WEBVTT 00:00:02.699 --> 00:00:06.419 Good afternoon, this is judge Lopez today is 00:00:06.419 --> 00:00:12.179 March 31st. I'm gonna call the 1 p .m. Case first 00:00:12.179 --> 00:00:17.699 day hearings in 26 904 28 today is a virtual 00:00:17.699 --> 00:00:20.079 Hearing there's no one in the courtroom. I just 00:00:20.079 --> 00:00:21.899 asked if you are on the line and wish to make 00:00:21.899 --> 00:00:25.859 an appearance Please hit five star, and I will 00:00:25.859 --> 00:00:28.620 unmute your line. I would also ask that you please 00:00:29.319 --> 00:00:32.740 Make an appearance electronically just jump on 00:00:32.740 --> 00:00:36.179 the Southern District of Texas What page you'll 00:00:36.179 --> 00:00:38.460 find a link to my home page and a place to make 00:00:38.460 --> 00:00:41.140 electronic? Appearances, and they'll find a link 00:00:41.140 --> 00:00:44.539 in this case, so I'm gonna unmute a few lines 00:00:44.539 --> 00:00:55.560 here two one two number David Feldman from Clifford 00:00:55.560 --> 00:00:58.560 chance On behalf of the proposed debtors, I'm 00:00:58.560 --> 00:01:02.140 joined here today by my colleague, Matti Nicolini. 00:01:02.219 --> 00:01:04.420 I'll be making some introductory remarks and 00:01:04.420 --> 00:01:06.700 Matti will be handling the balance of the first 00:01:06.700 --> 00:01:09.879 day motions. Okay, good. Good afternoon. Here's 00:01:09.879 --> 00:01:16.640 another 212 number. Good afternoon, Your Honor. 00:01:16.920 --> 00:01:19.560 Christian Jensen, Sullivan and Cromwell, representing 00:01:19.560 --> 00:01:22.599 Banco Santander and Deda Capital Investments, 00:01:23.000 --> 00:01:25.519 the agent and lender under the debtor's secure 00:01:25.519 --> 00:01:32.420 facility. Good afternoon. A 202 number. Good 00:01:32.420 --> 00:01:33.879 afternoon, Your Honor. Jason Ruff with the U 00:01:33.879 --> 00:01:36.760 .S. Treasury. Good afternoon, Mr. Ruff. And a 00:01:36.760 --> 00:01:42.019 917 number. Good afternoon, Your Honor. My name 00:01:42.019 --> 00:01:44.579 is Jamie Donat. I am the independent director 00:01:44.579 --> 00:01:47.680 at the Alton on holding companies. Good afternoon. 00:01:48.000 --> 00:01:49.700 Does anyone else wish to make an appearance? 00:01:51.819 --> 00:02:11.289 Just give me one moment. Okay, who should I turn 00:02:11.289 --> 00:02:37.280 this over to? As we note in the papers, a first 00:02:37.280 --> 00:02:39.520 -land affiliate, but we believe this is a separate 00:02:39.520 --> 00:02:42.300 and distinct and should be a fairly streamlined 00:02:42.300 --> 00:02:46.060 and hopefully simple case. The three entities 00:02:46.060 --> 00:02:50.599 that have filed are called Liberty 1BV, Liberty 00:02:50.599 --> 00:02:56.860 2BV, and Altanon Motion Holding BV. We have with 00:02:56.860 --> 00:03:00.620 us today, as noted on the appearances, Jamie 00:03:00.620 --> 00:03:03.400 Donath, who is an independent – the independent 00:03:03.400 --> 00:03:08.780 director. of each of these three entities. When 00:03:08.780 --> 00:03:12.680 I finish my opening remarks, I will seek to offer 00:03:12.680 --> 00:03:18.199 Mr. Donat's declaration into evidence and his 00:03:18.199 --> 00:03:20.719 direct testimony in support of the first day 00:03:20.719 --> 00:03:24.319 motions, and we'll offer him up for cross -examination 00:03:24.319 --> 00:03:28.240 to the extent anyone has any questions. I will 00:03:28.240 --> 00:03:32.259 note that as of this moment, And not surprising, 00:03:32.340 --> 00:03:35.759 I think, once we get into the substance of what 00:03:35.759 --> 00:03:38.439 we're requesting here, we have not – we have 00:03:38.439 --> 00:03:41.120 been in detailed discussions, as would be typical, 00:03:41.479 --> 00:03:43.319 with the U .S. trustee and appreciate the U .S. 00:03:43.419 --> 00:03:46.900 trustee's efforts in navigating through our first 00:03:46.900 --> 00:03:51.379 -day motions, but we have received no third -party 00:03:51.379 --> 00:03:55.819 formal or informal objection to any of our first 00:03:55.819 --> 00:04:00.419 -day motions. We're also joined on the line – 00:04:00.509 --> 00:04:05.409 by Gary Polkowitz of Teneo, who is the proposed 00:04:05.409 --> 00:04:11.750 financial advisor to the debtors, as well as 00:04:11.750 --> 00:04:15.449 the representative of Kroll, which is the proposed 00:04:15.449 --> 00:04:19.389 claims agent for the debtors. I want to thank 00:04:19.389 --> 00:04:22.709 the court for accommodating us for this first 00:04:22.709 --> 00:04:24.410 day hearing, and again, thank the U .S. trustee 00:04:24.410 --> 00:04:27.069 for their help and cooperation in getting through 00:04:27.069 --> 00:04:31.420 the first -day motions. fairly quickly, fairly 00:04:31.420 --> 00:04:36.120 after that basis. Just to give you a little background 00:04:36.120 --> 00:04:39.319 here, these – the three entities that have filed 00:04:39.319 --> 00:04:43.920 for bankruptcy today are holding companies of 00:04:43.920 --> 00:04:47.120 a business line of first brands called Altanon. 00:04:48.060 --> 00:04:53.620 Altanon is a successor entity to a business that 00:04:53.620 --> 00:04:57.139 was called LumaLeds. LumaLeds was an aftermarket 00:04:59.020 --> 00:05:03.699 producer of headlamps for vehicles around the 00:05:03.699 --> 00:05:07.300 world with manufacturing facilities in multiple 00:05:07.300 --> 00:05:10.220 jurisdictions around the world and had – was 00:05:10.220 --> 00:05:14.199 a big – had a big market share in this particular 00:05:14.199 --> 00:05:19.019 industry. It was a business that – so in addition 00:05:19.019 --> 00:05:22.259 to the three holding companies, there are 20 00:05:22.259 --> 00:05:26.500 -some -odd operating subsidiaries that – operate 00:05:26.500 --> 00:05:29.300 around the world. Those entities are not before 00:05:29.300 --> 00:05:31.500 your honor and will not be before your honor 00:05:31.500 --> 00:05:35.300 in this bankruptcy proceeding. Several of those 00:05:35.300 --> 00:05:38.379 entities have already commenced insolvency proceedings 00:05:38.379 --> 00:05:42.180 in their local jurisdictions, with likely more 00:05:42.180 --> 00:05:46.100 to come. I'll get back to that in a moment, just 00:05:46.100 --> 00:05:49.160 from a corporate governance standpoint. But all 00:05:49.160 --> 00:05:51.339 of those operating subsidiaries that you see 00:05:51.639 --> 00:05:55.920 on the chart, which is attached to Mr. Junot's 00:05:55.920 --> 00:05:58.920 first day at the David Thursday declaration. 00:06:00.160 --> 00:06:03.319 They – those are the operating subsidiaries that 00:06:03.319 --> 00:06:09.459 we're talking about. So the Eltonon business 00:06:09.459 --> 00:06:16.379 was acquired from LumaLeds in 2024. The business 00:06:16.379 --> 00:06:21.079 was acquired for a purchase price of $238 million. 00:06:21.560 --> 00:06:25.699 At that time, at the time it was acquired, it 00:06:25.699 --> 00:06:34.019 had EBITDA of 60 -some -odd million in 2022 and 00:06:34.019 --> 00:06:41.019 I think 48 million in 2023. It was until fairly 00:06:41.019 --> 00:06:44.439 recently an operating business, as I said, with 00:06:44.439 --> 00:06:48.680 manufacturing and sales facilities around the 00:06:48.680 --> 00:06:53.949 world. As of today, Virtually all of those operations 00:06:53.949 --> 00:06:59.829 have ceased, and we are – Mr. Donath was appointed 00:06:59.829 --> 00:07:04.670 as independent director for these entities. The 00:07:04.670 --> 00:07:08.829 initial appointment was for the two Liberty entities 00:07:08.829 --> 00:07:13.769 in November of 2025, and then subsequently in 00:07:13.769 --> 00:07:17.850 early 2026 he was added as the sole independent 00:07:17.850 --> 00:07:21.019 director. of the holdings entity. The ultimate 00:07:21.019 --> 00:07:24.459 holdings entity is the direct 100 percent shareholder 00:07:24.459 --> 00:07:26.860 of all of those operating subsidiaries that I 00:07:26.860 --> 00:07:32.160 have mentioned. The debtors do not have any employees 00:07:32.160 --> 00:07:37.019 or operations. It's a fairly simple capital structure. 00:07:38.399 --> 00:07:44.399 There is, as Mr. Jensen noted, a secured lending 00:07:44.399 --> 00:07:47.459 facility. I'll get into what that means. at the 00:07:47.459 --> 00:07:52.079 holding company. The principal amount of that 00:07:52.079 --> 00:07:56.120 facility was used as acquisition financing to 00:07:56.120 --> 00:08:00.339 acquire the Luma -led business in the first instance. 00:08:01.139 --> 00:08:04.860 The debt sits at the holding companies but has 00:08:04.860 --> 00:08:09.839 been guaranteed by many of the operating subsidiaries. 00:08:09.839 --> 00:08:12.500 Some of those guarantees are secured, some are 00:08:12.500 --> 00:08:17.759 not secured. The assets I think one point that's 00:08:17.759 --> 00:08:23.319 important to note – the assets currently of the 00:08:23.319 --> 00:08:26.079 holding companies at this point is really limited 00:08:26.079 --> 00:08:28.839 to the equity value in the subsidiaries, of which 00:08:28.839 --> 00:08:31.339 at this point it looks like it's unclear if there 00:08:31.339 --> 00:08:34.480 will be any equity value in any of the subsidiaries. 00:08:34.759 --> 00:08:37.940 I think that will depend on how each of those 00:08:37.940 --> 00:08:40.039 operating subsidiaries is wound down and whether 00:08:40.039 --> 00:08:42.779 there is and can be any equity value remaining. 00:08:44.080 --> 00:08:47.580 There is some cash on hand which will be principally 00:08:47.580 --> 00:08:53.360 used to fund this case. And most notably, there 00:08:53.360 --> 00:08:56.759 are what we believe to be a series of litigation 00:08:56.759 --> 00:09:02.980 claims arising out of the notion that this was 00:09:02.980 --> 00:09:06.919 a fully operating business when acquired and 00:09:06.919 --> 00:09:10.580 less than two years later. It is an intolerant 00:09:10.580 --> 00:09:12.580 business of the intolerant operating companies, 00:09:13.059 --> 00:09:17.019 where we believe that significant portions of 00:09:17.019 --> 00:09:19.580 the value of this enterprise have ultimately 00:09:19.580 --> 00:09:22.600 been transferred out to other parts of First 00:09:22.600 --> 00:09:26.419 Brands and other places. So we believe that there 00:09:26.419 --> 00:09:31.740 are viable litigation claims here that the holdings 00:09:31.740 --> 00:09:34.590 – the holding entities have. for the benefit 00:09:34.590 --> 00:09:38.730 of the creditors of those entities and would 00:09:38.730 --> 00:09:41.809 like to preserve the value of those claims for 00:09:41.809 --> 00:09:45.169 the benefit of those creditors. We had been – 00:09:45.169 --> 00:09:49.269 we have been in discussions. One thing that's 00:09:49.269 --> 00:09:51.269 important to note is – and the reason we don't 00:09:51.269 --> 00:09:53.710 have a cash collateral emotion before you, Your 00:09:53.710 --> 00:09:57.870 Honor, today is that while the lenders do have 00:09:57.870 --> 00:10:02.419 security interests in certain assets, They do 00:10:02.419 --> 00:10:05.820 not have security interest in the cash on hand 00:10:05.820 --> 00:10:08.559 at the data, so there is no – we've been working 00:10:08.559 --> 00:10:11.120 with them and coordinating with them as to our 00:10:11.120 --> 00:10:13.899 cash spend, given the limited amount of cash 00:10:13.899 --> 00:10:17.120 that's available, but there is no – this is not 00:10:17.120 --> 00:10:19.580 their cash collateral, nor are we seeking – therefore, 00:10:19.600 --> 00:10:22.679 we don't need to seek use of cash collateral. 00:10:31.470 --> 00:10:35.789 So we have been in discussions with the lenders 00:10:35.789 --> 00:10:39.129 about the best course of action here, discussing 00:10:39.129 --> 00:10:43.110 the notion of the creation of a litigation trust 00:10:43.110 --> 00:10:46.350 for the benefit of creditors to pursue these 00:10:46.350 --> 00:10:48.809 causes of action at some point in the future. 00:10:49.230 --> 00:10:51.429 I think it's important to note, and as you can 00:10:51.429 --> 00:10:54.409 see from our cash balance on hand, we do not 00:10:54.409 --> 00:10:57.409 intend or expect to litigate any of these claims 00:10:57.409 --> 00:11:00.320 before your honor. during this bankruptcy proceeding. 00:11:00.440 --> 00:11:04.679 This proceeding will all be about, in the very 00:11:04.679 --> 00:11:08.179 near future, we intend to file a planned disclosure 00:11:08.179 --> 00:11:12.700 statement and a litigation trust document that 00:11:12.700 --> 00:11:16.340 we will be negotiating with our major creditors 00:11:16.340 --> 00:11:19.480 that would preserve the value of all these claims 00:11:19.480 --> 00:11:23.159 for subsequent prosecution by the beneficiaries 00:11:23.159 --> 00:11:29.220 of that trust. The – it probably – Just spend 00:11:29.220 --> 00:11:35.340 a moment on – a little bit on the lending facility 00:11:35.340 --> 00:11:37.500 and then some of our other creditors and the 00:11:37.500 --> 00:11:41.179 reason that we are in this proceeding at this 00:11:41.179 --> 00:11:47.899 time. So Mr. Jensen represents the agent and 00:11:47.899 --> 00:11:52.200 one of the lenders in the facility. As I said, 00:11:52.399 --> 00:11:55.419 initially, this facility was put in place as 00:11:55.419 --> 00:11:59.259 acquisition financing. But during a time period 00:11:59.259 --> 00:12:01.899 when the debtors were looking to determine whether 00:12:01.899 --> 00:12:05.379 there were viable sales of the various lines 00:12:05.379 --> 00:12:08.200 of business, including the Eltonon business, 00:12:08.480 --> 00:12:13.679 as we understand it, and some of this pre -proceeded 00:12:13.679 --> 00:12:16.059 – certainly preceded Flipper Chancellor involvement, 00:12:16.139 --> 00:12:19.659 but also some of it preceded Mr. Donat's involvement 00:12:19.659 --> 00:12:25.320 as well. But there was a process that was teed 00:12:25.320 --> 00:12:28.779 up. through the first -brand debtors professionals 00:12:28.779 --> 00:12:32.120 to seek to sell the various businesses. And while 00:12:32.120 --> 00:12:36.039 the Eltonon business was cash strapped, there 00:12:36.039 --> 00:12:39.700 was various accommodations and extensions of 00:12:39.700 --> 00:12:43.620 credit and forbearances entered into by the lenders. 00:12:44.500 --> 00:12:48.679 As part of that process, the DIP lenders, in 00:12:48.679 --> 00:12:52.360 the main case, funded through a first -brand 00:12:52.360 --> 00:12:55.950 affiliate. a portion of funds that were made 00:12:55.950 --> 00:13:00.110 available to the Altanon entities. Without getting 00:13:00.110 --> 00:13:01.929 into all the detail, I think it's set forth in 00:13:01.929 --> 00:13:04.710 our first affidavit, and probably Mr. Jensen 00:13:04.710 --> 00:13:07.409 can speak more to the details better than I can. 00:13:07.929 --> 00:13:11.330 But the end result was that this first brand 00:13:11.330 --> 00:13:17.789 affiliated entity effectively – which is – reflects 00:13:17.789 --> 00:13:21.700 the advances of The DIP lenders that are first 00:13:21.700 --> 00:13:25.059 -brand affiliated entity holds currently approximately 00:13:25.059 --> 00:13:29.700 75 percent of the existing lending facility, 00:13:30.059 --> 00:13:33.720 and the DEVA Santander entity owns the remaining 00:13:33.720 --> 00:13:38.200 25 percent. And again, Mr. Jensen, if I've said 00:13:38.200 --> 00:13:40.919 anything incorrect, you can clarify or correct. 00:13:42.879 --> 00:13:48.600 The – in addition to that facility, there are 00:13:48.600 --> 00:13:52.039 certain trade creditor and service providers 00:13:52.039 --> 00:13:55.720 at the holding company. Substantially all of 00:13:55.720 --> 00:13:59.899 those service providers and contract counterparties 00:13:59.899 --> 00:14:03.820 were for the benefit of our operating companies. 00:14:05.299 --> 00:14:08.259 Under – in the past several weeks, as cash was 00:14:08.259 --> 00:14:13.580 dwindling and operations at the – at our OPCOs 00:14:13.580 --> 00:14:17.960 was winding down, we started to receive significant 00:14:17.960 --> 00:14:22.600 demands. on various contracts by various – or 00:14:22.600 --> 00:14:24.580 contract counterproviders, service providers. 00:14:24.620 --> 00:14:28.080 In addition to – and one of perhaps the most 00:14:28.080 --> 00:14:32.200 significant claimants at the hotel is LumaLeds 00:14:32.200 --> 00:14:35.860 itself. They were – given how recent this transaction 00:14:35.860 --> 00:14:38.759 was, LumaLeds was still providing transition 00:14:38.759 --> 00:14:44.519 services to Oman. They were asserting significant 00:14:44.519 --> 00:14:50.299 amounts due. And as part of an ongoing discussion 00:14:50.299 --> 00:14:55.960 with them on very short notice. They took action 00:14:55.960 --> 00:14:59.659 in the Netherlands to freeze one of our significant 00:14:59.659 --> 00:15:05.559 bank accounts. And once we became aware of that, 00:15:06.500 --> 00:15:08.139 we – while we were in the process of preparing 00:15:08.139 --> 00:15:10.840 for this Chapter 11, we expedited our timeline 00:15:10.840 --> 00:15:14.679 to file, and we found ourselves in bankruptcy 00:15:14.679 --> 00:15:18.799 as of the end of last week. As I noted before, 00:15:19.580 --> 00:15:23.600 we have not yet – and hope and expectation have 00:15:23.600 --> 00:15:25.960 been that perhaps we would have even more streamlined 00:15:25.960 --> 00:15:27.700 the case and would have filed the plan disclosure 00:15:27.700 --> 00:15:30.759 statement and litigation trust vehicle in advance. 00:15:30.860 --> 00:15:33.240 But unfortunately, we weren't able to do that. 00:15:33.240 --> 00:15:36.639 We wanted to get this case in, take advantage 00:15:36.639 --> 00:15:39.120 – get the advantage of the global automatic stay, 00:15:39.620 --> 00:15:42.440 prevent further actions like this from occurring 00:15:42.440 --> 00:15:49.759 all over the world. any of our assets or cash 00:15:49.759 --> 00:15:53.100 that's sitting at various accounts, but we will 00:15:53.100 --> 00:15:56.139 – we intend in the coming weeks, as I said, to 00:15:56.139 --> 00:15:58.519 file a plan of organization disclosure statement 00:15:58.519 --> 00:16:02.980 and litigation trust agreement with the cooperation 00:16:02.980 --> 00:16:09.279 of the lender group. I think maybe I would pause 00:16:09.279 --> 00:16:13.330 there. I probably forgot something, but I think 00:16:13.330 --> 00:16:18.870 that you get the gist of what we have here. There's 00:16:18.870 --> 00:16:21.110 obviously more detail in the first day declaration, 00:16:21.409 --> 00:16:24.610 but I'm happy to answer any questions that Your 00:16:24.610 --> 00:16:29.190 Honor may have before I move for admission of 00:16:29.190 --> 00:16:32.970 the zone ask declaration into evidence. I have 00:16:32.970 --> 00:16:37.009 no questions. Let me just see if anyone wishes 00:16:37.009 --> 00:16:41.340 to. Make any brief opening remark before we launch 00:16:41.340 --> 00:17:10.410 into the evidence a purchase of a sub -participation 00:17:10.410 --> 00:17:13.009 in the existing debt that was held by Debit Capital, 00:17:13.230 --> 00:17:17.170 the end result of which there is a 75 -25 split 00:17:17.170 --> 00:17:20.089 between the inter -company lender, KTRI, and 00:17:20.089 --> 00:17:23.190 Debit Capital, the whole super -senior incremental 00:17:23.190 --> 00:17:26.410 facility that was provided in late fall, as well 00:17:26.410 --> 00:17:29.009 as the original acquisition debt that was remaining. 00:17:29.829 --> 00:17:32.210 I'll just speak very briefly, Your Honor, at 00:17:32.210 --> 00:17:34.710 the outset before we get into the motions that 00:17:34.710 --> 00:17:37.109 my clients are supportive of the relief requested 00:17:37.109 --> 00:17:40.849 today and the broader goal of this Chapter 11 00:17:40.849 --> 00:17:43.549 proceeding to provide a forum to preserve these 00:17:43.549 --> 00:17:46.549 litigation claims which are likely the most significant 00:17:46.549 --> 00:17:49.869 asset remaining for these businesses and the 00:17:49.869 --> 00:17:52.990 source of any recovery for creditors. Thank you. 00:17:53.230 --> 00:17:58.029 Anyone else? Yeah, just briefly, Judge, and Jason 00:17:58.029 --> 00:18:03.930 Ruff, the U .S. trustee, as was alluded to earlier, 00:18:03.990 --> 00:18:06.849 we did get a chance to review all the motions 00:18:06.849 --> 00:18:09.970 that the betters filed today and were able to 00:18:09.970 --> 00:18:12.230 work through our comments. So you probably won't 00:18:12.230 --> 00:18:15.289 be hearing much from me. And I need to confirm 00:18:15.289 --> 00:18:18.109 that, you know, from my perspective, I think 00:18:18.109 --> 00:18:21.150 we're all set as far and don't have any opposition 00:18:21.150 --> 00:18:22.950 to any of the relief that's being sought today. 00:18:23.230 --> 00:18:25.460 So. Unless Your Honor has any questions, I'll 00:18:25.460 --> 00:18:28.700 remain quiet probably for the rest of the hearing. 00:18:29.140 --> 00:18:32.440 Okay. Thank you very much, Mr. Reffman. Anyone 00:18:32.440 --> 00:18:36.660 else? Let me just check. Okay. Let's get into 00:18:36.660 --> 00:18:40.240 the evidence. Well, actually, Your Honor, one 00:18:40.240 --> 00:18:42.839 more point. As I was sitting here waiting, I 00:18:42.839 --> 00:18:45.599 realized I forgot to mention, and this is just, 00:18:45.819 --> 00:18:51.420 I guess, an FYI. The one motion that we had discussed 00:18:51.420 --> 00:18:54.200 with Mr. Ruff. And I had mentioned to you that 00:18:54.200 --> 00:18:58.000 at this point, a handful of the operating subsidiaries 00:18:58.000 --> 00:19:00.420 have commenced insolvency proceedings around 00:19:00.420 --> 00:19:03.740 the world. In order to commence those insolvency 00:19:03.740 --> 00:19:06.859 proceedings, it requires the sign -off of the 00:19:06.859 --> 00:19:10.119 100 percent shareholder, which is this open -on 00:19:10.119 --> 00:19:13.740 -motion holding entity. We had initially prepared 00:19:13.740 --> 00:19:17.400 a motion which would have – I said – I would 00:19:17.400 --> 00:19:19.920 have characterize essentially a comfort order 00:19:19.920 --> 00:19:23.079 that we have the authority in the ordinary course 00:19:23.079 --> 00:19:27.720 of business to enter into, to sign off on those 00:19:27.720 --> 00:19:32.240 filings on a go -forward basis. Mr. Roth had 00:19:32.240 --> 00:19:37.160 an objection to that relief, didn't think it 00:19:37.160 --> 00:19:39.839 was necessary, he can speak for himself. I think 00:19:39.839 --> 00:19:44.420 we agree, frankly, that this is ordinary course. 00:19:44.650 --> 00:19:47.210 to be able to sign off as a 100 percent shareholder 00:19:47.210 --> 00:19:49.309 of ordinary course corporate governance action 00:19:49.309 --> 00:19:54.410 of the holding company. I know – I mentioned 00:19:54.410 --> 00:19:58.130 it for two reasons. One, that that's still an 00:19:58.130 --> 00:20:01.670 issue that's ongoing where – while the decision 00:20:01.670 --> 00:20:03.789 to file, whether to file or not to file, are 00:20:03.789 --> 00:20:07.670 being made by the operating companies, their 00:20:07.670 --> 00:20:12.420 boards, and their advisors. They do require, 00:20:12.599 --> 00:20:14.880 as a technical matter, a sign -off from the shareholder, 00:20:15.240 --> 00:20:19.740 and we intend to continue to provide those sign 00:20:19.740 --> 00:20:21.200 -offs. But to the extent there is an issue at 00:20:21.200 --> 00:20:24.940 any point, we may well come back to your honor 00:20:24.940 --> 00:20:28.160 on an expedited basis to seek authority to the 00:20:28.160 --> 00:20:29.500 extent we think we need it. We don't think we 00:20:29.500 --> 00:20:32.079 need it, but I want to just flag that for you 00:20:32.079 --> 00:20:35.900 as a placeholder. Understood. Thank you for the 00:20:35.900 --> 00:20:42.359 update. So at this point, I'd like to move into 00:20:42.359 --> 00:20:47.740 evidence Mr. Donath's declaration in place of 00:20:47.740 --> 00:20:51.460 his direct testimony. The declaration goes through 00:20:51.460 --> 00:20:53.960 some of the background information, as I just 00:20:53.960 --> 00:20:56.579 described, but also provides the evidentiary 00:20:56.579 --> 00:20:59.779 support for each of the first emotions that my 00:20:59.779 --> 00:21:01.900 colleague Madeline Nicolini will take the court 00:21:01.900 --> 00:21:05.119 to. And again, Mr. Donath is available for cross 00:21:05.119 --> 00:21:08.259 -examination, if anyone. Any questions on any 00:21:08.259 --> 00:21:10.660 part of the declaration the objection to the 00:21:10.660 --> 00:21:12.759 admission of the doughnut declaration for purposes 00:21:12.759 --> 00:21:19.259 of today's hearing? Okay, it's admitted and Okay, 00:21:19.279 --> 00:21:22.160 your honor. I'm gonna shift my feet otherwise 00:21:22.160 --> 00:21:24.880 you know see the podium to my colleague Madeline 00:21:24.880 --> 00:21:26.660 McElheny We're sitting in the conference room, 00:21:26.660 --> 00:21:29.240 and she'll take it from here. Thank you all righty. 00:21:29.259 --> 00:21:31.359 Thank you, and let me steal something there. 00:21:31.380 --> 00:21:35.240 I just Council once you make an appearance. I'm 00:21:35.240 --> 00:21:37.450 gonna I'm going to move your agenda around just 00:21:37.450 --> 00:21:39.930 a little bit. Just go ahead and state your name 00:21:39.930 --> 00:21:42.930 for the record. Good afternoon, Your Honor. Madeleine 00:21:42.930 --> 00:21:45.190 Nicolini. It's with the chance of both counsels 00:21:45.190 --> 00:21:50.170 as better. OK, good afternoon. I wanted to just 00:21:50.170 --> 00:21:53.309 get comfortable with where we were and to, before 00:21:53.309 --> 00:21:56.349 I signed, join admin, that I kind of understood 00:21:56.349 --> 00:22:00.369 the relationship and everything. I get the declaration 00:22:00.369 --> 00:22:02.869 into evidence. So I'm comfortable with where 00:22:02.869 --> 00:22:09.619 we are. sign While we're talking join admin I'm 00:22:09.619 --> 00:22:11.500 going to designate this as a complex chapter 00:22:11.500 --> 00:22:13.920 11 case, and I'm going to approve the ex parte 00:22:13.920 --> 00:22:18.319 application for for corals, so I'm going to Take 00:22:18.319 --> 00:22:21.640 care of one two and three on your agenda while 00:22:21.640 --> 00:22:25.799 we're while we're talking here I'm comfortable 00:22:25.799 --> 00:22:28.680 with with where we are and then I know what kind 00:22:28.680 --> 00:22:32.900 of that they need to be separate and so I'll 00:22:32.900 --> 00:22:35.490 let you pick whichever one you want After that 00:22:35.490 --> 00:22:37.170 one, but I'll take care of one two and three 00:22:37.170 --> 00:22:40.809 now Thank you, your honor appreciate it. I appreciate 00:22:40.809 --> 00:22:42.990 the fact that you have just under joint admin 00:22:42.990 --> 00:22:45.970 with joint administration motion We do just want 00:22:45.970 --> 00:22:47.829 to clarify on the record that the betters are 00:22:47.829 --> 00:22:49.890 not seeking to jointly administer these chapter 00:22:49.890 --> 00:22:52.529 11 cases With the larger first branch chapter 00:22:52.529 --> 00:22:54.910 11 cases which are being jointly ministers before 00:22:54.910 --> 00:22:58.589 the court as well given the significant interest 00:22:58.589 --> 00:23:00.750 in the first -place group cases and the number 00:23:00.750 --> 00:23:02.349 of parties involved, we just wanted to clear 00:23:02.349 --> 00:23:05.210 that point to avoid any confusion and confirm 00:23:05.210 --> 00:23:07.250 that these cases are proceeding separately. So 00:23:07.250 --> 00:23:08.690 we just wanted to take that on the record quickly, 00:23:08.990 --> 00:23:10.890 and thank you for answering those orders. All 00:23:10.890 --> 00:23:14.329 right. So the first now item on the agenda is 00:23:14.329 --> 00:23:16.710 agenda item number four, which is the debtor's 00:23:16.710 --> 00:23:19.170 request. for authority to file a consolidated 00:23:19.170 --> 00:23:21.670 creditor matrix motion and consolidated list 00:23:21.670 --> 00:23:23.950 of the debtor's 30 largest creditors, as well 00:23:23.950 --> 00:23:26.349 as to collect personal information of individuals 00:23:26.349 --> 00:23:28.690 identified in the debtor's filing, as well as 00:23:28.690 --> 00:23:31.349 to seek approval of the form and manner – a form 00:23:31.349 --> 00:23:33.930 and manner of notice of no -sign creditors of 00:23:33.930 --> 00:23:36.650 the commencement of these Chapter 11 cases. The 00:23:36.650 --> 00:23:38.750 authority to file a consolidated creditor matrix 00:23:38.750 --> 00:23:41.029 and consolidated list of the 30 largest unsecured 00:23:41.029 --> 00:23:43.920 creditors – complicated by the complex case procedures, 00:23:44.319 --> 00:23:46.380 alleviate the debtors of the administrative burden 00:23:46.380 --> 00:23:48.319 of compiling separate creditor lists for each 00:23:48.319 --> 00:23:50.740 of the debtors, limit the associated costs where 00:23:50.740 --> 00:23:53.279 the debtors have limited cash on hand, and reduce 00:23:53.279 --> 00:23:56.680 the possibility of duplicative services. Accordingly, 00:23:56.720 --> 00:23:58.519 the debtors request authority to file a consolidated 00:23:58.519 --> 00:24:01.119 creditor matrix and consolidated lists of 30 00:24:01.119 --> 00:24:03.200 largest creditors for all of the debtors here. 00:24:04.759 --> 00:24:07.039 further request the permission to retract potentially 00:24:07.039 --> 00:24:09.900 identi – personally identifiable information 00:24:09.900 --> 00:24:12.200 of individuals included in the betters' filings. 00:24:12.700 --> 00:24:14.680 This relief is particularly important here where 00:24:14.680 --> 00:24:16.779 the betters operate in the European Union and 00:24:16.779 --> 00:24:19.160 other countries where applicable law imposes 00:24:19.160 --> 00:24:21.740 significant constraints on the disclosure of 00:24:21.740 --> 00:24:23.920 information relating to identified individuals 00:24:23.920 --> 00:24:26.299 and potentially significant fines for violation 00:24:26.299 --> 00:24:29.920 of those authorities. Finally, the betters seek 00:24:29.920 --> 00:24:32.440 approval of the form and matter. of the notice 00:24:32.440 --> 00:24:34.519 of commencement through Friday to creditors, 00:24:34.640 --> 00:24:36.519 which is attached as a divot A to the motion. 00:24:37.160 --> 00:24:39.039 Unless, Your Honor, there's any questions, we 00:24:39.039 --> 00:24:41.839 respectfully request that the order filed at 00:24:41.839 --> 00:24:46.140 docket number 6 -1 be entered. Motion granted. 00:24:47.960 --> 00:24:51.220 Thank you. And so the next item on the agenda 00:24:51.220 --> 00:24:55.019 is item number 5, which the betters request for 00:24:55.019 --> 00:24:57.720 entry of an order enforcing the automatic state 00:24:57.720 --> 00:24:59.640 protections under the Bankruptcy Code, which 00:24:59.640 --> 00:25:02.980 is filed as Act at Number 7. The debtors are 00:25:02.980 --> 00:25:05.039 based in the Netherlands. Accordingly, many of 00:25:05.039 --> 00:25:06.900 their creditors and other parties' interests 00:25:06.900 --> 00:25:09.039 are located in the Netherlands and other jurisdictions 00:25:09.039 --> 00:25:11.579 outside of the United States. While the debtors 00:25:11.579 --> 00:25:13.519 do believe that many of their creditors and other 00:25:13.519 --> 00:25:15.339 parties' interests are subject to the automatic 00:25:15.339 --> 00:25:18.000 stay, many do not have U .S. operations, and 00:25:18.000 --> 00:25:20.500 we anticipate that not all parties in interest 00:25:20.500 --> 00:25:22.440 will be familiar with the global reach and the 00:25:22.440 --> 00:25:24.500 self -executing nature of the automatic stay. 00:25:25.079 --> 00:25:27.200 Through this motion and proposed orders, the 00:25:27.200 --> 00:25:29.400 debtors are not seeking to bridge or enlarge 00:25:29.400 --> 00:25:31.319 or otherwise modify the rights of any parties 00:25:31.319 --> 00:25:33.799 with respect to the automatic stay. As is typical 00:25:33.799 --> 00:25:36.099 in cases involving foreign debtors and foreign 00:25:36.099 --> 00:25:37.920 creditors and counterparties, we are seeking 00:25:37.920 --> 00:25:40.720 entry of an order simply confirming and reinforcing 00:25:40.720 --> 00:25:43.599 the protections of the automatic stay, particularly 00:25:43.599 --> 00:25:45.200 here where the debtors' creditors have already 00:25:45.200 --> 00:25:47.700 taken actions against the debtors' property outside 00:25:47.700 --> 00:25:50.180 of the United States. After an order of the bankruptcy 00:25:50.180 --> 00:25:52.700 court reinforcing the protections of the automatic 00:25:52.700 --> 00:25:55.200 stay, debtors are concerned that parties may 00:25:55.200 --> 00:25:57.859 attempt to take improper action against the debtors 00:25:57.859 --> 00:26:00.460 and or the property of their state. Therefore, 00:26:00.500 --> 00:26:03.130 we're seeking entry of an order. to ensure that 00:26:03.130 --> 00:26:05.450 all parties in interest are aware of these provisions 00:26:05.450 --> 00:26:07.609 of the U .S. Bank of the Code, and the debtors 00:26:07.609 --> 00:26:09.769 believe that the motions as drafted appropriately 00:26:09.769 --> 00:26:12.470 lay out these key provisions. We did share the 00:26:12.470 --> 00:26:14.009 motion and the proposed order with the United 00:26:14.009 --> 00:26:15.910 States Trustee, who did not have any objections 00:26:15.910 --> 00:26:18.650 to the motion or the relief requested here. So 00:26:18.650 --> 00:26:21.009 accordingly, we respectfully request the order 00:26:21.009 --> 00:26:28.470 filed with Docket Number 7 -1 be entered. Does 00:26:28.470 --> 00:26:30.349 anyone wish to be heard in connection with this 00:26:30.349 --> 00:26:37.059 motion? Okay, the motion is granted. I think 00:26:37.059 --> 00:26:40.700 it makes perfect sense in a case like this to 00:26:40.700 --> 00:26:46.019 Grant such relief requested on and it's really 00:26:46.019 --> 00:26:49.339 just restating the code And the provisions there, 00:26:49.359 --> 00:26:51.420 so it makes perfect sense to me. I'll grant the 00:26:51.420 --> 00:26:55.440 motion Thank you, your honor So the next time 00:26:55.440 --> 00:26:57.779 maybe on the agenda is item number six which 00:26:57.779 --> 00:27:00.140 is the betters motion for entry of an order authorizing 00:27:00.140 --> 00:27:03.160 the betters a Pre -petition obligations to certain 00:27:03.160 --> 00:27:05.640 critical service providers which is filed as 00:27:05.640 --> 00:27:08.259 Docket Number 8. By this motion, the debtors 00:27:08.259 --> 00:27:10.319 are seeking permission to pay certain prepedition 00:27:10.319 --> 00:27:12.519 amounts owed by the debtors to critical service 00:27:12.519 --> 00:27:15.640 providers in an amount not to exceed $15 ,000. 00:27:16.220 --> 00:27:18.640 Debtors Liberty One and Liberty Two engage the 00:27:18.640 --> 00:27:21.299 services of a Netherlands -based corporate and 00:27:21.299 --> 00:27:23.819 financial service provider that performs certain 00:27:23.819 --> 00:27:26.200 financial reporting services for those debtor 00:27:26.200 --> 00:27:28.619 entities, as well as a Netherlands -based tax 00:27:28.619 --> 00:27:30.980 law firm that provides corporate tax filing support. 00:27:31.289 --> 00:27:33.349 These providers are critical to ensuring that 00:27:33.349 --> 00:27:35.369 it's remained in good standing and in compliance 00:27:35.369 --> 00:27:37.509 with the applicable statutory, regulatory, and 00:27:37.509 --> 00:27:40.170 governance requirements under Dutch law. And 00:27:40.170 --> 00:27:41.750 absent the engagement of these professionals, 00:27:42.109 --> 00:27:44.309 there is a risk debtors could fall out of compliance 00:27:44.309 --> 00:27:46.569 with applicable legal and regulatory requirements. 00:27:46.869 --> 00:27:48.730 This would result in special penalties to the 00:27:48.730 --> 00:27:50.750 debtors and claims against the estate, which 00:27:50.750 --> 00:27:52.450 would not be in the interest of their stakeholders, 00:27:52.589 --> 00:27:54.490 particularly where the precondition amounts be 00:27:54.490 --> 00:27:57.359 paid is very limited. As I say at the outset 00:27:57.359 --> 00:27:59.579 of this hearing, the debtors and their advisors 00:27:59.579 --> 00:28:01.720 are failing new situations, and we're continuing 00:28:01.720 --> 00:28:04.480 to get our arms around the information. We've 00:28:04.480 --> 00:28:06.200 limited the relief that we've requested today 00:28:06.200 --> 00:28:08.519 to what we felt was absolutely necessary at the 00:28:08.519 --> 00:28:10.160 time of filing based on the information that 00:28:10.160 --> 00:28:12.180 we had and what was strictly needed for the debtors 00:28:12.180 --> 00:28:14.200 to get through the first 21 days or so of these 00:28:14.200 --> 00:28:17.200 cases. We're continuing to review our books and 00:28:17.200 --> 00:28:19.420 records as well as to engage in communications 00:28:19.420 --> 00:28:21.819 with our contract counterparties. Based on that, 00:28:21.900 --> 00:28:24.259 there is the possibility that we may identify 00:28:24.259 --> 00:28:26.940 additional providers outside of these two that 00:28:26.940 --> 00:28:30.140 are specifically identified in the motion. And 00:28:30.140 --> 00:28:33.099 we may seek court authority to make certain preposition 00:28:33.099 --> 00:28:35.079 payments on account of those critical providers. 00:28:35.420 --> 00:28:37.720 We expect that those amounts be similarly very 00:28:37.720 --> 00:28:39.599 limited, but we just want to flag that for the 00:28:39.599 --> 00:28:42.720 court as well. And so unless your Honor has any 00:28:42.720 --> 00:28:45.039 questions, we respectfully request that the order 00:28:45.039 --> 00:28:48.460 filed as Docket Number 8 .1 – 8 -1 be answered 00:28:48.460 --> 00:28:53.009 here. I wish to be heard in connection with this 00:28:53.009 --> 00:29:02.430 motion Okay, the motion's granted Thank you your 00:29:02.430 --> 00:29:05.609 honor So the next item on the agenda is item 00:29:05.609 --> 00:29:07.589 number seven which is the better is motion for 00:29:07.589 --> 00:29:09.750 an order or extending the time to file schedules 00:29:09.750 --> 00:29:12.670 of assets and liabilities as same as the financial 00:29:12.670 --> 00:29:15.130 affairs as well as waiving the requirement or 00:29:15.130 --> 00:29:17.450 on the alternative extending the time to file 00:29:17.450 --> 00:29:22.720 will 2020 reports As described in the motion, 00:29:23.220 --> 00:29:25.119 since the independent director has been appointed 00:29:25.119 --> 00:29:26.839 late last year and early this year with respect 00:29:26.839 --> 00:29:29.579 to both entities, we've endeavored to understand 00:29:29.579 --> 00:29:31.839 the assets and liabilities of the debtors as 00:29:31.839 --> 00:29:34.460 well as the operations of the debtors – of the 00:29:34.460 --> 00:29:37.359 non -debtors subsidiaries. While the debtors 00:29:37.359 --> 00:29:39.640 are holding companies with no employees and no 00:29:39.640 --> 00:29:42.680 operations, the ability to access the information 00:29:42.680 --> 00:29:45.319 necessary to file – to compile the statements 00:29:45.319 --> 00:29:48.400 about the liabilities and the statements of financial 00:29:48.400 --> 00:29:51.380 affairs has been somewhat complicated by the 00:29:51.380 --> 00:29:53.819 actions of prior management and the current status 00:29:53.819 --> 00:29:56.400 of sort of the Otonom business, including limited 00:29:56.400 --> 00:29:59.059 people remaining within the operations that are 00:29:59.059 --> 00:30:02.259 familiar with legacy systems and historical transactions. 00:30:03.039 --> 00:30:05.960 While Penao, whose best advisor, financial advisor, 00:30:06.380 --> 00:30:08.799 has worked constructively with remaining personnel 00:30:08.799 --> 00:30:11.099 at the businesses, as well as Alvarez and Macel, 00:30:11.359 --> 00:30:13.200 who is a financial advisor in the larger First 00:30:13.200 --> 00:30:17.099 Branch Chapter 11 cases, given the amount of 00:30:17.099 --> 00:30:20.819 work in compiling and completing schedules and 00:30:20.819 --> 00:30:22.660 statements, as well as the competing demands 00:30:22.660 --> 00:30:24.680 on the debtor's limited number of people in the 00:30:24.680 --> 00:30:27.259 Old Sinan business, the debtors may not be able 00:30:27.259 --> 00:30:29.339 to complete the schedules and statements properly 00:30:29.339 --> 00:30:32.119 and accurately within the required timeframe. 00:30:32.680 --> 00:30:34.759 Accordingly, the debtors are requesting an extension 00:30:34.759 --> 00:30:36.640 of the deadline by which the debtors will file 00:30:36.640 --> 00:30:39.440 the schedules of assets, liabilities, and statements 00:30:39.440 --> 00:30:41.960 of financial affairs through and including May 00:30:41.960 --> 00:30:44.660 10th, 2026, which is 45 days to the petition 00:30:44.660 --> 00:30:47.890 date. without prejudice of the ability to request 00:30:47.890 --> 00:30:50.950 further extension. The U .S. trustee has reviewed 00:30:50.950 --> 00:30:52.890 the motion prior to the filing and did not have 00:30:52.890 --> 00:30:55.269 any objections before he had requested extension 00:30:55.269 --> 00:30:57.849 of the time to file with schedules and statements. 00:30:59.470 --> 00:31:01.269 Through the motion, the debtors are also seeking 00:31:01.269 --> 00:31:03.589 a waiver of the requirement to bankruptcy rule 00:31:03.589 --> 00:31:06.609 of 2015 .3. And while the U .S. trustee did not 00:31:06.609 --> 00:31:09.269 have an objection to the extension of the deadline 00:31:09.269 --> 00:31:11.960 to file the statements and schedules, He did 00:31:11.960 --> 00:31:14.160 have an objection to the requested waiver to 00:31:14.160 --> 00:31:16.319 file – the requested waiver of the requirement 00:31:16.319 --> 00:31:20.019 to file the report set forth in Rule 215 .3. 00:31:20.319 --> 00:31:22.099 And with full respect to the position of the 00:31:22.099 --> 00:31:24.480 United States trustee, the debtors do submit 00:31:24.480 --> 00:31:26.420 that the posture here is somewhat unique and 00:31:26.420 --> 00:31:28.759 a waiver is justified under the circumstances. 00:31:29.420 --> 00:31:31.779 As we said at the outset, the debtors are – the 00:31:31.779 --> 00:31:33.940 debtors are affiliates of the debtors in the 00:31:33.940 --> 00:31:36.019 larger first branch groups, but we are not seeking 00:31:36.019 --> 00:31:38.359 the happiest cases jointly administered. And 00:31:38.359 --> 00:31:40.359 because the debtors are affiliates of the debtors 00:31:40.359 --> 00:31:43.400 in the larger first branch group, as part of 00:31:43.400 --> 00:31:45.859 the periodic report regarding value, operations, 00:31:46.079 --> 00:31:48.039 and profitability of entities in which the debtors 00:31:48.039 --> 00:31:50.519 have stapled a substantial controlling interest, 00:31:50.579 --> 00:31:53.920 which is filed as document number 1389 in the 00:31:53.920 --> 00:31:56.140 larger first branch case. In order to comply 00:31:56.140 --> 00:31:59.019 with the requirements of Rule 2015 .3, the debtors 00:31:59.019 --> 00:32:01.140 in the first branch through Chapter 11 cases 00:32:01.140 --> 00:32:03.759 did include in that periodic report each of the 00:32:03.759 --> 00:32:06.559 debtors, as well as each of the 20 non -debtor 00:32:06.559 --> 00:32:09.880 operating companies that Old Sun Motion holding 00:32:09.880 --> 00:32:13.660 is the parent company of. Thus, any 2015 report 00:32:13.660 --> 00:32:16.200 that is filed in these Chapter 11 cases would 00:32:16.200 --> 00:32:18.599 contain substantially identical information. 00:32:19.480 --> 00:32:21.299 to the disclosures that were already made in 00:32:21.299 --> 00:32:23.420 the larger First Branch Group's filing would 00:32:23.420 --> 00:32:25.420 be of limited utility to parties and interests 00:32:25.420 --> 00:32:27.960 and would result in unnecessary duplication of 00:32:27.960 --> 00:32:32.000 effort and expense. Further, the best source 00:32:32.000 --> 00:32:34.299 of information for the 2015 reports in these 00:32:34.299 --> 00:32:36.500 Chapter 11 cases would have been the First Branch 00:32:36.500 --> 00:32:39.299 Group's entities, given the further dissipation 00:32:39.299 --> 00:32:41.779 of personnel from the Oman business, the limited 00:32:41.779 --> 00:32:44.099 available records, and that many of the entities 00:32:44.099 --> 00:32:46.779 that would be included in these reports are in 00:32:46.779 --> 00:32:49.420 local R or writing in solvency proceedings or 00:32:49.420 --> 00:32:51.779 preparing to be in proceedings themselves. And 00:32:51.779 --> 00:32:53.640 so it's unlikely that the debtors here would 00:32:53.640 --> 00:32:55.920 be able to provide more accurate or comprehensive 00:32:55.920 --> 00:32:58.339 information beyond what has already been provided. 00:33:01.559 --> 00:33:03.440 And while the debtors submit that a waiver is 00:33:03.440 --> 00:33:05.819 justified under these unique circumstances, the 00:33:05.819 --> 00:33:07.960 debtors do understand the importance of notifying 00:33:07.960 --> 00:33:10.259 parties in interest of the disclosures that have 00:33:10.259 --> 00:33:12.599 been made in the larger first grant through Chapter 00:33:12.599 --> 00:33:15.640 11 cases. And thus, to provide that notice, the 00:33:15.640 --> 00:33:18.380 debtors were supposed to publish on the website 00:33:18.380 --> 00:33:20.680 maintained by Coral, our claims and noticing 00:33:20.680 --> 00:33:22.819 agent, a link to the periodic report that was 00:33:22.819 --> 00:33:26.099 filed in the larger chapter – excuse me – larger 00:33:26.099 --> 00:33:28.920 force branch, Chapter 11 case, and as well file 00:33:28.920 --> 00:33:31.700 a notice on the docket providing parties an interest 00:33:31.700 --> 00:33:34.640 with a link to that filing, as well as the information 00:33:34.640 --> 00:33:38.660 necessary to access it. Based on these circumstances, 00:33:38.819 --> 00:33:40.440 the debtors submit that granting the requested 00:33:40.440 --> 00:33:43.589 waiver Coupled with the notice through coal appropriately 00:33:43.589 --> 00:33:46.609 balances the objectives of rules 2015 with the 00:33:46.609 --> 00:33:48.670 practical realities of these cases and serves 00:33:48.670 --> 00:33:50.650 the interests of betters of states and their 00:33:50.650 --> 00:33:53.730 predators. In the alternative, if Your Honour's 00:33:53.730 --> 00:33:55.630 not prepared to grant a waiver, we would request 00:33:55.630 --> 00:33:58.609 the same extension of the deadline to file through 00:33:58.609 --> 00:34:04.950 May 10th, 2026. Okay. Does anyone wish to be 00:34:04.950 --> 00:34:07.490 heard in connection with this case, with this 00:34:07.490 --> 00:34:12.710 matter? Your Honor, just briefly, I actually 00:34:12.710 --> 00:34:17.769 thought we had resolved this. What the Council 00:34:17.769 --> 00:34:20.030 just went over there as far as an alternative, 00:34:20.670 --> 00:34:24.630 I was actually perfectly fine with. I think given 00:34:24.630 --> 00:34:26.510 the facts and circumstances here, I think what 00:34:26.510 --> 00:34:29.210 was expressed to me is that it would be very 00:34:29.210 --> 00:34:32.010 difficult for them to, this team, to be able 00:34:32.010 --> 00:34:35.510 to perform the work necessary to independently 00:34:35.510 --> 00:34:39.190 verify what had already been done in the first 00:34:39.190 --> 00:34:43.300 branch matters. And there's very limited resources 00:34:43.300 --> 00:34:47.280 in this state. So given the very specific facts 00:34:47.280 --> 00:34:50.699 and circumstances of these cases, I thought what 00:34:50.699 --> 00:34:55.900 better, what council proposed was satisfactory 00:34:55.900 --> 00:34:59.539 and probably provided the same amount of information. 00:34:59.619 --> 00:35:01.199 Otherwise, I think they would have been left 00:35:01.199 --> 00:35:04.559 with the choice of just listing it and then maybe 00:35:04.559 --> 00:35:07.599 noting it in the global notes anyway that. They're 00:35:07.599 --> 00:35:11.519 relying on someone else's work. So I think what 00:35:11.519 --> 00:35:15.199 council's proposing to do as far as just making 00:35:15.199 --> 00:35:18.440 the information easily accessible to predators 00:35:18.440 --> 00:35:20.139 and other parties and interests in this case 00:35:20.139 --> 00:35:23.780 actually makes sense. Yeah, I thought that made 00:35:23.780 --> 00:35:26.599 a lot of sense, too. And I do like putting it 00:35:26.599 --> 00:35:29.380 on the website, just linking it. So if someone 00:35:29.380 --> 00:35:32.039 wanted to see it, that just made a lot of sense 00:35:32.039 --> 00:35:37.489 to me. And I mr. Ruff is probably right. This 00:35:37.489 --> 00:35:42.150 is this may be the only case in which I preside 00:35:42.150 --> 00:35:45.829 over during my tenure here in which I'll grant 00:35:45.829 --> 00:35:47.730 a waiver on the first day, but this one just 00:35:47.730 --> 00:35:50.230 makes a lot of sense and understanding It's just 00:35:50.230 --> 00:35:55.190 a really really unique fact set I think I'm going 00:35:55.190 --> 00:35:58.150 to grant the relief Requested here in the motion 00:35:58.150 --> 00:36:00.449 just ask that you put kind of whatever reports 00:36:00.449 --> 00:36:04.880 are They are in the first branch case just kind 00:36:04.880 --> 00:36:07.739 of a link them up so that someone wanted to see 00:36:07.739 --> 00:36:11.920 them they could see them here Thank you honor 00:36:11.920 --> 00:36:16.079 will do that so one question for you can is the 00:36:16.079 --> 00:36:23.940 Order that you'd be asking me to sign Does do 00:36:23.940 --> 00:36:25.699 I need to sign something different or can can 00:36:25.699 --> 00:36:28.599 we can I just sign the proposed order and and? 00:36:29.380 --> 00:36:31.599 I'm more than high I don't need to order you 00:36:31.599 --> 00:36:33.920 to put it on the website But as long as it it 00:36:33.920 --> 00:36:35.539 doesn't conflict with anything that we're doing 00:36:35.539 --> 00:36:39.500 now. I think I'm fine signing the order So the 00:36:39.500 --> 00:36:41.980 order provides for a waiver it does not explicitly 00:36:41.980 --> 00:36:44.739 go into the sort of proposed noticing through 00:36:44.739 --> 00:36:46.880 poll We're happy to upload or provide form of 00:36:46.880 --> 00:36:50.199 order before we prefer or otherwise Yeah, let's 00:36:50.199 --> 00:36:53.500 just let's just like it's on the record. I'll 00:36:53.500 --> 00:36:55.280 sign the order we all know what I'm we all know 00:36:55.280 --> 00:36:58.039 what I'm doing we can just Just get it as long 00:36:58.039 --> 00:37:02.000 as that that link is there that I'm I'm considering 00:37:02.000 --> 00:37:11.699 it's satisfied Okay, thank you And so the next 00:37:11.699 --> 00:37:14.159 and final item on the agenda is number eight 00:37:14.159 --> 00:37:16.539 Which is the betters motion for continued use 00:37:16.539 --> 00:37:18.340 of the betters cash management system, which 00:37:18.340 --> 00:37:21.110 is filed as document pretend Through this motion, 00:37:21.269 --> 00:37:23.050 the debtors are requesting authority to continue 00:37:23.050 --> 00:37:24.849 their existing cash management system in the 00:37:24.849 --> 00:37:26.889 ordinary court, including maintaining existing 00:37:26.889 --> 00:37:29.769 bank accounts, engaging the services of non -debtor 00:37:29.769 --> 00:37:31.989 affiliates in the ordinary court, paying certain 00:37:31.989 --> 00:37:35.010 precision obligations, and an extension of time 00:37:35.010 --> 00:37:37.969 to comply with Section 345B of the Bankruptcy 00:37:37.969 --> 00:37:40.989 Code. Before the commencement of these cases, 00:37:41.130 --> 00:37:43.150 the debtors operated as part of a cash pooling 00:37:43.150 --> 00:37:45.900 system where monies were swept up from to ultron 00:37:45.900 --> 00:37:48.920 motion holding and pay down to the ultron – the 00:37:48.920 --> 00:37:50.739 non -debtor subsidiaries that make up the ultron 00:37:50.739 --> 00:37:53.860 business to fund the operating cost of those 00:37:53.860 --> 00:37:55.920 entities. But the debtor's understanding is that 00:37:55.920 --> 00:37:57.639 the cash flowing system has largely been shut 00:37:57.639 --> 00:38:00.139 down at the beginning of this year. Today, in 00:38:00.139 --> 00:38:01.760 the ordinary course of business, the debtors 00:38:01.760 --> 00:38:04.119 utilize an integrated cash management system 00:38:04.119 --> 00:38:06.480 that enables the debtor to monitor the collection 00:38:06.480 --> 00:38:09.420 and dispersion of flows as appropriate and maintain 00:38:09.420 --> 00:38:11.639 control of the administration of their bank accounts. 00:38:11.980 --> 00:38:14.219 As set forth in the motion, the debtors maintain 00:38:14.219 --> 00:38:17.440 22 bank accounts across five banks. The majority 00:38:17.440 --> 00:38:19.780 of the debtor's cash is held in the debtor's 00:38:19.780 --> 00:38:21.900 primary operating account and has been used to 00:38:21.900 --> 00:38:24.019 make vendor disbursements as well as advance 00:38:24.019 --> 00:38:27.000 funds to other operating entities. Fifteen of 00:38:27.000 --> 00:38:29.380 the debtor's accounts are currently located at 00:38:29.380 --> 00:38:31.599 non -authorized depositories. We discussed this 00:38:31.599 --> 00:38:33.340 with the United States Trustee and understand 00:38:33.340 --> 00:38:35.139 that the Office of the United States Trustee 00:38:35.440 --> 00:38:38.280 does not object to a 45 -day extension for the 00:38:38.280 --> 00:38:40.159 debtors to come into compliance with the requirements 00:38:40.159 --> 00:38:43.159 of Section 345B of the Bankruptcy Code without 00:38:43.159 --> 00:38:46.139 prejudice to seek further extension. Through 00:38:46.139 --> 00:38:48.360 this motion, the debtors are also seeking permission 00:38:48.360 --> 00:38:51.940 to, in their discretion, continue a relationship 00:38:51.940 --> 00:38:55.119 with a non -debtor affiliate called GOC Automated 00:38:55.119 --> 00:38:57.920 Malaysia, which provides certain back office 00:38:57.920 --> 00:39:00.539 and finance support to the debtors at a cost 00:39:00.539 --> 00:39:03.400 of about $5 ,000 per month. The debtors submit 00:39:03.400 --> 00:39:06.480 that maintaining such service and relationships 00:39:06.480 --> 00:39:08.679 is critical for the debtors' transition to the 00:39:08.679 --> 00:39:10.960 Chapter 11 cases and to preserving these safe 00:39:10.960 --> 00:39:13.679 assets for the benefit of its creditors, as this 00:39:13.679 --> 00:39:15.760 back office service provides much of the finance 00:39:15.760 --> 00:39:19.380 support that goes into preparing – sort of reporting 00:39:19.380 --> 00:39:22.480 and as well as facilitating the payments necessary 00:39:22.480 --> 00:39:24.840 for the debtors to continue their operations. 00:39:25.980 --> 00:39:28.440 The debtors are also seeking authority to establish 00:39:28.440 --> 00:39:30.579 professional fee escrow accounts and related 00:39:30.579 --> 00:39:33.329 professional fee procedures. The debtors have 00:39:33.329 --> 00:39:35.230 designated one of their bank accounts at J .C. 00:39:35.230 --> 00:39:38.110 Morgan Chase as a segregated account to hold 00:39:38.110 --> 00:39:40.969 budgeted professional expenses in these Chapter 00:39:40.969 --> 00:39:43.449 11 cases, as well as fees the fires to be paid 00:39:43.449 --> 00:39:45.190 to the clerk of the port and the United States 00:39:45.190 --> 00:39:48.389 trustee. Through this motion, the debtors are 00:39:48.389 --> 00:39:50.409 seeking authorization to fund that account on 00:39:50.409 --> 00:39:53.170 a weekly basis each Friday pursuant to the budget, 00:39:53.210 --> 00:39:55.610 which is attached as exhibit D to the tax manager's 00:39:55.610 --> 00:39:58.130 motion, which is also included as exhibit number 00:39:58.130 --> 00:40:02.309 6 on a witness and exhibit list. The budget in 00:40:02.309 --> 00:40:04.510 this case is very thin and cash is very limited. 00:40:05.150 --> 00:40:07.030 As disclosed in the cash management motion, the 00:40:07.030 --> 00:40:10.590 debtors only have about $3 .4 million of cash 00:40:10.590 --> 00:40:13.449 on hand, and as of today, a portion of that fits 00:40:13.449 --> 00:40:16.550 in a blocked account. And the budget for these 00:40:16.550 --> 00:40:18.389 debtor professionals is therefore very modest. 00:40:19.409 --> 00:40:21.190 While the professional -free escrow account is 00:40:21.190 --> 00:40:23.550 not intended to be function as a cap, unallowed 00:40:23.550 --> 00:40:26.269 professional fees or expenses, it is meant to 00:40:26.269 --> 00:40:28.429 provide professionals in these cases with a limited 00:40:28.429 --> 00:40:30.710 and reasonable protection under the circumstances. 00:40:31.320 --> 00:40:33.239 We've shared the cash management motion and proposed 00:40:33.239 --> 00:40:35.340 order with the United States trustee, but the 00:40:35.340 --> 00:40:37.820 minor comments to the proposed order that we've 00:40:37.820 --> 00:40:39.440 implemented in the versions filed on the docket 00:40:39.440 --> 00:40:42.940 at 10 .1 and 10 .2. We further provided the – 00:40:42.940 --> 00:40:45.019 all the United States trustee with some information 00:40:45.019 --> 00:40:47.239 reflected in respect to the bettered bank account. 00:40:48.199 --> 00:40:51.199 And so unless your honor has any questions, we 00:40:51.199 --> 00:40:53.059 respectfully submit that the court enter the 00:40:53.059 --> 00:40:55.539 interim cash management order filed at docket 00:40:55.539 --> 00:41:03.880 number 10 .10 -1. Everything makes sense to me. 00:41:03.880 --> 00:41:07.219 I'm going to grant interim approval of the cash 00:41:07.219 --> 00:41:11.199 management Motion this is just to allow the debtor 00:41:11.199 --> 00:41:15.440 to ease into the chapter 11 process and I think 00:41:15.440 --> 00:41:18.840 what we need to When do you want to come back 00:41:18.840 --> 00:41:23.239 for a final hearing? So we think that the week 00:41:23.239 --> 00:41:25.840 of April 27th subject to your honor of availability 00:41:25.840 --> 00:41:41.710 would work for a secondary hearing Let me ask 00:41:41.710 --> 00:41:45.550 are you planning on filing anything else that 00:41:45.550 --> 00:41:49.849 week to kind of go in or The reason I'm asking 00:41:49.849 --> 00:41:52.110 is it's gonna have to be a virtual only hearing 00:41:52.110 --> 00:41:56.030 I'm gonna be out of town. I can get you in But 00:41:56.030 --> 00:42:16.570 I We can just do it Let's see You think we could 00:42:16.570 --> 00:42:22.369 do And obviously if there's no objection to any 00:42:22.369 --> 00:42:24.250 of this on a final basis, why don't we do this 00:42:24.250 --> 00:42:28.030 if there's no object just follow cno, but Why 00:42:28.030 --> 00:42:39.750 don't we do April 27th at? 3 p .m.. Central and 00:42:39.750 --> 00:42:44.480 Then we'll do the objection deadline Why don't 00:42:44.480 --> 00:42:46.900 we just give folks as much time as possible give 00:42:46.900 --> 00:42:52.139 them April 22nd? And then if there's no objections 00:42:52.139 --> 00:42:57.380 just file a cno We'll take care of that Thank 00:42:57.380 --> 00:43:00.179 you your honor hold on a second me fill this 00:43:00.179 --> 00:43:08.079 in so I don't forget It is going to be a virtual 00:43:08.079 --> 00:43:35.920 only hearing I'm gonna put April 22nd at 4 p 00:43:35.920 --> 00:43:46.579 .m. Central. That's the objection deadline. Okay. 00:43:48.079 --> 00:43:51.219 That is going to be signed and it'll hit the 00:43:51.219 --> 00:43:54.800 docket today. Is there anything else we need 00:43:54.800 --> 00:44:03.590 to take care of today? nothing further from us 00:44:03.590 --> 00:44:06.929 today. Thank you again for your honour and your 00:44:06.929 --> 00:44:09.429 chambers for accommodating us. Alright folks, 00:44:09.590 --> 00:44:11.409 thank you very much. Have a good afternoon. Thank 00:44:11.409 --> 00:44:13.389 you. Thank you.