American court hearing recordings and interviews - Listen to the Saks bankruptcy court hearing of April 2, 2026

Episode Date: April 6, 2026

This is the official court audio of the hearing held April 2, and is docketed on the court's docket.There have been some hearings in the Saks bankruptcy proceedings since the last Saks hearing posted to this podcast. The hearings concerned, for the most part, a dispute with a particular party as opposed to macro developments in the cases. The hearings were somewhat lengthy and broken up over a few recordings, and not available on the podcast but are available on the court's docket and the case administration site. https://cases.stretto.com/Saks/court-docket/ (Search the docket for the files named audio).This latest hearing being streamed here was held on April 2, 2026 and concerns an emergency request to lift the automatic stay. The automatic stay is a protection that goes into effect by operation of law under section 362 of the Bankruptcy Code, when a bankruptcy petition is filed. In this case as it typical the Saks chapter 11 debtors are protected by the stay, not only from contractual obligations, but also from continuing to defend personal injury litigation arising from injuries sustained before Saks Global went into bankruptcy.In this case it sounds like an individual plaintiff wanted to proceed with personal injury litigation in Massachusetts and sought bankruptcy court approval via counsel. The bankruptcy court was responsive, held a hearing, and continued the hearing to a final hearing on May 7. The court encouraged the parties to work things out, in other words to at least agree to a date the automatic stay will lift. This is after the judge suggested a 60 day time frame at the outset of the hearing.The court noted that the court will not allow the stay to stop the case from going to trial indefinitely. I think it would be interesting for the lawyer who argued against the automatic stay being lifted to listen to what he is saying to the court, and ask himself why he would try to deprive a personal injury claimant of continuing litigation when it doesn't make a difference in terms of the future of Saks Global. Also the law is pretty clear, even with outlier cases like Purdue Pharma, which some people estimated pays just $40k for wrongful death claims - that personal injury claims can't be liquidated in bankruptcy court.As the court noted, at some point bankruptcy courts allow personal injury claims to be liquidated, in other words to continue on their path to jury trial or other payout under applicable non bankruptcy law.

The next matter is 26-9013-103 SACS Global, the emergency motion of the live stay. Yes, good morning, Your Honor. Heather McIntyre on behalf of Nancy Getz and with me is my associate Aguil Lopez Castro. He'll be leading the hearing. Good morning. Good morning. Good morning. Good morning, Your Honor.

John Brennan, the lawyer of behalf of the debtors. Good morning, Your Honor. Good morning. Good morning. Hello. Hello. Go ahead. Thank you.

Alain McAbrecki and Morrison Forrester for the official committee on security creditors. Good morning. Alejandra Garcia Castro for Safety National Casualty Corporation. Good morning, Your Honor. Christopher Hopsens of Paul Weiss on behalf of the ad hoc group of gift lenders and bondholders. Your Honor, Your Honor, Your Honor, Gitton, from Otterberg on behalf of Bank America at ABL agent. Mr. Castro. Lopez Castro.

Thank you, Your Honor. Yes, thank you, Your Honor. So we're here on Ms. Gates' emergency motion for relief from the automatic stay that was filed a document number 1142. The debtor filed an objection to the list state motion at docket 1488 and the debtors insurer safety national file a joint objection to the list of a motion at 1538. Ms. Gates filed a response to the objections at 1768 and that was not yesterday. The Gates also followed a Wittes and a Exhibit List and Supplemental Witness and Exhibit

List at Relating to Matter at 1498 and 1763, which we were definitely request to move to enter the exhibits 1498-1 through 1498-6 and 1763-1 through 1763-4 into evidence. 1798, what? One through? So it's going to be 1498-1 through 1498-6. And then 1763-1 through 1763-1 through 1763-4. All right, does anyone object to the admission of exhibits 1498-1 through 6 or 1763-1 through 4?

They'll be admitted. Thank you, Your Honor. And unless the court has any specific questions or would like me to address beforehand, I'd like to proceed with a brief background of the matter and address the objection are raised by the debtor and the N50 National. Right.

I've reviewed everything, including your response that you filed yesterday or this morning. So I'm generally familiar. So you can go ahead and do it. I mean, let me just, in a situation like this, I'm going to give the debtor some time. So we can either continue this to a final hearing or alternatively, we can just pick a date and then the stay will lift, you know, after 60 days or whatever time, because I'm going to give the debtor some breathing room up front, at least on the preliminary hearing time.

So, but go, you know, I don't want to take the win out of your sales, but go ahead, but that's going to be my inclination. Thank you, Anna. Well, I'll proceed just to have it for the record. Okay. And then their determination, of course, that's one's something done. So, Your Honor, the Listern motion, Bob Mitzgates, to lift the automatic stay for the pending litigation matter,

solely to proceed against the insurance policies, at least as related to the matters. And the three other defendants that are the underlying dependents in the matter, which is a person-frey matter, that Miscates suffered on the premise, of the debtors all have been done with the agreements with the debtors so the and I think the biggest factor was the SIR retention that that would have that would have that the federal would be a detriment to the debtors estate or the

debtors if they didger proceed I think the urgency or the trial has has been canceled that was separate April the 6th, I think the urgency still remains, at least for Ms. Gates to proceed because, one, she has a Massachusetts state right for a speedy trial, and given her age, she's 67 years old and lives alone with limited assistance and income. It's not going to, it's going to be more burdened, I believe, by the stay being in place, then the debtors will be by the state being lifted,

especially considering since it's going to be simply this litigation at the moment. And we don't believe that lifting this day and this instance will create a floodgate for other claimants to come in and try to do the same thing. And with regard to the debtor and to the debtors, I think that the, with regard to the SIR, I think that the particular certain death in the case should give freedom to Ms. Gates because the defendant can indemnify the other defendants with regard to the obligation that under the SIR.

I had a longer, much longer scripting that, but given your honor's position before I began, I mean, I think that at this point it would be up to the court to decide if they want to proceed with allowing the case to received litigation or giving us a little more time to maybe work out a situation with the debtors or at least given automatic, I think that might say to be lifted in this instance. And Your Honor, Heather McIntyre, if I may, just briefly, I think the particular facts and circumstances here with three non-debtor defendants indemnifying the debtor here, makes the idea that the debtor would ultimately be responsible for the sir rather remote. And that coupled with the circumstances of this particular plaintiff,

the fact that the litigation has been pending for four years way heavily in favor of granting the list stay. Having said that, if the court is willing to have that stay lift 60 days from today, that would be really very welcome to the move in here if that is the court's decision. and we would welcome an order to that effect. All right. Mr. Brendan. Yeah. Thank you, Your Honor. So, Your Honor, we would oppose the request to, let's the stay,

including, you know, at a determinate date in the future and would request to the opportunity to continue to a final hearing so that we can respond and oppose the motion. You know, the circumstances here, Your Honor, where there is no dispute that there's a pre-positioned is subject to the automatic stay. There's no dispute that there's insurance coverage and that there's a self-insurg intention

that is not paid under these circumstances for the recent fourth in our papers. We believe the Fifth Circuit has been clear about what the logic agreed here, which is, as Judge Isker explained in the IPARC media case summarizing the Fifth Circuit case from Edgeworth, that the controlling question is whether the litigation would place the financial burden solely on the insurer

or implicate the debtor. And in that case, the outcome, which are some circumstances that are now get to hear and distinguishable, as these are from the Edgeworth Fifth Circuit case, that the court found that the say relief was not appropriate. I think the same result is dictated here. their you know the premise of the motion both the emergency nature of it and for the most part the notion that there was any burden imposed by the stay at all was that the

trial bait has been scheduled that's no longer the case as the betters or as the movement rather has acknowledged the movement has raised some additional reasons why I think there's a certain stage as we understand that, and we're happy to respond to that and address that at a future hearing. But for now, we find ourselves in the same position that we stated in our objection, which is that we're between any plaintiff that wants to litigate this pre-petition claim against the debtor. That's not being an insurer who has made clear that they are going to enforce this self-insured retention provision, and that if the insurer incurred any liability, any costs in defending this action, that it's going to be a liability that is going to come back to the debtor.

And so we believe that relief from the stay would cause unnecessary burdens for the debtors. So that's our position still, and for that reason we suppose any orders that list the stay now or at any specified in the future and are happy to address the further at the case. Your Honor, if I may respond to that, I think that argument triggers what I mentioned in the motion. I mean, the difference with Edgewood to this matter is one, each of this same motion is fact-intensive and on a case-by-case basis to be determined by your honor. And the difference in this instance is that in that Judge Wood, the court should say that it was, the debtor would be solely responsible to hear. That's not the case.

The debtor can indemnify the three other non-debtor defendants and has other avenues as well via seeking contribution under Massachusetts law. Or to the extent that, and also to the extent that the debtors are liable for the unpaid sur, I think that the court in Sturgle said that because the insurance policy was a, it's not an executive contract to be assumed to rejected. The policy term, the policy term, I then did, and the insurance premiums were paid insured, which is more likely here, since that's the basis of the litigation, underlying litigation, is that in the event that the debtors are liable for, the any obligation under the cert that would give 50 national a unsecured general claim against the debtors. And so that would be pulled in with the general, uh, general, uh, general, uh, claims in the end of bankruptcy to be determined on how it's going to be treated by the debtors in the, and, and the proposed reorganization, um, plan.

So I think that's, I think that's the difference in, in, in this different sense than in local If I could address that briefly, Your Honor. Thank you. Thank you. So first I just want to clarify that the holding an X word, as we understand it, and as the IHard media case made clear, is not that lifting the stay is inappropriate if the debtor is solely responsible for the cost. It's actually that lifting the stay is appropriate if the in the appropriate if the indebtor is only responsible for the cost. appropriate if the insurer would be solely responsible.

And so that's what we should be looking for here is when the move in is saying that they want to proceed solely against insurance proceeds, is that actually the case? Is that actually the effect that most people say they were passed here? The court in IHeartMedia was clear that in that case where there was an unfunded deductible that could be subject to the court. That wasn't the case. The financial burden wasn't going solely on the insurer. And has been raised in the response to our objection is the citation to the surgical case,

which really stands for the notion that insurer's obligation are not excused if the insured fails to pay a self-insured retention due to bankruptcy. We're not disputing that principle. and I don't want to speak for Safety National who's on the line, but Safety National's joinder, as I read it, did not stake out the position that they were refusing to defend this case

if they have to defend it. Their position, as I understand it, is that a Safety National is required to defend it and incurred expenses that are subject to the self-insured retention. That will cause the debtor to incur liabilities from to Safety National. And now if there's a difference

of viewpoint, it sounds like, between Safety National and the movement about what the nature of those liabilities would be and how and what Safety National's recourse would be. We won't speak to that and get into that. But again, I bring it back to we are stuck in the middle of this effectively and find ourselves between a plaintiff who's trying to collect and an insurer who is saying that we will bear some responsibility if that happens. And so it would be inconsistent for the automatic stay. With the automatic stay, we would contend for us to have to defrust into that position,

including to have to contend with the national position, whatever it may be, if that arises. And then the last thing I would just address is the notion that was raised in the response to our objection and it was raised for the first time. So again, we would appreciate the opportunity to address this out of final hearing that in the underlying case, there is indemnification among the various defendants that makes it unlikely that the debtors would owe anything ultimately. For one thing, that potentially goes to the liability and not to the burden of the defense of the year, including the burden it was placed by either distracted the debtors and their management

to have to defend it. But beyond that, those issues of indemnification among the various defendants subject of the Trump claims funds. So I just wanted to clarify, and again, we could address this at a final hearing that it is not a certain case. But I understand it, where one of the other defendants is actively paying the bill of debtors. This is something it would require litigation to hammer out those details. And so at this point, speculative to an extent, as I understand it, to suggest that the debtors wouldn't have there any risk by proceeding with this litigation. All right, thank you.

So here's what I'm going to do. I'm going to continue this to a final hearing on May 7th at 1130. but again this is a personal injury tort it's going to have to be decided in Massachusetts I'm not going to indefinitely allow the state to person to you know stop this case from going to trial so I would encourage you all you could find an accommodation but I'm going to give the debtor some breathing room but I'm also I'll listen to the evidence, but I'm inclined at some point to allow this to proceed so that it can be liquidated. So, but we'll, if I would just, if I would bring one point also, that the argument isn't that the debtors will face in their hardship.

It's what the debtors, what they face and is, is in lifting the stay that is considerably outweighed by the hardship of the midst of faith in maintaining the stay. So it's not that they don't affect any hardship. And the other point with regard to that it would distract the debtors, I mean, I think the case in Lutheran is, sorry, I'll have a lot. to go back to the litigations. But there was case out of that said that just attending to a litigation is not a distraction for the debtors. But I differ back to your honest with regard to the matter.

All right. So, again, we'll just continue this till May 7th at 1130 and finish it. But I would encourage you all to talk because you understand where my feelings about this situation. All right. Let me call my next matter. Thank you.