WEBVTT 00:00:09.550 --> 00:00:11.890 Good afternoon, counsel. This is Judge Horan. 00:00:11.949 --> 00:00:14.169 We're on the record in Realist Technology, case 00:00:14.169 --> 00:00:21.350 26 -10371. I want to start out by acknowledging 00:00:21.350 --> 00:00:25.769 that this schedule change puts everybody in a 00:00:25.769 --> 00:00:32.829 tougher position than they would have been. Frankly, 00:00:33.909 --> 00:00:36.070 I had a death in the family and I've got to travel. 00:00:37.980 --> 00:00:43.799 today and I know that the the interim order was 00:00:43.799 --> 00:00:46.719 going to expire so I thought it important that 00:00:46.719 --> 00:00:51.380 I not leave before doing this hearing so I I 00:00:51.380 --> 00:00:55.520 apologize particularly to those who might not 00:00:55.520 --> 00:00:58.640 have read the ECF notifications until this morning 00:00:58.640 --> 00:01:01.799 and saw that there was a change in the schedule 00:01:01.799 --> 00:01:07.340 so with that I'll stop apologizing and turn it 00:01:07.340 --> 00:01:13.939 over to debtors. Hi, Your Honor. Good afternoon. 00:01:14.180 --> 00:01:16.420 Darren Asden from McDermott, proposed counsel 00:01:16.420 --> 00:01:19.180 to the debtors. I guess my question for Your 00:01:19.180 --> 00:01:21.799 Honor is how you want to proceed with today as 00:01:21.799 --> 00:01:26.420 a status conference. I guess I assumed that you 00:01:26.420 --> 00:01:28.280 maybe wanted to get understanding from the parties 00:01:28.280 --> 00:01:30.560 about whether we could come to an agreement on 00:01:30.560 --> 00:01:34.290 a further initial interim order to accommodate 00:01:34.290 --> 00:01:37.790 the court for a further second day, a second 00:01:37.790 --> 00:01:39.829 interim hearing. Is that how your honor would 00:01:39.829 --> 00:01:41.150 like to proceed? Because I think there's a way 00:01:41.150 --> 00:01:44.269 to easily do that. Yeah, I think that's right. 00:01:45.469 --> 00:01:49.310 The bill landscape is somewhat altered because 00:01:49.310 --> 00:01:55.569 of the objections that were filed by 1548199 00:01:55.569 --> 00:02:02.079 Alberta and the ward trust. I'm hopeful that 00:02:02.079 --> 00:02:06.599 both parties are represented at this hearing 00:02:06.599 --> 00:02:10.500 this afternoon, but it certainly bears on the 00:02:10.500 --> 00:02:15.099 relief that was granted. We're here on an interim 00:02:15.099 --> 00:02:20.180 hearing, so what my goal is is to address it 00:02:20.180 --> 00:02:25.419 insofar as I can to get a further order approved 00:02:25.419 --> 00:02:30.090 that prevents immediate and irreparable harm 00:02:30.090 --> 00:02:33.389 to the debtors, but we're going to have to have 00:02:33.389 --> 00:02:40.270 a more, well, we're going to have to have a full 00:02:40.270 --> 00:02:46.030 hearing on the objections that were raised. Well, 00:02:46.030 --> 00:02:48.750 let me make a proposal. Let the court and other 00:02:48.750 --> 00:02:51.250 parties know what would work for the debtors, 00:02:51.250 --> 00:02:54.050 and then I guess we can hear from the objecting 00:02:54.050 --> 00:02:55.930 parties, if that makes sense, Your Honor. Yeah, 00:02:55.930 --> 00:02:59.930 please, Mr. Esmond. Sure. So as you noted, the 00:02:59.930 --> 00:03:02.710 order expires on its own terms tomorrow. So obviously, 00:03:03.110 --> 00:03:05.289 the first thing we need is whenever the second 00:03:05.289 --> 00:03:08.110 interim hearing is scheduled, the current order 00:03:08.110 --> 00:03:10.150 or a revised form of that would need to carry 00:03:10.150 --> 00:03:12.969 through to that hearing. And I guess it'd be 00:03:12.969 --> 00:03:15.490 good to hear from your honor at some point what 00:03:15.490 --> 00:03:18.030 dates work for your honor. We can certainly accommodate 00:03:18.030 --> 00:03:20.610 pretty much anything. And then the only additional 00:03:20.610 --> 00:03:22.990 item is we need to increase the cap. You'll remember 00:03:22.990 --> 00:03:25.550 that the interim cash collateral order as well 00:03:25.550 --> 00:03:28.340 as the second interim. Which I guess I should 00:03:28.340 --> 00:03:31.379 note that Mr. Wilford's client has already consented 00:03:31.379 --> 00:03:33.139 to entry of that, but you're right, there is 00:03:33.139 --> 00:03:35.340 an objection from another party now that will 00:03:35.340 --> 00:03:37.599 need to be addressed. But I'm sure that Mr. Wilford 00:03:37.599 --> 00:03:41.259 and I can agree on a slightly increased amount 00:03:41.259 --> 00:03:44.400 for what I'll call the revised first interim 00:03:44.400 --> 00:03:48.080 period. I think what my folks are telling me 00:03:48.080 --> 00:03:50.960 is that as long as we had a second interim order 00:03:50.960 --> 00:03:53.300 hearing before the end of this week, we would 00:03:53.300 --> 00:03:56.060 be comfortable with increasing the cap to 2 .5 00:03:56.060 --> 00:03:59.939 million. that would get us through April 3rd. 00:04:00.039 --> 00:04:02.060 If there's other dates that the court or other 00:04:02.060 --> 00:04:04.240 parties want to think about, I kind of have different 00:04:04.240 --> 00:04:06.219 numbers depending on what it is. There's obviously 00:04:06.219 --> 00:04:09.039 a push in built in, it's not exact, but I just 00:04:09.039 --> 00:04:10.439 wanted to throw that out there for your honor 00:04:10.439 --> 00:04:12.719 to understand and for the other parties. But 00:04:12.719 --> 00:04:14.620 we would be fine with carrying the first interim 00:04:14.620 --> 00:04:17.480 order with the slightly increased cap to 2 .5 00:04:17.480 --> 00:04:19.500 through the end of this week, as well as obviously 00:04:19.500 --> 00:04:21.620 pushing out the expiration of the first interim 00:04:21.620 --> 00:04:26.550 order. Okay, okay, I appreciate that. Let me 00:04:26.550 --> 00:04:31.129 hear from Mr. Geller. Mr. Geller, good morning 00:04:31.129 --> 00:04:39.290 or good afternoon. 1548199 in Alberta. Also here 00:04:39.290 --> 00:04:41.589 with my co -counsel Thomas Padish and Alyssa 00:04:41.589 --> 00:04:45.850 Kiriakos. Your Honor, we are certainly not trying 00:04:45.850 --> 00:04:49.389 to be in any way preventing the debtor from having 00:04:49.389 --> 00:04:51.850 use of cash collateral. Obviously our projection 00:04:51.850 --> 00:04:54.410 was limited for that purpose and we're amenable 00:04:54.410 --> 00:04:59.230 certainly to a further interim order. One thought 00:04:59.230 --> 00:05:01.750 we had was to take an interim order through to 00:05:01.750 --> 00:05:03.670 the 16th when we have a bunch of other things 00:05:03.670 --> 00:05:05.670 teed up and have it all heard at the same time. 00:05:05.680 --> 00:05:07.560 and I'm sure we could work with the debtors in 00:05:07.560 --> 00:05:09.879 terms of making sure that that gets to the point 00:05:09.879 --> 00:05:11.740 where they have enough cash available to get 00:05:11.740 --> 00:05:16.439 to that hurdle. Okay. That would also work, Your 00:05:16.439 --> 00:05:19.699 Honor, obviously. It would be preferable. Okay, 00:05:19.800 --> 00:05:28.920 Mr. Hesman. How about the ward trust? Your Honor, 00:05:28.980 --> 00:05:31.819 Mr. Shirley. I'll just see me... Okay, Ethan, 00:05:31.860 --> 00:05:33.379 you were able to get on. I was just about to 00:05:33.379 --> 00:05:35.540 say that Mr. Sulik had emailed me saying he didn't 00:05:35.540 --> 00:05:37.720 have the video link, but I'm glad you were able 00:05:37.720 --> 00:05:40.439 to get on. Yeah, and again, I apologize, Mr. 00:05:40.540 --> 00:05:45.040 Sulik, for the little notice, which was entirely 00:05:45.040 --> 00:05:50.319 my doing, so I apologize for that. Your Honor, 00:05:50.620 --> 00:05:53.000 the Richard Ward Trust is also amenable to the 00:05:53.000 --> 00:05:56.800 proposal. Okay, so let me just clarify with Mr. 00:05:56.939 --> 00:06:01.589 Sulik and Mr. Gellert. What you're proposing 00:06:01.589 --> 00:06:06.490 is that enter a second interim order on the term 00:06:06.490 --> 00:06:09.329 set forth in the initial order with a change 00:06:09.329 --> 00:06:13.029 in the cap to 2 .5 million? Yes, that's correct, 00:06:13.149 --> 00:06:15.610 Your Honor. Okay. That's our understanding as 00:06:15.610 --> 00:06:19.709 well. Yes. Your Honor. Mr. Wilford. Yes, good 00:06:19.709 --> 00:06:22.529 afternoon. Your Honor, good afternoon. Keith 00:06:22.529 --> 00:06:25.029 Wilford from White and Case on behalf of Celsius. 00:06:25.670 --> 00:06:28.649 As your honor is aware, and I think as Mr. Asman 00:06:28.649 --> 00:06:31.670 alluded to, we put in a form of second interim 00:06:31.670 --> 00:06:34.790 order that was proposed and agreed that in fact 00:06:34.790 --> 00:06:39.790 had an expiration of the 16th. There's obviously 00:06:39.790 --> 00:06:42.850 a lot of volatility around crypto. Celsius as 00:06:42.850 --> 00:06:46.069 a secured creditor is secured by not only cryptocurrency, 00:06:46.250 --> 00:06:48.709 but also assets that are in effect dependent 00:06:48.709 --> 00:06:52.189 on cryptocurrency for value. And so we've been 00:06:52.189 --> 00:06:55.089 balancing with the debtors. the duration of this 00:06:55.089 --> 00:06:58.089 interim period versus the protection. So in the 00:06:58.089 --> 00:07:00.730 proposed interim, there was an increase of the 00:07:00.730 --> 00:07:04.509 usage cap effectively to $5 million. But then 00:07:04.509 --> 00:07:06.629 there was also a series of protections, including 00:07:06.629 --> 00:07:10.550 a trigger for potential emergency hearing, given 00:07:10.550 --> 00:07:12.509 that if there was a correct collapse in the value 00:07:12.509 --> 00:07:15.149 of crypto, obviously the alleged pushing would 00:07:15.149 --> 00:07:19.209 reduce substantially. There were a number of 00:07:19.209 --> 00:07:22.100 other elements in that draft order, which are 00:07:22.100 --> 00:07:26.660 primarily around information and around segregation 00:07:26.660 --> 00:07:29.939 of sales of any non -crypto assets in a segregated 00:07:29.939 --> 00:07:33.019 account with respect to proceeds. And from our 00:07:33.019 --> 00:07:36.639 perspective, the ideal scenario would be that 00:07:36.639 --> 00:07:39.860 those protections would come into place now as 00:07:39.860 --> 00:07:42.560 we had negotiated those as a package with the 00:07:42.560 --> 00:07:45.019 debtors in exchange for use through the 16th. 00:07:45.019 --> 00:07:47.699 We don't believe that those elements are prejudicial 00:07:47.699 --> 00:07:50.470 to any of the objectors. And so, to the extent 00:07:50.470 --> 00:07:52.889 there is a proposal to go to the 16th, we would 00:07:52.889 --> 00:07:54.790 like the second interim order to be the form 00:07:54.790 --> 00:07:57.430 rather than the existing form. Subject to, of 00:07:57.430 --> 00:07:59.569 course, any agreement of the debtors, if they 00:07:59.569 --> 00:08:02.050 want to lower the $5 million, obviously we don't 00:08:02.050 --> 00:08:04.889 have an objection to that. Your Honor, I want 00:08:04.889 --> 00:08:08.110 to clarify. The $2 .5 million that I had mentioned 00:08:08.110 --> 00:08:10.389 would get us to the end of this week. I think 00:08:10.389 --> 00:08:12.490 what Mr. Gellert and Mr. Sulek were indicating, 00:08:12.990 --> 00:08:14.589 and they'll correct me if I'm wrong, is that 00:08:14.620 --> 00:08:17.399 They're actually okay with the form of second 00:08:17.399 --> 00:08:20.000 interim order that's been agreed to with Mr. 00:08:20.139 --> 00:08:22.420 Wilford and I and our clients that carries us 00:08:22.420 --> 00:08:25.639 to the 16th. So we should put aside the $2 .5 00:08:25.639 --> 00:08:27.959 million that I threw out. I agree with Mr. Wilford. 00:08:28.180 --> 00:08:30.040 We should just go forward with the order that's 00:08:30.040 --> 00:08:32.340 on file again, subject to Mr. Geller and Mr. 00:08:32.500 --> 00:08:34.220 Sola saying there's an issue with that. But I 00:08:34.220 --> 00:08:36.879 thought that that's what they were saying. Let 00:08:36.879 --> 00:08:39.960 me start Mr. Geller. Are you agreeing to the 00:08:39.960 --> 00:08:42.860 form of second interim order? You know, I can't 00:08:42.860 --> 00:08:45.080 say that I've scoured that one. Yeah, it was 00:08:45.080 --> 00:08:52.139 only filed yesterday. Yeah. Yeah, I was going 00:08:52.139 --> 00:08:54.759 to say, I just certainly want them to have the 00:08:54.759 --> 00:08:56.639 availability of cash. I just would want to look 00:08:56.639 --> 00:08:59.000 at the additional protections that they're referencing. 00:09:00.139 --> 00:09:07.379 Yeah. Mr. Sulek? Our goal is just to get to the 00:09:07.379 --> 00:09:11.559 16th and to have our rights preserved without 00:09:11.559 --> 00:09:14.759 further prejudice for our client. we'd prefer 00:09:14.759 --> 00:09:16.700 the opportunity to also look at the proposed 00:09:16.700 --> 00:09:18.700 form of order and then perhaps coordinate with 00:09:18.700 --> 00:09:20.720 the debtors to see if we're amenable to that 00:09:20.720 --> 00:09:25.340 after reviewing. Okay. Your Honor, also if I 00:09:25.340 --> 00:09:27.679 may. Yeah, Ms. Van Lair. Good afternoon. Welcome. 00:09:27.679 --> 00:09:30.000 Yes. Thank you. Good afternoon. Jane Van Leer, 00:09:30.100 --> 00:09:31.980 Cleary .com. It's Jan Hamilton on behalf of the 00:09:31.980 --> 00:09:34.379 ad hoc group of Blockville's customers. I just 00:09:34.379 --> 00:09:36.320 wanted to chime in. We don't have an objection 00:09:36.320 --> 00:09:38.720 to the cash collateral order, but it was filed 00:09:38.720 --> 00:09:41.779 yesterday and my clients are extremely concerned 00:09:41.779 --> 00:09:45.500 about the expenses of the estate. And so we would 00:09:45.500 --> 00:09:48.240 like similarly an opportunity to review the order, 00:09:48.340 --> 00:09:52.240 review the amounts that are being proposed. And 00:09:52.240 --> 00:09:55.179 also there's a provision in the order that says 00:09:55.179 --> 00:09:58.899 the amounts can be exceeded with Celsius' consent. 00:09:59.379 --> 00:10:04.580 And we certainly want to add that our own, the 00:10:04.580 --> 00:10:07.620 ad hoc group as another party that should similarly 00:10:07.620 --> 00:10:10.519 get consent in the event that the debtors will 00:10:10.519 --> 00:10:16.049 exceed the amount. Yeah, and look, I hear that, 00:10:16.409 --> 00:10:19.049 and in addition, I know that the Office of the 00:10:19.049 --> 00:10:21.309 United States Trustee has appointed a committee 00:10:21.309 --> 00:10:27.370 who I suspect has not yet retained counsel. Here's 00:10:27.370 --> 00:10:31.889 what I think we ought to do. I would like the 00:10:31.889 --> 00:10:36.750 parties to discuss offline, if possible, and 00:10:36.750 --> 00:10:43.990 see where you can get if the Look if they had 00:10:43.990 --> 00:10:52.889 ad hoc group and Alberta and the ward trust and 00:10:52.889 --> 00:10:56.850 Celsius are all on board on a form of order that 00:10:56.850 --> 00:11:01.230 could get us through to the 16th, which is when 00:11:01.230 --> 00:11:07.470 the parties will be Be here again. Well, actually 00:11:07.470 --> 00:11:09.289 I'll tell you what I can look at other dates 00:11:09.289 --> 00:11:12.320 if we need that but if The point being, if you 00:11:12.320 --> 00:11:14.500 can agree on a form of order submitted under 00:11:14.500 --> 00:11:17.820 certification of council, but if you can't get 00:11:17.820 --> 00:11:23.419 there, then what I would be willing to approve 00:11:23.419 --> 00:11:29.799 would be a further form of order substantially 00:11:29.799 --> 00:11:33.940 in the form of the original interim order. It 00:11:33.940 --> 00:11:37.080 can have an adjustment to the cap to reflect 00:11:37.080 --> 00:11:42.159 the budgetary needs of the debtors moving ahead. 00:11:43.559 --> 00:11:47.120 But on a substantive basis I think frankly there's 00:11:47.120 --> 00:11:53.360 a lot in there that the parties probably want 00:11:53.360 --> 00:11:57.220 to have a chance not only to review but to discuss 00:11:57.220 --> 00:12:00.580 with their clients and get proper direction before 00:12:00.580 --> 00:12:08.240 agreeing to it. Again, I just want to prevent 00:12:08.240 --> 00:12:10.500 immediate and irreparable harm to the debtors 00:12:10.500 --> 00:12:17.899 and not do anything that's going to inappropriately 00:12:17.899 --> 00:12:22.259 affect the rights of the objecting parties without 00:12:22.259 --> 00:12:26.820 an opportunity for a full adjudication of their 00:12:26.820 --> 00:12:37.370 objections. get all the parties on board with 00:12:37.370 --> 00:12:39.490 a form of second interim order that takes us 00:12:39.490 --> 00:12:43.029 to the 16th. But just as a procedural matter, 00:12:43.610 --> 00:12:45.870 what is Your Honor's availability if in the event 00:12:45.870 --> 00:12:49.190 we're not able to get the deal on that? When 00:12:49.190 --> 00:12:51.190 is Your Honor, when do you need me to upload 00:12:51.190 --> 00:12:53.330 a second revised order that's consistent with 00:12:53.330 --> 00:12:55.889 the first one other than an increase to the cap 00:12:55.889 --> 00:12:59.070 to make sure that we don't break the expiration 00:12:59.070 --> 00:13:01.389 of the first interim order tomorrow? That's my 00:13:01.389 --> 00:13:07.690 main concern. Okay, my expectation is that today 00:13:07.690 --> 00:13:13.110 I will have pretty much continuous internet access 00:13:13.110 --> 00:13:19.830 for the rest of today. Tomorrow it's going to 00:13:19.830 --> 00:13:24.990 be a lot more difficult, but we will keep an 00:13:24.990 --> 00:13:29.610 eye out. And I know my staff will do their best 00:13:29.610 --> 00:13:38.889 to get a hold of me. We'll take care of it. The 00:13:38.889 --> 00:13:43.230 order won't lapse without a new order in place. 00:13:45.509 --> 00:13:47.110 I appreciate that. Thank you, Your Honor. Sure. 00:13:47.149 --> 00:13:56.549 Sure thing. Okay. Anything else? Not from the 00:13:56.549 --> 00:13:59.210 debtors, Your Honor. Okay. And Mr. Asmon, I take 00:13:59.210 --> 00:14:02.190 it that you have not heard from a firm that's 00:14:02.190 --> 00:14:04.590 been retained by the committee at this point. 00:14:04.720 --> 00:14:07.840 You know, my understanding is that the committee 00:14:07.840 --> 00:14:10.519 is holding pitches for legal counsel today, so 00:14:10.519 --> 00:14:13.279 I suspect we'll know who we're dealing with by 00:14:13.279 --> 00:14:15.960 the end of today or tomorrow, hopefully. Okay, 00:14:16.120 --> 00:14:19.340 fantastic. Okay, well look, I'll leave you to 00:14:19.340 --> 00:14:23.879 it and we will look at for a certification of 00:14:23.879 --> 00:14:27.419 counsel or, you know, if you can't get there 00:14:27.419 --> 00:14:33.360 and you need judicial intervention, maybe I can... 00:14:33.419 --> 00:14:36.759 Maybe I can get a colleague to help out, but 00:14:36.759 --> 00:14:40.919 hopefully you can get there. We will try to avoid 00:14:40.919 --> 00:14:42.460 the need to have to do that, Your Honor. Okay, 00:14:42.600 --> 00:14:47.059 I do appreciate that. All right. Well, thank 00:14:47.059 --> 00:14:49.379 you all for being so accommodating to my schedule. 00:14:49.960 --> 00:14:54.320 I genuinely do appreciate it. And we'll look 00:14:54.320 --> 00:14:57.980 out for the certification of counsel. Okay? Okay, 00:14:58.100 --> 00:14:58.940 thanks. Thank you, Your Honor.