1 00:00:00,000 --> 00:00:02,540 Your time is 11 o'clock central. 2 00:00:02,540 --> 00:00:06,340 On the 11 o'clock docket, we have the jointly administered cases 3 00:00:06,340 --> 00:00:12,180 under case number 22-90341, Core Scientific E. 4 00:00:12,180 --> 00:00:15,700 Folks, please don't forget to record your electronic appearance 5 00:00:15,700 --> 00:00:19,840 if it's the first or it's been a while, perhaps even an entire year. 6 00:00:19,840 --> 00:00:22,840 That's a quick trip to the website, a couple of mouse clicks. 7 00:00:22,840 --> 00:00:27,680 You can do that at any time prior to the conclusion of this morning's hearing. 8 00:00:27,680 --> 00:00:31,340 First time that you speak, if you would, please state your name and who you represent. 9 00:00:31,340 --> 00:00:34,700 That really does help to give the reporter a good point of reference 10 00:00:34,700 --> 00:00:38,140 in the event that a transcript request is made. 11 00:00:38,140 --> 00:00:40,940 We are recording this morning using court speak. 12 00:00:40,940 --> 00:00:46,640 We'll have the audio up on the docket shortly after the conclusion of this morning's hearing. 13 00:00:46,640 --> 00:00:52,200 I previously told everyone, there we go, that I have activated the hand raising feature. 14 00:00:52,200 --> 00:00:54,140 You know you're going to be speaking. 15 00:00:54,140 --> 00:00:55,400 Haven't already done so. 16 00:00:55,400 --> 00:00:59,400 If you give me a five star, and Mr. Perez, I just saw you. 17 00:00:59,400 --> 00:01:03,680 I don't think just looking at the numbers that we had a while, 18 00:01:03,680 --> 00:01:09,080 I thought we'd see you unmuted. 19 00:01:09,080 --> 00:01:10,180 Your Honor, good morning. 20 00:01:10,180 --> 00:01:10,800 This is Chris Turner. 21 00:01:10,800 --> 00:01:13,400 But we just want to confirm that our audio is working. 22 00:01:13,400 --> 00:01:18,080 I saw you pop on earlier and I could hear you, so yes. 23 00:01:18,080 --> 00:01:21,980 We can't hear you if you're intending to speak to us. 24 00:01:21,980 --> 00:01:24,100 I think mine unmuted. 25 00:01:24,100 --> 00:01:27,440 Wow, should I start over? 26 00:01:27,440 --> 00:01:28,840 Yes, you're on now, Your Honor. 27 00:01:28,840 --> 00:01:31,640 My apologies to everyone. 28 00:01:31,640 --> 00:01:32,740 So let me start again. 29 00:01:32,740 --> 00:01:34,940 The time is 1101 Central. 30 00:01:34,940 --> 00:01:36,600 Happy New Year to everyone. 31 00:01:36,600 --> 00:01:39,000 Today is January the 3rd, 2023. 32 00:01:39,000 --> 00:01:41,580 This is the docket for Houston, Texas. 33 00:01:41,580 --> 00:01:44,580 On the docket this morning, we have the jointly administered cases 34 00:01:44,580 --> 00:01:50,980 under case number 22-90341, Core Scientific Inc. 35 00:01:50,980 --> 00:01:53,340 We are recording this morning using court speak. 36 00:01:53,340 --> 00:01:55,500 We'll have the audio up on the docket shortly 37 00:01:55,500 --> 00:01:57,680 after the conclusion of the hearing. 38 00:01:57,680 --> 00:02:00,200 Please don't forget to record your electronic appearance. 39 00:02:00,200 --> 00:02:01,740 That's a quick tip to the website. 40 00:02:01,740 --> 00:02:06,680 You can do that at any time prior to the conclusion of the hearing. 41 00:02:06,680 --> 00:02:09,680 The first time that you do speak, if you would, please state your name 42 00:02:09,680 --> 00:02:10,640 and who you represent. 43 00:02:10,640 --> 00:02:14,380 That does, plays a very important role 44 00:02:14,380 --> 00:02:18,340 in giving the court reporters a point of reference in the event 45 00:02:18,340 --> 00:02:22,440 that a transcript request is made. 46 00:02:22,440 --> 00:02:23,500 I think I got it. 47 00:02:23,500 --> 00:02:27,340 I was better the first time than I was the second in any event. 48 00:02:27,340 --> 00:02:29,140 Mr. Perez, good morning. 49 00:02:29,140 --> 00:02:34,240 Are you doing intros and then handing it off? 50 00:02:34,240 --> 00:02:37,480 I think, Your Honor, that's correct. 51 00:02:37,480 --> 00:02:42,280 Along with me is my partners, Ronny Berkovich and Ted Zacharides. 52 00:02:42,280 --> 00:02:47,300 And I think Ms. Berkovich will handle the matters initially. 53 00:02:47,300 --> 00:02:49,100 Thank you. 54 00:02:49,100 --> 00:02:58,940 Let me ask, are we going forward today? 55 00:02:58,940 --> 00:03:00,100 Yes, Your Honor. 56 00:03:00,100 --> 00:03:01,340 All right. 57 00:03:01,340 --> 00:03:04,680 I really didn't understand the reason 58 00:03:04,680 --> 00:03:12,040 why there was a request to seal Celcia's preliminary objection. 59 00:03:12,040 --> 00:03:13,700 Was that done by agreement? 60 00:03:13,700 --> 00:03:15,600 Was there a discussion? 61 00:03:15,600 --> 00:03:19,240 I generally don't like to do that unless there's a reason. 62 00:03:19,240 --> 00:03:23,940 And having read it, I just didn't see the reason. 63 00:03:23,940 --> 00:03:26,400 Your Honor, for the record, Chris Turnman and Kirk Lonell 64 00:03:26,400 --> 00:03:28,500 for Celcia's and its affiliated debtors and debtors 65 00:03:28,500 --> 00:03:30,740 in possession, build our objection. 66 00:03:30,740 --> 00:03:34,600 Your Honor, there's a protective order in the Celcia case. 67 00:03:34,600 --> 00:03:37,640 That material is governed by the protective order. 68 00:03:37,640 --> 00:03:39,140 In advance of filing our objection, 69 00:03:39,140 --> 00:03:42,000 we reached out to counsel for court and asked them, 70 00:03:42,000 --> 00:03:44,140 what, if anything, they believe was confidential 71 00:03:44,140 --> 00:03:45,380 and should be sealed. 72 00:03:45,380 --> 00:03:48,540 They provided us with a list to be clear that Your Honor may 73 00:03:48,540 --> 00:03:49,980 have seen in our ceiling motion. 74 00:03:49,980 --> 00:03:52,240 We don't believe that the ceiling of that information 75 00:03:52,240 --> 00:03:53,600 is necessary. 76 00:03:53,600 --> 00:03:55,640 But pursuant to the protective order, 77 00:03:55,640 --> 00:03:57,040 that's what we're required to do. 78 00:03:57,040 --> 00:03:58,380 It was designated by court. 79 00:03:58,380 --> 00:03:59,840 So we can provide the obligations 80 00:03:59,840 --> 00:04:03,440 under our protective order filed and under seal. 81 00:04:03,440 --> 00:04:05,240 And under that protective order, court 82 00:04:05,240 --> 00:04:09,000 has seven days to object and argue 83 00:04:09,000 --> 00:04:11,800 about why that should be sealed. 84 00:04:11,800 --> 00:04:14,140 And if they don't object, they will automatically 85 00:04:14,140 --> 00:04:15,880 be unsealed after seven days. 86 00:04:15,880 --> 00:04:18,640 So there's a process to go through, again, to be clear. 87 00:04:18,640 --> 00:04:20,480 We don't believe that it needs to be sealed 88 00:04:20,480 --> 00:04:23,640 or should be sealed, but we did it at the request of court. 89 00:04:23,640 --> 00:04:24,140 All right. 90 00:04:24,140 --> 00:04:28,000 So this was, yes, Mr. Securities. 91 00:04:28,000 --> 00:04:29,400 Good morning. 92 00:04:29,400 --> 00:04:31,640 Yes, Your Honor, I wanted to address the content of the 93 00:04:31,640 --> 00:04:34,440 securities from Wilde to the debtors on the ceiling issue. 94 00:04:34,440 --> 00:04:37,000 So most of those documents relate 95 00:04:37,000 --> 00:04:40,040 to third party agreements or third party discussions. 96 00:04:40,040 --> 00:04:42,200 And that's why we kept them confidential, 97 00:04:42,200 --> 00:04:44,240 because they're not just our information. 98 00:04:44,240 --> 00:04:46,940 And the transcripts from the depositions, 99 00:04:46,940 --> 00:04:47,840 we allowed those in. 100 00:04:47,840 --> 00:04:50,000 And anything that was between the parties, 101 00:04:50,000 --> 00:04:50,840 we allowed those in. 102 00:04:50,840 --> 00:04:52,740 But because the documents that they wanted 103 00:04:52,740 --> 00:04:54,800 related to third parties, that's why 104 00:04:54,800 --> 00:04:56,400 we maintained the confidentiality. 105 00:04:56,400 --> 00:04:58,740 Separate from the issue that we don't think any of that 106 00:04:58,740 --> 00:05:01,480 is relevant, but just on the confidentiality point, 107 00:05:01,480 --> 00:05:02,840 that was the reason behind it. 108 00:05:02,840 --> 00:05:07,000 So was that with respect to Mr. Brown's affidavit? 109 00:05:10,760 --> 00:05:11,560 Yes. 110 00:05:11,560 --> 00:05:14,740 It was all on the issue about the underlying dispute 111 00:05:14,740 --> 00:05:16,240 on the contract. 112 00:05:16,240 --> 00:05:19,960 No, so let me take a step back. 113 00:05:19,960 --> 00:05:22,840 And again, I'm not trying to get in the middle 114 00:05:22,840 --> 00:05:29,080 of whatever arrangement was made. 115 00:05:29,080 --> 00:05:33,080 Mr. Brown's affidavit is totally inappropriate 116 00:05:33,080 --> 00:05:35,000 for so many different reasons. 117 00:05:35,000 --> 00:05:38,960 I'm not going to consider it on any basis. 118 00:05:38,960 --> 00:05:44,680 Quite frankly, it probably ought to simply be struck 119 00:05:44,680 --> 00:05:46,200 based upon what's on file. 120 00:05:46,200 --> 00:05:50,760 But I want to talk just about the objection itself, which 121 00:05:50,760 --> 00:05:58,920 is docket number 211, which is the actual sealed document. 122 00:05:58,920 --> 00:06:01,280 Is there a reason why that should be sealed? 123 00:06:01,280 --> 00:06:03,160 And if there is, I'm not, again, not 124 00:06:03,160 --> 00:06:06,960 trying to step on the toes of any agreement that's 125 00:06:06,960 --> 00:06:07,600 been reached. 126 00:06:07,600 --> 00:06:13,280 Just having read it, I don't understand why it was sealed. 127 00:06:13,280 --> 00:06:18,160 I got why you would have an issue with Mr. Brown's 128 00:06:18,160 --> 00:06:19,320 affidavit. 129 00:06:19,320 --> 00:06:22,800 But best I can tell, that wasn't actually sealed. 130 00:06:26,320 --> 00:06:29,920 Well, we didn't discuss with them in advance the objection. 131 00:06:29,920 --> 00:06:32,240 They had sent us a list of documents 132 00:06:32,240 --> 00:06:34,920 that related to the underlying dispute and some deposition 133 00:06:34,920 --> 00:06:35,480 testimony. 134 00:06:35,480 --> 00:06:38,120 That's what we referred to. 135 00:06:38,120 --> 00:06:40,080 When I read the objection this morning, 136 00:06:40,080 --> 00:06:43,680 I think the front half relates to the dispute 137 00:06:43,680 --> 00:06:47,240 about the rejection to the extent that it is one. 138 00:06:47,240 --> 00:06:50,160 And then the back half is on the underlying contract dispute, 139 00:06:50,160 --> 00:06:52,400 which we don't even think is relevant in the rejection 140 00:06:52,400 --> 00:06:53,520 context. 141 00:06:53,520 --> 00:06:55,560 Presumably, if they were seeming, 142 00:06:55,560 --> 00:06:58,280 because there is reference to the underlying documents that 143 00:06:58,280 --> 00:07:00,480 are confidential in that back half, 144 00:07:00,480 --> 00:07:02,960 probably that's why they've sealed that. 145 00:07:02,960 --> 00:07:04,280 I didn't see this beforehand. 146 00:07:04,280 --> 00:07:07,840 But the driver for the sealing, from our perspective, 147 00:07:07,840 --> 00:07:09,560 were these third party documents. 148 00:07:09,560 --> 00:07:12,760 That's some odd reference in this objection. 149 00:07:12,760 --> 00:07:16,400 Right, but the document, all of the materials themselves 150 00:07:16,400 --> 00:07:21,400 are attached to Mr. Brown's affidavit, which, again, 151 00:07:21,400 --> 00:07:25,760 just looking at it, isn't sealed. 152 00:07:25,760 --> 00:07:27,800 Right, I know that affidavit. 153 00:07:27,800 --> 00:07:29,720 Sorry, go ahead. 154 00:07:29,720 --> 00:07:32,560 Your Honor, there was a sealed version and an unsealed version. 155 00:07:32,560 --> 00:07:35,360 Certainly, the exhibits are not confidential and were not sealed. 156 00:07:35,360 --> 00:07:37,520 Certainly, the exhibits were confidential 157 00:07:37,520 --> 00:07:40,160 and were sealed for now. 158 00:07:40,160 --> 00:07:41,520 There's two versions. 159 00:07:41,520 --> 00:07:43,880 The sealed version is in 212. 160 00:07:43,880 --> 00:07:45,520 I'm sorry. 161 00:07:45,520 --> 00:07:46,520 Yes, the affidavit. 162 00:07:46,520 --> 00:07:48,520 It's 214 is the sealed version, which 163 00:07:48,520 --> 00:07:50,280 has all of the documents. 164 00:07:50,280 --> 00:07:52,760 And 212 is the redacted version, which 165 00:07:52,760 --> 00:07:54,680 those documents that were confidential 166 00:07:54,680 --> 00:07:56,560 was attached to the affidavit publicly 167 00:07:56,560 --> 00:07:58,400 and the remainder were not attached. 168 00:07:58,400 --> 00:08:02,720 I did not appreciate that they weren't identical. 169 00:08:02,720 --> 00:08:03,800 OK, I got it. 170 00:08:03,800 --> 00:08:05,560 All right. 171 00:08:05,560 --> 00:08:09,200 But with respect to the objection itself, 172 00:08:09,200 --> 00:08:12,960 that was sealed as well, correct? 173 00:08:12,960 --> 00:08:14,000 That's right, Your Honor. 174 00:08:14,000 --> 00:08:15,640 We did that because we made reference 175 00:08:15,640 --> 00:08:17,320 in the objection to certain documents 176 00:08:17,320 --> 00:08:20,040 that horse counsel told us they believed was confidential. 177 00:08:20,040 --> 00:08:23,560 And so we didn't want to have the horse be out of the barn 178 00:08:23,560 --> 00:08:26,800 at that point if it turned out that those documents were 179 00:08:26,800 --> 00:08:28,160 to be confidential. 180 00:08:28,160 --> 00:08:29,520 And again, we don't believe that they are, 181 00:08:29,520 --> 00:08:31,080 that the references are confidential. 182 00:08:31,080 --> 00:08:33,960 But it's hard to reseal something 183 00:08:33,960 --> 00:08:35,480 once we post it publicly. 184 00:08:35,480 --> 00:08:37,400 No. 185 00:08:37,400 --> 00:08:41,120 One second on the docket and it's no longer sealed. 186 00:08:41,120 --> 00:08:42,200 I totally got that. 187 00:08:42,200 --> 00:08:44,440 But I do. 188 00:08:44,440 --> 00:08:47,480 And again, if there is a legitimate reason 189 00:08:47,480 --> 00:08:50,400 that it should be sealed, then I'm all for it. 190 00:08:50,400 --> 00:08:55,320 But I really disfavor these situations 191 00:08:55,320 --> 00:08:58,360 where anyone who has an interest in the case 192 00:08:58,360 --> 00:09:03,200 can't understand what's going on because everything gets 193 00:09:03,200 --> 00:09:03,720 sealed. 194 00:09:03,720 --> 00:09:06,240 And again, there's a good reason to seal it. 195 00:09:06,240 --> 00:09:06,880 I'm all for it. 196 00:09:06,880 --> 00:09:09,320 I don't want it to be used as a competitive advantage 197 00:09:09,320 --> 00:09:12,960 or embarrassment or if it discloses 198 00:09:12,960 --> 00:09:15,000 any sort of confidential information. 199 00:09:15,000 --> 00:09:16,080 I just didn't see it. 200 00:09:16,080 --> 00:09:19,160 Mr. Secreta? 201 00:09:19,160 --> 00:09:21,280 Yeah, so I think the point I made there, Your Honor, 202 00:09:21,280 --> 00:09:26,160 is that their objection is through page 9 before section 203 00:09:26,160 --> 00:09:26,840 4. 204 00:09:26,840 --> 00:09:28,800 As it relates to the rejection, I 205 00:09:28,800 --> 00:09:31,480 don't think any of that section has 206 00:09:31,480 --> 00:09:33,280 anything to do with the underlying dispute 207 00:09:33,280 --> 00:09:34,440 in the documents that issue. 208 00:09:34,440 --> 00:09:36,480 They could have, we didn't say anything about that. 209 00:09:36,480 --> 00:09:38,320 They could have unsealed that front portion 210 00:09:38,320 --> 00:09:40,040 and redacted the back piece. 211 00:09:40,040 --> 00:09:41,880 I haven't gone through every document 212 00:09:41,880 --> 00:09:44,920 that they cite from section 4 to the end. 213 00:09:44,920 --> 00:09:46,360 I'm sure there's some in here that 214 00:09:46,360 --> 00:09:50,040 fall within what we would consider competitive information 215 00:09:50,040 --> 00:09:53,360 and third party information, but certainly in addition 216 00:09:53,360 --> 00:09:54,640 to not being relevant. 217 00:09:54,640 --> 00:09:59,080 But I think they could easily unseal the first 8 and 3 218 00:09:59,080 --> 00:10:03,000 quarters pages that have nothing to do with the underlying 219 00:10:03,000 --> 00:10:04,960 dispute or claim of confidentiality 220 00:10:04,960 --> 00:10:06,840 and relate just to the rejection fees. 221 00:10:06,840 --> 00:10:09,280 All right, so for purposes of today, 222 00:10:09,280 --> 00:10:10,840 because I don't want to get off track, 223 00:10:10,840 --> 00:10:13,480 I'm going to leave it where it sits. 224 00:10:13,480 --> 00:10:17,560 But I'm urging everybody, again, if there's 225 00:10:17,560 --> 00:10:21,640 a legitimate reason to seal something, then fine. 226 00:10:21,640 --> 00:10:24,960 And I understand that there are real reasons to do it. 227 00:10:24,960 --> 00:10:28,240 What I really don't want to see is a developing habit 228 00:10:28,240 --> 00:10:30,880 where every single pleading is sealed, 229 00:10:30,880 --> 00:10:34,160 because I think that just does a disservice to the process. 230 00:10:34,160 --> 00:10:37,040 And I just don't think it's needed most of the time. 231 00:10:37,040 --> 00:10:38,520 OK. 232 00:10:38,520 --> 00:11:01,000 I wonder what happened. 233 00:11:01,000 --> 00:11:12,040 Hello. 234 00:11:12,040 --> 00:11:13,720 Please enter your six digit conference. 235 00:11:20,920 --> 00:11:22,800 We'll now connect you to your call. 236 00:11:22,800 --> 00:11:26,280 There are 19 attendees in this conference. 237 00:11:26,280 --> 00:11:28,200 Your host has joined. 238 00:11:28,200 --> 00:11:33,640 Your honor, conference muted. 239 00:11:33,640 --> 00:11:37,600 All right, evidently the entire call was dropped. 240 00:11:37,600 --> 00:11:38,600 My apologies. 241 00:11:38,600 --> 00:11:40,640 We'll go back as far as we need to. 242 00:11:40,640 --> 00:11:42,880 I do have everybody muted. 243 00:11:42,880 --> 00:11:47,440 So if you would give me a five star again, 244 00:11:47,440 --> 00:11:48,840 I would be much appreciated. 245 00:11:53,240 --> 00:11:54,520 Your honor, we can hear you now. 246 00:11:54,520 --> 00:11:55,680 This is Alfredo Perez. 247 00:11:55,680 --> 00:11:56,160 Thank you. 248 00:11:56,160 --> 00:11:57,560 And I have you unmuted. 249 00:11:57,560 --> 00:11:59,880 I'm waiting for the other folks. 250 00:12:04,320 --> 00:12:06,080 Yes, Mr. Koenig. 251 00:12:17,040 --> 00:12:18,880 Mr. Sekiridis, can you hear me? 252 00:12:21,880 --> 00:12:25,000 Mr. Perez, could you text your colleagues in New York 253 00:12:25,000 --> 00:12:28,560 and tell them that they need to dial in again? 254 00:12:28,560 --> 00:12:29,040 Yes, sir. 255 00:12:42,560 --> 00:12:47,320 Mr. Koenig, can you hear me just thumbs up or thumbs down? 256 00:12:47,320 --> 00:13:00,640 All right, I need for you to hit five star again. 257 00:13:00,640 --> 00:13:03,640 Your honor, it looks like our whole line dropped. 258 00:13:03,640 --> 00:13:06,360 So we re-dialed in on my cell phone. 259 00:13:06,360 --> 00:13:07,120 We're coming in. 260 00:13:07,120 --> 00:13:08,720 Can you hear me OK on the cell phone? 261 00:13:08,720 --> 00:13:11,920 Loud and clear, however you're doing that. 262 00:13:11,920 --> 00:13:13,320 OK. 263 00:13:13,320 --> 00:13:16,480 So I missed whatever until just now when you asked me 264 00:13:16,480 --> 00:13:17,400 if we could hear you. 265 00:13:17,400 --> 00:13:17,880 All right. 266 00:13:17,880 --> 00:13:18,800 Please continue. 267 00:13:18,800 --> 00:13:21,480 Let's take a call. 268 00:13:21,480 --> 00:13:23,720 Let's just take a minute and get everybody in. 269 00:13:23,720 --> 00:13:26,520 I've got Mr. Perez back, and he's live. 270 00:13:26,520 --> 00:13:32,840 I don't think that we have Mr. Sekiridis back on the line 271 00:13:32,840 --> 00:13:35,320 yet. 272 00:13:35,320 --> 00:13:36,880 Your honor, we'll put in the chat 273 00:13:36,880 --> 00:13:39,080 that everybody should re-dial, and that's the best way 274 00:13:39,080 --> 00:13:41,640 to get re-counted. 275 00:13:41,640 --> 00:13:47,520 I think everyone has done that. 276 00:13:47,520 --> 00:13:50,640 I now have 80 some odd folks back on the line. 277 00:13:53,920 --> 00:13:54,480 But thank you. 278 00:13:59,560 --> 00:14:00,320 Thank you, your honor. 279 00:14:00,320 --> 00:14:01,160 I think we can. 280 00:14:01,160 --> 00:14:02,160 I can feel Koenig. 281 00:14:02,160 --> 00:14:06,840 I can read your lips, but I can't hear you. 282 00:14:06,840 --> 00:14:07,840 Hold on. 283 00:14:07,840 --> 00:14:11,080 There's a Chicago number just popped up. 284 00:14:11,080 --> 00:14:11,840 There we go. 285 00:14:11,840 --> 00:14:12,840 Thank you, your honor. 286 00:14:12,840 --> 00:14:16,760 Appreciate you helping us through the technicality. 287 00:14:16,760 --> 00:14:17,280 No, no, no. 288 00:14:17,280 --> 00:14:17,800 Let's see. 289 00:14:17,800 --> 00:14:19,760 Do we have? 290 00:14:19,760 --> 00:14:21,160 No, we don't even have it. 291 00:14:21,160 --> 00:14:22,080 Ah, there he is back. 292 00:14:22,080 --> 00:14:25,560 Sekiridis, can you hear me? 293 00:14:25,560 --> 00:14:26,840 I can't hear you. 294 00:14:26,840 --> 00:14:27,880 I can't hear you. 295 00:14:27,880 --> 00:14:28,680 I can't hear you. 296 00:14:28,680 --> 00:14:33,520 I can't hear you. 297 00:14:33,520 --> 00:14:34,120 There it is. 298 00:14:34,120 --> 00:14:35,920 There's the 646 number. 299 00:14:35,920 --> 00:14:37,720 All right. 300 00:14:37,720 --> 00:14:38,720 OK. 301 00:14:38,720 --> 00:14:39,480 We good? 302 00:14:39,480 --> 00:14:40,200 We are good. 303 00:14:40,200 --> 00:14:41,200 All right. 304 00:14:41,200 --> 00:14:44,600 So I don't know where I lost you, 305 00:14:44,600 --> 00:14:47,440 but let me just take a step back. 306 00:14:47,440 --> 00:14:49,600 And again, I want to make it very clear. 307 00:14:49,600 --> 00:14:53,240 If there are legitimate reasons for pleadings to be sealed, 308 00:14:53,240 --> 00:14:53,880 I'm all for it. 309 00:14:53,880 --> 00:14:56,160 I understand the reasons for that. 310 00:14:56,160 --> 00:14:59,760 What I don't want to do is to start a habit where 311 00:14:59,760 --> 00:15:03,280 every single thing that gets filed in the case is sealed. 312 00:15:03,280 --> 00:15:06,480 I just think that that does a disservice to the process. 313 00:15:06,480 --> 00:15:12,760 And again, if there are reasons that part or all of this, 314 00:15:12,760 --> 00:15:16,560 the motion, the affidavit, I'm sorry, 315 00:15:16,560 --> 00:15:20,480 the objection or the affidavit should be sealed, 316 00:15:20,480 --> 00:15:23,320 I don't want to parse through and say pages two through eight 317 00:15:23,320 --> 00:15:27,280 shouldn't be and the remainder shouldn't be. 318 00:15:27,280 --> 00:15:32,040 I'll leave it like it is and just please 319 00:15:32,040 --> 00:15:35,320 take the position of being yourself on the outside 320 00:15:35,320 --> 00:15:37,400 looking in, wanting to follow and wanting 321 00:15:37,400 --> 00:15:39,560 to understand what's going on in the case. 322 00:15:39,560 --> 00:15:42,200 Legitimate reason, great. 323 00:15:42,200 --> 00:15:45,560 But otherwise, I'd really prefer the transparency. 324 00:15:45,560 --> 00:15:48,360 So let's just proceed from there. 325 00:15:48,360 --> 00:15:49,360 OK? 326 00:15:49,360 --> 00:15:50,640 I'll certainly do that, Your Honor. 327 00:15:50,640 --> 00:15:51,720 Thank you. 328 00:15:51,720 --> 00:15:54,000 And Your Honor, this is Alfredo Perez. 329 00:15:54,000 --> 00:15:58,920 But they did file a redacted version of the objection 330 00:15:58,920 --> 00:16:01,040 at 2 13, I think. 331 00:16:01,040 --> 00:16:04,640 So that's the one that I pulled down before we ever 332 00:16:04,640 --> 00:16:05,880 got anything else. 333 00:16:05,880 --> 00:16:12,280 No, where I started was the sealed version 334 00:16:12,280 --> 00:16:13,160 of the objection. 335 00:16:13,160 --> 00:16:16,400 And I just didn't understand why it was sealed. 336 00:16:16,400 --> 00:16:21,480 I didn't learn anything in there that I didn't have already 337 00:16:21,480 --> 00:16:24,120 or in my base knowledge set. 338 00:16:24,120 --> 00:16:29,160 And so I just didn't understand it because all I see 339 00:16:29,160 --> 00:16:32,280 is what's on the docket. 340 00:16:32,280 --> 00:16:33,240 All right? 341 00:16:33,240 --> 00:16:34,920 So with that, let me. 342 00:16:34,920 --> 00:16:35,960 No, thank you both. 343 00:16:35,960 --> 00:16:45,520 So let me go ahead and Mr. Koenig. 344 00:16:45,520 --> 00:16:48,040 And again, I'm not trying to dictate 345 00:16:48,040 --> 00:16:50,680 how this proceeding goes. 346 00:16:50,680 --> 00:16:53,440 I'm still trying to understand what 347 00:16:53,440 --> 00:16:59,160 it is that your primary complaint focuses on. 348 00:16:59,160 --> 00:17:02,360 Because I'm having difficulty, other than trying 349 00:17:02,360 --> 00:17:05,320 to be strategic, I'm having great difficulty 350 00:17:05,320 --> 00:17:09,920 in understanding the position that you're taking. 351 00:17:09,920 --> 00:17:11,000 Sure, Your Honor. 352 00:17:11,000 --> 00:17:14,280 Again, for the record, Chris Koenig. 353 00:17:14,280 --> 00:17:17,560 So look, our concern here, Your Honor, is process and timing. 354 00:17:17,560 --> 00:17:20,160 Let me start with the strategic point. 355 00:17:20,160 --> 00:17:21,880 We're not seeking to make a dollar off 356 00:17:21,880 --> 00:17:23,760 of court followings today. 357 00:17:23,760 --> 00:17:28,080 We've agreed that they can turn off our rates effective today 358 00:17:28,080 --> 00:17:30,400 and that they don't get to continue to charge us. 359 00:17:30,400 --> 00:17:32,240 We don't continue to pay for it. 360 00:17:32,240 --> 00:17:34,240 We understand what we're trying to do 361 00:17:34,240 --> 00:17:37,200 is make sure that there's a process that gives us 362 00:17:37,200 --> 00:17:39,080 adequate time to talk to our stakeholders, 363 00:17:39,080 --> 00:17:41,720 gives us the opportunity to talk to Judge Glenn, 364 00:17:41,720 --> 00:17:43,320 and move forward on that basis. 365 00:17:43,320 --> 00:17:45,080 And candidly, Your Honor, we think 366 00:17:45,080 --> 00:17:48,000 this is an emergency entirely of court zone making. 367 00:17:48,000 --> 00:17:50,160 They filed this two business days ago. 368 00:17:50,160 --> 00:17:52,240 They knew all of the facts on the petition date. 369 00:17:52,240 --> 00:17:53,720 It was in the first day declaration. 370 00:17:53,720 --> 00:17:55,600 It was referenced at the first day hearing. 371 00:17:55,600 --> 00:17:57,440 We don't really understand why they filed it 372 00:17:57,440 --> 00:17:58,960 when they did last week. 373 00:17:58,960 --> 00:18:01,120 But to the extent there is an emergency that's valid, 374 00:18:01,120 --> 00:18:03,160 we've agreed to take care of that. 375 00:18:03,160 --> 00:18:06,400 By turning, if we allow them to turn off the rates, 376 00:18:06,400 --> 00:18:10,200 their alleged harm from continuing to go through 377 00:18:10,200 --> 00:18:14,640 and have to pay, or continue to service a contract 378 00:18:14,640 --> 00:18:18,840 that they believe is not value maximizing, 379 00:18:18,840 --> 00:18:20,880 that that concern will no longer be there. 380 00:18:20,880 --> 00:18:23,400 But that'll give us the adequate time that we need 381 00:18:23,400 --> 00:18:25,360 and we think it's appropriate to, you know, 382 00:18:25,360 --> 00:18:27,240 we're a veteran in our own Chapter 11 case. 383 00:18:27,240 --> 00:18:28,920 We have our own bankruptcy judge. 384 00:18:28,920 --> 00:18:31,200 And we have litigation with CORE that is pending 385 00:18:31,200 --> 00:18:33,600 before Judge Glenn right now. 386 00:18:33,600 --> 00:18:37,320 So we're trying to be mindful of Judge Glenn. 387 00:18:37,320 --> 00:18:39,040 We don't want to get sideways with him. 388 00:18:39,040 --> 00:18:41,200 We don't want him to feel like the rug was sort of pulled out 389 00:18:41,200 --> 00:18:43,680 from under him on an emergency basis. 390 00:18:43,680 --> 00:18:45,400 And if this had been said on regular notice, 391 00:18:45,400 --> 00:18:46,880 we would have had time to work with CORE 392 00:18:46,880 --> 00:18:50,880 and to go to Judge Glenn and propose a list state motion. 393 00:18:50,880 --> 00:18:53,200 To be clear, we're not opposing the rejection 394 00:18:53,200 --> 00:18:54,840 at the appropriate time. 395 00:18:54,840 --> 00:18:57,520 We're not opposing the listing of the automatic state 396 00:18:57,520 --> 00:19:00,360 because we think that CORE could demonstrate cause. 397 00:19:00,360 --> 00:19:02,240 But we think as a technical matter, 398 00:19:02,240 --> 00:19:04,280 the automatic state exists and is in place 399 00:19:04,280 --> 00:19:07,000 and the debtor can't just waive the automatic state. 400 00:19:07,000 --> 00:19:10,080 There's black letter law that says that the state, 401 00:19:10,080 --> 00:19:12,320 not only the debtor, but the debtor's creditors 402 00:19:12,320 --> 00:19:14,440 to make sure that the debtor can't lift the state 403 00:19:14,440 --> 00:19:17,120 to allow a friendly creditor to proceed. 404 00:19:17,120 --> 00:19:19,200 And so we think that the process is important. 405 00:19:19,200 --> 00:19:22,080 And again, we don't think that CORE is going to suffer 406 00:19:22,080 --> 00:19:24,120 one iota from having done this 407 00:19:24,120 --> 00:19:27,200 because they can turn off the power on our ranks today. 408 00:19:27,200 --> 00:19:30,400 But that'll give us time to go to our own constituents, 409 00:19:30,400 --> 00:19:32,000 to go to our own CORE. 410 00:19:32,000 --> 00:19:34,840 And we will support a joint stipulation with CORE 411 00:19:34,840 --> 00:19:37,680 that we believe automatic state should be lifted. 412 00:19:37,680 --> 00:19:40,680 And that'll also give us the time to continue to work 413 00:19:40,680 --> 00:19:42,840 with CORE on the terms of the transition. 414 00:19:42,840 --> 00:19:44,960 I'm sure your honor saw in the objection we filed last night 415 00:19:44,960 --> 00:19:48,400 that we proposed terms for the transition 416 00:19:48,400 --> 00:19:50,200 to the 37,000 rates. 417 00:19:50,200 --> 00:19:51,920 We just frankly, given the emergency, 418 00:19:51,920 --> 00:19:54,960 haven't had the time to finish working that out 419 00:19:54,960 --> 00:19:56,400 with CORE's counsel. 420 00:19:56,400 --> 00:19:59,520 But we think that that would be appropriate and reasonable 421 00:19:59,520 --> 00:20:00,840 and frankly, we think it's required 422 00:20:00,840 --> 00:20:02,800 by the automatic state in our own case. 423 00:20:02,800 --> 00:20:07,080 And so what provision of the automatic state 424 00:20:07,080 --> 00:20:09,600 is it that you think that the sheer act 425 00:20:09,600 --> 00:20:11,520 of rejection violates? 426 00:20:12,760 --> 00:20:15,560 We think it's control over property of the estate. 427 00:20:15,560 --> 00:20:17,120 I mean, it's black letter law 428 00:20:17,120 --> 00:20:19,400 that the debtor can enforce compliance 429 00:20:20,640 --> 00:20:22,360 with an executive order contract 430 00:20:22,360 --> 00:20:24,240 by the non-debtor counter, 431 00:20:24,240 --> 00:20:25,480 so we're just two debtors here. 432 00:20:25,480 --> 00:20:30,480 But Celsius can compel CORE to comply with the contract 433 00:20:30,760 --> 00:20:32,600 and it's an automatic state provision. 434 00:20:32,600 --> 00:20:33,640 And that's what we did. 435 00:20:33,640 --> 00:20:35,480 That's exactly what we did in our bankruptcy. 436 00:20:35,480 --> 00:20:37,760 We brought a motion for contempt 437 00:20:37,760 --> 00:20:39,680 and a motion to enforce the automatic state 438 00:20:39,680 --> 00:20:42,320 to compel the non-debtor counterparty, 439 00:20:42,320 --> 00:20:44,840 the then non-debtor counterparty CORE 440 00:20:44,840 --> 00:20:47,200 to comply with the automatic state. 441 00:20:47,200 --> 00:20:48,920 And so we believe that- 442 00:20:48,920 --> 00:20:50,560 Let's peel that back a bit. 443 00:20:51,440 --> 00:20:56,440 So the act of rejection is simply nothing more 444 00:20:56,960 --> 00:21:01,200 than giving the debtor the right to breach the agreement 445 00:21:01,200 --> 00:21:06,200 and excusing future performance. 446 00:21:08,040 --> 00:21:11,560 A motion to enforce and for contempt 447 00:21:11,560 --> 00:21:15,360 absolutely impacts the stay in this case. 448 00:21:15,360 --> 00:21:16,200 Did you agree? 449 00:21:17,680 --> 00:21:19,560 We agree and that's why we haven't pursued 450 00:21:19,560 --> 00:21:21,800 that motion in our own case. 451 00:21:21,800 --> 00:21:23,400 And so how is it, 452 00:21:23,400 --> 00:21:28,400 because the debtor could just stop performing 453 00:21:28,400 --> 00:21:32,040 and that wouldn't violate the stay. 454 00:21:32,040 --> 00:21:33,440 The CORE debtor. 455 00:21:33,440 --> 00:21:37,640 Yes, CORE, they could just stop performing 456 00:21:37,640 --> 00:21:39,360 and it doesn't violate the stay. 457 00:21:42,040 --> 00:21:45,280 I think it could violate Celsius' stay 458 00:21:45,280 --> 00:21:47,360 and I think it would order for us to continue. 459 00:21:47,360 --> 00:21:50,240 What would, if I just decide not to perform, 460 00:21:50,240 --> 00:21:55,240 I'm third party dealing with your Celsius debtor. 461 00:21:56,360 --> 00:21:58,240 If I choose not to perform, 462 00:21:58,240 --> 00:22:01,560 how could that possibly violate the automatic stay 463 00:22:01,560 --> 00:22:04,320 in your case and what provision? 464 00:22:05,920 --> 00:22:07,800 Because we have the right, Your Honor, 465 00:22:07,800 --> 00:22:11,040 to file the contract in self property of the estate 466 00:22:11,040 --> 00:22:14,160 and contractual rights of property of the estate. 467 00:22:14,160 --> 00:22:16,000 And so we have the ability to enforce 468 00:22:16,000 --> 00:22:18,080 those contractual rights in our own bankruptcy 469 00:22:18,080 --> 00:22:21,160 and we file the motion to enforce the automatic stay 470 00:22:21,160 --> 00:22:22,000 in our bankruptcy. 471 00:22:22,000 --> 00:22:23,480 But that's not the state. 472 00:22:23,480 --> 00:22:28,480 The state doesn't have to do with seeking enforcement. 473 00:22:28,760 --> 00:22:33,760 You can absolutely file a motion to compel performance. 474 00:22:34,440 --> 00:22:37,360 But until you do that, until you have an order, 475 00:22:37,360 --> 00:22:38,680 which you don't have an order 476 00:22:38,680 --> 00:22:40,800 and you can't get one at this point 477 00:22:40,800 --> 00:22:43,240 without violating the stay in my case. 478 00:22:44,400 --> 00:22:45,240 Agreed. 479 00:22:45,240 --> 00:22:48,240 How does non-performance violate the automatic stay? 480 00:22:50,280 --> 00:22:53,440 Because we have contractual rights 481 00:22:53,440 --> 00:22:54,840 that property of the estate 482 00:22:54,840 --> 00:22:58,120 and their failure to perform under them. 483 00:22:58,120 --> 00:23:00,600 It gives rise to a claim perhaps, 484 00:23:00,600 --> 00:23:03,920 but tell me what provision of the automatic stay 485 00:23:03,920 --> 00:23:06,920 that simple non-performance violates. 486 00:23:14,840 --> 00:23:16,840 I think it's an attempt to exercise control 487 00:23:16,840 --> 00:23:18,680 over the property of the estate. 488 00:23:18,680 --> 00:23:20,040 Not even close. 489 00:23:20,040 --> 00:23:22,600 What am I trying to exercise control over? 490 00:23:22,600 --> 00:23:25,520 I'm just simply saying I either can't or won't perform. 491 00:23:26,480 --> 00:23:30,200 What property right is that exercising control over 492 00:23:30,200 --> 00:23:31,320 other than my own? 493 00:23:32,840 --> 00:23:36,720 It's our contractual rights to compel performance 494 00:23:36,720 --> 00:23:37,560 from the non-performance. 495 00:23:37,560 --> 00:23:39,720 So if I told you that I consider that 496 00:23:39,720 --> 00:23:42,320 to be a frivolous argument, 497 00:23:42,320 --> 00:23:53,440 where would you like to go from here? 498 00:23:53,440 --> 00:23:56,080 Your honor, what I would say is we have litigation 499 00:23:56,080 --> 00:23:57,920 that's pending in front of Judge Wynne 500 00:23:57,920 --> 00:23:59,640 and we think that it's appropriate that, 501 00:23:59,640 --> 00:24:03,000 as I said earlier, that he not sort of have the rug pulled out 502 00:24:03,000 --> 00:24:05,480 from under him, that there's litigation 503 00:24:05,480 --> 00:24:07,000 that this would effectively move. 504 00:24:07,000 --> 00:24:08,720 If the rejection goes forward, 505 00:24:08,720 --> 00:24:11,840 that would move the litigation in front of Judge Wynne. 506 00:24:11,840 --> 00:24:12,680 How so? 507 00:24:13,880 --> 00:24:16,680 It may limit it, but how does it pull the rug out 508 00:24:16,680 --> 00:24:17,680 from underneath it? 509 00:24:18,520 --> 00:24:21,560 If there was a right between your petition date 510 00:24:21,560 --> 00:24:23,480 and the date of rejection, 511 00:24:23,480 --> 00:24:27,320 that cause of action hasn't been affected. 512 00:24:27,320 --> 00:24:30,960 It hasn't, just simply rejecting the contract 513 00:24:30,960 --> 00:24:33,240 doesn't affect what happens next. 514 00:24:33,240 --> 00:24:36,240 It doesn't affect what happens to the computers. 515 00:24:36,240 --> 00:24:38,040 It doesn't happen to enforcement. 516 00:24:38,040 --> 00:24:41,680 Sure, your honor, I'll concede that I'll move instead 517 00:24:41,680 --> 00:24:43,240 to the rig for the property of the estate 518 00:24:43,240 --> 00:24:44,720 that we're really concerned about, right? 519 00:24:44,720 --> 00:24:46,280 It's not about, at this point, 520 00:24:46,280 --> 00:24:48,880 it's not about the contractual right. 521 00:24:48,880 --> 00:24:50,920 It's about the rig, about the... 522 00:24:50,920 --> 00:24:51,760 Sorry, your honor. 523 00:24:51,760 --> 00:24:54,640 Now, let me say this to both of you. 524 00:24:54,640 --> 00:25:01,640 So one, the debtor has almost an unqualified right to reject, 525 00:25:01,640 --> 00:25:06,640 so long as there is a right to reject, 526 00:25:06,640 --> 00:25:11,320 there is a rational business reason for doing it. 527 00:25:11,320 --> 00:25:14,640 And you've acknowledged that that reason exists. 528 00:25:14,640 --> 00:25:17,960 So what, and again, I'm talking to you, 529 00:25:17,960 --> 00:25:20,000 but I'm also talking to the debtor. 530 00:25:20,000 --> 00:25:24,760 I'm not gonna let you use this as a strategic maneuver, 531 00:25:24,760 --> 00:25:29,280 and I think that you're actually taking advantage 532 00:25:29,280 --> 00:25:31,200 of Judge Glenn without Judge Glenn 533 00:25:31,200 --> 00:25:33,280 being able to voice his own concerns. 534 00:25:33,280 --> 00:25:35,040 I think it's exactly the opposite 535 00:25:35,040 --> 00:25:38,240 of what you're representing to me. 536 00:25:38,240 --> 00:25:43,200 That all being said, my debtor is not gonna use 537 00:25:43,200 --> 00:25:47,280 the rejection of the contract to gain a strategic advantage 538 00:25:47,280 --> 00:25:52,200 in dealing with very valuable and expensive 539 00:25:52,200 --> 00:25:57,760 and sensitive property, which are the computers themselves. 540 00:25:57,760 --> 00:26:00,800 So what I, and again, I'm not trying to dictate 541 00:26:00,800 --> 00:26:01,960 the course of the hearing. 542 00:26:01,960 --> 00:26:04,160 I just need to get this on the right track, 543 00:26:04,160 --> 00:26:08,200 because you folks are not talking to one another. 544 00:26:08,200 --> 00:26:10,720 You're talking past one another. 545 00:26:10,720 --> 00:26:12,720 And I don't think that you want a third party 546 00:26:12,720 --> 00:26:13,720 in this conversation, 547 00:26:13,720 --> 00:26:17,920 because I tend not to listen very well. 548 00:26:17,920 --> 00:26:23,560 There needs to be a structured, agreed, orderly, 549 00:26:23,560 --> 00:26:29,400 efficient, cost-effective way of dealing with 550 00:26:29,400 --> 00:26:33,360 the termination of the relationship without prejudice 551 00:26:33,360 --> 00:26:38,120 to whatever monetary issues may exist out there. 552 00:26:38,120 --> 00:26:39,960 You folks will work that out. 553 00:26:39,960 --> 00:26:42,240 But I'm not gonna let this, 554 00:26:42,240 --> 00:26:44,480 there aren't gonna be computers on the sidewalk, 555 00:26:44,480 --> 00:26:46,040 and I know that nobody would do that, 556 00:26:46,040 --> 00:26:49,000 but it's just a statement. 557 00:26:49,000 --> 00:26:51,240 There aren't gonna be computers on the sidewalk. 558 00:26:51,240 --> 00:26:55,520 There isn't gonna be air conditioning turned off 559 00:26:55,520 --> 00:26:59,280 that would endanger sensitive electronic components. 560 00:26:59,280 --> 00:27:01,320 It isn't gonna be, well, you gotta come pick them up 561 00:27:01,320 --> 00:27:03,560 between the hours of four and five. 562 00:27:03,560 --> 00:27:05,240 Not gonna happen. 563 00:27:05,240 --> 00:27:07,440 I'm gonna do this the right way. 564 00:27:07,440 --> 00:27:12,440 So we can have a hearing on whether or not 565 00:27:12,840 --> 00:27:16,840 the debtor is entitled to reject the agreement. 566 00:27:16,840 --> 00:27:20,040 You and the respond, or you and the objection 567 00:27:20,040 --> 00:27:22,120 acknowledge that that's a losing battle. 568 00:27:22,120 --> 00:27:24,400 It's just a question of when. 569 00:27:24,400 --> 00:27:28,560 And I'm telling you, the when is gonna be right now. 570 00:27:28,560 --> 00:27:33,160 And we can spend time figuring out the right way 571 00:27:33,160 --> 00:27:38,040 to effectuate the transition so that we maximize 572 00:27:38,040 --> 00:27:41,200 the current situation that we find ourselves in 573 00:27:41,200 --> 00:27:42,840 for both bankruptcy estates. 574 00:27:42,840 --> 00:27:45,280 That's what we should all be working toward. 575 00:27:45,280 --> 00:27:49,040 Not trying to hang somebody up with a contiff motion 576 00:27:49,040 --> 00:27:52,960 or a sanctions motion, or trying to set this up 577 00:27:52,960 --> 00:27:57,960 so that we can charge rent for computers 578 00:27:57,960 --> 00:28:00,720 or we can try to make a point. 579 00:28:00,720 --> 00:28:02,880 Not gonna happen either way. 580 00:28:02,880 --> 00:28:05,720 But it just seems to me that we ought to be focused 581 00:28:05,720 --> 00:28:09,160 on having a conversation about how we end this 582 00:28:09,160 --> 00:28:12,360 in an honorable and transparent way 583 00:28:12,360 --> 00:28:15,640 without the involvement of either Judge Glenn 584 00:28:15,640 --> 00:28:16,680 or Judge Jones. 585 00:28:16,680 --> 00:28:19,800 This ought to be an operational transition 586 00:28:19,800 --> 00:28:22,800 that quite frankly no one who wears the black dress 587 00:28:22,800 --> 00:28:24,120 ought to be engaged in. 588 00:28:24,120 --> 00:28:27,520 Unfortunately for you, I lived in a data center 589 00:28:27,520 --> 00:28:30,200 for a long time and I feel like I know an awful lot 590 00:28:30,200 --> 00:28:33,440 about it and we don't really wanna test that theory. 591 00:28:33,440 --> 00:28:38,440 So let me ask, do we want to take a break 592 00:28:38,720 --> 00:28:42,720 and perhaps talk about a reset on how to proceed 593 00:28:42,720 --> 00:28:45,040 with the hearing or do we wanna proceed ahead 594 00:28:45,040 --> 00:28:45,880 with the hearing? 595 00:28:47,480 --> 00:28:49,200 Your Honor, I think it would be helpful for us 596 00:28:49,200 --> 00:28:51,080 to have a few minutes to talk offline 597 00:28:51,080 --> 00:28:53,160 and come back to your honor and committee 598 00:28:53,160 --> 00:28:54,080 and come back to your honor. 599 00:28:54,080 --> 00:28:55,880 We certainly understand and appreciate your comments 600 00:28:55,880 --> 00:28:56,720 about the stage. 601 00:28:56,720 --> 00:28:58,880 Just to be clear, we just felt like we couldn't 602 00:28:58,880 --> 00:29:01,560 concede it in our case and given that we have our own, 603 00:29:01,560 --> 00:29:03,720 our own judge and our own constituents, 604 00:29:03,720 --> 00:29:05,720 it was something that we felt like we had to do. 605 00:29:05,720 --> 00:29:07,080 I'm not bothered by it at all. 606 00:29:07,080 --> 00:29:08,160 I think it's wrong. 607 00:29:08,160 --> 00:29:10,800 I think there's a huge difference between 608 00:29:12,280 --> 00:29:16,440 rejecting a contract and then what happens next. 609 00:29:16,440 --> 00:29:20,400 It's the what happens next that absolutely touches 610 00:29:20,400 --> 00:29:21,240 on the set. 611 00:29:21,240 --> 00:29:25,680 And I haven't heard and I asked everyone 612 00:29:25,680 --> 00:29:28,600 who had listened to me over the past couple of days 613 00:29:28,600 --> 00:29:31,920 as to give me the best argument you can come up with 614 00:29:31,920 --> 00:29:36,520 as to how a rejection would possibly violate 615 00:29:36,520 --> 00:29:39,760 an automatic stay in a case filed by the counterparty. 616 00:29:39,760 --> 00:29:41,600 I haven't heard it yet. 617 00:29:41,600 --> 00:29:44,280 Maybe that it's out there and I just haven't met anybody 618 00:29:44,280 --> 00:29:46,680 smart enough and I may not be smart enough 619 00:29:46,680 --> 00:29:50,120 to come up with it myself, but I don't see it. 620 00:29:50,120 --> 00:29:51,440 It's what happens next. 621 00:29:51,440 --> 00:29:55,640 And so I want the thing that happens next 622 00:29:55,640 --> 00:29:57,280 is the most important thing to me. 623 00:29:57,280 --> 00:29:59,080 So let's focus on that. 624 00:29:59,080 --> 00:30:03,160 Let me ask the wild team have any opposition 625 00:30:03,160 --> 00:30:04,240 because it is your hearing. 626 00:30:04,240 --> 00:30:06,680 And again, I didn't mean to hijack your hearing. 627 00:30:07,680 --> 00:30:09,520 Any objection from the wild team 628 00:30:09,520 --> 00:30:10,840 as I've taken a couple of minutes 629 00:30:10,840 --> 00:30:12,840 and see if we can talk about what I think 630 00:30:12,840 --> 00:30:14,920 the most important part of this is 631 00:30:14,920 --> 00:30:16,200 and that's the transition. 632 00:30:17,880 --> 00:30:18,920 No objection, Your Honor. 633 00:30:18,920 --> 00:30:20,040 We agree with you. 634 00:30:20,040 --> 00:30:22,000 So it's 1130. 635 00:30:22,000 --> 00:30:24,680 This is not a short conversation. 636 00:30:24,680 --> 00:30:27,080 Should we check in at noon? 637 00:30:27,080 --> 00:30:28,840 Does that make sense? 638 00:30:28,840 --> 00:30:31,720 And that would be noon central, 30 minutes from now? 639 00:30:31,720 --> 00:30:32,720 That makes sense. 640 00:30:32,720 --> 00:30:33,560 All right. 641 00:30:33,560 --> 00:30:37,120 Then what I'll do, I'm gonna leave everything up and running. 642 00:30:37,120 --> 00:30:41,040 I will mute everything and I'll make sure that I don't, 643 00:30:41,040 --> 00:30:43,960 I'll make sure that I unmute it when I get back on. 644 00:30:43,960 --> 00:30:48,120 If it turns out that there are productive discussions 645 00:30:48,120 --> 00:30:49,560 and you need more time, 646 00:30:49,560 --> 00:30:52,080 just have somebody pop back on and say, 647 00:30:52,080 --> 00:30:53,000 we need more time. 648 00:30:53,000 --> 00:30:55,680 And that way folks who want to monitor can hear it 649 00:30:57,880 --> 00:31:00,040 and we'll figure out what to do next. 650 00:31:00,040 --> 00:31:03,760 If we don't go in a productive direction, 651 00:31:03,760 --> 00:31:05,920 then what I'll expect when we come back at noon 652 00:31:05,920 --> 00:31:09,320 is that the debtor will present its case 653 00:31:09,320 --> 00:31:10,840 and we'll move forward. 654 00:31:10,840 --> 00:31:11,840 Okay. 655 00:31:11,840 --> 00:31:14,440 Yes, we've actually had preliminary discussions 656 00:31:14,440 --> 00:31:16,680 about these, which is just issues that have been 657 00:31:16,680 --> 00:31:19,760 in the past, and I'm confident that we can use 658 00:31:19,760 --> 00:31:21,080 the 30 minutes of productive week 659 00:31:21,080 --> 00:31:21,920 to get to a resolution. 660 00:31:21,920 --> 00:31:22,760 We'll start that right away. 661 00:31:22,760 --> 00:31:23,600 Terrific. 662 00:31:23,600 --> 00:31:24,440 All right. 663 00:31:24,440 --> 00:31:26,040 Then I'll see everybody back at noon central. 664 00:31:26,040 --> 00:31:26,880 Thank you. 665 00:31:26,880 --> 00:31:45,880 Thank you. 666 00:31:56,880 --> 00:31:57,720 Great. 667 00:31:57,720 --> 00:31:58,720 You ready? 668 00:31:58,720 --> 00:31:59,560 Great. 669 00:31:59,560 --> 00:32:02,440 All right, folks, it is 12 o'clock noon. 670 00:32:02,440 --> 00:32:04,920 We are back on the record in the jointly administered cases 671 00:32:04,920 --> 00:32:09,640 under case number 22-90341, core scientific. 672 00:32:09,640 --> 00:32:10,480 Folks, where are we? 673 00:32:12,240 --> 00:32:14,480 Your Honor, Chris Coney for the record. 674 00:32:14,480 --> 00:32:15,960 We had very productive conversations. 675 00:32:15,960 --> 00:32:17,920 We used the time well. 676 00:32:17,920 --> 00:32:19,200 Language was pretty good. 677 00:32:19,200 --> 00:32:21,320 We had a very productive conversation. 678 00:32:21,320 --> 00:32:23,080 We had a very productive conversation. 679 00:32:23,080 --> 00:32:24,440 We had a very productive conversation. 680 00:32:24,440 --> 00:32:26,880 We used the time well. 681 00:32:26,880 --> 00:32:28,800 Language was proposed by core that we believe works. 682 00:32:28,800 --> 00:32:30,160 We've recommended it to our clients. 683 00:32:30,160 --> 00:32:32,720 Frankly, we need the clients to sign off on it. 684 00:32:32,720 --> 00:32:33,960 We're not expecting any issues, 685 00:32:33,960 --> 00:32:36,280 but we need a little bit more time 686 00:32:36,280 --> 00:32:37,600 to confirm with the client. 687 00:32:37,600 --> 00:32:41,040 Our proposal would be to submit an agreed form of order, 688 00:32:41,040 --> 00:32:42,520 assuming that the client agrees to it, 689 00:32:42,520 --> 00:32:45,000 but I think that we're resolved in the terms 690 00:32:45,000 --> 00:32:46,360 of an orderly transition that works 691 00:32:46,360 --> 00:32:47,920 for both Celsius and core. 692 00:32:47,920 --> 00:32:48,760 All right. 693 00:32:49,920 --> 00:32:50,880 Deirdre, agree? 694 00:32:52,440 --> 00:32:53,520 Your Honor, yes, that's agreed. 695 00:32:53,520 --> 00:32:54,920 Just one request. 696 00:32:54,920 --> 00:32:56,960 They're losing more than $1,000 an hour 697 00:32:56,960 --> 00:32:58,200 by leaving this machine on. 698 00:32:58,200 --> 00:33:00,840 So since it's agreed that we can turn the machines off, 699 00:33:00,840 --> 00:33:04,000 we intend to do so right after this hearing 700 00:33:04,000 --> 00:33:05,600 while we work out the form of order. 701 00:33:05,600 --> 00:33:08,600 Mr. Coney, do you have any objection to that? 702 00:33:08,600 --> 00:33:09,480 No, Your Honor. 703 00:33:09,480 --> 00:33:14,240 And I assume that there's no process 704 00:33:14,240 --> 00:33:15,640 for taking the machines down. 705 00:33:15,640 --> 00:33:17,960 It literally is just disconnecting power. 706 00:33:17,960 --> 00:33:22,960 No, there is a process to track palletized, 707 00:33:22,960 --> 00:33:25,960 but for right now, no, simply turning off the power. 708 00:33:25,960 --> 00:33:29,920 Okay, I just, I lived a life where there was a process 709 00:33:29,920 --> 00:33:31,800 to taking something down. 710 00:33:31,800 --> 00:33:34,200 I just want to make sure that we were following 711 00:33:34,200 --> 00:33:37,360 any protocol that was in place or any process 712 00:33:37,360 --> 00:33:41,160 that was needed in order to ensure the longevity 713 00:33:41,160 --> 00:33:44,400 or preserve the integrity of the equipment. 714 00:33:44,400 --> 00:33:47,400 Core will do that in the decommissioning process. 715 00:33:47,400 --> 00:33:51,200 All right, Mr. Coney, let me ask, I'm sorry, go ahead. 716 00:33:52,200 --> 00:33:54,200 I was gonna say, I apologize, Your Honor. 717 00:33:54,200 --> 00:33:56,280 I was just gonna say that part of the language 718 00:33:56,280 --> 00:33:58,240 that we've agreed to is that part of the transition 719 00:33:58,240 --> 00:34:00,640 is how is Core going to be rad and palletized 720 00:34:00,640 --> 00:34:02,280 and get everything ready for pickup. 721 00:34:02,280 --> 00:34:03,800 But as far as just turning off the machines, 722 00:34:03,800 --> 00:34:05,240 we have no objection to them doing that 723 00:34:05,240 --> 00:34:06,080 right after this hearing. 724 00:34:06,080 --> 00:34:08,520 Okay, let's just talk to the people that know 725 00:34:08,520 --> 00:34:10,480 and make sure that, again, 726 00:34:10,480 --> 00:34:14,480 I've lived in a world where if you've flipped off 727 00:34:14,480 --> 00:34:17,280 the power switch without running a process, 728 00:34:17,280 --> 00:34:19,080 it was a million dollar mistake. 729 00:34:19,080 --> 00:34:24,080 So let's make sure we do it the right way. 730 00:34:24,080 --> 00:34:25,680 Mr. Coney, let me ask you this. 731 00:34:25,680 --> 00:34:28,480 I'm perfectly comfortable if you tell me 732 00:34:28,480 --> 00:34:32,880 that you are proposing to simply submit an agreed order. 733 00:34:32,880 --> 00:34:36,280 I'm also perfectly happy if you want to 734 00:34:36,280 --> 00:34:41,280 I can give you some time this afternoon, 735 00:34:41,280 --> 00:34:43,080 if you wanna come back and say, 736 00:34:43,080 --> 00:34:46,080 we have an agreed order, you can upload it before then, 737 00:34:46,080 --> 00:34:49,080 or we have this outstanding issue. 738 00:34:49,080 --> 00:34:52,080 You know the conversations that have occurred, 739 00:34:52,080 --> 00:34:53,480 obviously, much better than I do. 740 00:34:53,480 --> 00:34:55,080 What would be the most productive? 741 00:34:56,480 --> 00:34:58,880 I'm happy to take the time if it's not an imposition 742 00:34:58,880 --> 00:35:00,080 to you or to chambers. 743 00:35:00,080 --> 00:35:01,480 I don't know what your schedule is like. 744 00:35:01,480 --> 00:35:03,880 I don't believe that you're gonna be able to do that. 745 00:35:03,880 --> 00:35:06,480 I don't know what your schedule is like. 746 00:35:06,480 --> 00:35:08,080 I don't believe we're going to need the time. 747 00:35:08,080 --> 00:35:09,480 We had a very productive conversation. 748 00:35:09,480 --> 00:35:11,080 I expect we'll be able to get there 749 00:35:11,080 --> 00:35:14,080 on the agreed form of order pretty rapidly. 750 00:35:14,080 --> 00:35:16,080 But if Your Honor has time this afternoon, 751 00:35:16,080 --> 00:35:17,480 we certainly want to say no to it. 752 00:35:17,480 --> 00:35:20,880 I've had a number of things go off the docket. 753 00:35:20,880 --> 00:35:24,480 So I'm perfectly happy to give you all some time 754 00:35:24,480 --> 00:35:26,080 if you think it would be helpful. 755 00:35:28,080 --> 00:35:31,080 Happy to have a placeholder on your calendar. 756 00:35:31,080 --> 00:35:32,480 And if we end up not needing the time, 757 00:35:32,480 --> 00:35:34,080 I'll contact Mr. Alonzo. 758 00:35:34,080 --> 00:35:34,880 Absolutely. 759 00:35:34,880 --> 00:35:37,280 How about 3.30 Central? 760 00:35:37,280 --> 00:35:39,480 That would be 4.30 East Coast time. 761 00:35:39,480 --> 00:35:40,680 Would that work for everybody? 762 00:35:42,280 --> 00:35:43,480 Okay, for Celsius. 763 00:35:43,480 --> 00:35:44,480 Okay. 764 00:35:44,480 --> 00:35:49,280 Then what we'll do is we will adjourn the hearing 765 00:35:49,280 --> 00:35:52,480 until 3.30 with hopes that perhaps 766 00:35:52,480 --> 00:35:54,880 an agreed order can be uploaded prior to. 767 00:35:56,280 --> 00:35:59,080 But if folks who are listening, 768 00:35:59,080 --> 00:36:01,480 what I will do is at 3.30, 769 00:36:01,480 --> 00:36:03,080 whether I have a hearing or not, 770 00:36:03,080 --> 00:36:05,280 I will get on the line and make an announcement 771 00:36:05,280 --> 00:36:07,880 so that folks aren't wondering what's occurring. 772 00:36:08,880 --> 00:36:10,080 Any objections to that? 773 00:36:12,480 --> 00:36:13,480 No, Your Honor. 774 00:36:13,480 --> 00:36:15,480 And again, if you've uploaded an agreed order, 775 00:36:15,480 --> 00:36:16,680 no need for you to get on. 776 00:36:16,680 --> 00:36:18,680 I know you've got a million other things to do. 777 00:36:18,680 --> 00:36:21,080 All I'm going to do is to, 778 00:36:21,080 --> 00:36:22,080 if there's been an agreed order, 779 00:36:22,080 --> 00:36:23,480 I'm just going to make the announcement 780 00:36:23,480 --> 00:36:25,480 that an agreed order has been uploaded. 781 00:36:25,480 --> 00:36:27,080 I either have or haven't signed it. 782 00:36:27,080 --> 00:36:30,880 And if I have signed it, it's on the docket at docket number X. 783 00:36:30,880 --> 00:36:31,880 I'll do it. 784 00:36:31,880 --> 00:36:32,880 Okay. 785 00:36:34,080 --> 00:36:35,080 Okay, Your Honor. 786 00:36:35,080 --> 00:36:37,080 And one just quick item to flag, 787 00:36:37,080 --> 00:36:38,480 and it's not an issue for today. 788 00:36:38,480 --> 00:36:39,880 It's just sort of a coming attraction 789 00:36:39,880 --> 00:36:41,480 and we wanted to make sure while we have, Your Honor, 790 00:36:41,480 --> 00:36:42,480 in front of us. 791 00:36:42,480 --> 00:36:45,480 We discovered that Celsius recently made a prepayment 792 00:36:45,480 --> 00:36:47,880 for January services. 793 00:36:47,880 --> 00:36:51,080 That prepayment is the amount of about $4.7 million. 794 00:36:51,080 --> 00:36:52,880 Not for today, not for rejection. 795 00:36:52,880 --> 00:36:54,880 It's not going to be part of this resolution, 796 00:36:54,880 --> 00:36:56,280 but it's going to be a resolution 797 00:36:56,280 --> 00:36:57,880 that we need to work on very soon. 798 00:36:57,880 --> 00:37:00,080 We're going to start talking to CORE immediately. 799 00:37:00,080 --> 00:37:01,280 Hopefully we can reach a resolution. 800 00:37:01,280 --> 00:37:03,880 If not, you know, we expect to bring it before Your Honor, 801 00:37:03,880 --> 00:37:06,480 but just wanted to flag so that you are aware of it 802 00:37:06,480 --> 00:37:09,880 as I said, a coming attraction potentially. 803 00:37:09,880 --> 00:37:13,080 Either a resolution or another just to see if that's going to arrive. 804 00:37:13,080 --> 00:37:14,080 I got it. 805 00:37:14,080 --> 00:37:16,680 I assume that this is just one in a number of issues 806 00:37:16,680 --> 00:37:18,880 that you folks are going to have to address. 807 00:37:18,880 --> 00:37:22,480 And as I told you first day and I meant it, I mean it today. 808 00:37:22,480 --> 00:37:25,080 As soon as you folks are ready to tee things up, 809 00:37:25,080 --> 00:37:30,480 you will have my undivided attention promptly. 810 00:37:30,480 --> 00:37:31,080 Thank you. 811 00:37:31,080 --> 00:37:33,080 We personally, we just wanted to make sure Your Honor wasn't surprised. 812 00:37:33,080 --> 00:37:34,280 I got it. 813 00:37:34,280 --> 00:37:40,680 It's and what's the fun in life if you can't get surprised from time to time. 814 00:37:40,680 --> 00:37:44,680 I will see everybody if I need to at 3.30 and if not, 815 00:37:44,680 --> 00:37:48,880 again, just reach out to Mr. Alonzo and let him know that an order is there. 816 00:37:48,880 --> 00:37:51,080 All right. 817 00:37:51,080 --> 00:37:51,880 Thank you, Your Honor. 818 00:37:51,880 --> 00:37:52,480 Thank you, everyone. 819 00:37:52,480 --> 00:37:55,280 We'll be adjourned until 2.