WEBVTT 00:00:10.509 --> 00:00:12.970 Good afternoon, Your Honor. It's nice to see 00:00:12.970 --> 00:00:15.730 you again. It's been a while. Bill Hazel Klein 00:00:15.730 --> 00:00:19.309 of Sullivan Nimroff Brown Hill on behalf of the 00:00:19.309 --> 00:00:24.609 debtor Glenwood Cavern Holdings. And I'd like 00:00:24.609 --> 00:00:30.410 to introduce my co -counsel, Mike Panko of Brownstein, 00:00:30.570 --> 00:00:34.929 Hyatt, Farber, and Shrek, and the company CRO, 00:00:35.429 --> 00:00:38.630 Paul Menescalo of Macco Group Restructuring. 00:00:38.780 --> 00:00:43.479 Macero restructuring group, excuse me. Your Honor, 00:00:43.659 --> 00:00:46.960 I'm going to make a few open remarks. Mr. Pankow 00:00:46.960 --> 00:00:49.219 will go forward through it in much more detail. 00:00:50.000 --> 00:00:53.640 But as you probably saw from the pleadings, we're 00:00:53.640 --> 00:00:59.899 here because of a very tragic accident on, oh, 00:00:59.960 --> 00:01:03.100 I should step back. Glenwood operates and owns 00:01:03.100 --> 00:01:05.219 and operates the amusement park in Glenwood, 00:01:06.000 --> 00:01:12.540 Colorado. Tragic accident resulted in the loss 00:01:12.540 --> 00:01:17.980 of a young girl's life The plaintiffs got a huge 00:01:17.980 --> 00:01:24.840 judgment against Glenwood that they they just 00:01:24.840 --> 00:01:29.819 can't pay and Over the last let's see we got 00:01:29.819 --> 00:01:33.959 involved in this case in early December, maybe 00:01:33.959 --> 00:01:39.489 late November and We have been ready to file 00:01:39.489 --> 00:01:43.930 on several occasions. In the meantime, Mr. Panko 00:01:43.930 --> 00:01:47.450 and Mr. Maniscalio have been in discussions with 00:01:47.450 --> 00:01:50.109 the plaintiff's council about possible settlement. 00:01:50.829 --> 00:01:55.569 We received numerous standstill agreements to 00:01:55.569 --> 00:01:58.989 stop execution. Eventually, we ended up filing 00:01:58.989 --> 00:02:04.950 on Monday. And part of the reason I bring that 00:02:04.950 --> 00:02:08.650 up is to express my heartfelt thanks to the U 00:02:08.650 --> 00:02:13.090 .S. Trustee's office for the on -again, off -again, 00:02:13.150 --> 00:02:15.849 on -again, and off -again. They've been very, 00:02:15.849 --> 00:02:19.610 very cooperative and have made this process a 00:02:19.610 --> 00:02:22.849 lot easier than it could have been. And I'd also 00:02:22.849 --> 00:02:24.830 like to thank the court. We've made numerous 00:02:24.830 --> 00:02:27.270 calls to the court about a possible bankruptcy 00:02:27.270 --> 00:02:33.169 filing and so they've been very cooperative as 00:02:33.169 --> 00:02:37.509 well. Your Honor, I just want to mention service 00:02:37.509 --> 00:02:39.430 of all the first, the pitch station, the first 00:02:39.430 --> 00:02:46.490 day pleadings. Epic restructuring is our claims 00:02:46.490 --> 00:02:49.830 and noticing agent. I have a certificate of service 00:02:49.830 --> 00:02:53.330 here attesting to the service of everything. 00:02:53.490 --> 00:02:54.830 I don't know if your honor would like to see 00:02:54.830 --> 00:03:14.020 a copy. And they assured me it's all been served 00:03:14.020 --> 00:03:18.120 according to the court's rules. Very good. And 00:03:18.120 --> 00:03:20.240 with that, I will turn the podium over to Mr. 00:03:20.500 --> 00:03:32.340 Panto. Thank you. Good afternoon, Your Honor, 00:03:32.520 --> 00:03:35.580 and thank you. It's a privilege to be in this 00:03:35.580 --> 00:03:40.139 court. I also would like to second Mr. Hazel 00:03:40.139 --> 00:03:42.539 things expression of gratitude to the United 00:03:42.539 --> 00:03:46.219 States trustee They were extraordinarily responsive 00:03:46.219 --> 00:03:49.120 and extraordinarily patient, you know through 00:03:49.120 --> 00:03:52.419 through the fits and starts of this and have 00:03:52.419 --> 00:03:56.979 been a pleasure to work with Appreciate them 00:03:56.979 --> 00:04:01.560 So I think we're here by consent We may have 00:04:01.560 --> 00:04:04.280 one issue, you know a couple of issues floating 00:04:04.280 --> 00:04:07.020 language and and I don't want to get out in front 00:04:07.020 --> 00:04:09.120 of anybody on that but I think we're I think 00:04:09.120 --> 00:04:13.439 we're proceeding by consent. So I'll just give 00:04:13.439 --> 00:04:16.720 a quick overview. I think the court has probably 00:04:16.720 --> 00:04:18.740 heard a little bit and probably has read the 00:04:18.740 --> 00:04:20.939 papers. The debtor before the court is Glenwood 00:04:20.939 --> 00:04:25.079 Cavern Holdings, LLC. It owns and operates an 00:04:25.079 --> 00:04:27.259 amusement park in the town of Glenwood Springs, 00:04:27.279 --> 00:04:29.920 Colorado, which is on the western slope on the 00:04:29.920 --> 00:04:31.620 other side of the Rocky Mountains from Denver. 00:04:32.660 --> 00:04:34.800 If you're driving from Vale to Aspen, you'll 00:04:34.800 --> 00:04:37.819 drive through Glenwood Springs. It's a town of 00:04:37.819 --> 00:04:41.620 10 ,000 people. It is the only mountain top amusement 00:04:41.620 --> 00:04:46.680 park in the USA. One access is the park via gondola. 00:04:47.819 --> 00:04:51.800 The park started 25 years ago as tours of caves 00:04:51.800 --> 00:04:54.180 located in the mountains and started adding rides 00:04:54.180 --> 00:04:56.800 about 20 years ago. Currently, the park offers 00:04:56.800 --> 00:04:59.680 cave tours, six rides, and other attractions. 00:05:01.339 --> 00:05:05.540 For some order of magnitude, the park attracts 00:05:05.540 --> 00:05:09.329 attendance plus or minus of about 200 ,000 patrons 00:05:09.329 --> 00:05:13.490 a year. Revenue is about 16 million plus or minus, 00:05:13.490 --> 00:05:18.970 and the assets are unique. It's up on top of 00:05:18.970 --> 00:05:21.769 a mountain, side of a mountain, the roller coasters 00:05:21.769 --> 00:05:27.389 up on, excuse me, with a mountain view. I have 00:05:27.389 --> 00:05:29.089 personally never been there, but I have seen 00:05:29.089 --> 00:05:34.449 pictures of this unusual. The park's employment 00:05:34.449 --> 00:05:36.949 varies seasonally. During the summer months, 00:05:36.990 --> 00:05:40.149 it employs about 250 people. It's not what you 00:05:40.149 --> 00:05:42.569 would call a destination park like a Six Flags 00:05:42.569 --> 00:05:46.490 or a Disney. But it is an important attraction 00:05:46.490 --> 00:05:51.310 in a small town that does generate in significant 00:05:51.310 --> 00:05:53.490 or does depend, excuse me, in significant part 00:05:53.490 --> 00:05:57.189 on tourism. The corporate structure is fairly 00:05:57.189 --> 00:06:00.490 simple. This is an operational entity despite 00:06:00.490 --> 00:06:05.689 the name Holdings in it. And it is 100 % owned 00:06:05.689 --> 00:06:10.850 by another entity called GCAP Holdco LLC. That 00:06:10.850 --> 00:06:15.050 in turn is owned by, in part by some private 00:06:15.050 --> 00:06:20.790 equity investors and 17 % interest retained by 00:06:20.790 --> 00:06:25.230 the founder of the park. I'll just mention one 00:06:25.230 --> 00:06:27.050 outside director because I think it gives a point 00:06:27.050 --> 00:06:30.209 of comparison for the park. His name is Jeff 00:06:30.209 --> 00:06:33.560 Clark. He doesn't have a financial investment 00:06:33.560 --> 00:06:37.699 in the park, as I recall. He happens to run the 00:06:37.699 --> 00:06:40.699 amusement park on the Santa Monica Pier in Los 00:06:40.699 --> 00:06:44.699 Angeles. So it just adds a little color to that. 00:06:45.579 --> 00:06:48.899 The debt structure here is very simple. There's 00:06:48.899 --> 00:06:50.980 a secured lender, Community Banks of Colorado, 00:06:51.560 --> 00:06:53.759 outstanding balance of just under $13 million, 00:06:54.439 --> 00:06:56.980 series of loans secured by a deed of trust, which 00:06:56.980 --> 00:07:01.430 is the Colorado equivalent of a mortgage. The 00:07:01.430 --> 00:07:04.670 maturity start in 2029. There's a small amount 00:07:04.670 --> 00:07:08.290 of trade debt, and as Mr. Hazelty mentioned, 00:07:08.449 --> 00:07:10.790 the largest debt and the reason we're here today 00:07:10.790 --> 00:07:14.790 is a large judgment resulting from this tragic 00:07:14.790 --> 00:07:18.449 accident. Let me ask you a question because I'm 00:07:18.449 --> 00:07:25.709 curious. The bank has a mortgage. The park owns 00:07:25.709 --> 00:07:28.170 the park, but it doesn't own the mountain, does 00:07:28.170 --> 00:07:31.350 it? How does that work? Oh, it owns real estate 00:07:31.350 --> 00:07:33.930 that happens to be located on the mount. Okay, 00:07:34.009 --> 00:07:36.310 so it does have the real estate that the park 00:07:36.310 --> 00:07:39.410 is owned on it own. I mean the park is on it 00:07:39.410 --> 00:07:48.930 owns, right? Got it. Right. So. The reason we're 00:07:48.930 --> 00:07:51.290 here ultimately is this tragic accident and you 00:07:51.290 --> 00:07:54.689 know the consequences from that. In September 00:07:54.689 --> 00:07:57.899 2021, a little girl died on one of the. parks 00:07:57.899 --> 00:08:01.459 rides and it would be presumptuous of me to speak 00:08:01.459 --> 00:08:03.779 of the effect on her family. I'll just have to 00:08:03.779 --> 00:08:07.899 touch briefly on the parks response. The park 00:08:07.899 --> 00:08:11.519 shut down that ride for two years, redesigned 00:08:11.519 --> 00:08:20.040 it, has reviewed, revamped safety processes, 00:08:21.540 --> 00:08:28.130 engaged gold standard outside training. individuals 00:08:28.130 --> 00:08:32.649 and they have trained their supervisors who then 00:08:32.649 --> 00:08:37.730 audit and monitor. And it is a very rigorous 00:08:37.730 --> 00:08:42.029 training and auditing program. In addition, one 00:08:42.029 --> 00:08:44.230 of the other rides that had been manufactured 00:08:44.230 --> 00:08:48.049 by the same manufacturer, they just shut it down 00:08:48.049 --> 00:08:54.049 permanently. And from these lessons that have 00:08:54.049 --> 00:08:56.820 been learned, the park has thought it important 00:08:56.820 --> 00:08:59.679 to reach out to the rest of the industry and 00:08:59.679 --> 00:09:03.080 has reached out engaged in trade groups and made 00:09:03.080 --> 00:09:06.120 presentations to other amusement parks on what 00:09:06.120 --> 00:09:09.080 can go wrong how to prevent it from going wrong 00:09:09.080 --> 00:09:14.240 and hopefully somewhere that will help someone. 00:09:15.519 --> 00:09:18.360 On a parallel path there's wrongful Beth litigation 00:09:18.360 --> 00:09:20.360 you know that that proceeded through the Colorado 00:09:20.360 --> 00:09:23.700 State Courts trial in September of this year 00:09:23.700 --> 00:09:27.230 a verdict came back order of magnitude $100 million. 00:09:28.649 --> 00:09:30.970 So here we must obviously deal with the financial 00:09:30.970 --> 00:09:36.169 impacts. The underlying CGL insurance policy 00:09:36.169 --> 00:09:40.870 was only $5 million. And that actually includes 00:09:40.870 --> 00:09:45.450 a primary and a first level excess. So obviously 00:09:45.450 --> 00:09:47.870 the judgment far exceeds the assurance available. 00:09:48.509 --> 00:09:51.730 After the judgment was entered, The company retained 00:09:51.730 --> 00:09:54.970 Mr. Maniscalco as chief restructuring officer 00:09:54.970 --> 00:09:57.870 and counsel and the plaintiff at one point started 00:09:57.870 --> 00:10:02.549 to execute on the judgment. But then the conversation 00:10:02.549 --> 00:10:05.110 started. We reached out and tried to work this 00:10:05.110 --> 00:10:09.029 out over the last several weeks. In the process, 00:10:09.190 --> 00:10:11.529 we provided comprehensive financial information 00:10:11.529 --> 00:10:15.509 to the plaintiff available to answer questions 00:10:15.509 --> 00:10:18.240 as we could. there was back and forth and in 00:10:18.240 --> 00:10:20.299 that there was a series of standstill agreements. 00:10:21.399 --> 00:10:24.500 The last one expired on Monday, which is why 00:10:24.500 --> 00:10:29.059 we ended up filing on Monday. Moving forward 00:10:29.059 --> 00:10:31.759 in this Chapter 11 case, Your Honor, I should 00:10:31.759 --> 00:10:36.419 point out this is not a prepack. Our planning 00:10:36.419 --> 00:10:39.460 and efforts and the efforts of the company and 00:10:39.460 --> 00:10:42.159 the board have been focused primarily on finding 00:10:42.159 --> 00:10:44.519 a solution out of court. that would preserve 00:10:44.519 --> 00:10:47.399 the park and would be mutually satisfactory to 00:10:47.399 --> 00:10:49.720 the plaintiff. So the debtor will need to take 00:10:49.720 --> 00:10:51.899 a little bit of time to use the automatic stay, 00:10:52.039 --> 00:10:54.940 a breathing spell here, and determine the best 00:10:54.940 --> 00:10:57.740 exit strategy, which may be a going concern sale. 00:10:59.940 --> 00:11:03.480 On a parallel path, the stay court litigation 00:11:03.480 --> 00:11:07.519 technically will now be stayed. I would anticipate 00:11:07.519 --> 00:11:09.639 probably filing a motion to modify the stay to 00:11:09.639 --> 00:11:13.990 permit appellate proceedings to... go on in that 00:11:13.990 --> 00:11:16.870 case. I haven't discussed that with Plaintiffs' 00:11:17.070 --> 00:11:19.049 Council yet, but that's probably something, you 00:11:19.049 --> 00:11:23.730 know, we'll propose. And, you know, we could 00:11:23.730 --> 00:11:27.230 have a plan with a sale, potentially with a claims 00:11:27.230 --> 00:11:30.710 reserve, you know, to sort that out. Now we continue, 00:11:31.070 --> 00:11:33.470 and we may also continue to negotiate with the 00:11:33.470 --> 00:11:36.190 plaintiffs, now of course in a slightly different 00:11:36.190 --> 00:11:40.570 context than we were outside of court. The immediate 00:11:40.570 --> 00:11:42.870 needs of this debtor, I think, are fairly straightforward. 00:11:43.529 --> 00:11:49.870 It does not need dip financing. Instead of revolving 00:11:49.870 --> 00:11:54.750 the lending here generally, because there's a 00:11:54.750 --> 00:11:58.009 lot of seasonality in the cash, the company would 00:11:58.009 --> 00:12:01.250 just hold a large cash balance from the high 00:12:01.250 --> 00:12:04.210 months, and then it would decline over time into 00:12:04.210 --> 00:12:07.129 low months. So at the end of summer, cash is 00:12:07.129 --> 00:12:11.289 high, starts to decline. The trough bottoms out 00:12:11.289 --> 00:12:13.669 probably April, May, depending on the weather 00:12:13.669 --> 00:12:16.669 and everything, other things affecting Colorado, 00:12:16.789 --> 00:12:19.190 and then starts to build back up again. So right 00:12:19.190 --> 00:12:21.909 now, we're sitting on approximately $3 million 00:12:21.909 --> 00:12:26.590 cash. And for the next few months, there will 00:12:26.590 --> 00:12:30.730 be a cash deficit with seasonality and cost of 00:12:30.730 --> 00:12:33.750 administration. So while I mentioned we do not 00:12:33.750 --> 00:12:37.830 need a dip financing, we do need cash collateral. 00:12:38.190 --> 00:12:41.990 And in that regard, we are proceeding by consent. 00:12:43.309 --> 00:12:45.250 We'll also need to ask the court for permission 00:12:45.250 --> 00:12:50.210 to make the payroll cycle happen to end Sunday 00:12:50.210 --> 00:12:55.129 night just before our petition. And if the court 00:12:55.129 --> 00:12:57.950 permits it, we will fund payroll tomorrow and 00:12:57.950 --> 00:13:01.570 issue checks on Friday. And then we have other 00:13:01.570 --> 00:13:05.690 matters such as insurance to address. So we can 00:13:05.690 --> 00:13:07.610 jump into the specific motions if you'd like, 00:13:07.610 --> 00:13:10.490 Your Honor. And we have shared these with the 00:13:10.490 --> 00:13:13.830 bank and with the United States trustee and have 00:13:13.830 --> 00:13:16.870 received their comments. And before I jump into 00:13:16.870 --> 00:13:19.289 specific moments, I would offer into evidence 00:13:19.289 --> 00:13:22.850 the declaration of Paul Maniscalco, which sits 00:13:22.850 --> 00:13:27.009 at docket number 10. Yes, let me ask, are there 00:13:27.009 --> 00:13:31.350 any objections to Mr. Maniscalco's? I'll get 00:13:31.350 --> 00:13:36.940 it. Maniscalco? his declaration coming into evidence. 00:13:37.139 --> 00:13:42.120 Thank you. So we can start just with perhaps 00:13:42.120 --> 00:13:44.100 docket number three, the retention to obtain 00:13:44.100 --> 00:13:47.220 or the application to retain EPIC as claims of 00:13:47.220 --> 00:13:51.100 noticing agent pursuant to 28 USC section 156 00:13:51.100 --> 00:13:56.659 C. We received informal comments to the form 00:13:56.659 --> 00:14:01.000 of order from the United States trustee and We 00:14:01.000 --> 00:14:04.139 have a red line, I think, Mr. Hazeltine. It has 00:14:04.139 --> 00:14:07.320 been circulated among and perhaps we should hand 00:14:07.320 --> 00:14:28.539 one to the court. If you don't mind. The only 00:14:28.539 --> 00:14:31.320 change there is, as I recall, is a change to 00:14:31.320 --> 00:14:58.019 the preamble of the order. I see the change, 00:14:58.320 --> 00:15:01.039 it's appropriate in this jurisdiction, and I 00:15:01.039 --> 00:15:06.240 will approve it. Thank you. Next, at docket number 00:15:06.240 --> 00:15:10.299 four, what I refer to as the matrix redaction 00:15:10.299 --> 00:15:13.500 motion requesting to redact personally identifiable 00:15:13.500 --> 00:15:18.379 information from the creditor matrix. And there 00:15:18.379 --> 00:15:26.360 were comments to that order as well. They are 00:15:26.360 --> 00:16:20.909 of a similar nature as I recall. wish to be heard 00:16:20.909 --> 00:16:28.210 with respect to the redaction motion. I hear 00:16:28.210 --> 00:16:31.750 no one. I reviewed it prior to the hearing. I 00:16:31.750 --> 00:16:34.690 see the changes that have been made at the request 00:16:34.690 --> 00:16:38.110 of the Office of the United States Trustee. The 00:16:38.110 --> 00:16:40.049 changes are appropriate and I will approve it 00:16:40.049 --> 00:16:52.519 as revised. Thank you. Next, and I can just follow 00:16:52.519 --> 00:16:55.659 the DACA numbers for now, the motion regarding 00:16:55.659 --> 00:16:58.919 or proposed motion at DACA number five regarding 00:16:58.919 --> 00:17:05.160 insurance. And in this respect, Your Honor, the 00:17:05.160 --> 00:17:08.500 debtor maintains the normal and appropriate assurance 00:17:08.500 --> 00:17:13.220 that the court might expect to see. For property 00:17:13.220 --> 00:17:17.099 insurance, there are two twists. One is. That 00:17:17.099 --> 00:17:20.099 there's a premium financing so that there's a 00:17:20.099 --> 00:17:23.759 monthly payment shared for efficiency among various 00:17:23.759 --> 00:17:28.480 entities. Number one, and number two, there's 00:17:28.480 --> 00:17:30.960 a brokerage fee that is associated with that. 00:17:30.960 --> 00:17:34.119 That is part of the premium payment. We would 00:17:34.119 --> 00:17:38.799 request permission to continue with payments 00:17:38.799 --> 00:17:41.819 of insurance pursuant to that program. And of 00:17:41.819 --> 00:17:51.119 course, any other insurance that we need. with 00:17:51.119 --> 00:17:58.279 respect to the insurance motion. I hear no one. 00:18:03.000 --> 00:18:06.359 This is part of the shared services arrangement, 00:18:06.400 --> 00:18:10.980 correct or no? Broadly speaking. This insurance 00:18:10.980 --> 00:18:14.079 program, and I've seen it, for instance, where 00:18:14.079 --> 00:18:17.700 multi -family or things are under common management. 00:18:19.850 --> 00:18:22.210 Companies otherwise unrelated that happen to 00:18:22.210 --> 00:18:25.309 be owned, you know, have common ownership of 00:18:25.309 --> 00:18:27.410 the private equity fund, pitch their insurance 00:18:27.410 --> 00:18:32.049 together in order to save costs. So we get a 00:18:32.049 --> 00:18:35.630 lower overall quote, and then the allocation 00:18:35.630 --> 00:18:38.210 to this debtor comes from the carrier. It's part 00:18:38.210 --> 00:18:41.450 of their quote. Okay, so this allocation is not 00:18:41.450 --> 00:18:43.849 an internal allocation. It's from the carrier 00:18:43.849 --> 00:18:46.650 based on whatever the carrier base is premium 00:18:46.650 --> 00:18:55.910 on. Precisely. Okay. That was the only question 00:18:55.910 --> 00:19:06.450 that I had. Are there any changes to this form 00:19:06.450 --> 00:19:11.910 of order? Yes. There were some corrections in 00:19:11.910 --> 00:19:18.250 the figures. And there is a provision inserted, 00:19:18.269 --> 00:19:19.829 I believe, at the request of the United States 00:19:19.829 --> 00:19:22.869 trustee that the debtor will provide prior notice 00:19:22.869 --> 00:19:28.299 to the US trustee of changes. okay is there a 00:19:28.299 --> 00:20:50.480 red line So I see the cap has been changed and 00:20:50.480 --> 00:21:07.839 reduced on the interim basis. Okay. Did you all 00:21:07.839 --> 00:21:20.059 get a final hearing date from Ms. Johnson? Yes, 00:21:20.059 --> 00:21:23.740 March 11th at 2 o 'clock. Okay. So that can be 00:21:23.740 --> 00:21:28.380 inserted in your forms of order. Okay. Okay. 00:21:28.480 --> 00:21:31.900 I've reviewed this. I see the changes made at 00:21:31.900 --> 00:21:33.900 the request of the Office of the United States 00:21:33.900 --> 00:21:36.480 Trustee. The debtor obviously needs to continue 00:21:36.480 --> 00:21:41.079 with its insurance in place. And I will approve 00:21:41.079 --> 00:21:43.779 this on an interim basis as necessary to avoid 00:21:43.779 --> 00:21:51.390 immediate and irreparable harm. Next, I would 00:21:51.390 --> 00:21:54.049 proceed to docket number six of the motion regarding 00:21:54.049 --> 00:22:00.009 utilities. Utilities, yes. And in that respect, 00:22:00.089 --> 00:22:02.890 Your Honor, the debtor has been current in paying 00:22:02.890 --> 00:22:06.309 its utilities as generally it has been in paying 00:22:06.309 --> 00:22:10.950 trade debt as a rule. What we are proposing in 00:22:10.950 --> 00:22:13.910 the utilities motion is a deposit in the amount 00:22:13.910 --> 00:22:17.329 of two weeks. And as I mentioned, they've been 00:22:17.329 --> 00:22:19.400 current on the bills. There had been some back 00:22:19.400 --> 00:22:23.740 and forth about where to place the deposit. And 00:22:23.740 --> 00:22:26.819 the US trustee had requested that the deposit 00:22:26.819 --> 00:22:31.420 be made at a bank that had signed the UDA, which 00:22:31.420 --> 00:22:34.000 our current bank and our current lender has not. 00:22:35.359 --> 00:22:37.579 And that's an issue for cash management, which 00:22:37.579 --> 00:22:40.299 we're coming to. And I think the resolution here, 00:22:40.660 --> 00:22:43.519 which we've come to shortly before the hearing, 00:22:43.759 --> 00:22:48.539 is that It's only about $12 ,000 of utility deposits. 00:22:49.359 --> 00:22:52.140 The direction of where that's deposited is subject 00:22:52.140 --> 00:22:55.200 to the cash management resolution. So for now, 00:22:55.359 --> 00:22:58.599 they will be deposited at our existing bank, 00:22:58.900 --> 00:23:00.759 Community Bank of Colorado, subject to further 00:23:00.759 --> 00:23:38.380 proceedings. Next on my list your honor at docket 00:23:38.380 --> 00:23:45.779 seven is the cash management motion And Generally 00:23:45.779 --> 00:23:49.099 speaking your honor the the debtor operates with 00:23:49.099 --> 00:23:53.160 four accounts There's its general operating account 00:23:53.160 --> 00:23:57.240 Where most of the activity is? Into that operating 00:23:57.240 --> 00:24:00.799 account the debtor receives its revenues credit 00:24:00.799 --> 00:24:08.109 card remittances, and it also pays expenses Then 00:24:08.109 --> 00:24:10.630 there's a separate payroll account. That payroll 00:24:10.630 --> 00:24:15.089 account is administered by a third party, Paycom 00:24:15.089 --> 00:24:22.089 served, and with the crump and Paycom issues 00:24:22.089 --> 00:24:24.910 checks out of the payroll account to employees. 00:24:26.109 --> 00:24:29.670 Then there are two money market accounts, a money 00:24:29.670 --> 00:24:31.809 market account and then a reserve money market 00:24:31.809 --> 00:24:36.109 account. Those are kept separate because of the 00:24:36.109 --> 00:24:41.240 size of the balance. So that the size, if somebody 00:24:41.240 --> 00:24:42.819 hacked into the operating account, for instance, 00:24:42.859 --> 00:24:46.240 they wouldn't get all the money. So that money, 00:24:46.319 --> 00:24:48.960 there's about $2 .4 million in that account right 00:24:48.960 --> 00:24:52.660 now. And what we're asking, Your Honor, is to 00:24:52.660 --> 00:24:58.660 continue with those existing bank accounts. There 00:24:58.660 --> 00:25:01.259 are reasons for that that we would urge the court. 00:25:01.279 --> 00:25:03.579 We understand the US Trustee's position because 00:25:03.579 --> 00:25:07.180 we need to ask a waiver, Section 345. The resolution 00:25:07.180 --> 00:25:11.220 for today is that the U .S. Trustee has asked 00:25:11.220 --> 00:25:13.160 that we insert language into the court order 00:25:13.160 --> 00:25:18.119 that says we'll have 30 days to comply with Section 00:25:18.119 --> 00:25:21.599 345, absent further of the court or agreement 00:25:21.599 --> 00:25:24.339 with the United States Trustee. Now I think there 00:25:24.339 --> 00:25:26.799 might be one or two open language issues on the 00:25:26.799 --> 00:25:30.299 order, or are we finished on that exact order? 00:25:35.690 --> 00:25:39.210 My good friend Mr. Waxman sent me comments to 00:25:39.210 --> 00:25:44.630 this order, like at 225. And I had them print 00:25:44.630 --> 00:25:47.609 it, but apparently the black line doesn't show 00:25:47.609 --> 00:25:52.130 up. So I can hand your honor a copy of the black 00:25:52.130 --> 00:26:10.279 line that we did. Well, let me see what we have. 00:26:35.759 --> 00:26:38.480 Okay, well, if this is agreed upon language and 00:26:38.480 --> 00:26:41.859 the U .S. trustee signs off on it, then I'm sure 00:26:41.859 --> 00:26:45.359 it will be acceptable to me. We may want to make 00:26:45.359 --> 00:26:48.519 sure that U .S. trustee receives. Your Honor, 00:26:48.680 --> 00:26:50.220 Hannah McCollum for the U .S. trustee. I have 00:26:50.220 --> 00:26:52.599 seen the language. I am not thrilled with this 00:26:52.599 --> 00:26:55.099 resolution, but as we have all agreed amongst 00:26:55.099 --> 00:26:57.480 ourselves, this is the first day hearing. This 00:26:57.480 --> 00:27:00.940 is not a final order. It is fairly customary 00:27:00.940 --> 00:27:03.279 to give debtors who are not in compliance a period 00:27:03.279 --> 00:27:07.660 of time to do so. Mr. Waxman is discussing the 00:27:07.660 --> 00:27:09.779 matter with his client in terms of whether that 00:27:09.779 --> 00:27:13.880 bank is willing to sign a UDA 345 allows the 00:27:13.880 --> 00:27:16.539 debtor although my my people have told me it's 00:27:16.539 --> 00:27:18.599 not actually the debtor that gets the bond it 00:27:18.599 --> 00:27:20.880 would be the bank that gets a bond but somebody 00:27:20.880 --> 00:27:23.359 gets a bond and protects it because if you look 00:27:23.359 --> 00:27:26.559 at the cash management motion It's between seven 00:27:26.559 --> 00:27:30.140 and eight million dollars Total in these debtor 00:27:30.140 --> 00:27:32.680 accounts. We're still not sure whether the money 00:27:32.680 --> 00:27:35.829 market accounts are like risk -bearing accounts 00:27:35.829 --> 00:27:38.589 that were, you know, money trades or anything 00:27:38.589 --> 00:27:41.529 like that. And that's another problem under 345. 00:27:42.710 --> 00:27:45.210 But I think it's very fair to let the debtors 00:27:45.210 --> 00:27:47.269 have a breathing spell and see if we can get 00:27:47.269 --> 00:27:49.509 that resolved. If not, we can come in front of 00:27:49.509 --> 00:27:52.230 your honor and say, no, there's no grounds for 00:27:52.230 --> 00:27:55.450 a 345 waiver or the debtor presents their case 00:27:55.450 --> 00:27:57.329 and convinces your honor that there is grounds. 00:27:57.849 --> 00:28:50.930 So. I certainly think there should not be, on 00:28:50.930 --> 00:28:53.589 the first day, a disruption in the debtor's accounts, 00:28:53.650 --> 00:28:57.390 which it needs to be able to use in order to 00:28:57.390 --> 00:29:03.230 make payroll, for example, and then pay insurance, 00:29:03.470 --> 00:29:08.289 et cetera. So I will approve a form of order 00:29:08.289 --> 00:29:11.390 with revised language that has been circulated 00:29:11.390 --> 00:29:14.710 and agreed between the debtor, the bank, and 00:29:14.710 --> 00:29:18.470 the Office of the United States Trustee. And 00:29:18.470 --> 00:29:23.490 we'll deal with what happens after today when 00:29:23.490 --> 00:29:25.990 parties are able to discuss and see what the 00:29:25.990 --> 00:29:29.269 options are and what the debtor proposes, what 00:29:29.269 --> 00:29:31.829 it wants to do on a final basis. So I will sign 00:29:31.829 --> 00:29:35.309 off on that as necessary to avoid immediate and 00:29:35.309 --> 00:29:37.470 irreparable harm. We appreciate that, Your Honor. 00:29:37.670 --> 00:29:46.170 Thank you, Your Honor. Next on my list is payroll 00:29:46.170 --> 00:30:04.440 at . . . Permission to make the last payroll 00:30:04.440 --> 00:30:09.460 cycle, which happened to end the day before the 00:30:09.460 --> 00:30:12.859 petition was filed. It is obviously necessary 00:30:12.859 --> 00:30:16.039 to keep employees maintain morale, maintain the 00:30:16.039 --> 00:30:20.160 going concern. What we have requested is authority 00:30:20.160 --> 00:30:23.579 to set forth in the proposed interim order on 00:30:23.579 --> 00:30:27.319 a not to exceed basis of $211 ,000. The order, 00:30:27.440 --> 00:30:29.420 I believe, also provides, and I could represent 00:30:29.420 --> 00:30:36.069 that, the individuals cannot exceed the 507 caps. 00:30:38.210 --> 00:30:41.950 We did add there was one comment, and I think 00:30:41.950 --> 00:30:46.029 this may have been the only comment to this motion 00:30:46.029 --> 00:30:48.630 from the United States trustee asking that the 00:30:48.630 --> 00:30:50.990 order provide the debtors will not discontinue 00:30:50.990 --> 00:30:55.730 or reduce any compensation to employees without 00:30:55.730 --> 00:30:58.329 notice and an opportunity for hearing. We're 00:30:58.329 --> 00:31:00.230 agreeable to that. We had no thought of doing 00:31:00.230 --> 00:31:05.079 so anyway. If I may approach? You may. And paragraph 00:31:05.079 --> 00:31:26.960 seven is the red line. Thank you. and all that. 00:31:27.299 --> 00:31:29.299 So I don't think the debtors are going to do 00:31:29.299 --> 00:31:31.359 this, but if they feel the need to reduce these 00:31:31.359 --> 00:31:33.480 benefit programs or eliminate them, especially 00:31:33.480 --> 00:31:35.880 because some of them have to do with subsidized 00:31:35.880 --> 00:31:38.539 housing and that sort of stuff, to please let 00:31:38.539 --> 00:31:40.640 the employees know sufficiently in advance that 00:31:40.640 --> 00:31:42.359 everybody can come to court if there's a reason 00:31:42.359 --> 00:31:48.720 to do so. So thank you. Thank you. We all learn 00:31:48.720 --> 00:31:56.109 from other cases. Yes, I saw the... benefits 00:31:56.109 --> 00:32:00.210 that we don't always see in cases. I was curious 00:32:00.210 --> 00:32:10.650 about the property professionals lease that's 00:32:10.650 --> 00:32:17.849 discussed at page 12 of the motion. The debtor 00:32:17.849 --> 00:32:24.799 subleases a rental property to an employee. I 00:32:24.799 --> 00:33:00.420 do have a recollection of this So I don't get 00:33:00.420 --> 00:33:03.000 this wrong. I'll ask the CRO to join me at the 00:33:03.000 --> 00:33:06.400 podium if that's okay, Mr. Maniscalco. Generally, 00:33:06.539 --> 00:33:09.900 Your Honor, and I think labor, housing is very 00:33:09.900 --> 00:33:12.140 difficult in that part of, you know, in that 00:33:12.140 --> 00:33:16.160 region of Colorado, and housing for, you know, 00:33:16.380 --> 00:33:19.420 employees compensated that level very hard. So 00:33:19.420 --> 00:33:22.579 what the company has done on it, and a few, is 00:33:22.579 --> 00:33:25.640 subsidize housing, you know, for a dozen or for 00:33:25.640 --> 00:33:28.420 something at a time. And we want to be sure we're 00:33:28.420 --> 00:34:00.539 answering your precise question. Staffing the 00:34:00.539 --> 00:34:03.339 park is a challenge. So what you see depicted 00:34:03.339 --> 00:34:07.940 here These are forms of subsidized housing, right? 00:34:08.059 --> 00:34:12.920 So it's coming through as a benefit And there 00:34:12.920 --> 00:34:16.380 are others for you know for other for multiple 00:34:16.380 --> 00:34:18.679 employees I think this one is for one and I think 00:34:18.679 --> 00:34:24.360 that is for one and depicted in in 39 These that's 00:34:24.360 --> 00:34:26.860 the subsidized housing. Yeah, and then depicted 00:34:26.860 --> 00:34:49.889 in item 40 there I see. And the debtor here is 00:34:49.889 --> 00:34:53.090 paying the landlord $13 .50 a month, and then 00:34:53.090 --> 00:34:56.489 it's subleasing that property to an employee 00:34:56.489 --> 00:34:59.210 for whatever percentage of that or... Yes, Your 00:34:59.210 --> 00:35:02.130 Honor. And taking it out of the paycheck. Got 00:35:02.130 --> 00:35:08.789 it. Yes, Your Honor. Got it. Okay. Okay, thank 00:35:08.789 --> 00:35:12.010 you. That was really the only question I had 00:35:12.010 --> 00:35:18.179 with respect to the... Benefits that are being 00:35:18.179 --> 00:35:22.699 provided. Is there a then a revised form of order 00:35:22.699 --> 00:35:45.610 on the employee wages and benefits motion? Okay. 00:35:45.750 --> 00:35:48.230 Does anyone wish to be heard with respect to 00:35:48.230 --> 00:35:52.889 the employee wages motion? I hear no one. I reviewed 00:35:52.889 --> 00:35:57.989 it. I've asked my question. I have no other questions. 00:35:58.349 --> 00:36:02.710 Obviously, the employees need to be continued 00:36:02.710 --> 00:36:08.769 to be paid what they have. So I will grant this 00:36:08.769 --> 00:36:11.190 as necessary to avoid immediate and irreparable 00:36:11.190 --> 00:36:15.170 harm and revised form. per the comments from 00:36:15.170 --> 00:36:17.809 the Office of the United States, Trustee. Thank 00:36:17.809 --> 00:36:47.199 you, Your Honor. can tell me what I need to look 00:36:47.199 --> 00:36:54.900 at. Thank you. Your Honor, subject to everyone 00:36:54.900 --> 00:36:57.699 making sure that they have their eyes on the 00:36:57.699 --> 00:36:59.559 same language and are agreeable to it, I think 00:36:59.559 --> 00:37:05.940 we're proceeding by consent here. Yes. We've 00:37:05.940 --> 00:37:08.380 had a good working relationship with the bank, 00:37:09.039 --> 00:37:12.460 both as lender and depository bank, which is 00:37:12.639 --> 00:37:15.219 Part of this bill I left out in terms of cash 00:37:15.219 --> 00:37:19.539 management and there has been back and forth 00:37:19.539 --> 00:37:23.699 regarding a budget and what's needed to maintain 00:37:23.699 --> 00:37:27.000 operations at the park. There's a budget attached 00:37:27.000 --> 00:37:30.719 and part of the proposed cash collateral order. 00:37:39.590 --> 00:37:43.769 Form of order that is is presented to your honor 00:37:43.769 --> 00:37:46.230 authorizes expenditures in the ordinary course 00:37:46.230 --> 00:37:57.769 of business I think you know this may be subject 00:37:57.769 --> 00:38:10.320 to I should also note that this does have a challenge 00:38:10.320 --> 00:38:14.139 period, that structure. And in this case, it 00:38:14.139 --> 00:38:18.460 is 75 days. The US trustee did make some informal 00:38:18.460 --> 00:38:22.119 comments, and I believe all of them were accommodated 00:38:22.119 --> 00:38:25.739 in this. Again, subject to the question of whatever 00:38:25.739 --> 00:38:30.480 the last second change was. And one of them relates 00:38:30.480 --> 00:38:32.280 to the fact that the lender is not an approved 00:38:32.280 --> 00:38:35.260 depository, so we have to address that again. 00:38:35.530 --> 00:38:38.829 Another was regarding the priority of the replacement 00:38:38.829 --> 00:38:40.730 lanes, just ensuring that that was completely 00:38:40.730 --> 00:38:44.750 clear. Ensuring that the challenge period is 00:38:44.750 --> 00:38:49.050 75 days. And then there was, in paragraph 10, 00:38:49.989 --> 00:38:51.989 a provision regarding termination of use of past 00:38:51.989 --> 00:38:55.289 collateral upon a default and the permitted scope 00:38:55.289 --> 00:38:59.210 of hearing at that. And that has been changed. 00:38:59.230 --> 00:39:02.289 Ms. McCollum knows my preference on that. Yes. 00:39:05.199 --> 00:39:08.880 So on this one in particular, I want to be careful 00:39:08.880 --> 00:39:11.659 and open the floor to other parties because I 00:39:11.659 --> 00:40:12.659 think there was some language Okay, so replacement 00:40:12.659 --> 00:40:17.380 lanes are not priming lanes. if there is some 00:40:17.380 --> 00:40:20.199 senior lame and they're subject to challenge. 00:40:47.759 --> 00:40:50.260 Those changes are acceptable to the debtor, Your 00:40:50.260 --> 00:40:53.360 Honor, and just a little bit additional color. 00:40:54.039 --> 00:40:55.840 Probably the only type of lien we would be talking 00:40:55.840 --> 00:40:59.559 about here is accruing property tax, just in 00:40:59.559 --> 00:41:03.019 the ordinary course. The company has paid its 00:41:03.019 --> 00:41:05.739 trades as it goes forward. We're unaware of any 00:41:05.739 --> 00:41:07.860 situation like a mechanics lien or anything like 00:41:07.860 --> 00:41:10.599 that. So the language here, it has to be right, 00:41:10.619 --> 00:42:53.119 but it is probably academic. 21 in paragraph 00:42:53.119 --> 00:42:59.099 8F. I just think there was probably something 00:42:59.099 --> 00:43:02.980 carried over. So I see this is the challenge 00:43:02.980 --> 00:43:05.179 paragraph and I see the change in the challenge 00:43:05.179 --> 00:43:08.099 period to 75 days, so that's great. And then 00:43:08.099 --> 00:43:18.480 here there's a reference to if a trustee is appointed, 00:43:18.539 --> 00:43:21.840 what happens to the challenge period? And it 00:43:21.840 --> 00:43:26.260 says the trustee shall have until the later of 00:43:26.260 --> 00:43:29.940 one, the expiration of the challenge period or 00:43:29.940 --> 00:43:34.460 two, the 30th calendar day or the first business 00:43:34.460 --> 00:43:37.780 day thereafter if the 20th calendar day is on 00:43:37.780 --> 00:43:40.000 a Saturday. I assume those are supposed to be 00:43:40.000 --> 00:43:42.780 the same and I don't know if it's 20 or 30 and 00:43:42.780 --> 00:43:45.449 which y 'all landed on but. since you're going 00:43:45.449 --> 00:43:49.889 to fix the order. Thank you. We can fix that. 00:43:54.489 --> 00:43:57.429 The couple of changes that I had, Ms. McCollum 00:43:57.429 --> 00:44:04.269 has taken care of. So I've reviewed this. I've 00:44:04.269 --> 00:44:09.309 looked at the order. It seems to me a very straightforward 00:44:09.309 --> 00:44:12.889 usage of, consensual usage of cash collateral. 00:44:14.539 --> 00:44:18.119 with no determinations being made by the court 00:44:18.119 --> 00:44:21.780 with respect to the collateral, including cash 00:44:21.780 --> 00:44:28.400 collateral, and with replacement liens and a 00:44:28.400 --> 00:44:32.179 super priority claim and no priming. So on those 00:44:32.179 --> 00:44:37.659 terms and given the consensual use and the comments 00:44:37.659 --> 00:44:40.139 of the United States trustee haven't been taken 00:44:40.139 --> 00:44:44.760 and a budget being agreed upon. I will approve 00:44:44.760 --> 00:44:48.239 on an interim basis the use of cash collateral 00:44:48.239 --> 00:44:57.860 as set forth in the order and the budget. Thank 00:44:57.860 --> 00:44:59.900 you. And that will be approved. We'll look for 00:44:59.900 --> 00:45:02.860 a revised form of order which has the language, 00:45:03.079 --> 00:45:15.130 the bank's new language and or submit them on 00:45:15.130 --> 00:45:20.070 their COC? I guess I'd like to see the red line, 00:45:20.130 --> 00:45:24.210 particularly of the cash collateral order. Cash 00:45:24.210 --> 00:45:26.670 management? Yeah, and cash management. Okay, 00:45:26.670 --> 00:45:28.849 so we'll submit those on their COC and upload 00:45:28.849 --> 00:45:30.750 the rest. And I think you can upload the rest 00:45:30.750 --> 00:45:32.530 because I've seen those and you're just going 00:45:32.530 --> 00:45:37.389 to add the second day hearing date. Thank you, 00:45:37.489 --> 00:45:42.960 Your Honor. And let us know, in particular, when 00:45:42.960 --> 00:45:48.679 the cash collateral comes over. Shoot us an email, 00:45:48.820 --> 00:45:51.059 because I know that's time sensitive, and you 00:45:51.059 --> 00:45:54.820 need to get payroll paid. Thank you. Your Honor, 00:45:54.820 --> 00:45:57.480 if you can just say on the record that it's a 00:45:57.480 --> 00:46:00.139 order subject to the entry of the order, so there's 00:46:00.139 --> 00:46:02.800 no concern if the order doesn't get it. The cash 00:46:02.800 --> 00:46:05.300 collateral? Yes. If the bank likes that, that's 00:46:05.300 --> 00:46:08.730 fine. It is so ordered. I just want to make sure 00:46:08.730 --> 00:46:10.570 that we're not holding up anybody's paycheck. 00:46:10.590 --> 00:46:13.389 I appreciate that. And I'm sure the gutter does. 00:46:13.989 --> 00:46:19.409 We do indeed. And we appreciate the court's availability 00:46:19.409 --> 00:46:23.730 and opportunity to present these motions. And 00:46:23.730 --> 00:46:25.730 again, thanks to the other parties in interest. 00:46:25.849 --> 00:46:28.690 Of course. If there are no other questions, I 00:46:28.690 --> 00:46:30.550 think we're through. I have no questions. Anything 00:46:30.550 --> 00:46:36.630 further for today? Ms. McCollum. I just wanted 00:46:36.630 --> 00:46:38.550 to let you know that the committee solicitation 00:46:38.550 --> 00:46:41.190 letters went out yesterday, and we are, you know, 00:46:41.690 --> 00:46:44.170 it's the typical one -week return period. We 00:46:44.170 --> 00:46:47.110 are also discussing the initial debtor interview 00:46:47.110 --> 00:46:49.889 timing and the timing of the Section 341 meeting 00:46:49.889 --> 00:46:52.150 with the debtors, and that seems to be proceeding 00:46:52.150 --> 00:46:55.590 apace. And there are no issues, and I really 00:46:55.590 --> 00:46:57.269 appreciate the debtors working with me as well. 00:46:57.389 --> 00:47:00.750 So thank you. Very good. We're adjourned.