.740 --> 00:29:08.779 want to bring to the court's attention that recently 00:29:08.779 --> 00:29:13.759 in the district court in New York, did rule, 00:29:13.900 --> 00:29:20.779 this is in the - In the goal case. The goal leniency 00:29:20.779 --> 00:29:29.839 areas, intelligentsia. made a ruling regarding 00:29:29.839 --> 00:29:36.380 consent under state contract law and federal 00:29:36.380 --> 00:29:40.759 contract law, and ruling essentially that the 00:29:40.759 --> 00:29:45.259 opt -outs did not provide consent for this type 00:29:45.259 --> 00:29:47.059 of third -party releases. And that's something 00:29:47.059 --> 00:29:48.740 I want to bring up to the court's attention. 00:29:50.250 --> 00:29:52.569 Your honor, I want to point out that in this 00:29:52.569 --> 00:29:56.690 case, your honor, as we just heard, more than 00:29:56.690 --> 00:30:01.829 16 ,000 notices of non -voting status were sent 00:30:01.829 --> 00:30:06.470 out and only 132 opt -out forms were returned. 00:30:07.430 --> 00:30:09.390 I thank your honor from my point of view that 00:30:09.390 --> 00:30:14.450 shows a very low participation. And in my point 00:30:14.450 --> 00:30:16.869 of view, it's not enough to support that this 00:30:16.869 --> 00:30:20.109 is a mechanism that is successful in reaching 00:30:20.109 --> 00:30:22.549 out to the parties that are going to be affected 00:30:22.549 --> 00:30:25.569 by these certifying releases. So it might be 00:30:25.569 --> 00:30:29.329 that it's something of concern, Your Honor. I 00:30:29.329 --> 00:30:31.450 want to move, Your Honor, to the discussion of 00:30:31.450 --> 00:30:34.490 the issue of the injunction and the gatekeeping. 00:30:35.670 --> 00:30:40.430 Your Honor, here the injunction also includes 00:30:40.759 --> 00:30:45.559 a gatekeeping provision. So I'm going to discuss 00:30:45.559 --> 00:30:49.279 those briefly as two separate issues. There is 00:30:49.279 --> 00:30:55.599 the issue of how our argument that the injunctions 00:30:55.599 --> 00:30:59.700 shouldn't be allowed under the plan. But also, 00:30:59.839 --> 00:31:02.440 Your Honor, separately, it's the gatekeeping 00:31:02.440 --> 00:31:06.559 provision. We have the discussion with the betters. 00:31:06.619 --> 00:31:08.859 Regarding the gatekeeping provision and the better 00:31:08.859 --> 00:31:12.039 make some changes to exclude some parties that 00:31:12.039 --> 00:31:14.880 were included in that gatekeeping provision However, 00:31:14.880 --> 00:31:17.940 we think the gatekeeping provision is still objectionable 00:31:17.940 --> 00:31:20.359 your honor because it includes the release party 00:31:20.359 --> 00:31:24.019 Under the Highland 2 case in order to comply 00:31:24.019 --> 00:31:26.640 with fifth circuit decision in Highland 2 your 00:31:26.640 --> 00:31:30.579 honor the gatekeeping provision should only extend 00:31:30.579 --> 00:31:34.079 to the exculpated parties now the additional 00:31:34.079 --> 00:31:36.549 parties here the release parties, which in turn 00:31:36.549 --> 00:31:39.329 includes related parties. And that will be very 00:31:39.329 --> 00:31:41.450 expensive application of the gatekeeping provision. 00:31:41.930 --> 00:31:44.049 You're providing it to a lot of people. So a 00:31:44.049 --> 00:31:47.430 lot of people hear that we sometimes we don't 00:31:47.430 --> 00:31:49.930 have, we don't know clearly who they are because 00:31:49.930 --> 00:31:52.990 this related parties, it's a long list of people. 00:31:53.049 --> 00:31:55.670 And we just are, I think do not identify. We 00:31:55.670 --> 00:31:58.750 don't know who they are. So the gatekeeping provision 00:31:58.750 --> 00:32:01.369 around the still does not comply with Highline 00:32:01.369 --> 00:32:04.509 two. In order to comply, then the release parties 00:32:04.509 --> 00:32:08.029 would be to be stricken out of the gatekeeping 00:32:08.029 --> 00:32:12.710 paragraph within the injunction provision. And 00:32:12.710 --> 00:32:15.710 finally, Your Honor, there is the waiver of the 00:32:15.710 --> 00:32:23.650 3020E stay after confirmation of the plan. We 00:32:23.650 --> 00:32:26.309 sustain that it's not warranted in this case 00:32:26.309 --> 00:32:29.789 and that the 14 -day stay should not be waived. 00:32:30.400 --> 00:32:32.599 And thank you, Your Honor, for listening to my 00:32:32.599 --> 00:32:34.980 argument. No, thank you. I'm just writing them 00:32:34.980 --> 00:32:42.220 down. OK. Let me just ask, if anyone who hasn't 00:32:42.220 --> 00:33:07.079 spoken wishes to address the court. Give me one 00:33:07.079 --> 00:33:11.279 moment. I'm just looking at the confirmation 00:33:11.279 --> 00:33:50.730 order. Okay before the court is consideration 00:33:50.730 --> 00:33:56.289 of Confirmation of the amended joint prepackaged 00:33:56.289 --> 00:34:01.650 chapter 11 plan of Cleopatra finko sa They are 00:34:01.650 --> 00:34:05.049 L, and it's debtor affiliates under chapter 11 00:34:05.049 --> 00:34:11.170 of the code Note this case started on November 00:34:11.170 --> 00:34:15.110 4th of this year as a prepackaged chapter 11 00:34:15.110 --> 00:34:18.739 plan Court finds that it has jurisdiction to 00:34:18.739 --> 00:34:23.079 consider confirmation of the plan, and there's 00:34:23.079 --> 00:34:26.420 been proper notice and service of all required 00:34:26.420 --> 00:34:29.820 documents in connection with plan confirmation 00:34:29.820 --> 00:34:34.539 and in connection with the hearing for today. 00:34:37.539 --> 00:34:47.159 Just note. Make note that the court has admitted 00:34:47.159 --> 00:34:50.280 certain documents and declarations into evidence 00:34:50.280 --> 00:34:54.260 which form the basis of the court's ruling today. 00:34:55.420 --> 00:34:58.519 I'll start with the disclosure statement portion 00:34:58.519 --> 00:35:04.179 of it, which can be just done pre -bankruptcy, 00:35:04.579 --> 00:35:08.719 but still 1125 still applies. It still has to 00:35:08.719 --> 00:35:11.500 provide adequate information within the meaning 00:35:11.500 --> 00:35:16.039 of section 1125, which is to provide Voting parties 00:35:16.039 --> 00:35:20.300 information adequate information to make an informed 00:35:20.300 --> 00:35:23.039 judgment whether to accept to vote to accept 00:35:23.039 --> 00:35:26.760 or reject the plan and No objections were filed 00:35:26.760 --> 00:35:30.699 the court still finds that it has a requirement 00:35:30.699 --> 00:35:35.320 to Provide that analysis and conduct kind of 00:35:35.320 --> 00:35:37.719 an analysis under the law and I've reviewed the 00:35:37.719 --> 00:35:40.599 disclosure statement I do find that it satisfies 00:35:40.599 --> 00:35:45.530 section 1125 provides information about the history 00:35:45.530 --> 00:35:49.809 of the company, provides about kind of proposed 00:35:49.809 --> 00:35:52.730 plan, treatment of the plan, the classes in the 00:35:52.730 --> 00:35:57.230 plan, tax information, information about the 00:35:57.230 --> 00:36:00.670 confirmation process, everything you would want 00:36:00.670 --> 00:36:05.730 in connection with a disclosure statement. So 00:36:05.730 --> 00:36:08.590 I find that there's been adequate kind of publication 00:36:08.590 --> 00:36:14.250 and service. form connection with the objection 00:36:14.250 --> 00:36:17.789 and Kind of objection deadlines in connection 00:36:17.789 --> 00:36:19.769 with this case as well, and I look at all the 00:36:19.769 --> 00:36:22.750 certificates of service to inform the court's 00:36:22.750 --> 00:36:27.769 judgment I'd note this based upon the voting 00:36:27.769 --> 00:36:31.650 declaration submitted by miss Sanchez I do find 00:36:31.650 --> 00:36:38.210 that the plan enjoys extraordinary support and 00:36:38.210 --> 00:36:41.860 close to 99 percent In each class in class three 00:36:41.860 --> 00:36:45.679 and four voting to accept the plan and I think 00:36:45.679 --> 00:36:47.900 in one class there was only one party who voted 00:36:47.900 --> 00:36:52.360 to Reject the plan that you you rarely ever see 00:36:52.360 --> 00:36:55.980 numbers that high even when there's a lot of 00:36:55.980 --> 00:37:01.539 support, that's That's that's that's uber support. 00:37:01.559 --> 00:37:04.400 That's that's rare air support in connection 00:37:04.400 --> 00:37:09.000 with this Plan and the plan was solicited with 00:37:09.000 --> 00:37:17.159 sufficient Time so I'm gonna You look at that 00:37:17.159 --> 00:37:22.019 so turning to kind of 1122 and 1123 I find that 00:37:22.019 --> 00:37:24.519 those two sections of the code have been satisfied 00:37:24.519 --> 00:37:28.599 nothing runs afoul Any of them I find under 1129 00:37:28.599 --> 00:37:31.719 that the plan has been filed in good faith and 00:37:31.719 --> 00:37:34.650 not by any means forbidden My law, obviously, 00:37:35.190 --> 00:37:38.849 the overwhelming support tells me something as 00:37:38.849 --> 00:37:43.110 well. I do note that we hold hearings today, 00:37:43.809 --> 00:37:45.909 both what you call hybrid hearings, where folks 00:37:45.909 --> 00:37:48.090 could come in person and people can also appear 00:37:48.090 --> 00:37:53.010 by video and raise any objection. I think that's 00:37:53.010 --> 00:37:57.389 important to... So I think due process has been 00:37:57.389 --> 00:37:59.889 served and obviously the overwhelming support 00:37:59.889 --> 00:38:04.650 by this plan speaks volumes. I also note that 00:38:04.650 --> 00:38:08.190 there were some language requested by some parties 00:38:08.190 --> 00:38:11.710 and parties even after solicitation worked, right? 00:38:11.789 --> 00:38:15.170 That means it tells me that the debtors and their 00:38:15.170 --> 00:38:19.489 professionals received phone calls and then returned 00:38:19.489 --> 00:38:23.050 them and worked with parties and their lenders 00:38:23.050 --> 00:38:28.789 to kind of achieve. these results. So congratulations 00:38:28.789 --> 00:38:32.030 to each of the parties for working together. 00:38:34.630 --> 00:38:37.650 I like old school cases where parties work together 00:38:37.650 --> 00:38:39.929 and sometimes there's disagreements and people 00:38:39.929 --> 00:38:42.190 work through it. That's what makes the Chapter 00:38:42.190 --> 00:38:44.769 11 processing, quite frankly, in the United States 00:38:44.769 --> 00:38:47.409 is that the quality of the restructuring professionals 00:38:47.409 --> 00:38:50.469 that appear and can work through complicated 00:38:50.469 --> 00:38:55.400 issues. So 1129. The plan has been proposed in 00:38:55.400 --> 00:38:58.820 good faith all the voting requirements have been 00:38:58.820 --> 00:39:04.219 required as well and I'm gonna Just know and 00:39:04.219 --> 00:39:07.199 I'll make good faith findings on behalf of the 00:39:07.199 --> 00:39:11.019 debtors their professionals the independent directors 00:39:11.019 --> 00:39:14.719 and the lenders everybody has appeared and before 00:39:14.719 --> 00:39:17.440 me and I take judicial notice of the record before 00:39:17.440 --> 00:39:20.880 the hearing even in three packs you there is 00:39:20.880 --> 00:39:27.869 kind of You just don't get this level of support 00:39:27.869 --> 00:39:33.449 without Efforts to work and I take notice of 00:39:33.449 --> 00:39:35.389 that and so I'll make good faith findings on 00:39:35.389 --> 00:39:36.969 the record about each of their professionals, 00:39:36.969 --> 00:39:43.590 so I'm turning now to The the objections raised 00:39:43.590 --> 00:39:47.670 by the office of the United States trustee here 00:39:47.670 --> 00:39:50.889 and kind of human in separate buckets one is 00:39:50.889 --> 00:39:55.289 kind of the And I would call it the notice of 00:39:55.289 --> 00:39:58.570 the opt -out Argument one and it's kind of the 00:39:58.570 --> 00:40:00.690 gatekeeper and then related injunction in the 00:40:00.690 --> 00:40:04.630 30 -20 And it note in this district that opt 00:40:04.630 --> 00:40:09.289 -outs are have been granted But they're not always 00:40:09.289 --> 00:40:12.369 Not always and so I think you can look at even 00:40:12.369 --> 00:40:14.829 recent cases in this district, and it's not always 00:40:14.829 --> 00:40:22.380 kind of a Given some cases Require them some 00:40:22.380 --> 00:40:25.800 cases Courts will step in I think judge Perez 00:40:25.800 --> 00:40:28.980 recently Noted that in a case where there was 00:40:28.980 --> 00:40:31.039 proposed for an opt -out and he said no, let's 00:40:31.039 --> 00:40:32.820 let's do an opt -in I think that's right. Every 00:40:32.820 --> 00:40:35.139 case is different and you got to look at the 00:40:35.139 --> 00:40:42.340 facts in every case There were a number of parties 00:40:42.340 --> 00:40:47.980 who opted out and I Know they're a larger number 00:40:47.980 --> 00:40:51.070 of folks who received this opt -out But when 00:40:51.070 --> 00:40:53.369 you're getting paid in full, I think things get 00:40:53.369 --> 00:40:59.429 a lot easier. So I didn't see much there in terms 00:40:59.429 --> 00:41:01.409 of kind of whether the mechanism worked or didn't 00:41:01.409 --> 00:41:04.369 work. When you're getting a notice of non -voting 00:41:04.369 --> 00:41:06.409 status because you're getting paid in full everything 00:41:06.409 --> 00:41:08.030 that you could have asked for and your claim 00:41:08.030 --> 00:41:14.730 is, Kerm, you, it's, anyway, you're getting paid 00:41:14.730 --> 00:41:18.050 in full, your rights are there. And the release 00:41:18.050 --> 00:41:22.719 is here. I do find a narrowly tailored to kind 00:41:22.719 --> 00:41:24.980 of the issues related to the case and so they're 00:41:24.980 --> 00:41:29.440 not kind of releasing Non -debt or on non -debt 00:41:29.440 --> 00:41:30.840 or towards. I'm nothing to do with the connection 00:41:30.840 --> 00:41:33.219 with the case itself It's really related to the 00:41:33.219 --> 00:41:35.320 restructuring and what's being advanced here 00:41:35.320 --> 00:41:37.400 and so I look at those things because it's important 00:41:37.400 --> 00:41:41.019 because you can't just Propose a broad release 00:41:41.019 --> 00:41:42.920 against just anything. I think they're narrowly 00:41:42.920 --> 00:41:44.780 tailored towards the case here so I'm gonna overrule 00:41:44.780 --> 00:41:47.460 the office of the United States trustee on that 00:41:47.460 --> 00:41:54.730 I do note and I There were a number of based 00:41:54.730 --> 00:42:00.130 on the testimony a number of parties who May 00:42:00.130 --> 00:42:04.369 have perceived undeliverable And and to the extent 00:42:04.369 --> 00:42:08.309 there is someone who never got the piece of paper 00:42:08.309 --> 00:42:12.449 right that's not a that's not a Enough doubt 00:42:12.449 --> 00:42:14.389 that I'm going to enforce and I would look past 00:42:14.389 --> 00:42:17.699 parties to take a look at My team decisions on 00:42:17.699 --> 00:42:20.340 that and so if someone I think the way the process 00:42:20.340 --> 00:42:22.079 has always been set up in our district is that 00:42:22.079 --> 00:42:24.019 you someone actually gets a piece of paper and 00:42:24.019 --> 00:42:26.039 has the opportunity to check the box or not check 00:42:26.039 --> 00:42:29.880 the box and Instead of someone just didn't get 00:42:29.880 --> 00:42:37.159 it But I think there's about The numbers are 00:42:37.159 --> 00:42:39.539 where they are, but if someone did receive it 00:42:41.039 --> 00:42:43.159 And certificates of service will confirm that 00:42:43.159 --> 00:42:45.019 that's another issue for another day, but I just 00:42:45.019 --> 00:42:47.300 raised that there just to note I know it came 00:42:47.300 --> 00:42:48.900 out in the testimony, so I thought it was important 00:42:48.900 --> 00:42:51.679 to kind of raise that I think the injunction 00:42:51.679 --> 00:42:55.679 issue really kind of Kind of dovetails with the 00:42:55.679 --> 00:42:57.539 opt -out if you permit the opt -out then then 00:42:57.539 --> 00:43:01.019 the injunction kind of Works with it as well. 00:43:01.059 --> 00:43:06.900 I know I do note I Think the gatekeeper function 00:43:06.900 --> 00:43:09.000 that we do which kind of relates to the injunction 00:43:09.000 --> 00:43:13.079 as well It's it's I'm not trying cases. I'm not 00:43:13.079 --> 00:43:16.639 getting into Any litigation to confirm it one 00:43:16.639 --> 00:43:19.440 way or the other it's just to to confirm There's 00:43:19.440 --> 00:43:21.239 an order providing a release in order providing 00:43:21.239 --> 00:43:23.500 an exculpation and by the way the exculpations 00:43:23.500 --> 00:43:26.219 that are provided Here, I think is the right 00:43:26.219 --> 00:43:29.539 answer under highland for what it's worth. I 00:43:29.539 --> 00:43:33.420 think the parties to whom it's limited to provides 00:43:33.420 --> 00:43:37.760 the right answer But I think the the gatekeeper 00:43:37.760 --> 00:43:40.340 function here works. And I do note, right, if 00:43:40.340 --> 00:43:45.659 there's an argument about whether, you know, 00:43:45.739 --> 00:43:49.920 I'm making something up, employee is an employee 00:43:49.920 --> 00:43:51.940 and not an employee about a dispute about that, 00:43:52.000 --> 00:43:54.280 that's a whole other issue that we'll have to 00:43:54.280 --> 00:43:57.260 take up another day. But if someone is specifically 00:43:57.260 --> 00:43:59.440 named, right, I can then point to that, point 00:43:59.440 --> 00:44:03.239 to the order and get it going. There could be. 00:44:03.739 --> 00:44:06.219 What I would call concurrent jurisdiction to 00:44:06.219 --> 00:44:08.860 just determine if there was actual litigation 00:44:08.860 --> 00:44:12.980 as to whether someone was or wasn't Kind of specifically 00:44:12.980 --> 00:44:15.139 within that that realm and that's consistent 00:44:15.139 --> 00:44:17.780 with what I've done in other cases as well But 00:44:17.780 --> 00:44:19.340 parties coming here to have me take a quick look 00:44:19.340 --> 00:44:21.019 at it quite frankly the district courts send 00:44:21.019 --> 00:44:23.360 me send it back to me in the first instance anyway, 00:44:23.400 --> 00:44:26.199 so it's just We'll be here one way or the other 00:44:26.199 --> 00:44:30.650 so I think that that works As well and with respect 00:44:30.650 --> 00:44:33.050 to the 3020 e I'm gonna grant it in this case 00:44:33.050 --> 00:44:35.050 It's a bunch of international moving pieces and 00:44:35.050 --> 00:44:38.110 stuff has to get started and you have 99 % support 00:44:38.110 --> 00:44:40.730 Here so I do think there's a cause to kind of 00:44:40.730 --> 00:44:45.210 get it to to going 99 % on both ends and unencumbered 00:44:45.210 --> 00:44:48.650 parties For the majority. This is a consensual 00:44:48.650 --> 00:44:51.929 restructuring. I Approved a plan confirmation 00:44:51.929 --> 00:44:55.929 yesterday in which one was not approved. So Again, 00:44:55.949 --> 00:44:58.739 every case is different Every case has its own 00:44:58.739 --> 00:45:01.900 set of facts. We'll take everyone up on their 00:45:01.900 --> 00:45:05.239 own I think the trustee is right to raise these 00:45:05.239 --> 00:45:09.699 issues they're doing their job and It's a tough 00:45:09.699 --> 00:45:11.139 one in this district because they have to read 00:45:11.139 --> 00:45:14.099 just as much paper as I do and that's a lot of 00:45:14.099 --> 00:45:18.599 paper and a lot of work and so they're Kind of 00:45:18.599 --> 00:45:21.239 unsung heroes in the process, so I thank them 00:45:22.019 --> 00:45:24.440 But I want to congratulate the debtors, their 00:45:24.440 --> 00:45:26.840 professionals, and everyone involved in connection 00:45:26.840 --> 00:45:30.820 with this case. It's a successful restructuring, 00:45:30.900 --> 00:45:32.900 and I wish everyone the best, and I wish everyone 00:45:32.900 --> 00:45:35.239 a happy holiday. I've reviewed the proposed form 00:45:35.239 --> 00:45:37.960 of order, and I'll get it signed and on the docket. 00:45:38.940 --> 00:45:43.400 I do know there are still some kind of pending 00:45:43.400 --> 00:45:48.409 applications that are out there. Just... take 00:45:48.409 --> 00:45:51.429 them up CNL or whatever, COC or whatever that 00:45:51.429 --> 00:45:54.869 is and just let my case manager know, but I want 00:45:54.869 --> 00:46:01.590 to get that done. I just, people start to disappear 00:46:01.590 --> 00:46:05.829 in the next 14 days, but I'm, except when it 00:46:05.829 --> 00:46:07.309 comes to fee apps, you know, they want to get 00:46:07.309 --> 00:46:09.809 all that stuff in, but I think I want to make 00:46:09.809 --> 00:46:11.829 sure that applications are in, but I also don't 00:46:11.829 --> 00:46:15.409 want to kind of swamp my folks with. So but just 00:46:15.409 --> 00:46:17.690 as soon as it is it's there see you see but just 00:46:17.690 --> 00:46:22.210 a simple email to my team We'll make sure and 00:46:22.210 --> 00:46:23.670 we'll get it done, but it'd be great to just 00:46:23.670 --> 00:46:26.929 kind of put her But if obviously we need to have 00:46:26.929 --> 00:46:30.130 a hearing we'll have the hearing so Anyway, we're 00:46:30.130 --> 00:46:31.550 adjourned. I want to thank everyone for their 00:46:31.550 --> 00:46:35.610 time. Thank you. Have a good day. Thank you All 00:46:35.610 --> 00:46:38.630 right, yeah, I will turn my camera off and