American court hearing recordings and interviews - Global Clean Energy Holdings - audio of April 16, 2025 first day hearing before the US Bankruptcy Court for the Southern District of Texas in case 2025-90113

Episode Date: April 17, 2025

This is the official court audio recording of the April 16, 2025 hearing before the US bankruptcy court, docketed as docket number 59.For access to the free bankruptcy docket, and more information about the Global Clean Energy Holdings bankruptcy proceedings, see https://dm.epiq11.com/case/gceholdings/dockets

Conference recording. Line unmuted. I see you talking, but I believe you're muted. Sorry about that. We'll get started right at 11 o'clock. But please go to my webpage and sign in. That's how we see formal tract of adherences. And also, please keep your line muted so that don't have to activate the hand-raising feature.

We have about almost 50 people on, so please your line muted. Good morning. We're here for the 11 o'clock doctor. Today is Wednesday, July 16, 2025. Case number 25-90113, global clean energy holding. So the first day hearing. So why do we get the appearances of council first? Good morning, Your Honor. Jason Ball and Bob Boehner,

Julie Harrison, up in Hornow's full-wide firm and proposed local council for the centers. We're joined this morning with our co-counsel, Bright Sharks, Rossi, Burt, Bill, or null to the Kirklandt, Annales, and Mr. Sharks will take the lead of today because you broke your time. All right. Good morning, Mr. Paul and Mr. Sharp.

Good morning, Judge. Jackson Garvey of Sidley-Alston, LLP. On behalf of Detal America's Port. On the line from Sidley are my colleagues, Mr. Robert Stevens. This is Megan Kejana, Ms. R.in-Farrel. V-Tol is an energy and commodities company that's been around for over 55 years years and plays a number of different roles in these cases.

First, through the supply and off-take agreement, which is a safe harbor forward contract, beat all the vice the debtors with liquidity and beat stock and then buys the finished product. We were also the pre-petition revolving credit facility provider and we're at a debt lender in this case. Thank you. Good morning, Your Honor.

How is it to the United States Trustee? Good morning, Mr. Lennie. Morning, Your Honor, Steve Pugalski with Haines and Boone on behalf of CTCI and CTCI America. Also appearing with us as our co-councils at James Rutton-Termaine, Reagan Powers, and his team. We have some other hands and booms on phone as well, but we're here as a party to the restructing support agreement.

I'm sure we'll have some comments as the case of the hearing goes on. All right, thank you, Mr. Prasopsy. Anyone else? Anyone else? Your Honor, not the cell. I can hear you. I can hear you. The honor, not the spells from Latham and Lytton on behalf of Orion Energy Partners with

Agents for the Termon, the Terminal, and the Fifth Terminal, and giving them. Anyone else, wish to make an appearance, Mr. Sharpe? Karana, can you hear you? I can hear you. Yes, sir. Okay, thank you. Good morning, Your Honor. We're going to work for the bench charts,

the difference in those types of letters. It is very good to be here today. As you guys, it was a little bit about what it's taking to get here. But before I do that, since I think that, I can have to provide various stakeholders, really around the

support and have the support for the time for long. And so, you said, but to take them off the same thing. And the staff, the people, people, the assistance for accommodating a state. I was just not a lot of done. that you're a judge both held time on your respective calendars for a couple days so

you thank you for that hope it wasn't too much of an imposition also so at growth today happens to be my oldest friend's fifth birthday and I promised him I would be home so earlier here in time is very much appreciated so I can keep that wrong thank you I know this is on the table during early hours of this morning hopefully your honor was able to get everything on a timely basis and a as soon as possible. If that's not the case, please let us know a little dress like it,

it's possible. First, to keep production to the Northern Road and Corpum team that you just heard from. The company of several other individuals

on its side that I've liked in review. First and foremost, there is Mr. Noah Berlun. The debtor is present. Mr. Bellin, he said, raise your hand.

Mr. Balloon has suited the first day declaration and supported the better sufficient of that doctor's under hand. That was very thorough, by the way. So I really appreciated it. I've got a whole education in biofuels in a short period of time.

Mr. Trudson, do you can just get a little closer to the microphone? So I want to make sure our idea is working. Thank you, Your Honor. Hopefully there was some good information in that briefing. Yeah, it's very good. Thank you for that. It really helped me get through the rest of the paper. Good to hear.

Sorry. I just, and you were just phrasing up on our first, our phone dropped, I'm sorry about. Also from the management, that's sitting Mr. Balloon in that window. He is the company's general counsel, and Mr. Wade, asking the company, the company CSO, so I also take in the Zemones. In addition, we have Mr. John Walsh of Albrein and Hempel. And so, Mr. Walsh, he has one declaration, actually two decorations, one, so does the first table in second three, and another in support of the DIP that

goes one of the Svarez number 16. And then last in all least, we have Mr. Crickson-Penkempsey, the reserve firm, each of the better proposed investment interest, you know, separation of this process of the present piece coming. We also will be a tepics as a proposed claim in those weeks. We do have to include presents, Your Honor. I would like to use the people.

We'll also, if you'd like to file the presentation on the do if you haven't already, we'll do that. We're going to save all of declarations Mr. please don't speak to me with your plea declaration to be the evidence right now that

that's document with that evidence just for the purposes of the day here okay so you put out this just a bit there Mr. Charles so you want to introduce the declaration of which one

Mr. Noah Berlun the first day declaration and the evidence now is document number two your honor okay so is there is any objection to the admission of the declaration of Mr. Noah for news, which is on the exhibit list at docket number 39-1? Hearing no objections, it will be admitted at this direct testimony for the purposes of this hearing.

To the extent anyone wishes to cross-examine him, we can do that when we get to the motion. Thank you, Your Honor. We appreciate it. Let's put the presentation up. So if you could give sharing to us, see there's a window called person presenter. If you can show notes to that person, we'll put that up very quickly. K.E. presentation, excuse me. K.E. presentation.

Yep. There's a certain. Now presenter. Appreciate. Okay. I'm going to give you the evening while it comes up. Your Honor, we're here today on behalf of Global Queen after really half a year, hard-fought, intense negotiations between the company and its state.

key stakeholders on a carefully crafted chapter-led case. I will get into this in detail and read it in the documents, I'm sure, but I don't want to bear the lead. We enter the case with the deal, but that deal was not a foregone conclusion. Our collective negotiations really continued all the way up to the finish line in the early hours of this morning without any real certainty that we would reach the conclusion that we have today. So we all push through, and I have to say that even when things got a little bit testy during the last few late night,

the professionals involved, a state of course, state professional, and we have landed what we think will be a truly value-maximizing transaction. That says, Your Honor, the deal we've reached, it's a bit of a fragile basis, and it kind of requires all these pieces to work together to rub the needle. Talk a little bit about it, but, you know, this is. the case that we hope can be as smooth as possible because, candidly, we did most of the work pre-petition and is embedded into the RSA. There are few unique features of the deal.

For example, you'll hear about when we get to the dip. There's a paragraph, paragraph 48 that we call the snapback provision where the deal falls apart when things come back to a state of nature. I frankly, it's been 10 years since I've used that provision when I had to find a step back. between our crisis agent and Joe Simone State Wall back of who was around and we brought it back because we need to have that sort of provision but how I want to illustrate for you that there are a lot of results in as thoughtful a way of possible. It cannot be overstated just how important the deal is to the company because it avoids

costly and protract the litigation in favor of a consensual vaccinal maximizing path forward. The end result of that is, of course, we're just a piece. Before we go too far into it, let's talk a little bit about the company. What is Global Earth Clean? And if it's possible, could you just move? Do you guys move the next slide? So Global Clean is a vertically integrated rear-of-the-field system that produces ultra-low carbon fuel from agriculture but to be stuck.

The company has three segments, really, upstream, midstream, and downstream, which, you know, you're honest in a lot of time doing oil and gas fields, it's always going to sound familiar to you, although I does have some different flavor here. The upstream business is a combination of plant breeding and seed production, along with, I'm going to, and that's just work up. Atronomy is a word I use farming the context of this deal, and it's very important because what it refers to is the attention to science of farming, the study of soil, soil, plants, and animals and a way to produce production, and improving production of farms.

As that term has applied to fission, agronite, is the first to the upstream parts of it. It's kind of like what you're honored would be used in the context of the conditional oil and gas team, gas company, excuse me, but instead of responding to the extraction of a hydrocarbon, it refers to development in aquaculture and base all these.

Right? So it's not, it's not what you're using. sustainable oil and gas going to make fuel, which is a basically a crush. Through the upstream business, well, the theme has developed a portfolio of a proprietary varieties of crop known as Camalina, Civa, or just Camalillo. And they certainly have 20 varieties of IT protection and intellectual and intellectual property protection, along the patent for enhanced plant use. What the company has done over the years is it's gone and it's introduced Camelina to farmers in their locations around the world

so they can grow it in foul fields where they're not growing food because whenever you're using a crop for fuel, you get into this debate about she'd be using that crop for food or should be using it for fuel. And Camelan has designed to sort of bridge the gap in the world. The company currently contracts with more than 500 farmers all over the world, representing more than 120,000 acres to grow Camelina as feedstock. The company also has an extensive experience of processing Camelan grain and producing sustainable biohills. So while Global Queen certainly is in the industry,

it's important to understand that the dream of Camelina as a feedstock is still developed, right? The company believes that if you look worldwide, there's probably really 150 million acres that could be one stay available for something like Camelina but we're not quite there yet that's upstream judge in the midstream company has some key contractual relationships with logistics company because you've got to get the speed to the facility which I'll get from a second and that's you see a reference in the declaration and this is a room who is right now

and then we get to downstream. Downstream judge is It's the refinery. It is in Bakersfield, California. That's where Mr. Bodebore is sitting right now. It is the centerpiece of the entire operation and, frankly, a large part of why we're here today. Because while that facility is running today and is producing approximately 8,500 barrels of bio-tuel today, it's taken a long time to get there and it's been several hundred million dollars over as much. The other punchline with respect to Bakersfield, and there's a lot of complexity to it, is that writes how the sweet stock that goes into Baker's field really only about 10%

Camalina, about 9% of it is soy, which is purchased from other places. So this first integration is something the company is still growing into. It's a dream that one day. It hopes to capitalize on and maximize value for everyone. What you have here on this slide is just a few fun facts about Camalini, I've heard it's not good to eat, but it tastes terrible. I didn't try it. I was Josh Deppard, I was, so I didn't try it.

But I didn't try it. I've heard it's terrible. It's very hardy and it can grow in some really difficult places, and it doesn't take a huge amount of water, most importantly. It does not create a carbon opportunity from direct or indirect land use. So, you know, in a world where we're experiencing the global warming, world where there is a move to decrease the crop and footprint, a crop like a canoenery like what we have in Baker Steel that's come by the company,

can be very helpful to speaking those environmental goals. Let's talk a little bit on a slide spot about the history of the company. The company has been around since 2007, after relocating from Salt Lake City to Los Angeles, to provide a rate of really what was a rapid of growing biofield industry. At the time, the company's predecessor was a startup focused on the cultivation

of a different seed oil from a different plant that would be used for the production of bio-deasel. The company eventually expanded business internationally and export their 10 species and the land. Really, the 18 years over the 16th of years

over the world's largest portfolio of proprietary varieties of Camelina and parts of the companies trying to see this slide. We've highlighted a few of them. It's all going to slide, Judge, and I'll get into this a little bit more, but I want to highlight it. Start to see where some of the trouble

has started for the business long before, no, Kirkland and A&M were involved, but this was highlighting. So the first is this red circle at the bottom of the timeline. The company has entered to an agreement with Exxon. And when they had entered into an agreement with Exxon, it was for an off-pacary,

the pursuant to which Exxon had agreed to purchase the same was about $130,000,000,000 of renewable diesel from the company for five and a half years. Great. It makes sense. The issue is that the plant, which was supposed to be initially eligible, that 2022, is critical. So first, you know that we have to schedule.

All right. Sorry about that. I'm going to have to implement the hand-raising feature, so why don't you, Mr. Schartz, just go ahead and hit five-star one time. Conference, muted. Mr. Schart, did you hit five-star one time? I promise. All right, there you go.

So sorry about that, Judge. I don't know why the phone dropped. Again, X-Font, we had this off-take agreement, and the company had to terminate it because the facility wasn't on the, wasn't up as it was running as it had anticipated when Exxon entered into the agreement of the company. Also, in 2023, you'll see this, 2020, 24, the company replaced Exxon with VTOL. Oh, I'm just a objection. They're off the agreement.

I think we're losing you. For some reason, we're not picking up every word. now. If you go on one second, I'll just change phone. It's five star one time. I can hear you fine. Not should. Okay.

Thank you so much. Sorry about that. I hope that I'll end up in a phone booth on Lexington Avenue at this rate. Okay, so the company entered into an arrangement with VTAL, very important, party. And then if you look at the very top right of this timeline, Judge, December of 2024, the key there is that the facility started to come online. So, you know, we go through this whole history, acquires Camelina, the stew with Exxon, replaces Exxon with Detal,

and in 2024, the Baker Sill facility comes online. I'm going to fill in some of the gaps, but I just want to have those key dates as we go through how we got here. Let's talk for a moment about, on the next slide, the company's organizational structure. It's not overly complicated, even though it is a worldwide operation. There are a total 19 entities that sit below the lead. better global clean energy holdings, which is the holding company, and also, you know,

trades publicly right now over the counter. The non-bettor affiliates are the companies for subsidiaries that are based outside the U.S., Argentina, Brazil, Canada, and Spain. We kept them out of the case because they didn't have things that they needed to restructure. We do anticipate, you know, making sure that they can continue to operate during the case unintended. I want to talk a little bit about the capital. structure. So on this box in the middle there, you've got the layer cake that makes up the capital structure. As you can see, it's just over $2 billion in known claims against

it, the vast majority of which breaks into three components. At the top is the revolving credit facility. That is VTAL and the lenders that are in there. That group is represented by Fidley and RPA advisors. The amount reflected in the table is a little small to see is about $40 million that is owed. That doesn't include potential set-offs that would be associated with amounts to the company owns back to VTALs under the off-take agreement. So this is just a pure debt number. The Sydney team would tell you that's actually much less when you account for the set-offs.

But as a comment of the case, that's what's owed under the revolving credit facility. In addition, just both... Let me get back to... Did I read all? Also, did I read correctly that Beecho also has a part of term loan fee? Correct, yes. They do have part of term loan deep, correct? Yes, Your Honor.

You read closely. The consenting term loan lenders, so the next layer down, they're owed about a billion dollars. Again, this is sort of exclusive of premiums and fees, just trying to get as close we can to a principal number. they're led by the agents, which is an entity known as Orion Infrastructure Capital or OIC, agent and also a lender. There are other lenders in a group, namely VOIA and Grossmanor Capital. There are a few others.

The consenting term loan lenders are represented by our friends at Latham and Porella, that was Nossis, who spoke up, and the Perela Weinberg firm led by Doug McGovern. As I will get to in the moment, the term loan lenders have funded literally hundreds of million dollars into the debtors beyond of what they originally expected when they first made the investment. I'm going to have a slide just to walk you through that very quickly. And, you know, like probably all distressed borrower-lender relationships, it hasn't always been perfect or peaceful, but on a net basis, it's always been constructive.

And, you know, to put it warmly without the lender support, who probably wouldn't be standing here today because they've really kept the lights on by keeping this company funding. I'll come back to that in just a second. If you guys keep it on the prior slide, prior slide, I want to talk a little bit about CTCI. So CPCI is the company's engineering, procurement, and construction for EPC counterparty. They are responsible for the work that was needed to be done

to convert the Bakersfield facility from a conventional operation to a biofuel operation. Now, CTCI is based in Taipei, Taiwan. on. And I think they are probably still trying to figure out how they ended up in the bankruptcy process in the Southern District of Texas. But CTCI has also been a really important supporter of the business, even if it has been acrimonious at times. We did have the opportunity. I did personally to meet many of the principals from CTCI in Tokyo, Japan at the beginning of this year when we really kicked off our discussions in earnest. I don't know if they're listening,

but I haven't talked to them since then, but I would like to say thank you to them. for helping us get to where we are today and getting this over the line that required everyone working around the clock. Our friends from CPCI are represented by Davis-Rite-Tremaine, led by Reagan Powers out of Portland and the BDO team. It's important to know, Judge,

just a leader on this slide for a second, which collectively represents like 98% of the known claims against the company. This is the lion's share of the claims against the debtors. It's important to note that things are a lot more complicated than this little oranges table on this slide might have you believe, because there are, in fact, a huge number of complicated disputes lurking beneath the

surface. They're so sensitive. I'm a bit low, the way it's into them. So I don't want to go too far into it because I don't want to disrupt the apple cart, but I do want to just touch on it briefly just so you know what the pressure points are because I think it will help make some of the other details you picked up in the documents make a lot more sense. So first and foremost, judge, I would say the biggest issue is one of priority, right?

CTCI as a contractor, right, engineering and procurement contract, EPC party, has asserted a more than $900 million mechanic's lien on the Baker's Field facility, right? And that lien is, I'll raise a whole host of issues because you have to have a fight potentially about where does that lead sit relative to the lenders. Lenders will tell you we're senior. CTCI will tell you, well, I don't really care because I think there are lots of other things you haven't paid attention to, including timing, et cetera, et cetera, et cetera.

So we don't think you're senior. Suffice to say, the priority dispute sits at the heart of the structure, including the deal that we cut. I'm not going to say anything more about it because I'm going to make people angry. The second dispute is one of the amount, right? What is the amount of the lender?

claims, should include fees, should include premiums, all the things that we fight about in the bankruptcy case under Section 502 of the bankruptcy code. Similar issue with respect to CPCI, but it has a different flavor, right? The debtors have maintained and would maintain, if it was litigated, that CPCI's claim amount should be a lot lower. CPCI would say actually should be a lot higher. Suffice to say, it's an extremely complicated issue and that would have been the subject of the arbitration that was launched pre-petition.

Third, Your Honor, are all of the various ancillor disputes that really would have emanate for those first two, right? Dysical questions about adequate protection. Can we impose a non-consensual priming div on someone who's asserting a lien, whether it's junior or not, the value of a company, who gets what? I mean, I'm not going to lie to you, Judge. There's a small part of me that really wanted to hash out all of these issues in court.

It would have been a lot of fun in intellectual industry, interesting. I also think, Judge, it probably would have killed the company because no one was going to sit around and fund that massive litigation where everyone fought over it. And so we'll have to save those types of fights for a different time, a different place, in a different case. Because as we sit here right now, Your Honor, we have settled, embedded in the RSA and in the dip financing. We've settled these issues as that careful detonk that I started at the beginning. Let's go up now to the next slide. Let's talk a little bit about really how we ended up here. You've got what the company does.

You've got the history sort of broadly written over the last, call it, almost 20 years. You've got a view of the capital structure. You know what the amounts are. You know where things fit. You know some of the fault lines. How did we get here? So I'm zooming in to really the last year or so. The company's liquidity issues primarily stemmed for,

delays in the conversion of the Bakersfield facility from convention to agricultural feedstock. That's the work that CTCI did. When the company acquired the facility in 2020, they immediately focused on retooling and converting it from existing crude oil to, you know, bio-refinery. To get that underway, they hired actually a different group. COVID hit. It terminated that agreement. They signed a new agreement with CTCI. the initial date to complete the facility under the EPC agreement was 2022,

long before I was on the scene. And again, based on the assumption that that would be active in 2022, the company entered into Exxon's agreement and they had to terminate it. Really what happened in sum and substance is that the liquidity hit to the business during 2023, 2024, just became more extensive. And in the fall of 2024, the company realized that it need to have a more holistic view about what their options were. And so Kirkland and A&M came into the scene. Now, at the time, as we were sorting things out, we also appointed a new independent director to the board, Mr. Todd Arden,

and we formed a special committee with an existing independent director, Ms. Susan Anhal, formed special committee to review and approve conflicts matters, all over to see the restructuring, just because we knew we would have to be pretty nimble from a board perspective. also at the time, this was the fall of 2024, the company was in a pivotal moment because it had terminated the EPC contract for cost, an action that CTCI vigorously disputed and would still dispute if it was a lot of issues today. And CPCI had just filed with mechanics liens for more than $900 million of secured claims and actually had kicked off an arbitration process to go resolve that.

That was a process that probably would have taken years and would have cost millions of dollars to resolve. So we came in just as that stuff was starting to unfold, and there was another development because at the same time, the term lenders were at the end of their proverbial road. The term lenders were making clear to the company that any additional financing needed to be tied to productive discussions with CTCI. The term lenders were saying, look, we're not willing to fund a company outside of a bankruptcy process absent some production discussion with CPCI that were reasonably likely to result in a complete resolution. They needed to have an end to it.

They could see that it was heading towards litigation. They didn't want to fund it. We needed to find a way out. So as we headed to the end of 2024, we realized that we were going to have to move as fast as possible. So just before the holiday season hits, and with the assistance of the special committee management, the company put out what I'll call a straw man proposal

for how we thought the company could be, resolve. I think we did the right thing at the time, Judge, because everyone hated that proposal and was angry about it, and so they went to the holidays and kind of mad at us. As we came out of the holidays, we knew we had to hit the ground running because financing was tight, liquidity was tight. And so in mid-January, a key subset of advisors from the company, the term loaned under C.T.S.I and their respective principals, we met in Tokyo, Japan. Why Tokyo just seemed like a nice fair ground. We didn't want to go to Taipei. They didn't want to go to China. I ended up in Tokyo. and we all sat down.

We had a real conversation about the company's circumstances. That meeting was the seed that sprouted into the deal. And, you know, it almost died a couple times as we went through the process, but it played out literally every day from mid-January when we were Tokyo to about 450 this morning prevailing Eastern time when we signed the RSA. So that's what it took to get this done. People have worked around the clock who wind up. One last thing, and I'll come back to the RSA in seconds, I want to highlight this.

The bottom blue box judge in the right-hand corner, you know, Lizarre has been around for a while, long before Kirkland and Alvarez were there, doing a marketing process. I'm not going to read all of the words on the page, and it's covered in detail in the declarations. The punchline judge is that this thing has been marketed every which way until Sunday, and we don't have an active alternative. Now, the RSA does have what I'm sure you would expect is the right thing here. We've had a customary fiduciary out along with some fiduciary flex provisions that allow some discussions to continue even within the backdrop and confines of the RSA.

So if someone shows up, that's there. But we as the company and the special committee are confident that this is the value-maximizing deal. Lazzar, you know, is a very well-respected investment bank, and they have tried their They have this to go try and find something and it hasn't matured. So this is where we're at. This is not just lenders and everyone coming together and slapping their hands together. There's been a very expensive marketing process that sits behind this whole thing. Let's go to the next slide.

I just want to highlight for you, Judge. I talked a little bit about the lenders financing the company. You can see here every step of the way the term loan lenders, in addition to all the work that CPCI has done, I've really stepped up and upsize the facility significantly. This is kind of extraordinary, but there are no less than 22 amendments to the original credit agreement to get to this point, which, you know, that in of itself speaks volumes about the lender support for this business to get here. And, you know, it also speaks to the point that we need to have a resolution because

it couldn't go on forever and this thing couldn't devolve into litigation, either in bankruptcy or out of bankruptcy. It just was not going to work. Let's go quickly to slide 11. Okay, so how do you put several hundred pages, maybe a thousand pages of document

on one piece of paper? Here you go, Judge, and I'm sorry, it's a little busy. I'm going to highlight just a few things for you. I'm not going to read everything on this, but I'm going to highlight a few things. The capital structure is a bit of a layer cake. And the reason it's a bit of a layer case,

this is what's in the deal, right? This is the pro forma structure. I have another slide that I'll show you before and after. It's a layered cake, but it's in a layered kick because to resolve all these various outstanding disputes, the weed, like the royal weed, the bosotros and the deal, all of us involved, had the thread-bed needle on a myriad of collective difficult issues.

Not at least the which is that, you know, CTCI is an engineering firm based out of Taiwan, and they don't have necessarily the flexibility that maybe a lender may have or a distressed hedge fund may have. They have limitations on what they can do in a bankruptcy. They have limitations on what kind of consideration they can get back. So kind of even if people had a desire to kind of deal, we had to be receptive to some things that maybe we weren't used to dealing with in a restructuring.

That's really what's reflective of this deal. I'm not going to spend too much on this slide other than to say that the parties to the the RFA hold about 98% of all known claims against the debtors. That's the line across the top. And so we've been able to really bring the stakeholders together to find a place here. Let's go to the next slide because I actually think it's more helpful. Here's a layer tape. I can't say I've ever seen so much of a pro forma capital structure that just in my entire

career. The reason we have this, a lot of reasons we have this structure is that the state's stakeholders have limitations on what they can take. They have limitations on what they're willing to give. If I was in court, I would be pointing to the box, but if you kind of look at the box that is the one, two, three, four, fifth from the bottom, subordinated senior secure facility, you can start to see their judge some of the gives and takes, right, on the disputes.

We're stipulating to a claim for CTCI. We're stipulating to the claim to the senior secured term lenders, and they're sharing in the priority at a certain level. That theory kind of hangs through. So what we've done is we've taken claims, we've taken values, everyone's beating each other up about what they think their arguments are, to sort of slice the value in a way that we think makes sense. You may be wondering how the company is going to come out with this much debt.

A lot of this, when we get the confirmation, we'll explain to you in detail how the projections work. But a lot of this debt, it ticks, right? And the way it's designed is to get the company into a spot so that as it continues to consistently produce biofuels at hopefully 8,500 barrels, 8,500 barrels, it will grow into this capital structure and the stakeholders, even if the junior letter, will have the opportunity to get significant value

because this is worth way more of the going concern than if it's not operating, and certainly more than if it turned into an expensive scrap heap. There's more in this. We'll talk more about it at confirmation. The last thing I'll say is there is one piece of the deal that we have to nail down, which is that we still have to line up exit financing. There's a small slug of cash needed for exit financing at the end of this process. And so as we move past the deal and we move past locking everything in,

move past doing all the things we've been doing, there's going to be a singular focus on. on finding that so that we'll be for your honor confirmation. We're as certain as we can that we've lined that up and you know that we have the cash and a go-forward basis to get the exit finance in. Last slide, and I swear I'll be done, and I'll appreciate your patience and I apologize for the text issue.

I'm sorry, two more slides. We just put things side by side. What does the settlement look like versus litigation, right? Because there's so many things that could be fought over. We probably wouldn't have access to disfinancing. One thing I should have mentioned earlier, but I need to mention now, and it's worth mentioning, is that, you know, CTCI also is, it's not a DIP lender. It's a contract support party in the DIP.

So it's going to provide consideration that's going to have a DIP provider, but, you know, it's not a lender, but it's still part of the DIP through a contractual range with a company. That's $75 million of new capital coming from CTCI, with another $25 million coming from Orion. there's support from VTOL. You're going to steer in a second. You know, VTAL is party to an off-take agreement. That's a forward contract. You know, if we didn't have an agreement V-TAL,

they'd probably going to terminate it in the bankruptcy. All of this stuff, like I said, carefully hangs together, and we've avoided all the litigation on the right. I won't go through it in detail. There's probably other stuff that you could think of, Judge, that we would be fighting over. That would be, frankly, a mess, deal with.

Okay, so how do we get from here to the end of the case? So looking at the timeline, every presentation starts and ends with the timeline. This is our third. I apologize for that. How do we get here? Judge, it's a fast case but not too fast case. It's a prearranged case. We are going to make provision for an unsecured criteria committee, so we insisting

having that discussion with them. There's a critical vendor basket, so we're going to have a discussion with some of the stakeholders who are not in the deal. They're not huge dollar amounts relative to the two. billion of claims that have signed the RSA, but we have made provision for them in the timeline to have a conversation with the committee, when and if they're appointed. We assume that there will be one, I guess there's chances they might not be. The punchline here, Judge, is that we want to be at a disclosure statement hearing roundabout

the last week of May. We have May 22nd or May 23rd, if I can see it correctly, and then a confirmation hearing entered around, call it the first week of July. If we've done it all correctly, the deal is hung together. We have hopefully worked with credit to resolve whatever issues they have. We found exit financing, and if we do our job correctly, this will be a very boring case for you, and we'll be at a uncontested confirmation hearing, which is our dream and hope because I'm tired of fighting with all of my friends on the phone, and now we have an RSA.

We can all focus on the solution, and move. forward with a stronger, more successful reorganized global queen. So with that, Your Honor, thank you for your patience. Sorry again about the technology issues. If you have any questions, I'm happy to answer them. And if not, I am going to speed the podium. If anyone else would like to be heard at the intro, then we'll move to the first item on the agenda, which we propose is the dip.

All right. So does anyone wish to make any comments by way of what I would call an open statement? I think and if you want to speak just hit five star one time. I don't see anyone saying anything. I don't see anyone take five star. So why don't we go ahead and then... Your Honor, Steve has my ask you if I could. I'm sorry.

I thought I hit five star and maybe I didn't earlier. No, you did. You did. Okay. I'm sorry about that. Sometimes I fumble. I fumble around with the technology here. Again, Your Honor, Steve Zedmanoski,

within the Boone represent CTCI and CTCI Americans, along with the Davis-Rides for Maine folks, Reagan to Powers and C. McCullough, who are also appearing here. I don't want to say a whole lot here, Your Honor. I think Mr. Sharks has been a very nice job of making an even-handed presentation for the constituents here. I would just say, and inform my client's benefit, CTCI is a large construction company based in Taiwan. It does have the United States subsidiary CTCI in America that is based in Houston.

There has been some press coverage leading into this bankruptcy filing about some of the disputes between CTCI and, the debtors and some of the lenders here. Needless to say, there are two sides of every story. Our side has really not been covered publicly, and we're not going to get into it in a lot of detail here. I would say, however, of the $900 plus $9 million that my client feels like it's owed, $700 million of that is actual cash that it paid out

to subcontractors on this project. And we would obviously also, our claim is secured by an M&M lien on the facility in Bakersfield. And obviously we would have assert that we're not, that lien in those claims are not subordinated to the extent that some of the other parties believe. The good news is, as Mr. Short said, the parties reached an agreement earlier this morning, finalizing it, which is reflected in the papers that are here. We're here to support that settlement and to support that RSA.

We do believe that it's in the best interest of all the constituents here, including our client, and it provides the best path forward for maximizing the value of this estate and its assets. And we're hopeful, as Mr. Schert said, that this case will not be controversial and that we'll get through to the finish line here in short order with everybody in a much better position than we are right now. Thank you. All right.

Does anyone else wish to be heard? If your line is muted, it's just a five star one time. All right, Mr. Sharke, why don't you? Okay, I'm actually going to see the podium to my partner, Ross Fiedler, will present Adip. Thank you, Your Honor. Thank you, and again, sorry for the technological issues. No problem.

Good to your honor. Can you hear me all right? It can hear you just fine, sir. All right. For the record, Ross Fiedler, Kirkland, and Ellis on behalf of the debtors, I must apologize on Sharks's behalf, Mr. Sharts. I convinced him to use this room for today's hearing, so I take all the blame.

As Mr. Sharts mentioned, I will take the court through the dip financing motion. I'll quickly address a sealing motion that we filed that's related to the dip, and then I'll turn over the podium to my colleagues to address the balance of the agenda. I did want to reiterate Mr. Scharck's comments at the beginning of the hearing, which is we want to thank the office of the United States trustee for working with us through all of this paper for the last week and a half. They've been tremendously constructive. I think you'll see that in all the orders that we present to you,

as I believe we are going forward on a fully consensual basis. So now turning to the DIP, Your Honor, the motion was filed at docket number 16. The release is supported by two first-day declarations from Mr. Verlund and Mr. Walsh, as well as two other DIPP specific declarations. The first is a separate and second declaration from Mr. Walsh filed at docket number 18. The second is from Mr. Christian Temke, a managing director at Lazzard that was filed at docket number 17. Both are on the video conference today. They're available to testify as necessary. But unless your honor has any questions, we'd ask that the court submit those declarations into evidence.

All right. So we've already admitted Mr. Berlund's declaration for purposes of this hearing. Let me first take Mr. Walsh's two declarations. The first declaration is found at Docket 39-2. And the second declaration is found at .39-4. Does anyone have an objection to the admission of Mr. Walsh's two declaration? By hearing none, I will admit for purposes of this hearing, Mr. Walsh's declaration at 39-2 and 39-4.

And then, so if you send anyone wishes to cross the famine, Mr. Walsh, we can do it at you know an appropriate home second does anyone have an objection to the declaration of mr. Christian Tempsey as found at docket 39-3 all right here are no objection we probably admit mr. Tempsey's declaration found the document 39-3 for purposes of the hearing today and again to the standing one wishes to cross examine mr. Tempey We can do that in connection with the particular potion. So go ahead, Mr. Fieldsett.

Thank you. Thank you, Your Honor. So as you heard from Mr. Scharz, the various dip financings were highly negotiated and they really are the glue that is holding the RSA together. I might repeat some of what Mr. Scharst has said, but I do think it's important to make those points. But in terms of the structure, Your Honor, we have two regular way. dip facilities, and one new contract services agreement, which are separately being provided by each of the three groups that are signatories to the RSA.

The first is a $100 million revolving credit facility being provided by VTAL, the debtor's pre-petition RCS lender. That consists of a $75 million revolver, which the company will have access to during the tendency of the case, subject to a weekly borrowing base that's calculated on a weekly basis. Whatever is borrowed... Yes, yes. When, did I understand it correctly, basically this is just a traditional revolver where everything that comes in gets baked down and then it's relent again. So that's why they call it the creeping roll-up.

That's right, Your Honor. So whatever is borrowed during the interim period will dollar-for-dollar roll-up whatever's outstanding on the pre-petition facility, and then at the final order stage, whatever's outstanding will just be rolled up into the dip RCF obligations. There is, you know, one unique feature to this, which I'll delve in to at the end, which is how inextricably linked the RCF is to the supply and off-take agreement that Mr. Schartz was referring to earlier. But the second piece of the facility, Your Honor, is approximately $27.5 million roll-up

of VTAL's pre-petition trunch fee term loan obligations, which we're seeking to roll into the DIPRCF facility upon entry of the interim order. And as I think you saw in Mr. Tempty's declaration, this roll-up was a key feature of the negotiations with VTAL. I think he'll tell you we try to avoid the inclusion of the roll-up, let alone on the interim basis, but VTAL is providing a number of very critical benefits to the company that I think I'd just like to point out.

One is obviously the continued access to the revolving credit facility, but the other is continuing the supply and offtake agreement, which as Mr. Schultz mentioned is a forward contract and could be terminated by VTAL at any time. They're also pursuant to the RSA committing to provide exit financing to fund the Go Forward business, and they are providing additional liquidity relief with respect to the revolver by opening up additional flexibility in the borrowing base, which will be critical both during the case and on a go-forward basis. So when you take into account all these benefits, the fact that all the pre-petition secured parties are consenting to be primed by the roll-up and what Your Honor has approved in prior cases, I think it's eminently reasonable and certainly in the best interest of the country.

that we have the roll of approved on an interim basis. The second facility, Your Honor, is the DIPTermalum facility being provided by Orion and the other pre-petition term loan lenders. Like the Revolver, this will have liens on substantially all of the company's assets, though it will sit behind the Revolver in both lien and claim priority. It's $75 million facility, $25 million of New York City. million of new money, approximately 15 million of which will be available upon entry of the interim order, and then a $50 million roll-up of the pre-petitioned term loan obligations, but that is subject to the final order and is not up for today.

So we'll address that roll-up piece at the second-day hearing, but I just wanted to preview for your honor. When you look at the financing that the term loan lenders have provided just in the four months leading up to the cases, it's about over $70 million. dollars. And that financing was absolutely critical to keep the company operating as a going concern, but also to bridge us to the consensual deal we have that's embodied by the RSA. So that's the first two facilities. The last is the new CTCI agreement. As part of the negotiated settlement with CTCI, the company will enter into a new construction services contract

where CTCI is committed to provide $75 million of consideration in the form of payments and reimbursements for certain goods and services. And 25 million of that will be available upon entry of the interim order, and then the balance will be spread out throughout the budget. And I think one point to highlight here is as amounts are paid or reimbursed by CTCI,

they will be given the protections of the dip order through super priority claims and liens that will sit hairy with the dip term loan obligations. But again, junior to the revolver. So those are the three facilities, Your Honor. I think it's unquestionable that the company needs cash. As you saw in Mr. Walsh's declaration, we have little to no money as of the petition date. And we need access to cash collateral and the facilities to continue operating. Just briefly, Your Honor, we've been in the market for financing in one form of the other for about eight months now.

Lazard in July of 2024 ran a process to raise money for the upstream business. That didn't result in anything actionable. And in the last few months, they narrowed that process to post-efficient financing, reaching out to over 80 parties with no one willing to provide financing on a junior or on secured basis. And part of that, really, Your Honor, is substantially all of the company's assets are leaned up, and there's no material unencumbered value against which we could have raised financing. So that's the marketing process. I'll turn real quick to the economic terms of the free facilities at a high level.

I think they're quite better friendly. The RCF bears interest at an all-in rate of 12%. That's the same rate as the pre-petition revolver. The DIP term loan has an all-in rate of 8% for ANM with no fees associated with it. And then the CTCI contract has a typical standard contract margin fee that will not be paid in cash, but will be along with the DIP term loan interest be capitalized upon the principal amount and converge into the exit facilities upon exit. So those are the facilities and the terms, Your Honor, turning quick.

to the order, there's a standard adequate protection package here. Each of the dip parties will get replacement liens, super priority claims, and payment of professional fees during the case. The one difference is the pre-petition RCF will get current cash pay interest, but that's only for the amounts that haven't been rolled up, so we expect it to be pretty de minimis up until the final order. The 506 and marshalling waivers are all subject to final order as well. And then we have a standard challenge period in paragraph 38 of the dip order

that gives the committee 60 days from its appointment and third party 75 days from entry of the order to put forth the challenge. There is one point I want to highlight which Mr. Schartz certainly previewed, which are the stipulations in paragraph G and what all of the advisors on the phone have referred to as the snapback provision in paragraph 48. This is, I think, I think one of the most important provisions of the dip order and is keeping the deal together, right? So as Mr. Sharps mentioned, as is in Mr. Verlund's first day declaration, these cases would have been consumed by the litigation associated with the relative priority in claimant out of CTCI, vis-a-vis the other secured lenders. and so the stipulations reflect a global resolution on that. However, to the extent the cases do go,

IANRSA is terminated for whatever reason, paragraph 48 provides that the CPCI stipulations and release would fall away, while the stipulations with respect to the RCF lenders and the term loan lenders would remain binding on the debtors. That said, the framework we've put in the dip orders that everyone's rights would be reserved as if the cases were filed without appeal. And so CTCI will still reserve its right to assert that it's senior to the other lenders and vice versa.

Before I finish here, Your Honor, the last point of dip motion is kind of another motion based within the DIP motion and its authority to continue the supply and offtake agreement in the ordinary course of business and to assume that agreement with subject to entry of the final order so the committee wants appointed can take a look at that. As Mr. Scharck explained, these agreements are really the arms and legs of the business. And we've tried to lay that out in a demonstrative and show you how it is intertwined with the RCF, that's at exhibit one of the DIPMotion. And really, what the SOA does is the debtors purchase feedstock,

such as soybean oil from VTAL, which is then transferred to the facility. It's defined and produced renewable diesel, which VTal then purchases and then sells to the end market. And the RCS is what is providing the working capital to pay for that feedstock. But the main reason why the SOA is so critical is that without it, the company would be forced to source feedstock from third parties on the open market. And, you know, given the company's credit worthiness and its position, it likely would have to post significant amount of collateral to make those purchases. And so the SOA allows us to leverage VTAL's balance sheet, their ability to purchase in bulk. and really get leverage over suppliers in terms of price.

And so there's not only liquidity from the RCF, there's a substantial amount of liquidity being provided by the SOA. So given the importance of that, the RCF lenders have conditioned their willingness to provide the revolver on the debtor's commitment to continue the SOA as amended and ultimately assume it at the final order stage. And so that's really what this is all about. The obligations under the SOA pre-petition

have similar security as the RCF. And so what we're looking to do is extend the super priority claims and liens to the obligations under the post-petition amended SOA. So I think that's it, Your Honor, for me. If you have any questions on my remarks or the order, I'm happy to answer them. But otherwise, we would ask the court to approve the interim dip order as submitted on the docket. Right.

Does anyone else wish to be heard? Yes, Your Honor, Jackson Garvey from Sidley Austin, again for V. Tolton. If I may be heard. Absolutely. Go ahead, Mr. Sparney. And I'm an out-a-towner, but I do have a pro-hawk on the law. Since I woke along, and I thought Mr. Scharck and Mr. Fidler did a nice job of explaining how our facilities work and there are a number of them.

But did have just a couple of quick points of clarification, mostly around some of the numbers. And I'm going to use numbers as of yesterday since the filing slid into the early hours of this morning and we don't have those updated figures yet. But the $39.1 million figure that was in the presentation Mr. Chart set up on the screen in the simplified sample structure,

that's the balance as a petition date just on the pre-petition revolving facility rather than across the full suite of B.T.m. with the debtors. So that $39.1 million is exclusive of the term loan piece that VTAL hold in Trondh B and the SOA amounts. Then we've got the $25 million of principal to Trondi plus some accruing capitalized interest, and then there's the SOA.

And under the S.O.A, there's a constant term of what VTal and the company owned one another on a net basis under the various puts and takes. As of yesterday, B.Tal is owed approximately $9.4 million. So you put those three pieces together. And VTOL across those facilities have approximately a $76.5 million claim against the company, all of which is secured to one set extension or another. The TRONCHD is parry with the other TRONCD. Everything else is under the Leans at the top of the cap stack with the pre-efficient OCS.

One other quick point of clarification, because I think there may have been a little bit of confusion on that point. Through the Betalt div, the overall RCF availability is getting upsized from 75 million to 100. That's primarily to accommodate the roll-up of the Trachee, but paired with that, there's borrowing base relief under the DIP facility. So the borrowing base has a supplemental $35 million, which creates, you know, seven-ish-million of incremental liquidity across the two revolving facilities for the setters. Again, that's all incremental for the big amount of liquidity that VTALP provides.

through the SOA and that's been a demonstrative that was attached to the dimension covered a couple pieces of that judge as you've heard it was a significant list to get us here in front of you today with three dips a four-party RSA you know across a large number of time zones and with the overhang of threat litigation that run right to the heart of the deal that's embodied in that RSA I think mr. Scharst used the word fragile to describe the the illness presentation, which I thought was a good way to put it. But while there are still a few points that need to be resolved between today and the

confirmation of a plan, be told in strong support of approval of the DIP and of the RSA, and please, this is an important first step towards getting the company the restructuring its disability. I'd like to thank your honor and your staff for accommodating us as we work through the final points to move the dates on you a few times, and appreciate you getting us and a short notice basis. All right, thank you. Anyone else? So I did have an opportunity to review the motion, the proposed form of orders, and I think that the declarations were in this case particularly helpful. So thank you, Mr. Walsh, Mr. Tentke, and Mitch of Rulun. I found them to be very helpful once I started reading the documents to have gone through the background. and the declaration.

So I find that I do have jurisdiction. And based on the evidence presented, the fact that the company was entering the bankruptcy with $2 million of cash in the bank, and the fact that it is a very complicated, not only complicated capital structure, but as a result of the various components, This is something that,

is a good word that Mr. Sharke's used, the whole capital structure. I find that the debtors exercise is business judgment in entering into this ability. The terms, I think, are reasonable under the circumstances, the ability to create the liquidity for the company to go forward, to be able to get to a plan confirmation,

I think is very important. And I do think that based on the complexity of the capital structure and the complexity of the way the debtor does business, you know, in essence, having these all finance the debtor's business on a go-forward basis, that the dip is appropriate. So I will go ahead and approve the dip. So let me... We have to talk about a final hearing

May 14th, 1 o'clock? I think that should work, Your Honor. If it's all right with you while we go through the balance of the agenda, it would be possible if we confirm that with the other parties and just get back to you. Absolutely. You know that in connection with the motion that was filed to assume the executive contract,

that was tentatively scheduled for the 23rd, which is the following week. But, you know, the 14th is about a month out, four weeks out from today. So I will, okay, why don't you just let me know, so I'll hold off on entering the dip order because I have to put that tape in there.

I think it will probably work. Let us just come back to it, confirm. It certainly works for me. Okay. All right, Yarmor. The next item I'll handle and then I'll see the podium to my colleague, Mr. Candell, with the sealing motion

with respect to the SOA. I think with respect to the ceiling motion, the way that the local rules work is It's automatically sealed and unless there's an objection, I'll enter it on the 21st day or on the 22nd day. If there's no objection, if there is an objection, then we'll have a hearing. But I can't imagine that I've not had any objections in the eight months that I've been adjudge to any sealing motion. So that under the local rules is automatically sealed and they don't know if it will just be handled in the ordinary course.

Even better. Okay. That concludes my presentation, Your Honor, I'll see the podium to my colleague, Mr. Candell. I think you're on mute. Good afternoon, Your Honor. Can you hear me okay? I can hear you. Great.

For the record, Your Honor, Peter Candell, Mr. Kandell, Mr. Lindell has proposed counsel for the debtors. Next on the agenda is item number three, which is the debtors. Wages motion, which was filed at docket number seven. Your Honor, pursuant to this motion, the other than seeking authority on a final basis to pay pre-petition wages, salaries, and related compensation, as well as reimbursable expenses and to continue their employee benefits programs in their course. Your Honor, as you know, probably better than anyone else, the employees are the true foundation of a company.

The debtors here employ approximately 125 individuals and also retain. an additional 35 independent contractors who collectively conduct critical job functions across the entirety of the debtor's vertically integrated business. Your Honor, it's important to remove any uncertainty as it relates to debtors authority to continue their benefits programs in the ordinary course during these Chapter 11 cases, particularly as many of the employees depend on those, you know, for their daily living expenses and also to support their family. Your Honor, note that the motion and order were shared with the United States Trustee and the proposed order before you reflect comments in the United States, and has confirmed that it resolves their comments to the order. Unless you're on any questions, we would respectfully move for entry of the order. All right.

Does anyone else wish to be heard with respect to the employee wage motion? Okay, hearing none. I didn't have a chance to review this motion and obviously keeping the employee. you know, permanently paying is important for this case and basically for all cases. So on that basis, I'm going to go ahead and approve the employee wage motion. Great. Thank you, Your Honor. All right.

All right. Let me sign it. All right. Thank you very much, Your Honor. Next on the agenda is item number four, which is a debtor's critical vendors motion filed a docket number eight. Your Honor, pursuant to this motion, the debtors are seeking authority to pay in the already course of business, the pre-pictician claims of certain of the debtors, vendors,

and suppliers. The debtors are seeking authority up to pay up to $14.5 million on an interim basis and up to $30.3 million on a final basis. These vendors and suppliers, Your Honor, may hold 503B9 claims, demand the ability to assert liens on the debtor's property. or they may serve critical functions without the ability for the debtors to compel performance. Any disruption to their services

will likely result in immediate and irritable harm to the debtors. Your Honor, I have to really commend the management team here as well as Mr. Lawson's team, who undertook considerable efforts to really dig in and analyze the claims and vendor base here to make sure that the relief being sought today was narrowly and appropriately tailored under the circumstances. And these vendors do really provide very important services to the debtors, Your Honor, including specialized services that relate to ensuring compliance with health, safety, environmental, and regulatory matters to make sure that the facility is up and running safely.

Your Honor, similar to the way this motion and order was shared with the United States Supreme and the proposed order before you reflect their comments that we understand results in matters. for that. So left any questions from your honor we would respect your request for entry this order. Right. Does anyone else wish to be heard on the critical vendor motion? Right. So I review the motion in particular looks at the types of claimants that would be paid, including 503B9 claimants, potential lien claimants, and other, you know, critical vendors at the

facility. And I think it's appropriate under the circumstances. I think it's an exercise of the debtor system. and judgments maintain the going concern value of the business so I will go ahead and approve that motion and again there we figure out what the final hearing date is so I'll grant it but I'll hold the order until we then so we have a final hearing date all right what's meant great thank you your honor with that I will see the poll in tonight colleague mr. Sanders okay did you hit five star one time

Sorry, John, can hear me okay? I can hear you fine. Definitely, Your Honor. As Mr. Candell, you just mentioned self-standers for Colonial to the debtor. I'll walk this through the next set of motions, starting with cash management. The agenda item 6, filed a document number 13. Grout of this motion, the debtor seek authorities to continue the cash management system in the ordinary course, including collecting cash proceeds, making disbursements

defenders, aggregating cash from the debtor's primary concentration account, incurring and settling intercompany positions, and also related to as part of the motion seeking to grant administrative expense status to those intercompany transactions. Finally, the motion seeks relief with respect to certain pre-position claims to cover the company's credit card program and certain things. As your honor can imagine, the debtors maintain a complex cash management system as they pivoted on Exhibit 1 through the motion, and it's critical and necessary to continue that cash management system to allow for a smooth transition into the Chapter 11 cases, including the

but not limited to the continued use of the revolving credit facility and being called up the in short requiring the debtors to adopt some sort of different tax management system would be highly disruptive with a limited benefit to any parties. We previewed the motion in the order with the United States trust B believe that they're supportive after incorporating their comments. Unless Your Honor has any questions, we respect to the question of the interim order. Are all of the accounts that I read it correctly at U.S.B. That's correct, Your Honor. All right. And then the credit card program is with somebody else, not with U.S.A.

It's with a credit card program called RAMP? Yes, that's right. Except for entities, separate companies. As of the petition, Dave, we owed about $48,000 that we secretly to pay. Those are always the most difficult to get back on track. Make some side experience. So again, we need anyone else wish to be heard.

All right, hearing none. I've reviewed the motion, and granted, I think that in maintaining the tax management system is important. And as soon as we have a final hearing date, I'll get the order rendered because This is, again, trying to get people that are out some place and need to get gas and don't have, they cut off their credit card. It's always a process. So I'll get that done as quickly as possible. Thank you, Your Honor. Okay.

The next item on the agenda, Your Honor, is the utilities motion. That's agenda item 7, filed at docket number 14. Kind of by this motion, the debtor seek release to establish adequate assurance procedures to make sure continued access to essential utility providers and see confirmation that those adequate assurance procedures, in fact, give adequate assurance to the utility providers in court of Section 356 of the bankruptcy code. Now, we have background, and as you can imagine, Your Honor, the Bakersfield facility relies on essentially utility providers for including but not limited to natural gas, telecommunications, water,

et cetera. Those are absolutely critical that those utility services are not disruptive in any way. We seek authorities to place just over $300,000 to a separate account, an adequate assurance account, which constitutes half of the debtor's average monthly cost of utility services. So that would be the adequate assurance proposed for the utility providers. And we have run this motion in order by the United States trustee and understand that they're supportive of that really good for. Unless your honor has any questions, it would require entry of the fertility order. Isis, anyone else wish to be heard?

All right, I did have one question. I thought that the spend was about, you know, $650,000 or so for a month. But then did I read correctly that there was like a million one that was owed? Or did I, am I confusing another motion? We are in the rear is about $1.1 million. Okay. And so the 317 is to provide adequate assurance on a go-forward basis, and the $1.1 million will be dealt with if there's an executory contract or something like that

or treat it as an unsecured claim. that's right now so obviously being able to have utility service for a plan is imperative I think that you see this is I view as a as a motion you know that better pursuant to three sixty six has to offer adequate assurance to the extent the utility believes that they're not provided adequate assurance the motion provides the mechanism in order to be able to, you know, come back to court to seek that. And obviously, whenever we establish the final hearing date, we can use that day to the extent any utility provider wants to come back,

we can have the hears on that case. So based on that, I've signed the order and just the document. Thank you, Your Honor. Next up on the agenda is the creditor of matrix motion. That is agenda item number eight, filed a docket number 15. By this motion, Your Honor, the debtor seek authority to redact personally identifiable information of all natural persons from any papers to be filed with the court during several other cases.

They'll just be released to waiver requirements to file a list of equity, security holders, and directly notice them. And finally, approving the form of the matter of. notifying creditors of the commencement of the Chapter 11 cases and other notices throughout the Chapter 11 cases. Your Honor, with respect to the redaction, specifically we believe that request is appropriate and necessary in light of the many privacy laws that the debtors are subject to, we believe, for the second point of filing a list of equity security holders and noticing them directly would be as

administratively burdensome with, again, limited benefits and parties. We previews this order with the United States Ritpies as well, incorporate their comments with that they're supportive of this relief. So I'll not have any questions was requested. Thank you. All right. Does anyone else wish to be heard with respect to the Creditor to Matrix order? All right.

I reviewed the motion. This is kind of typical relief that is branded with respect to basically redacting the names and the personal identifiable information. I think the form of notice is also appropriate. So I will go ahead and grant the motion. Okay, that's been signed in the sent to docketing. Excellent. Thank you, Your Honor.

We'll try to move quickly to the balance of these. The last one for me is the sale-fism scheduled extension motion. That's the item number nine on the agenda, of document number nine as well. Your Honor, by this motion, we seek to cure relief for 40 additional. days to file our services and schedules as well about 2015-23 reports for a total of 54 days that would be an addition to the normal 14-day period of clock post that length is on May 26 which we've placed fairly standard relief requested for the extension of the

status of schedule us review this motion as well unless any questions will request entry of that work thank you mr. when are you going to hold the 341 meeting I think it just unmuted you. You may be muted on your side. Thank you. I would be, I apologize. I went to the U.S. trustee. Your Honor, it's going to be likely between 4 to 45 days.

We've reached out to the debtors and to get to the corporate representatives so we can have some calendar dates. Normally for these cases, I'd like to reach out and see other people's availability before I schedule, so we don't have a date yet, but it's going to be between 30, and 45 days. And to the extent that we don't have scheduled those for the required 341

date, I've always spoken to the Adders Council. We're just going to continue it outlining every day. So the extension of the 5048 shouldn't prejudice any stability to have a full of 341 meeting in the honor. Okay, thank you. You answered my question. Again, requesting an extension of time to solve payments and schedules, I think, is appropriate under the circumstances it would be administratively burdensome. So I'm going to go ahead and grant the motion. Okay, that order has been signed and sent the docpity. Thank you, Your Honor.

One note from us, we already made 14th at 1 p.m. works for us, for calendaring and for the finalization of the interim orders. All right. So as soon as the hearing is over, I'll go ahead and just insert that date, and I'll do the objection deadline the week before. at 5 p.m. and I'll get those at 5 p.m. and I'll get those in as soon as we're done with this hearing. Thank you, Your Honor. There's three motions left and for those I will send a present to further over to my colleague. Thank you. Your Honor. Can you hear me all right?

I can hear you fine. Great. For the record, Your Honor, John Gibbons from Kirkland Dallas, proposed counsel to debtors. I'll be taking the court in the balance of the agenda today starting with the insurance motion which was item number 10 on the agenda and document number 10 your honor the insurance motion seeks that the betters maintain their insurance insurity coverage on a post-petition basis and satisfied pre-station obligations only there too currently debtors maintain 60 insurance policies and 630 bonds which they obtained through their brokers they also have one premium finance which they use to finance

the profit of 75% of the pre for their policies. As the petition state, the debtors believe they have about $20,000 outstanding on account of premiums and about $7,000 on account of the surety bond program. There will also be about $4 million coming to a post-position basis for the PFA. Your Honor, we preview this motion with the Christ's office in advance of the hearing and have incorporated their comments. We believe we're moving forward on a point of a special basis. So unless you're on there, any questions, we respectfully request the court enter the proposed order.

All right. They all wish to be heard with respect to the insurance motion. Right. I reduce the motion and proposed form of order. The incating insurance is obviously not only a requirement of the safety guidelines, but It's also an exercise, done exercise with a generous business judge. So I'm going to go ahead and approve the insurance motion. I mean, I mean, it's been signed it since Adopony.

Great. Thank you, Your Honor. So the next item on the agenda is a tax motion, which is item number 11 and document number 11. Your Honor, this motion seeks to continue paying taxes on a post-petition basis and satisfied free petition amounts outstanding on taxes and fees. As the petition, the debtors estimates they owe approximately $3 million on account of taxes and fees, most of which relates to property taxes related to the Baker-Skilled facility. This motion also seeks to store to undertake certain tax planning activities that will help

maximize the value of the debtors' state, especially as a little. turn towards or go-forward structure. We also shared this motion of the United States trustee and we're moving forward on a political-consensual basis. Unless your honor, I have been questions. We respect the court entry this order. All right. Does anyone else wish to be heard?

So I did have one question and this is more for my identification. But when is the last day that passes are due in California without penalty for the prior year is it normally I know in Texas is February 1st or January 31st do you know I'm not sure under state law but we can back in no no that's okay I can mr. Atkins do you know let me uh six six five star one time right did I unmute here you can hear yes I can hear you so Yes, the property tax is due to the solvents. One is in December, and the second one is in April.

In fact, we are behind on payment payments to April 10th, and so we will have a felony when we do make payments. All right, thank you. What I wanted to know. All right, I refuse the motion and obviously paying the status is something that continues even one year in bankruptcy. So if this is the proper side of the debtor business justice, and having the liquidity be able to pay the taxes

and not have to incur additional penalties, I think, is important. So I'm going to go ahead and grant the motion. So give me a minute and I'll have a letter. All right, that has been signed and sent the document. Great, thank you, Your Honor. So last item on today's agenda. on today's agenda is item number 12 which is the document number 12 allowments. The evidence generates during tax assets throughout Christmas that can be used

for offset taxable income. The release sought in this motion essentially sets forth notice procedures regarding transfers or declaration for worthlessness with respect to global clean energy holding banks. Common Stocks that could impair the value of these assets. These assets are a potentially significant value So the notification and objection procedures set forth in the motion will really just help protect those to the benefit of the data and stakeholders. Again, we shared the United States of B and believe we're moving forward on a consensual basis. Unless you're on here, I've any questions, we'll request the court enter the proposed order. Sorry, does anyone else wish to be heard?

So I've reviewed the motion, I think, maintain obviously the NOL is our property of the estate and may and creating a notice procedures pursuant to which the debtor is able to make an informed decision as to whether a transfer would potentially have an impact I think makes a lot of sense and it's a sound exercise of the debtor's business judgment so I will on that basis I'll grant the motion and let me all right so that that that has been signed and consensus document is great thank you That was the last item on the HF and death. So I'm not, Your Honor, as any, we just like to thank the court for your time and for accommodating us in such. No, thank you very much.

As I said, I felt, so there's one other question before we close. The motion that was filed to assume the contract that had a 23rd hearing date. Should we move that to the 14th at the final hearing date? Yes, that would be great, Your Honor. Okay, we'll move that, but just send out a notice that, because that obviously will change the objection deadline as well. Okay, we'll do, Your Honor. To send out a notice of that motion, so everything we'll consider.

So, again, thank you very much. I thought that the four declarations really made reading the motions very, very helpful. And I commend you for the work that was done in that. And the declaration that actually describes the motion in the declaration, I find a lot more helpful than the declaration that says go read the motion. So I found that to be very helpful. So thank you very much. We're in stand in recess and we'll see you all on May 14th, that's 1 o'clock.

Unless something else comes up in the interim and we're always surrounded. So you can you need to coordinate. That's just to speak to Mr. Lodge. But so we're in recess until 4 o'clock this afternoon. Thank you. Thank you. Thank you, Your Honor.