American court hearing recordings and interviews - Bitcoin Depot/BTM Listen to the 1st bankruptcy hearing held 5/19 https://bitcoindepot.com/ #BitcoinATM

Episode Date: May 22, 2026

--

Let's be honest. Buying cannabis shouldn't be complicated, sketchy or low quality. That's why I want to tell you about mood.com. That's M-O-O-O-D.com. Mood ships federally legal cannabis straight to your door. No medical card, no hassle. And here's the kicker. The quality is better than anything you'll find at your local dispensary. Yeah, I said it. Whether you're into edibles, concentrates, flour, or just looking to explore, you'll find it all at mood. And it's not just the variety that makes them stand out. Every product is sourced from small American-owned family farms that care deeply about what they grow. It's cannabis you can trust, delivered discreetly, and ready to elevate your mood. And because you're a listener, you get 20% off your first order. Just head to

mood.com. That's M-O-O-O-D.com to get started. Good afternoon. This is Judge Lopez. Today is Tuesday, May 19th. I'm going to call the 2 p.m. First Day hearing in 26-905. 28 Bitcoin Depot. I'll take appearances on the line. This is a virtual hearing, so there's no one in the courtroom. I'll just start on meeting a few lines. Is a 713 number? In the Newellon's proposed counsel with me today with my partner, David Meyer, Paul Heath, and Matt Moran, along with Senior Associates, Megan Cloud, and Sarah Zogelman. Okay, good afternoon. A 202 number. Good afternoon, Your Honor. How would the U.S.S.

Good afternoon, Mr. Warren. Anyone else wish to make an appearance, please hit five star, and I will unmute your line. There's a 2-1-2 number. Good afternoon, Your Honor, James Fitzacquare, from Alston and Bird for Silverview Credit Partners as an administrative agent to the lender, the secured lender. With me today as my partner, William Howe. Both of us have our Prolop B-J applications pending. Okay, and you're more than welcome to appear today.

we will get that on file and take care of it. Thank you. There's another 713 number. Good afternoon, Your Honor. Paul Heath's intervention, Alkins. Good afternoon, Mr. Dean. Okay. Okay, I'll turn it over to the debtors.

Hear me all right, Your Honor. Just fine. Your Honor, we're here today on behalf of Bitcoin Depot, Inc. And its debtor affiliates. We're joined virtually by members of the company's management team who I'd like to acknowledge at the outset. We have Alex Holmes, our chief executive officer and the executive chair of the board of Bitcoin Depot.

Chris Ryan, our general counsel, David Gray, our chief financial officer, and Thomas Sudebaker, the chief restructuring officer. Mr. Sudebaker is also the declarant in support of our first day motions and a managing director and co-head of turnaround and restructuring and supported to point partners. The debtor's proposed financial advisor. Before you continue, I can just ask everyone to just please place your phone on mute, just so we can all hear each other. Thank you.

Sorry, please continue. Thank you, Your Honor. Your Honor, I'm going to start us off by providing an overview of the company and the road that led to these Chapter 11 cases and then discuss a bit about what the company is seeking to achieve here before this court. I have a presentation and would ask that you kindly turn over presentation privileges to my colleague, Jamie Gross. Okay.

Thank you. Thank you. If you could please move to the next slide, great. So we'll spend a moment on this slide. Your Honor, I think you spend a moment just providing a top line overview of really what the bottom line is in these Chapter 11 cases. Bitcoin Depot operates a large network of Bitcoin ATM. He asks, like the one you see on the screen here, that permit customers to convert cash into Bitcoin, the largest such network in North America.

There are other business lines at the company that the company, but the key Kiosk generate 99.8% of the company's revenue. The company was founded in 2016 when Bitcoin was relatively emergent and built for a world where Bitcoin usage was mainstream. Kiyos look much like any cash ATM you've ever used, and they're located in the same spot that you find cash ATM, grocery stores, convenience stores, all across America, as well as in Canada and Australia.

Unlike cash ATM, Bitcoin deposed Kiosk let the user make, a one-way conversion of cash into Bitcoin for a minimal transaction fee and for a markup to the price at which Bitcoin Depot acquired that Bitcoin. The customer approaches the kiosk, provides account information, and is able to deposit their cash, which is then converted immediately by Bitcoin Depot by delivering Bitcoin into the customer's digital wallet. Unfortunately, outside parties, scammers, preying on vulnerable individuals like the contact their victims, convince them they face some imminent threat,

and persuade the victim to deposit money into a kiosk, not into their own wallet, which is a digital wallet of the scammer. In October of 2025, the company implemented new compliance standards, namely ID verification measures, and I'll spend some time during this presentation going into that timeline in more detail. But they implemented these measures to guard against the use kiosks by potential scammers or their victims. Following implementation of these standards, the company

experienced a precipitous drop in revenue, which continued into the first quarter of this year. By the time of its 10K filing in March 2026, the company disclosed in that filing that the company expected revenue for the core business, the kiosk, to be down in the range of 30 to 40% year over year in 2026. As I said, I'll walk through the timeline leading to this filing in more detail in a moment. But at bottom, the current management team and its advisors have worked tirelessly to evaluate whether Bitcoin Depot can implement compliance measures that sufficiently guard against the use of their platform by fraudsters and also maintain a viable go-forward business.

And the difficult conclusion that management and the board has reached in recent days is no. With clarity on that answer, the board made the decision to authorize the filing of these Chapter 11 cases and the company's T.Fs have been taken offline. The management team and the board took this decision extremely seriously. And they have been doing and are continuing to do exactly what they should be doing in light of these circumstances. That includes the board appointing independent director Ivana Smith to the board last week and delegating to her the full authority to invest. investigate and determine appropriate action with respect to any potential claims and causes of action held by the company. We know that this filing came as a surprise, if not a shock, to many of our companies' key

stakeholders, employees, stockholders, and contract counterparties. And the court may hear from some of those parties today. We believe that this filing and the Chapter 11 process is the best possible forum to achieve the company's primary objective, which is to preserve and distribute value to the company's stakeholders. With the estate assets protected by the automatic stay, the company can proceed the cease operation of the kiosk while doing the work to maintain its software, licenses, and other potentially valuable assets, and to continue collecting cash from the kiosk and return that cash to the estate. We intend to file a bid procedures motion in the very near term and to seek

approval of that motion on an emergency basis and to engage a banker to help effectually a sale of the company's assets. In parallel, we will also be seeking to build consensus as quickly as we can with the goal of achieving confirmation of a Chapter 11 liquidating plan within 45 to 60 days in this case. That's what we're here to do, Your Honor. I'll move now into a bit of background on the company and go through a little more detail of some of the events I've just described. We could please move to the next slide. The fact shows the company's operating footprint where all the kiosks are located, the United States, North America, including Canada there, and then also there are some kiosks in Australia. As of December 31st, 2025, Bitcoin Depot operated approximately 9,700 owned and leased kiosks across 48 United States, U.S. states, 10 Canadian provinces, and 6 Australian states.

The company, as I mentioned, was founded in 2016, almost exactly 10 years ago, in June as Lux Vending LLC by Brandon Mintz, who remains a director and is the majority stockholder today. The company completed a D-SPAC transaction in June of 2023 and emerged as Bitcoin Depot Inc, publicly listed on NASDAQ. After the D-PAC, the company continued its efforts to develop and expand its business with a particular focus on its network of kiosk. The company has several business segments. If we could please move to the next slide. There was mentioned the kiosk generate almost all of the revenue. In addition to the kiosk, the Bitcoin product lines are BD Checkout, which is the same principle of cash converting to Bitcoin, but implemented by a cashier at checkout of a grocery store or similar venue.

Bit Access, which is the software that enables the APMs to process the transactions. I should note here, Your Honor, that the company is not engaged any Bitcoin. engaged any Bitcoin mining and it doesn't hold the Bitcoin in custody. The Bitcoin is purchased on a just-in-time basis to perform the transaction. The company also owns Cut Inc., which is a peer-to-peer social betting platform, and ReadyBucks, a standalone online platform offering business advances to small businesses. As of the petition date, ReddyBuck has ceased to offer new advances and is continuing operations for the purposes of collecting payments on advances that are currently outstanding.

Please go to the next slide. The company has a few buckets of major contracts. They mostly sit at the operating entity. This corporate torque chart shows us all of the entities in the business. Those outlined in green are the debtors in these spaces. And those outlined in red are almost entirely. They're foreign entities that had little to no operations

and are in various stages of whinedown. The Australian entities had the most most significant operations of the group and had already started moving towards wind down proceedings before these chapter 11 cases were filed the the sorry just returning to the contracts I'm gonna couple of buckets of major contracts those are largely with our operating company Bitcoin Depot operating I'll see sort of in the middle of the page there first the company's size little footprint was a chief entry into four space agreements agreements

to obtain space in retail locations the company's party to approximately 7,700 of those agreements. Companies also party to certain profit share agreements that it entered with various counterparties in 2024 and 2025. Those counterparty provided funding to purchase kiosks as well as additional float funding of our incidental costs. And in exchange, received a share of profits

from the specified kiosk for a defined period. We also have equipment agreements with two counterparties, which are essentially secure loans to the company, collateralized by the applicable kiosk. The outstanding balances on those contracts are 1.463, pardon me, 1.463 million under the DFS agreement

and just under $960,000,000 in under the NFS leasing agreement. The capital structure is otherwise very straightforward. There's a term one facility with Silverview credit partners that have an outstanding balance of approximately 13.3 million. I'd like to thank Silverview and their council, Alston and Byrd, for working with us so cooperatively in recent days.

I believe we are close to or have reached agreement on a cash collateral order. So I will turn it over to Paul Heath later in this presentation to address that matter. Oh, and I should mention the Canadian entities, there are four of them. Three are on the sort of right of the chart, and then one is down at the bottom, express sending.

Those entities we all expect to commence recognition proceedings in Canada. They are debtors in each other than each other than cases. The next slide, please. All right. Let's be honest. Buying cannabis shouldn't be complicated, sketchy, or low quality. That's why I want to tell you about mood.com. That's M-O-O-D-com.

Mood ships federally legal cannabis straight to your door. No medical card, no hassle. And here's the kicker. The quality is better than anything you'll find at your local dispensary. Yeah, I said it. Whether you're into edibles, concentrates, flour, or just looking to explore, you'll find it all at Mood. And it's not just the variety that makes them stand out. Every product is sourced from small American-owned family farms that care deeply about what they grow.

It's cannabis you can trust, delivered discreetly. and ready to elevate your mood. And because you're a listener, you get 20% off your first order. Just head to mood.com. That's M-O-O-O-D.com to get started. Moving into the past the Chapter 11 cases in more detail. From about 2024 through the present, the company faced a litany of mounting obstacles,

lawsuits and investigations from 11 state agencies, an SEC information request, and an FTC investigation, all driven by various concerns related to the issue of third-party scammers using the platform. Various civil lawsuits also plagued the company, including an arbitration award for $18.5 million from a breach of contract claim in favor of claimant cash clouds. In August of 2025, Mr. Holmes, now our CEO, joined the board. As a former CEO of MoneyGram International, he brought to the table more than $12,000.

25 years of experience of financial services companies and is a leader in the compliance state. We discussed already the company's October 2025 implementation of compliance measures, which was in part responses to the concerns raised in the investigations I just mentioned, to address the risk of fraud. To describe those in a bit more detail, that included a know-your-customer verification process that required ID before transactions and banned users that failed authentication requirements. Driven by a combination of regulatory impact as states and localities began to implement new statutes but limited operations of Bitcoin kiosks and the enhanced compliance controls, transaction fell and revenue began to drop.

Indeed, revenue decreased by 80.7 million or 49.2% for the first quarter of 2026 as compared to the first quarter of 2025. Next slide, please. The company began to experience leadership changes. Brandon Vince resigned a CEO effective January 1st, 2026. Scott Buchanan, who had been the Chief Operating Officer, was appointed CEO. On February 13, 26, the Chief Legal Officer, Christopher Ryan, Chief Compliance Officer, Philip Brown, resigned, citing concerns

about the company's compliance practices. In response, the Board formed a special committee of independent directors and hired Goodwin Proctor to conduct an internal investigation of the issues raised by Mr. Ryan and Mr. Brown. While that work was underway, in March 26th, Scott Buchanan resigned as CEO. Elizabeth Seimer, then the chief operating officer, also resigned. In response to these changes and instability, the board appointed Mr. Holmes as CEO. Mr. Holmes built became executive chair of the board, with Mr. Mince stepping down from that role but remaining a director.

After Mr. Holmes became the CEO, Mr. Ryan rejoined the company as general counsel. The new management team's mandate was to develop a turnaround strategy for the business while continuing to enhance compliance performance. The company retained Portage Point in April to insist in business model analysis and the evaluation of potential transaction options. Next slide, please. As they completed their initial evaluation, the new management team has serious concerns

regarding the company's ability to implement the necessary compliance measures and preserve the possibility of the enterprise, particularly in light of the additional costs associated with the regulatory scrutiny, litigation, and governmental enforcement agents. And this timeline shows what's happened just this month in the days leading up to be Chapter 11 cases.

The company engaged Vincent & Alkins as a Restructure and Council and began contingency planning for a Chapter 11 process and also continued to implement transaction restrictions to mitigate the use of the platform by fraudsters. The company had been required to file its 10K on May 11th. On May 12th, it filed a Form B-25, which disclosed that the the 10-Q would not meet the deadline, and also that the management team had,

the company had substantial doubts about the ability to continue as a going concern. As mentioned at the top of the presentation, the board had appointed Ivana Smith. Dales created a restructuring committee, delegated, among other things, the authority to deal with conflict matters, and a subcommittee of that restructuring committee

was formed with Ivana Smith as a full member and the scope that I mentioned at the outset to handle investigation matters. Ultimately, as I covered at the outset, the board determined to file these Chapter 11 cases. The timeline flag here shows what we're seeking to achieve in this court in the next 45 to 60 days, essentially to run a fail and plan process in tandem

with the goal of distributing value to creditors while also implementing a value maximizing sale transaction. The company has cash, but with the kiosk sauce, time is of the essence, and so we are seeking to move very quickly here and expect to be back before the court in short order. Your Honor, that concludes the opening of my presentation. Before I turn over the podium, I'd love to address evidence, but I'll pause there for any questions. Okay. All right to go to evidence?

Great. We filed our witness in exhibit list to docket number 26. We have two witnesses who submitted a declaration. The declaration in support of the first-day filing from Thomas Bedebaker and a declaration in support of the parole retention application from Benjamin Steele. Your Honor, unless there are questions, I move to introduce all the exhibits 1 through 10 on the witness in exhibit list into evidence at this time. Any objection to the admission of Exhibits 1 through 10 for purposes of today's hearing? Okay, they're admitted.

Thank you, Your Honor. with that unless the court has any questions I'm pleased to turn the podium to my colleague captain stance to begin on the first day release okay before you do let me just see if anyone who is on the line that wishes to make any form of brief statement to the court before we jump into the motions okay let's turn to the motions thank you your honor good afternoon your honor can you hear me all right just fine good afternoon Thank you. Your Honor, Kathleen Sam, Simpson, and Alkins,

to post-counsel to the debtors. With your honor's permission, we'd like to take things slightly out of order from what was filed on our hearing agenda, and so as long as it's all right with the court, I would walk through agenda items 1, 4, 6, and 9, and then turn the podium over to my colleague Abby Emery. Okay. So beginning with agenda item 1, Your Honor,

that's the debtors, motion for joint administration of these Chapter 11 cases. signed the amended I signed the amended order I may have stolen the thunder on that one I just signed it it'll it'll hit the docket any any moment but I did see it so I apologize perfect so we can skip ahead so that takes us to agenda item four which is the debtors motion to extend time to file schedules and statements so filed the docket number five your honor by this motion the debtors are requesting an extension of the deadline to file their schedules and statements by 30 days to June 30th to 2006 and also corresponding extension of the deadline to file their rule 2015.3 reports, also to June 30th, 2026, and further an amendment to the local rule 2015.3 to allow them to file those reports once every six months versus once every month. The basis for the request is just

to reduce administrative burden on the debtors of states. Given that these are going to be voluminous filing, it will take quite a bit of time for the debtors, management team advisors to review and prepare. And what about your honor? Subjecting any questions that the court has, we would ask that the court grant that motion to extend those deadlines and amend the rule. Anyone wish to be heard? Okay, motions granted. Thank you, Your Honor. Next is agenda item six. The motion to authorize Bitcoin Depot Inc. as foreign representative in legal proceedings in Canada that was filed at docket number 10. As Ms. Pete previewed in her presentation, there are three debtors in these Chapter 11 cases that are formed under the laws of Canada.

Those digital gold ventures Inc. It access ink and Express and vending Inc. Those three debtors are debtors in the Chapter 11 process, but they have material assets in Canada and some limited ongoing operations in Canada, and so the intention is to seek answer relief in the Ontario Court of, Ontario Superior Court of Justice in order to get cooperation from the Canadian courts with extending the automatic stay and administering the cases presently in order to do that pursuant to section four

the Canadian Creditors Arrangement Act we would ask that the court enter the order filed as exhibit A to the motion which would authorize lead debtor Bitcoin Depot Inc. to ask as that foreign representative and that entered order would be a necessary supporting document to the debtors application to commence this proceedings in Canada which they intend to do by the end of the week. So just any questions that the court has, we just asked

the court enter that order essentially was filed. Anyone wish to be heard in connection with this motion? Okay. I will then consider the emergency motion authorizing Bitcoin Depot Inc. to act as the foreign

representative in connection with the matters requested. on the terms relief requested. I'm going to rely on the Studebaker declaration and support for the evidentiary basis to get me comfortable here. I do take counsel's representation that this proceeding is going to start in the next few days, and so it makes sense to have a foreign representative in place to seek that relief in the Canadian courts based upon the declaration and the relief request that I do think emergency consideration is warranted under the circumstances.

And I do note that 1505 does contemplate this type of procedure. So I'm going to grant the relief requested, and I'm going to grant immediate relief of that today. And I've seen the order at docket number 10. Is that still the one you want me to sign? It is, gentlemen. Okay. I'll get it signed it on the docket. Thank you, Your Honor.

The last agenda item for me will be item number nine, that's the debtor's motion, critical vendors motion that was filed at docket number 11. Your Honor, the debtors are seeking authorization, not direction, but authorization to pay up to $448,000 on an interim basis on account of prepetition critical vendor claims. We are in a slightly unusual posture

with a critical vendors motion given that this is a wind down scenario, but as further described in the motion, the debtors have focused on the vendors that they believe are critical to these wind down efforts. Principal buckets of vendors are software and internet providers that they need to essentially keep their businesses online and running, keep access to their files. The armored carriers that go out to collect cash from the kiosks, the warehouses that are storing and kiosks that are not in use and the retail hosts that allow the kios to be placed in those high traffic retail locations.

Those vendors on a collective basis represent about 10% of the pre-petition full vendor population. So Your Honor, I'm happy to answer any questions specific questions that the court has on this notion, but otherwise we would ask the court grants this relief on an interim basis as a question. I understand what you're doing. Bad things can happen between now and then if you don't pay these folks. Let's be honest. Buying cannabis shouldn't be complicated, sketchy, or low quality.

That's why I want to tell you about mood.com. That's M-O-O-D dot com. Mood ships federally legal cannabis straight to your door. No medical card, no hassle, and here's the kicker. The quality is better than anything you'll find at your local dispensary. Yeah, I said it. Whether you're into edibles, concentrates, flour, or just looking to explore, you'll find it all at mood. And it's not just the variety that makes them stand out. Every product is sourced from small American-owned family farms that care deeply about what they grow. It's cannabis you can trust, delivered discreetly, and ready to elevate your mood. And because you're a listener, you get to, 20% off your first order. Just head to mood.com. That's M-O-O-O-D.com to get started. Automatic stay is in effect, but this is a value-maximizing, value-preserving aspect here. And if who you're paying are the folks that kind of keep the software up and the folks who are going to help make sure that whoever's going to buy this can actually buy it and this makes

sense to me. Just make sure that you're paying the folks, it looks like from the motion that you're just going to go after and paying the folks that are necessary to kind of get to the sale, and that's the way I envision this, and so I'll approve this on an interim basis. I understand where we are. You want to come back on a final hearing. When do you want to come back? We would ask the court to set up final hearing within 21 days on this motion. Make me do math, then let me see. Let me see. I'll put out the old calendar. I think that would be the week of, Your Honor. Rosario, can I do 2 o'clock on June 9th?

June 9th at 2 o'clock? I was told no. Let's do 3 o'clock then. Let's do June 9th at 3 o'clock. And then your objection deadline will be a week before. You went, let's do June 2nd. Well, that's probably not. Yeah, let's do June 2nd.

Okay, where do we go next? All right, thank you, Your Honor. With that, I will speed the podium to my colleague, Abby, and then. Okay. Ms. Emery, I can't hear you. Apologies, Your Honor. Ms. Vance helpfully muted it, and I unhelpfully left it there. Good afternoon, Your Honor, Abby Emery of Vincent and Elkins.

I'll begin with item number three on the agenda, which is the debtor's consolidated creditor matrix motion, filed at docket number five, and the flag that the debtors have submitted a revised proposed order at docket number 22. Okay. There are 17 debtors in these Chapter 11 cases, and the cases are jointly administered pursuant to the order the court granted shortly before this hearing. The court has also entered the order granting complex case treatment, and through this

motion the debtors are requesting authority to file the consolidated creditor matrix and top 30 list of unsecured creditors as required under the complex case procedures for jointly administered complex cases. Additionally, Your Honor, the debtor they are requesting authority to redact the confidential information of individuals in the creditor matrix, which is consistent with Section 107 of the Bankruptcy Code, as well as Local Rule 9037-1B. The debtors believe that this is an appropriate measure to mitigate the risk of identity theft or other harm that could come to these individuals absent redaction of information such as their physical and personal, physical addresses or email

addresses. The debtors will provide unredacted copies to the United States trustee for the court, Any statutory committee appointed upon requests and other parties can request it by filing a motion on the docket. The debtors are further requesting a waiver of their requirement to file a list of equity security holders. Bitcoin Depot, Inc. is a publicly traded company with an excess of 11 million shares of common stock. The debtors only maintain a list of registered equity security holders and would need to obtain the names and addresses of beneficial shareholders from the securities agents. a process that would create undue expense and administrative burden with limited corresponding benefit given the availability of more efficient methods of notice. In lieu of filing a list and providing direct notice to equity security holders, the debtors

propose instead to serve notice unregistered holders and all banks, brokers, intermediaries, and nominees that hold the equity securities in street name for beneficial holders with instructions to serve that notice down to the beneficial holders. The debtors will post a notice of commencement on the case website, and the debtors have filed a form 8K with the SEC notifying equity holders of the commencement of these cases. In light of these multiple channels, the debtors submit that the waiver requested here is appropriate under the circumstances. Finally, the debtors request approval of the form and manner of notice of commencement filed as Annex A of the revised proposed order as adequate and sufficient notice of the commencement of the debtors chapter 11 cases. The debtors submit that cause exists to grant this relief because it will allow for adequate and sufficient notice, minimize administrative costs, provide the United States trustee with

an accurate picture of the debtor's creditors and protect confidential information that may put individual creditors at risk. The motion was previewed with the United States trustee and any informal comments have been incorporated. The evidentiary support can be found in Mr. Sue Baker's declaration filed at docket number 23, and for the record, the revised proposed order includes Bit Access Inc. as a debtor in the notice of commencement but is otherwise substantially the same as the originally filed proposed order unless your honor has questions the

there's respectfully request entry of the revised proposed order at docket number 22-1 okay motions granted thank you your honor next we'll turn to wages which is item number seven on the agenda the wages and benefits motion was filed at docket number 12 okay by this motion thank you by this motion the debtor there's seeking entry of an order authorizing the debtors to pay accrued pre-petition obligations arising on account of wages, health care benefits, and other compensation and benefits programs, and to continue to administer these programs during these Chapter 11 cases. The debtors are seeking a final order as permitted by paragraph 4 of the complex case procedures.

By way of overview, the debtors employ 116 individuals across three entities. Debtors Bitcoin Depot operating LLC, PET Inc. and Bit access Inc. The debtors also routinely use about 13 independent contractors who primarily provide technical, administrative, and other support services. The benefits provided to employees include health, life, and disability insurance, as well as retirement benefits. The motion also outlines corporate credit card and expense reimbursement programs through which the employees are compensated for expenses they incur for the benefit of the debtors in the course of performing their duties. The workforce is critical to the administration of and transition into these Chapter 11 cases.

Without their continued uninterrupted services, the debtor's ability to preserve and maximize value for the benefit of stakeholders that suffer immediate and irreparable harm. The total pre-petition amount of the debtors are seeking authority to pay is approximately $850,000, which is broken out for the court and a chart on page 7, paragraph 17 of promotion. This amount is inclusive of pre-petition wages, withholding obligations, credit card program, obligations, health insurance expenses, and $401K obligations, all of which will become due and payable within the first 21 days of these cases. In addition to paying these accrued amounts, the debtors are seeking authorities to continue

administering the compensation and benefits programs consistent with past practice. Your Honor, I want to highlight several key safeguards the debtors have built into the proposed order. First, the debtors do not believe that there are pre-petition amounts owed to any individual on account of wages that exceed the priority expense cap in Section 507 of the Bankruptcy Code, nor are the debtors seeking to pay any amount in excess of this cap.

Nothing in the proposed order authorizes the debtors to make any payments that violate or permit violation of Section 503C of the Bankruptcy Code, including payment of any bonus or severance obligations to or on behalf of any statutory insider. Finally, the debtors will maintain the schedule of payments made pursuant to the order, which will be periodically provided

to the United States trustee and any statutory committee appointed in these cases. With respect to the legal basis for the relief sought in the motion, Sections 507A4 and 5 of the bankruptcy code entitle certain claims on account of employee compensation and benefits to priority treatment. Because these claims must be paid and full to confirm a Chapter 11 plan under Section 1129 ,

the relief here only affects the timing of this payment. And particularly in this context, Your Honor, courts have consistently recognized the power to authorize payment of proof. preposition claims where it's critical to a debtor and possession's ability to manage as the state. And courts in this district have routinely granted similar relief. Finally, I'll note that the debtors have sufficient liquidity to pay the amounts described

in the motions and to continue making payments under the compensation and benefits programs in the ordinary course during these cases. Your Honor, the vast majority of the workforce relies exclusively on their compensation and benefits from the debtors to pay their daily living expenses and support their families. And I'll note importantly, payroll is due Friday, so the debtors need authority as soon as possible to begin processing this payroll. The motion has been previewed with the United States trustee. Many informal comments have been incorporated. The evidentiary support is also found in Mr. Suda Baker's declaration at docket number 23.

Unless Your Honor has any questions, the debtors respectfully request entry of the proposed order filed at docket number 12-1. Okay, motions granted. Thank you, Your Honor. That's all from me this afternoon, so I will see the Portean. for my colleague Christian Katan. Okay, thank you. Good afternoon, Your Honor. Christian Katan and Sincinn Elkins on behalf of a proposed counsel for the debtors.

Good to be in front of you again this afternoon. Good afternoon. Today, Your Honor, I'd like to turn your attention to the debtor's cash management motion, which is item number eight on the agenda and is filed at document number 13. By this motion, the debtors are seeking to maintain their pre-petition cash management system, including their outstanding your current budget. bank accounts, flow of funds throughout that system, all in the ordinary course. There are a few things about the debtor's cash management system and the motion that I'd like to call

to John's attention. Firstly, historically, the debtors, given, as this piece described, the nature of their business, have held certain cryptocurrency wallets. These wallets are divided between wallets that were used to fund operating expenses of the debtor's business, as well as to hold as an investment. By this motion, the debtors are requesting the authority to liquidate their cryptocurrency holding, turn them into U.S. dollars, and put them into bank accounts that are part of the cash management system. As the debtors do that, so then... Let's be honest. Buying cannabis shouldn't be complicated, sketchy, or low quality. That's why I want to tell you about mood.com. That's M-O-O-D-com. Mood ships federally legal cannabis. Mood ships federally legal

straight to your door. No medical card, no hassle. And here's the kicker. The quality is better than anything you'll find at your local dispensary. Yeah, I said it. Whether you're into edibles, concentrates, flour, or just looking to explore, you'll find it all at mood. And it's not just the variety that makes them stand out. Every product is sourced from small American-owned family farms that care deeply about what they grow. It's cannabis you can trust, delivered discreetly, and ready to elevate your mood. And because you're a listener, you get 20% off your first order. Just head to mood.com.

That's M-O-O-O-D dot com to get started. The debtors intend to do that as quickly as practical. However, because of the amount of cryptocurrency that are held in certain of their wallets, there is a concern that they could alter the price if they were to sell all at one time, and therefore the debtors will take steps to sell as quickly as possible without impacting the price that they receive for their cryptocurrency,

harming the estate and debtors cash position. The debtors are also asking for authority to extend the timeline to comply with certain requirements of the U.S. trustee in Section 345. The debtors enter this Chapter 11 cases with about 29 different bank accounts. As you heard, they've operated across several countries all around the country, and in various different business lines. However, as the debtors begin to cease operations and close certain operations, they are going to seek to work with the U.S. trustee and consolidate some of the bank accounts as they're no longer needed. The debtors will consolidate bank accounts

as possible and then close bank accounts that are no longer needed during these Chapter 11 cases. With those things flagged for your honor, we did share this motion with the United States trustee we received a request for some further information about the bank accounts and the cryptocurrency wallets and we did share that with them but to not receive any informal comments or informal objections so if that your honor unless you have any questions for me with those would respectfully request that you enter the cash management interim order okay anyone wish to be heard in connection with this motion okay I've reviewed the order the motion's granted

Thank you, Your Honor. That's all for me today. Okay. I'm going to set the same, since this is an interim hearing, I'm going to set kind of the same June 9th, 3 p.m., June 2nd, date as for the, just for the interim order. Okay. That's perfect, Your Honor.

Thank you very much. All right, thank you. I'll hand the podium over to Paul Heath. Okay. Mr. Heed, good afternoon. tuning in, Your Honor, can you hear me? Just fine. Okay, Paul Heath with Vincent Elkins, and thank you again for hearing us in this short notice,

and thank you to Mr. Wynn and Mr. Jimenez, who we're working with, who assisted us over the weekend for that. We're grateful. I'm going to address the cash collateral motion, which was filed at docket number 24. We also have a declaration of Tom Studebaker, a Portage Point, who Ms. Pete identified as our CRO, in support of the cash collateral motion, that's filed at document number 25. Mr. Studebaker is in the virtual courtroom. He's available to testify further on directive needed on cross-examination or to answer any questions you might have.

To the extent necessary, I just want to make sure it got admitted. I'm going to move for the admission of Mr. Studebaker's declaration for purposes of this hearing only. I believe it's in. Okay. Just wanted to make sure, Your Honor. thinking. As Ms. Pete pointed out, our primary secured lender here is Silverview Partners, who alleges a lien across virtually all our personal property assets with certain exceptions.

Silverview is represented by Alston Burr, who appeared by phone, and I'll say at the outset, we appreciate their work with this last several days. Also, our goal here is to obtain interim use of cash collateral. We have prepared and attached to both Mr. Studebaker's declaration and also to the form of order, a proposed four-week budget, which takes us, I believe, to the week of June 5th. We'll need to adjust that budget slightly given an adjustment we made to our added protection reserve, which I'll explain in a moment. As you can see from the form of order, we endeavor to keep the form of order relatively simple.

We did not, given our recent and our being Benson Elkins' recent engagement by the debtor on these sort of issues, we're not able to stipulate day one on debt allowance and lean validity and perfection. Rather, what we agreed to do was simply to segregate cash in the alleged of the alleged of, amount of Silver Point's claim, including principal of about 13.3 million pre-petition accrued interest and estimated post-petition interest through July 17th, unasserted exit fee, an illegal fee reserve. That segregated cash, per the terms of the order, cannot be spent for state expenses or anything, absent further order of the court. The total amount of the segregated fund is going to be approximately $17,000, $200,000.

And we will update that. I think that has been updated in our most current order. We've also agreed for the standard replacement means and super priority administrative expense claim to protect solely against diminution in their collateral value since the petition date. given the cash segregation I'm pretty confident there really should not be any diminution here at the end of the day both the estate and the UCC will have a window to review and see if any challenges to the debt to lean priority and

validity exists and will of course work with silver view to resolve any objections we have the with Alston and Bird or revised form of order to address their comments. I'm happy that was filed like five minutes in front of the hearing at docket number 35. I'm happy to put that up in the screen and walk the court through it. At high level, the primary changes were to put in two review periods or challenged periods, both of the debtor, and then ultimately for the committee, the committee is obviously being longer. Our would be about 30 days and if we don't have challenges, we do have challenges, we'll

stipulate to what we can in the form of a final order. We'd anticipate because we're giving ourselves, since some of you agreed, 30 days to finish up our review, that we would come back for a second interim hearing on June 9th at 3 p.m. And then no later than the week of June 22nd, we'd come in for a final hearing. I'm happy to put the revised order on the screen and walk the court through any questions that might have, if that would be helpful, Your Honor. Just taking, I'm actually walking through it right now

as we go through it. Mr. Wynne, any, just want to make sure that you've had a chance to review this. I just read it. I think the challenge period improved the cash corridor. I think the committee gets a little bit more than what the local rules provide, so I have no objection.

I think it's 75 days under the revision. The local rule gives them 45, so I have no problem to give in the committee more time. Okay. Which paragraph would I need to insert a new date? I was trying to find it. It's your owner, it's at the very end. Oh, I see it. I see it.

Paragraph 21. Yep. And we can upload the order. I want to try to me. Don't make me feel bad. I can get this one done. I can get this over the finish line. Yeah.

Okay, well, I appreciate it because you know somebody who could not, which is me. But that's great, because it should be self-contained to the budget preparing for Mr. Studebaker should be attached to the queen. I think it has been updated. It all looks good. We're going to kick this to a second interim as opposed to kind of going to a final, see where we are, give the party some time to continue working, and provide the adequate deposit there. This is really down the fairway, though, in terms of adequate protection. And this all makes sense to me. And this is consensual as adequate protection, scheduling a further hearing.

And so I will grant the relief requested. And I'll sign the order at 35. And we'll get it on the docket. Thank you, Your Honor. All right. Thank you. Ms. Pee, thank you. I got to start coming up with some new questions.

Everybody knows the speeches during the presentations. They're stealing my thunder when I want to ask good questions about the motions. They've answered all of them already. I've got to come up with some new ones with these new associates. They did a fantastic job. They answered all the questions that I would have been able to ask. So really, really, really good job presenting on the motions. Thank you, Your Honor.

Okay. That concludes our agenda for today. Is there anything else we need to take care of or talk about? One question for you is when you file your motion, when are you going to try to set your, when do you think you're going to get bidding procedures on? Are you just going to try to work with my case manager to try to get a date on it? Yes, Your Honor. I think we're going to try to get it on file as soon as we can, hopefully, this week.

And as I mentioned, we'd be seeking emergency relief, because we would hope to be in front of Your Honor again as soon as next week, we can work it with your calendar. Okay. Just get it. I think what would be best is get it on file, reach out there. Let me take a look at it and see what it is,

kind of the lay of the land on the motion, and then we'll get you a date right away. Thank you very much. All right. Thank you very much. Have a good afternoon. Let's be honest. Buying cannabis shouldn't be complicated,

sketchy or low quality. That's why I want to tell you about mood.com. That's M-O-O-D-D. Mood ships federally legal cannabis straight to your door. No medical card, no hassle. And here's the kicker. The quality is better than anything you'll find at your local dispensary. Yeah, I said it. Whether you're into edibles, concentrates, flour, or just looking to explore, you'll find it all at mood. And it's not just the variety that makes them stand out. Every product is sourced from small American-owned family farms that care deeply about what they grow. It's cannabis you can trust,

delivered discreetly and ready to elevate your mood. And because you're a listener, you get 20% off your first order. Just head to mood.com. That's M-O-O-O-D.com to get started.