American court hearing recordings and interviews - 8 - Saks bankruptcy court hearing, 1/30/2026

Episode Date: January 30, 2026

--

All right, good afternoon. It is 1 o'clock on Friday, January 30, 2026. We're here in case number 26-903, SACS Global on an emergency motion. Can everyone please mute their lines? There's a lot of people on the line. I'd like to avoid going to the hand-raising feature. All right, make sure to go to my webpage and note your appearance because that's the way we keep track of. formal appearances in this case. So why don't we get appearances and then we can proceed. Good afternoon, Your Honor. This is Betsy Feldman from Wilkie Far and Gallagher on behalf of the Global Denters. Can you hear me all right?

I can hear you fine, yes. Thank you, Your Honor. Michael Gereman on behalf of the SO5 digital debtors and hopefully joining me soon will be my colleague, Jared Martin. He is unfortunately tied up another hearing, but should be free from you could. Good afternoon, Your Honor.

Jerry Lee Miller appearing on behalf of crime and property group from City Austin. All right, thank you. Good afternoon, Your Honor. It's Timothy Schilling on behalf of GA Group. Ms. Chilling. Good afternoon, Your Honor. Chris Hopkins with Paul White's,

for the Morton and Garrison on behalf of the ad hoc group of five holders. Good afternoon. Good afternoon, your honor, Maggie Vesper of Ballard's Bar LLP on behalf of certain landlords, including street retail LLC and fashion outlets of Chicago LLC.

All right. Good afternoon. Thank you, Your Honor. Jennifer Valley of Pelley and Ryan Warren on behalf of certain landlords, including GCP retail, Bricksmore, and Regency Center. Thank you. Good afternoon, Your Honor. Great guess on the capital one. All right, let me just go around.

Mr. Scott. Brendan Scott from Clayson Winters for other Southern Stevens on behalf of B.H. Multi-Colour, PHMulti-Comp, Unique Design Bank and Richland Grouping. All right, Ms. Ryan. This is Abigail Rushing Ryan with the National Association of the Tunis General. Good afternoon, Your Honor, for the record, Daniel Fiorello from Audubb, PC, Council for Bank of America as agent for the ADL dip lenders. All right, Mr. Ward. Nathaniel, Your Honor, Nathaniel Ward will keep firing Gallagher on behalf of the global debtors.

All right. Does anyone else, Mr. Castleman, do you wish to make an appearance? I can't hear you. You might be muted. No, you're still muted. Hold on. All right, try now. Sure. You're on here. I'm David Kasselman from Otterberg. I'm here with Mr. Cirovo. Also on behalf, thanks to our case as an A.D.L.

All right. I'm going to activate the hand-raising feature because we have a lot of people on, and we have 150 people on. It's very loud. So just hit five-star one time, and I'll let you back in. Conference, muted. All right. Are you a 646 number? All right, so let's see. 212 number. That's Ryan?

212. All right, hold on. The number ending in 8633. Right, right. There's a 646 number in a line that I just opened up. All right, and then a 908 area code number? Yes, Your Honor, Jason Hill. I've said comments and gross, and I just wanted to note my appearance for the record.

on behalf of Alpsis Caparillo, S-A-S-N-D-A-E-V-A. Okay, all right. Thank you. Ms. Feldman, are you taking the lead? Yes, Your Honor, thank you. We are here today on an emergency motion that we filed yesterday concerning the global debtor's door closing procedures. I'm joined today by my colleague Jennifer Hardy and Nathaniel Ward.

The Global Debtors Chief Restructuring Officer, Mark Weinstein is also on the line, as is Tim Schilling from the consultant, GA Retail Solutions LLC. We wanted to thank Your Honor for giving us time on this emergency motion today. This morning we filed a witness and exhibit list with four exhibits at docket number 530. First, the declaration of Mr. Mark Weinstein in support of these first days at docket number 530-1. Second, a copy of the consulting agreement at docket number 530-1. third, a copy of the store closing procedures at docket 530-3. And finally, the declaration of Mr. Weinstein in support of this emergency motion.

We would ask at this time that each be admitted into evidence. All right. Let's start with the last one first, which is Mr. Weinstein's declaration as it relates to this particular motion. Does anyone object to the admission of Mr. Weinstein's declaration found at docket 530-4? as his direct testimony in connection with this motion subject to cross-examination. All right. Hearing no objection, that will be admitted. Does anyone object to the admission of exhibits 530-2, which is the consulting agreement, and 530-3, which is the store closing procedures admission of those exhibits into evidence?

All right. Hearing no objection, they will be admitted to – obviously to the extent. Do you send anyone, oh, wait a second, somebody just, I just opened the line for someone. Apologize, Your Honor. This is Jerry Lee Miller. I had raised my hand earlier to make my appearance, but that got me. Okay. All right, hearing no objection to admission of Exhibit 530-2 or 530-3, those will be admitted.

As it relates to 530-1, that's the general background petition, which had been admitted just for purposes of the background. I'm going to take judicial notice of that. I don't think that pertains directly to this to this motion. It's more of a background. So the exhibits are admitted. Thank you, Your Honor. As Your Honor may recall from our first day hearing a few weeks ago and certain motions that we filed in these cases to date, the debtors operate the Sachs Office brand, which offers discounted luxury goods to customers. The Sachs Office brand has two selling channels, 74, brick and Morton. stores that are operated by the global debtors and an e-commerce site that is operated by the SO5 digital debtors.

The global debtors have also been winding down operations at the Neiman Market's last call stores as well. Unfortunately, all three channels have suffered in performance of late and last week, Your Honor heard a motion by the SO5 digital debtors for authority to wind down the e-commerce site. were before you seeking authority for similar relief with respect to the stores. The global debtors strategy with respect to the stores is to resize the store footprint down to 12 and to use those stores as a liquidation channel to sell excess inventory. In furtherance of this strategy by this motion, the global debtors seek authority to enter

into and perform under a consulting agreement with GA Retail Solutions LLC, a copy of which is attached as Exhibit 1 to the proposed interim order. In addition, we're seeking authority to conduct store closing sales pursuant to certain proposed procedures that are attached as Exhibit 2 to the proposed interim order. Also, we're seeking authority to pay bonuses for non-insider employees of the closing stores and to approve modifications to the customer program. With respect to that last point, I'd like to point out that the SOSO five digital debtors have joined in our motion with respect to the customer program's

modifications. The purpose of that, Your Honor, was to coordinate so that we would ensure that release is as clear and consistent as possible for SACS office customers, whether they're shopping in store or online. Since we followed the motion yesterday, we had a number of parties reached out to us to discuss specific aspects of the relief we are seeking, including the attorney for the U.S. trustees, certain landlords of the closing stores, and other interested parties. However, there has been one objection that was filed to the motion this afternoon, I believe, by Simon's property. Before I go too much further, I wanted to make a few statements on the record in response to points that have been raised over the past 36 hours. Judge, you may

hear from a lot of vendors about issues that were raised at the first day hearing, but nothing in this sale closing procedures motion, which true to its name is procedural, affects what the court heard as to the vendors on the first day and any remaining issues from the first day that aren't yet resolved, and again we really do hope to resolve them all before any final order is entered, that those will be resolved at the hearing on the 13th. But this hearing is not the forum to address those issues unless they are specific to the release that's requested here. Consistent with what was said at last week's hearing for the SO5 digital debtors, we care very

deeply about the debtors' brands and relationships. And this order is not intended to diminish any vendor's rights in inventory or otherwise, and likewise the global debtors' rights. Next, the global debtors will not expand the release sought in the motion to stores beyond those that are listed on the exhibit to the consulting agreement without seeking further relief from this court on notice and a hearing. Next, with respect to any side letters that are entered into under the proposed interim order. Great American and the global debtors will work in good faith on the terms

of such side letters. If a landlord had a breach of contract claim arising from the closing of the stores and any sales that are conducted under these procedures and has failed to enter into a side letter, those rights are preserved and can be dealt with in the assumption and rejection process later on in this case. Finally, following this hearing, we will file a revised, proposed form of interim order reflecting some changes that we have agreed to make with certain parties of interest in the interest of time i'll ask if your honor has a preference on how we proceed i'm happy to answer any questions that you might have or proceed on the merits or otherwise we would ask the court enter the proposed interim order all right so i have a one or two questions and then

i'm going to let the other parties uh speak and then the other the other overriding concern is I saw from the from the docket sheet that the organizational meeting for the unsecured creditors had been yesterday, I believe. And so I don't know if the unsecured creditors committee had appointed counsel yet, but I would love for them to be able to see. to see this before I consider entry of the order, but we'll talk about that at the end. The only question that I had was, so you filed a motion at docket number 32 to reject certain leases.

Are these 74 leases included in that motion? No, Your Honor, they are distinct. Okay, so there's currently no motion to reject any of the leases that are covered by this motion. That's correct, Your Honor. Okay. All right. That actually simplifies things for me.

All right. Let me hear from anyone else who would like to be heard. Your Honor, can you hear me? Yes. Okay. Jerry Lee Miller from Sidney-Ofton here on behalf of Simon Property Groups. Your Honor, we did file an objection at docket 533 immediately before this hearing.

Yes. My client does not, in principle, oppose the debtors conducting the store closing sales. We understand that's within their discretion. that's within their discretion. What we would like, Your Honor, is simply time. Time that's guaranteed to us by its due process clause and the bankruptcy code. Just for Your Honor's context, this motion was filed at 1.30 p.m. yesterday. We immediately reached out to Great American with our form of side letter agreement.

Simon is obviously a very large landlord. They've got a form of agreement that they negotiated with, standard terms and conditions that they reach out to parties who are in similar circumstances and turn to an agreement with. We did hear back from Great American this morning around 10 a.m., but the feedback was simply that it was too close to the hearing and we weren't going to be able to reach a resolution in time. And so, Your Honor, we simply asked for that time to reach a resolution. We understand that the debtors filed this on an emergency basis, but frankly, Your Honor,

they've been in bankruptcy for two and a half weeks, so to the extent that there was something to be negotiated, they could have been working with the landlords for the past two and a half weeks so that this could have been filed on an agreed upon basis. Unfortunately, that's not what happened. We just learned about it when it got filed yesterday at 1.30 p.m. And so we should not now be forced into an arrangement on one day's notice simply based on the promise that they'll work with us in the future. And going to that promise, Your Honor, while I very much appreciate their willingness to

work with us in the future, and I'm confident in the signing group's ability to consensually resolve these for context they have resolved approximately. 90% of these that they've done. The entry of the interim order today would change the playing field, Your Honor. So when that interim order gets entered, the store closing sales could immediately commence and we understand that they would immediately commence, which constitutes post-petition breaches of our leases and which causes signing property group damages. All we're asking for is for these side letters to be negotiated in advance.

And so, Your Honor, we'd ask for simply more time before this interim order is entered or that the sign and leases be carved out of the interim order, subject to the earlier of a consensual entry into a side letter, which we think could happen very quickly or the final order. All right. Anyone else? Can you hear me? Yes, I can, Ms. Ryan. Thank you, Your Honor.

And for the record, this is Abigail Ryan with the National Association of Attorney General. We just learned about this filing this morning, and I have been coordinating with some agency's offices, but I'm sure that the majority of them have not seen this for the proposed order. And since it does impose liquidating sales laws and dispute resolution processes, I'd really like to be able to touch face and make sure that AGE know about that. I do know a couple of things have been raised. I believe we can absolutely find language that will address these issues

need more time. The first issue is the dispute resolution process, as I actually, read it does not carve out police and regulatory laws to be enforced for human health and safety. And generally, when this language is used, I'm very familiar with it, it's in almost every gang of a business sales case, you do have a carve-out. And so that's the first issue. The second issue, AG's feel that consumers need to be able to return materially non-conforming goods if they get something like that at a sale.

third, it needs to address augmented goods as well. And so if other goods are brought in, they're not as the facts of Avenue or the debtors or what have you. They need to be clearly labeled. So customers know they're buying an augmented good that is not part of the debtor supply. And finally, since this is going to be very quick and these closing bills are going to go into the motion soon, We would like to have the customers notice through the debtor's website and social media apps because we believe that reaches more consumers more quickly. I believe the order said they would accept gift cards for the first 15 days of the sale.

I don't have an issue with that, but I do have one question as to whether other stores that aren't closing, will they continue to accept the gift cards? And so if you have questions for me, I'm more than happy to answer them. Otherwise, I wanted my objection on the record, but I think we can probably find language that'll fix these issues. Yeah. I think those are all issues that need to be addressed. I'm not sure that if they have to be in the interim order, we're going to set a prompt hearing on the final. So I suspect and Ms. Feldman, if we can set it at the time of the final hearings on the 13th,

or we could do it at a different date if it's more appropriate. But the 13th is all sacks, so we can certainly find a time to do it that day. So that's only two weeks from today. So I think that can be addressed at that time. Okay, anyone else wish to be heard? Good afternoon. Your Honor, Matt U.S. Bar LLP on behalf of Street Retail LLC and Fashion Outlets of Chicago LLC.

I rise today to echo the concerns raised by Simon Properties. Prior to the these hearing, you know, an effort towards all our concerns, we preview these issues with the debtors, and although we need some progress, we are not able to fully resolve all of our concerns. Our central issue is having signage and advertising in place at our client's location prior to the entry of a final order or the execution of a guide letter. Many of the purported sale guidelines violate numerous provisions of our client's leases,

and there's no basis to invalidate or otherwise ignore these lease terms. Accordingly, we object to the commencement or continuation of sales at our clients' two locations under the proposed guideline, and less than until there's a side letter or the court makes a determination at a final hearing. on the sale guidelines. Our clients are willing to work with the debtors on the process for these sales as we have done in so many other retail

bankruptcies and we would request that the release be conditioned on the entry of the ladder of the entry of the side letter between the parties or the entry of the final order. We also have two specific line items that we

spoke with Ms. Feldman about, but I'm not sure we're incorporated in the proposed order and I'm happy to address those now or wait for. or a sign your honor would prefer. I mean, I don't know what they are. I don't know whether they've been addressed. If I can respond to that one piece, Your Honor, we'll continue to work with Ms. Bester to address those two final line items.

Okay, all right. Thank you for all right. Thank you. Your Honor, my editor? Yes. Brendan Scott on behalf of Richelaine Group, Inc. and Unique Designs, Inc. I just wish to raise, Your Honor, a point of clarification in this,

In the consulting agreement, the definition of merchandise appears to carve out all memo and consignment risks, but there is something of a qualifier owner that says as identified by a merchant. I think that means that the debtors are just going to send a list of all consignment and memo books. I want to be certain that they're not reserving the right to pick and choose, which goods they think are on were received on consignment and memo. That to the extent they're going to pick and choose that the party should have some consent right with respect to that. I'm hoping the debtor can clarify that that is truly all goods received on memo and confinement are cards out. And they're not reserved to send right there if they can choose.

Is that correct, Ms. Feldman? That's correct, Your Honor. Yeah, that's the way I understood it. And that's the way this is almost identical to the numbers are different, obviously, but this is almost identical to the one that we signed last week with respect to the digital debtors. and that point was raised and addressed it at that time. All right, anyone else wish to be heard? Your Honor, Your Honor.

Go ahead. Mr. Hess, go ahead. Yes, thank you, Your Honor. Cray-Cance on behalf of Capital One. Capital One, as a reminder, is a provider of private label credit cards to customers of Neiman-Marcus, the Hrudeauv, Goodman, and Lassold Debtors. The motion filed with the debtors, which includes the closing of five last three,

call stores impacts the ongoing relationship between Capital One and the debtors. After receiving the motion, we reached out to Council for the debtor as well as the business folks at a meeting and we raised a number of concerns with the process, the sales, and the impact that it would have upon the ongoing customer program. I'm happy to report that we have reached an agreement as to many of the issues that were raised, and the Darris Council has represented that there will be language added to the order to address those issues. At this point, from the statement of Ms. Valdman earlier on, apparently the revised form of order has not yet been uploaded or filed,

so we have not seen it to make sure that it's in there. So we'll reserve the right with regards to those particular pieces. Having said that there is one open issue that we have continuing discussions about, and that relates to a feature of the program agreement in which customers who do not have their card on their persons can have people at the store without their account member. We believe that there are some issues that are raised with it. We have not been able to resolve that issue, and so we're reserving the right to possibly object to that particular provision before a final hearing.

we're going to continue to work just debtors to try to resolve it outside. But that, hopefully we can get up involved. Thank you, Your Honor. All right, thank you. All right. Who else wishes to be heard? If I may quickly, Your Honor? Yes, sir.

Thank you. Once again, for the record, Michael Reardon, on behalf of the SO5 digital debtors, as we've all been noted at the top, we have joined this motion and reparties to this motion solely with respect to the provisions relating to customer programs. We've been working with the global. side to make sure we're coordinating the timing and implementation of these changes, you know, at least on the Saksonsoff.com side in connection to our liquidation sale.

And on the SACS global side, proposed door closings in order to limit customer confusion. We are at a point where we have, I think, these changes queued up and ready to go. We're anticipating implementing them either today or tomorrow. So as we're discussing timing, we think it's important in terms of, you know, keeping our liquidation. sale moving forward to at least have authorization on the customer program aspect of this order. Thank you, Your Honor. Thank you. Yeah, dear. Yes. Thank you, Your Honor. For the record, Jennifer of Alley of Kelly Dry. Again, on behalf of the GCP Retail, Brooks Moore and Regency Centers, we echo the comments of Ms. Miller and Ms. Vesfer. And we did reach out to Loki before the hearing. And a lot of these issues, frankly, we were usually able to resolve prior to an interim hearing, but because of the expeditability. nature we were not able to in this situation. I hope that the revised order will address a lot of our concerns.

I have seen some of Ms. Vesford comments to it. I did just want to raise a few points. One being that we agree, but until a side letter is signed because of expedited nature, we would ask that no store clothing sale signage is installed in our client's locations. Two, we would like to be notified when the store clothing sales are going to conclude at those locations. That's typically something we can address on a side letter, but it is important. and so our clients can dress the windows to avoid the appearance of a dark store.

And then ultimately, the sale termination date in the motion appears to the April 30, but the parties have the right to extend that. And we would like to be given notice to the extent that the sale termination date is extended just so that we're aware of what's going to be happening in our spaces. I think that's all I have for now. But again, I do just echo the comments of Ms. Miller and this fast for. All right. Anyone else wish to be heard?

Go ahead. Did you hit five star? Okay. There you go. Good afternoon, Your Honor. Good afternoon, Your Honor. Audrey's Warner, Sherwoods Quartale, TLC, representing Scottsdale Promenade of the, we also echo the concerns of the other landlords today.

Primarily are concerned of expedited nature. Typically, we would enter into five. Our system will end this conference in five minutes. To extend this call for one hour, please enter the moderator, PIN now. Your conference has been extended for 60 minutes. Raise these concerns and that we hope that we're going to be able to amicably resolve these before signage and marketing commences at our location.

All right. Ms. Feldman? Your Honor, if there's no and all who wishes to be heard, I'd like to respond just to a few of these points. Sure. Thank you, Your Honor. With respect to the landlord councils who have raised similar issues, I'll just reiterate what I stated earlier in my introduction. It's very important to us that our sale not be conditioned on an individual landlord's consent,

and for that reason, we would respect to any side letters that the parties will likely enter into, as I noted earlier, we will definitely continue to work in good faith with the Landlords Council to reach an agreement on those side letters. However, the exigency of these store closings is very palpable for these global debtors. With respect to the timeline of these cases, the store closing sales really do need to commence right now. They're slated to proceed for approximately 12 weeks in these cases. And if we expand the timeline beyond those 12 weeks, we will not only incur unnecessary rent charges beyond that time, but also we will incur additional case costs throughout these cases,

which will really burden the debtors. For that reason, we cannot let the store close, So the commencement of the store closings split past the date that's projected in our motion, and for that reason we would respectfully request the landlord's counsel's objection with respect to the side letters needing to be entered before any store closings can commence that their stores be overruled. When do you anticipate putting the signage up? MS.

Your Honor, I believe that is happening on Saturday, but I will defer to Mr. Schilling, if anything, has changed. Hearing nothing, however, I think that's... No, no, no. He's trying to get on. Hit five-star one time, Mr. Schilling. No. Just hit five-star one time.

Thank you, Your Honor. Yes. Ms. Sullivan is correct. The plan is right now to start to sell tomorrow morning. Anyone else wish to be heard? I don't think to... Oh, sorry. My apology.

Your Honor, if I may briefly respond, we're not looking... We're not looking to condition anything on our consent, Your Honor. We simply want due process. This could have been negotiated over the last two weeks. They could have worked with their landlords. This is what would have been done in the ordinary course and what is done in 90% of these cases.

And it just simply was not here. We should not now be punished for that lack of their reaching out and they're working with the landlords. We're standing by. We're ready to negotiate this side letter agreement. We're confident we'll get one done. But we don't want to be punished and deprived of due process by an exigency of their own making.

Your Honor, to the question you asked earlier, I understand that the committee is hiring counsel today. I also anticipate, as Your Honor does, that the committee's counsel will likely want to weigh in on this. And so at the very least, Your Honor, we would ask for until Monday, a delayed ruling until Monday, to allow all the parties to work together and try to negotiate something. All right. Does anyone else wish to be heard?

Your Honor, just briefly. Yes. Your Honor, I agree with what Ms. Miller said. I also just wanted to note our client, JVP Retail, is a committee member, and they are currently in the process of selecting counsel. The committee has asked that they do have. I know Your Honor noted it. I just wanted to reiterate the committee has asked that they have the opportunity

to weigh in on this motion. All right. Anyone else wish to be heard hit five-star one time? Thank you, Your Honor. Can you hear me? I can hear you, yes. Yes. Good afternoon, Your Honor, Justin Burnbrock of Shepard Mullen.

on behalf of Chanel as well as Akrhus and Ralph Lauren. The counsel from Brookfield just reported what I was sent here directly from the committee call, which is ongoing on another line to ask your honor. Chanel is co-chair of the committee. We are presently deliberating council selection. and anticipate announcing that very, very soon. And so if there could be a very, very brief delay until such time as counsel has had an opportunity to weigh in on this after the committee's toll, I'd be greatly, greatly appreciated. All right. Anything further?

All right. So I view this as a relatively routine motion. I think it's perfectly within the debtor's business judgment to do this. I want to be sensitive to the committee and the landlords. So what I'm going to do is, you know, subject to an agreeable form of order by Monday, I will wait until Monday at 5 to consider the order. If there isn't agreement, then we will have a continued status conference on this with respect to the order Tuesday at 1230 at noon. And then the final hearing on this will be very quickly on February 13.

But as I indicated, I'm inclined to, you know, I really view this more as the timing. I mean, I'm going to approve the order. I think we just need to go through, allow the committee to look at it and allow there to be discussions over the weekend during this. Now, as it relates to the custom program aspect of it, which is really very limited, I'm going to go ahead and orally approve that so that there isn't any, especially since the digital debtors have already started their process. So that's my ruling, but I really would like to have the weekend and all day, Monday, for people to look at this and then I won't consider it. And unfortunately, Monday and Tuesday of next week, and probably Wednesday, I'm in a contested confirmation hearing. So Monday, you know, Tuesday at noon or at 1230, it'll be the only time that I'm going to have to. to actually look at this so it's a it's a it's a brief delay but I think under the

circumstances it's appropriate thank you very much your honor all right all right any other thing that we can do today oh wait a second somebody somebody else raised their hand all right I all right somebody from the 516 area code your honor that this is Dan Fiorrello from Otterberg I had raised my hand but your ruling had addressed a question of to ask so you can disregard the hand raise. Okay. All right.

Anyone else wish to be heard? Hopefully I'll get an agree in order with everybody, to anybody's satisfaction, and I'll sign it 501 on Monday. Thank you, Your Honor. All right, thank you. Thank you. All right. We'll be in recess to 3 o'clock.

Two o'clock.