American court hearing recordings and interviews - 7 - Saks third bankruptcy court hearing, 1/23/2026

Episode Date: January 23, 2026

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All right, good morning. It is Friday, January 23rd, 26. We are here in the Sacks Office Avenue Digital on a motion to an interim for an interim order with respect to a consulting agreement with the GA group. So if you want to speak, please hit. five star there were a lot of people on the line and it was just too much background noise and also to the extent you want to make an appearance please make sure to go to my web page and note your appearance there that's how we keep track of appearances so mr. reardon good morning your honor like we'reden on behalf of the s o five digital letters and also joining me today virtually are Andrew Heed a CRO of the s05 digital debtors and can defeat jay

Schilling, president of GA Retail Solutions LLC, the proposed litigation consultant. All right. Does anyone else wish to make an appearance? Good morning, Mr. Scho. Mr. Hedie and Mr. Schilling, why don't you both hit five star one time on your phone, and I'll unmute you? Hello, good morning. I would like to make an appearance.

My name is Beatrice, Montanaga. Okay. All right. Thank you. Thank you. You're welcome. Mr. Schilling, are you, Are the from the six ones, are you from the six one seven area code?

Yes, Your Honor. All right. Good morning. Good morning. All right, Mr. Reardon, go ahead. Thank you, Your Honor. I just wanted to reiterate our thanks for giving us our time this morning on this emergency motion. I know you have fairly busy day lined up, so I'll be quick about it.

We filed last night an amended witness and exhibit list at ECF 419. Yes, I'm sorry. Go ahead. And we just asked, we have four exhibits, Mr. Heads' declaration, in support first days, a copy of the consulting grievance, exhibit two. Trust and Will is an online estate planning service. Visit trustinwill.com for details.

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and Mr. Schoing's declaration support of the liquidation motion as well. At this point, we would ask that that the entry to evidence. All right. So let's take them one at a time. I think with respect to Mr. Heady's declaration with respect to the hold on a second all right with respect to Mr. Heady's declaration with respect to the first days that's already been admitted so I'll admit it again for purposes of of this hearing with respect to the consulting agreement which is 419-2 anyone about

to the admission of the consulting agreement at 419-2 all right that will be admitted with respect to mr. Heedy's declaration in support of this motion at 419-3 does anyone object to the admission of mr. Heedy's declaration at 419 3 as his direct testimony and connection with this motion okay that will be admitted as his direct testimony subject to cross-examination. And as it relates to Mr. Schilling's declaration at 419-4, does anyone object to the admission

of Mr. Schilling's declaration at 419-4 as his direct testimony in connection with this motion? Right, having heard an objection, that will be admitted as his direct testimony subject to cross-examination. All right, Mr. Reardon, you can proceed. Thank you, Your Honor. Who asked how much at check this morning?

No objections have been filed. We did have a vendor reach out yesterday, and we have agreed beneath a statement on the record relating to consignments, developments, or other inventory subject to similar arrangements, essentially inventory where the vendor may assert that it does not constitute property of the estate. Our statement is this order,

the proposed interim orders without prejudice to any party's rights with respect to such inventory, and that includes any rights of the SO5 digital debtors to sell such inventory. Essentially, this order is not intended to diminish any vendor's rights in any such inventory, and likewise, the SO5 digital debtor's rights in such inventory. Understood, yes. That has been a common theme. That has been a common theme.

Yes. I thought it would have made a similar statement even if someone hadn't reached out. We're not aware of any other informal objections or comments, but I do. want to note that we were affected by the outlook disruption that happened last night. That apparently affected a lot of people across the country. So my apologies to anybody who did try to reach out and we didn't respond. I did try to review my inbox this morning and didn't see anything further though. All right. Okay.

I won't spend too much time reiterating Mr. Martin's comments from Mr. Martin's comments for Mr. Cartial hearing about the path to where we reached this point and our foreseeable path forward. But as explained the first of the day declaration at the outset, as a case, GIFO5 digital debtors intended to conduct an overly slow process to maximize value of stakeholders. And that's based on preliminary market feedback in the operational structure of the business. Trust and Will is an online estate planning service. Visit trustinwill.com for details. My dad and I were always close, but some things we just didn't talk about like his will.

After he was gone, we found out he didn't have one, and it created a lot of stress during a time of grief. Creating a will can be hard to think about, but avoiding it can lead to greater difficulty for the people you love. That's why trust and will makes estate planning simple. Create a will online in as little as 30 minutes. Now, I have a will in place to make sure my loved ones are protected. With trust and will, it was easy and affordable, and I got peace of mind knowing my wishes are clear. Get 20% off when you visit trust and will.com slash future. That's trust and will.com slash future to get 20% off.

Trust and will.com slash F-U-T-U-R-E. We believe that an inventory monetization strategy like this liquidation sale is most likely to optimize recoveries in the case. And I do want to specify here for people who are listening in, this order pertains to the SO5 digital letters and phone number. the SO5 digital debtors, it does not affect the SACS office brick and work stores. Yeah, and as noted in the motion, we've also received expressions of interest in potential alternative transactions.

And those appear to have enough substance to them to merit pursuing a bid procedures process in parallel with this liquidation sale. But continuing to pursue this inventory liquidation unless on sale when a position where an alternate transaction emerges, that justifies halting it in the exercise of the that has been business judgment. And another consideration pursuing this course of liquidation, there's several milestones in the interim cash collateral orders that requires to move forward with a liquidation

as a condition to authorization of use to use cash collateral and allows to access to that cash collateral would have devastating consequences for our restructuring efforts. We've been regular contact with our term loan lender, Agent Kaladine, about these matters, and it has approved the motion of those liquidation cell procedures. So as a result, we're asking the court to, on an interim basis, authorize the SO5 visual betters to enter into a performally consulting agreements,

a test of interim order as exhibit one, and grant-related relief as set out in the interim order. And in the interest of time, Your Honor, I will ask if you have any questions or if you'd like me to go proceed on merits. Otherwise, you would ask that the court enter the interim order. I don't have any particular questions. I'm familiar with Great America's consulting agreements. So this is not something that I haven't seen before.

So in terms of the final hearing, what are you looking for? We'll be looking something in the range of 21 days. All right. You're asking me to do math now. Oh, my apologies, Your Honor. I did, I didn't mean to put right down a date for you, but I did not get to that. So the 21 days from today is the 13th, which is when basically it's an All-Sax day. Should we just put it there on the 13th, or do you want to have this separate from that?

I think that makes a lot of sense, Your Honor. All right, just tell them to put you guys first on the agenda. Thank you, Honor. We will. All right. All right. Okay. Does anyone else wish to be heard with respect to the consulting agreement? All right. I've reviewed the motion, the proposed form of order. I understand that the SACS digital debtors are different than the other SACS entities

and that they're pursuing a different strategy than the other SACS entities. As I indicated, during my time in practice, I've reviewed. I've reviewed, I wouldn't say a lot, but I've reviewed several consulting agreements from Great America and others. And I think this is a standard form agreement that has been, you know, negotiated. So I'm going to go ahead and approve the consulting agreement on an interim base. Trust and Will is an online estate planning service. Visit trustinwill.com for details. My dad and I were always close. But something. things we just didn't talk about, like his will. After he was gone, we found out he didn't have one,

and he created a lot of stress during a time of grief. Creating a will can be hard to think about, but avoiding it can lead to greater difficulty for the people you love. That's why trust and will makes estate planning simple. Create a will online in as little as 30 minutes. Now, I have a will in place to make sure my loved ones are protected. With trust and will, it was easy and affordable, and I got peace of mind knowing my wishes are clear. Get 20% off when you visit trust and will.com slash future. That's trust and will.com slash future to get 20% off. Trust and will.com slash F-U-T-U-R-E.

And we will set a hearing for February 13th at 9 a.m. And the objection deadline will be February the 6th. All right, so let me just do that. All right, that order has been signed and sent to docketing. It should be entered shortly so you all can get started. All right. Thank you very much, Your Honor. All right.

Anything further we can do this morning? Nothing for us. All right, thank you. We'll be in recess till the 9 o'clock hearing. Thank you. Thank you. Thank you.