American court hearing recordings and interviews - Listen to the Saks bankruptcy court hearing of June 5, 2026, 8:59 am

Episode Date: June 13, 2026

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Try at risk-free for 30 days. Visit apollo.com slash audio and take $99 off today. Conference recording started. We have a lot. It's a suggestion of the time when I'm going to go out. Yeah. And if you're done, that's okay? We have a lot of background noise, so I'm going to go ahead and activate the hand-raising feature now. So if you would, please hit five-star.

Conference, muted. If anyone else wishes to be heard, hit five-star. And please make sure to go to my webpage and note your appearance. So, good morning. It is Friday, June 5th, 2026. We're here for various matters in case number 26-9013, SAC's Global Enterprises, and we're also here on the SAC's digital confirmation hearing as well. So why don't we get appearances of counsel, and then we can talk about how we're going to proceed.

Good morning, Your Honor. Are you able to hear me okay? I can. Great. Severus and Claire will be here for the global better. With me in the room are my partners Robin Siebel, Chris DePompio, and John Brennan, and joining me virtually is my partner, Allison Smith. Also with me in the room here are the Global Better's Investment Baker, Jamie Baird, our chief structuring officer, Mark Weinstein, and joining us virtually our independent director, Paul Aronson, and Latica Sanchez, who's a managing director of Strano, and I'm mentioning

all of them because they have signed various declarations and attestations and support of the plan. All right. Thank you. Good morning, Your Honor. Jared Martin, Bradley Aaron Bolt Cummings, counsel for the SS5 digital letters. Also on the line with me is my co-counsel, Michael Reardon. Our chief restructuring officer, Andrew Heed, is also on the line, and Gary Beggeman, our independent manager. All right.

Let me just go through the boxes and that might be quicker. Mr. Lehane. Good morning, Your Honor. Robert Leaghan, Kelly, Drian Warren. on behalf of Ricksmore Property Group, WPF Power B Company, WPF Power D Company, GGP Services, Regency Centers LP, and Aventura Fashion Island LP. Thank you. All right. Ms. Boardy? Omine Boardy on behalf of Exxonic. Mr. Schiffer.

Good morning, Your Honor. Mr. Schiffer, acquired Cashman LLP. On behalf of David Yerman Enterprises LLC, Yermann Retail, North America, LLC. Go ahead, New York, Incorporated, Caring America, Incorporated, LVN-Aidt, LN, Hennessee, Leviton, Inc., and HesvilleA., L.C., and H.L.C., Mr. Prostock. Good morning, Mr. Prostock. On Board of Badeum, Kat, Tester, and Haynes, on behalf of Salesforce,

which is my co-counsel, Tom Gay, with the Bergen, with the Bielsen Bergen and Strawfurt. All right, good morning. Mr. Galardi. Good morning, Your Honor. Greg Gallardi of Mr. Chairman Williams Chulte on behalf of Mr. Metrick. All right, Mr. Zer.

Good morning, Your Honor. Roy Zer on behalf of S.F. Wilsher, B.H. L.L.2. All right. Mr. Manno. I'm sure. Mr. Matt, I heard you. This is the Rangeone-A-Naronezzi from Morrison and Forster on behalf of the committee,

joined by my partner, Subdano, Rapp's 30. Rats, Ferioli and Brian Cotlier. Good morning. Good morning. All right. Ms. Besper. Good morning, Your Honor. Margaret Bessper, Fowler on behalf of Bridgewater Commons Mall 2 LLC, California Union Square LP, Centennial Waterfall, Rillobend, LLC, Dambury Mall, LLC, fashion outlets, two LLC, Federal Realty OPL,

Scott Field Fashion Square Limited Partnership, Street Retail, LLC, Somerset Collection Limited Partnership, and the Irvine Company LLC. Can you repeat that? No, I'm sorry. Ms. Raviel, please. Thank you, Your Honor. Good morning.

Jennifer of L.A.F. Kelly, Dry and Warren, I will not repeat the list. I'm here on behalf of the theme parties as Mr. Lee Hine listed in his opening. Thank you. Did he get it correct? I think you did. All right, Mr. Hopkins.

Good morning, Your Honor. Chris Hopkins of Paul White. On behalf of the ad hoc group of dip lenders and secured bondholders, I'm here today with my colleague, Andrew Rosenberg, Rob Britain and Martin's Subbo. Mr. Reardon. All right. All right, I'll skip over you.

I know you're with Mr. Martin. All right. Mr. Wynne, Your Honor, Hauvin for the United States Trustee. All right. Mr. Cot here? Mr. Cotley is my partner. Okay, thank you.

All right, all right. Ms. Northfleet. Good morning, Your Honor. Kelly Northfleet from Hanzon on behalf of the Global Debtors and I'm joined in the conference room by my colleague David Trouch. Okay.

Mr. Gough? Mr. Gauth? They're unmute you? No, you're still muted. You have to hit five star one time. Your Honor, if it's Mr. Gaines, okay. Please go counsel with you.

Okay, thank you. All right. Mr. Holfel. Good morning, Your Honor. Kail holds off hole on behalf of Safety National Casualty Corporation. All right. Mr. Feinstone.

Good morning, Your Honor. Ben Feinstone. behalf of HB strategies all right mr. Castleman good morning honor again three and David Castleman from Otterberg on behalf of Bank of America as a deal agent mr. Fleischer so it's affiliated with urban edge pro your honor can you hear me okay yes great again good morning Scott Fleischer on the affidlamo is affiliated with urban edge

properties and Westfield LLC all right uh if you see realo good morning Your Honor, Dan Fierlo, along with the assessment from Audubour Council for Bank of America, the admin agent for the DIP ADL lenders. All right, Mr. Harris. All right. All right, Ms. Strickland. This episode sponsored by Lettuce Financial.

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you understand what money is actually safe to spend versus what should be set aside for taxes. Honestly, it just makes running your business feel way less overwhelming. If you're self-employed, there's a good chance you could be saving more money and spending a lot less time managing your back office. See for yourself at lettuce.coe today. That's lettuce. Strickland, hit five-star one time. Your Honor, can you hear me? I can. Thank you. Good morning. Rachel Strickland, Robson, Gray, on behalf of Richard Baker and Ian Putnam. All right. Mr. Scheingberg. Good morning, Your Honor.

Good morning, Your Honor. Sid Schiberg, on behalf of Margo McKinney-Jolie and Schi Creations. All right. Does anyone else wish to make an appearance? We have a lot of people on the line. So if you're not speaking, please mute your lines. All right, Ms. Sinclair? Yes, Your Honor.

Good morning. Again, Deborah Sinclair, will be Faring Gallagher, for the record. With Your Honor's permission, I'd like to take the agenda slightly out of order today. We start with the global debtors combined plaintiff's hearing, then we can turn it to the offset debtors combined hearing, and then following that we could take up the interchange in Brookfield matters leader in the hearing, if that's medical to your honor. All right, and there was another matter for HBB, a status conference?

Yeah, apologies, Your Honor. That's what I'm referring to by the interchange. Okay, all right. Your Honor. Yes. This is obviously just case administration. I don't think the agenda should be revised. It's a quick status conference concerning our motion.

I propose we get it out of the way rather than ask the parties to whom that is critically important to sit through to extended, potentially protracted confirmation hearings. I don't even know to what extent these confirmation hearings are disputed, Your Honor, so forgive me. But what's the reason for moving the agenda? Your Honor, if I can be heard, I think the main show today is confirmation, and I'm happy to announce police on R and that it's purely conceptual. So I don't anticipate this will be a long and drawn-out hearing, but I'll leave it to your honor to decide which order we proceed. I mean, if we're just going to have a quick status conference, that's the only reason I asked.

I just, we can kind of get that out of the way quickly and then we can move on to the other matters. Yes, Your Honor. For the status conference, I'll turn the podium to my colleague, Mr. DuPonio. I'll leave it to that. Okay. Thank you, Your Honor, and thank you, Mr. DuPonpano. Your Honor, this will be less than five minutes, I think. This status conference concerns our motion, which is filed at ECF numbers 1983 and 1984, Your Honor.

The motion was actually filed pursuant to an order that Your Honor entered earlier in the case, resolving the debtor's 1990 motion concerning its settlement with certain credit card service provider defendants. Certain cash was put into proceeds. The debtors believed, and I respect the debtors for, taking this position that all of the proceeds should go to my client as our property interests. The Creditor's Committee objected, and so we have a contested matter that we still have to sort through. We followed our motion, Your Honor, pursuant to Your Honor's order.

The Creditors Committee is the only party that objected. We have negotiated, although we couldn't disagree more in the substance, we have been able to negotiate a procedure to get this resolved. And what we'd like to ask, Your Honor, is if Your Honor, has the ability to schedule us a hearing on July 15th or as soon thereafter as the court is able to do it that's really the main purpose that we'd like to accomplish today just getting on your honor's calendar and then we'd step out of the way and let the main events proceed all right mr. Kotler did you have five stop oh yeah there you

go good morning your honor can you hear me okay I can thank you for the record Brian Kotley or Morrison and Forster on behalf of the committee your honor this is a status conference, so I promise I will be very brief. We agree we're here on the schedule and we're asking for you here in Dayton, July. Thank you. All right. Thank you.

So I think July 15th, so the afternoon of July 15th would work, one o'clock. That's great, Your Honor. Thank you. All right. We in the committee, we also have an agreement, Your Honor, on certain discovery, focused dates leading up to that hearing. But if it's okay with Your Honor, we'll document that and submit something

to the court afterwards. We've got an agreement in principle. We won't belabor the record with that today. But thank you for scheduling that, and we appreciate it very much. All right, thank you. All right. Ms. Sinclair? Thank you, Mr. Pompeo. Thank you, Your Honor. For the record, DeFersinclair, we'll keep up.

Proceeding with the combined hearing, Your Honor. We're here today for the combined hearing on the disclosure statement and confirmation of the plan for SAC's Global Enterprise and LLC and its affiliated global debtors. As I mentioned a couple of minutes ago, we are very proud to be here today with a plan that is nearly fully consensual, not a small feat in a case of this size and complexity. And so I first like to thank everybody that was involved in getting us to this critical moment.

The various stakeholders, all of their counsel and advisors, the U.S. trustee, and of course the non-stop efforts of the management team and the thousands of employees who kept the company operating through this process. We'd also like to thank you, obviously, Judge Perez, and your staff for accommodating our many scheduling requests in this case and helping us to manage a very complex process. With that, if it pleases the court, what I suppose for our combined hearing is that we first start with a brief overview of the Chapter 11 cases and the restructuring, and after anyone else would like to give an opening, I'm happy to present the argument and evidence in

of both final approval of the DS and confirmation. The plan is the product of months of hard-bought negotiations and really tireless and more focused back. The plan gives a new financial, these iconic brands, ready to emerge with a four, renewed brand and partner relationship, luxury retail. I want to take a few moments to highlight the companies, they're 11 because I think they're very important for the record. The process, SACC Global has achieved significant milestones, and together they've positioned

up to emerge with a stronger and better cap. million of a $1 billion a global settlement overwhelmingly in addition to the dip budget inventory results and revenue month to month and we've also reached deals with many critical service providers whose support and cooperation

we generated in 46th year under the brand community to revitalize its core focus on luxury and full line selling we right size and we advanced the integration the company opt to be going performing the company's internal plans and third we are go forward business plans the result is that

faxed global will maintain a portfolio of high-performing stores in desirable location. Our footprint at emergence consists of 49 total, full-line-lilict, physical tax, liquidity not only to fund its operations over time as we drive that continues momentum and grows merchants. The company will have the opportunity to thrive. Key role, including more than 15,000 people, buy billions of dollars, and serving loyal costs. Overwhelming the commitment of the company, highly reputable management in support of the deal.

Who else would like to make an opening statement? Your Honor, I'd like to, if Your Honor, Christelds me for a minute. Absolutely. Lorenzo Meredith, from Morrison and Forrester, again for the record, on behalf of the Official Committee of Unsecured Predators, joined by my partners and also the welcome of Colchots as local co-counsel. The punchline here, Your Honor, is that the UCC is supportive of a plan confirmation. Documents are coming around by email,

and I'm sure my colleagues are reviewing. If there's any issues, they'll know, but otherwise we assume everything is as we expected to be, and so we're supportive of plan confirmation. I'd just like to spend a minute or two talking about how the UCC sees this case and talk generally about how we got here. Your Honor didn't hear much from us during the case. That's not because the UCC wasn't active.

It's really because the UCC, and all the major constituents here, the debtors and the ad hoc lender group in particular, acted smartly to move the case forward as quickly and smoothly as possible, and that took a lot of work. The UCC itself is comprised of 11 members that include and represent pension, labor, financial creditors, landlords, merchandising partners, and vendors. Some of the members are household names. All of these members were represented individually by very seasoned and sophisticated lawyers

on the committee. This committee hired our firms, Alex Partners, and Hulahan Loki to represent it. It was a very active committee. Each member has invested a great deal of personal time keeping current on case activities and participating in regular and frequent committee meetings. They have a long history with the company as well, and we're thankful that the members have been as engaged as they have been here, and so willing to help the UCC professionals

get smarter than the otherwise could have been. From the time we got up and running in early February, a few themes emerged in this case. First, SACS was going to be successful only with the support from the major brands and trading partners, otherwise it was just an ordinary retailer. Second, time was nobody's friend. This case needed to move quickly.

And third, there were a number of events leading up to the bankruptcy filing that warranted a thorough investigation. UCC immediately tackled the dip financing, which was already contested at the first state hearing before the committee was even put in place. And the dip, I think, proved to be the first moment of trust for the parties. There was an inherent tension in being asked to continue to provide merchandise and trade support while not having a certainty of payment. and mindful of what happened in twice or us years ago, and because many of the members of the UCC themselves had been strung along by prior management, prior management of promises of payments that never came,

the UCC negotiated important protections for creditors under the dip order. In particular, under the dip order, the new money dip loans and the dip roll-up loans were subordinated to post-petition obligations of concession and consignment vendors arising from post-petition sales. Second, concession and consignment, were deemed to have valid and perfected rights for goods in the global debtors' possession as of the petition date, regardless of whether such rights were properly perfected.

Three, stubborn was paid to landlords, and four, the dip lenders were required to marshal away from unencumbered assets, including avoidance actions, and the value of Holdko's assets. While this was happening, at the same time, the company was asking for final approval of its critical vendor order, and the UCC insisted that nearly half of the $700 million have proposed critical vendor dollars be used within 14 days of entry of the final dip order, and that's in fact what happened. We don't see this in every case, really. This laid the foundation for where we are today and really reflected the commitments from

the company, its creditors, and the ad hoc lender group to get to the end of this case together and come out as a healthier enterprise which were on the verge of doing. While this was happening, the UCC conducted an investigation of the company's prior transactions, including the Newman Marcus acquisition, the LME transaction, and the conduct of officers and directors at the time of those transactions. The UCC also investigated and identified unusual transactions with respect to brand licensing rights, forgiveness of insider loans, payments of bonuses, borrowing base irregularities, and other matters.

And the UCC coordinator would counsel for the debtor special committee to ensure that these potential... All right, can you hear me? Yeah, I can hear you now. Sorry. And this is ultimately what occurred in this case through the UCC settlement with the company in the ad hoc group. That settlement creates a litigation trust funded with $20 million. The parties painstakingly, and I emphasize pain in that word,

identified the claims that were being preserved, and the parties were not getting released under the plan, so that the trust could determine whether to bring those claims and how best to dispose of them. UCC and lenders agreed to a sharing mechanism for proceeds, reflecting the fact that the dip loan is impaired. The settlement provides for a small cash distribution to go forward trade on the outgoing digital debtor sides. It provides for the broad waiver of ordinary course avoidance actions for trade, creditors,

vendors and landlords. And importantly, it provides for the continuation of the PBGC sponsored plans and the CBA and the payment of indenture trustee fees. The most important thing here, though, Your Honor, is that the settlement allows the company to emerge as a healthy company coming out of bankruptcy without being mired in bankruptcy a day longer than necessary, and that's really important. I spent a couple of minutes patting the UCC's collective back, but we don't get here without all of the collective hard work

of the debtors professionals and the professionals for the ad hoc group of lenders. There were many late-night conversations among our teams. It's always a pleasure to work on a case without standing professionals all around, and we're blessed to have that here. With that, I'd like to thank the court chambers for accommodating us throughout this case.

on behalf of the UCC students, unless the court has any question, I will stop talking. Thank you. All right, thank you. All right, anyone else wish to make an opening statement? All right, it's back to you, Ms. and Claire. Thank you, Your Honor. I'll first start with the evidentiary matters,

which I think we can take through quickly. We filed our witness an exhibit list. I believe that's docket number 26, 27, but there may have been a revision to that this morning. Either way, the references all used to the exhibit and the docket numbers are also accurate. So first, I'll move the declaration of Letitia Sanchez of Strato, which is Exhibit number 22, filed a docket number 2604 under seal,

with our adapted version filed a docket number 2605. That's the declaration of strato that sets forth the voting results and also the details of the various options and opt-act. Hold on just a second. The one that was filed this morning is 2658. So does anyone object to the admission of Ms. Sanchez's declaration filed at 2658-21 and 22 as her direct testimony in connection with the confirmation hearing subject to cross-examination? All right, hearing no objection, that will be admitted subject to cross-examination at the appropriate time if necessary. All right, that's admitted.

Thank you, Your Honor. Next would be the declaration of Mark Weinstein, the Global Debtors' Chief Restructuring Officer. I believe it's Exhibit No. 23 filed a docket number 2611. All right. Does anyone object to the admission of Mr. Weinstein's declaration filed at 2658-23 as his direct testimony in connection with confirmation? All right. Hearing no objection, that will be admitted as his... direct testimony subject to cross-examination at the appropriate time.

Yes, Your Honor. Next, the Declaration of Jamie Baird of PJT Partners, who's the debtor's investment banker. That's Exhibit No. 24, which was originally filed. All right. Does anyone object to the admission of the Declaration of Jamie Baird as his direct testimony in connection with confirmation, subject to cross-examination at the appropriate time? All right. Hearing no objections.

Exhibit 2658-24 will be admitted as Mr. Baird's direct testimony subject to cross-examination. Thank you. Next, the declaration of Paul Aronson in support of the plan. Does anyone object to the admission of the declaration of Mr. Paul Aronson at 2658-25 as his direct testimony in connection with confirmation, subject to cross-Ehrinson? examination. That exhibit will be admitted as his direct testimony subject to proper to cross-examination if necessary. Yes, Your Honor. Finally, we'd like to move the various certificates and service solicitation materials as well as the

affidavit of the New York Times regarding publication notice of the DSF order. Those are exhibit 15 through 20 on the list. All right. Any objection to the admission of 2658-15 through 2658-20 of those exhibits. All right, hearing no objection, 2658-15 through and including 58 2658, I'm sorry, 2658- I'm sorry, 2658-15 to 2658-20 will be admitted. With that, I can turn to the presentation and I'll take first the disclosure statement. We conducted the solicitation of the plan beginning on May 4th, 2026, in accordance with the solicitation procedures that Your Honor approved at the hearing we held on May 1. The disclosure statement contains information in each of the categories that courts typically look for when they're making the determination as to whether a disclosure statement contains adequate information for the purposes of that pieces of information include the events that went to the filing, the material terms of the Chapter 11 plan.

that the disclosure statement contains adequate information. Anyone else wish to be heard with respect to the final approval of the disclosure statement? Your Honor, how long to the yes, trustee? Yes, go ahead. How on to the U.S. Yes. Yana, we did file an objection to the plan and disclosure statement. We did work out almost all of the issues that we could work out in terms of the disclosure statement.

the solicitation, we do have an objection to the opt-out. Your Honor, have heard it before. We continue to raise those issues. As Your Honor, know, we're in the Fifth Circuit in the container store in one of your cases arguing that. But for the purposes of today, I'm just laying out the U.S.C. Opposition to the use of the opt-out. I understand Yon has ruled it in the past, so I won't belabor the argument, and that will just rest in the fleeting.

But in terms of all of the other points we had on the objection, counsel, for the better, we incorporated language that resolves all of those issues that we could resolve, except the opt-out. Thank you, Your Honor. Thank you. Thank you, Mr. Wynn. All right. Anyone else wish to be heard on the disclosure statement? All right. I've had an opportunity to review it as well as review the evidence, particularly Mr. Weinstein's declaration.

So, and I think that the disclosure statement provides sufficient and adequate information for a reasonable hypothetical investor to look at in order to make a decision. So I'm going to approve that on a final basis. Thank you, Your Honor. With that, I think we can turn to confirmation of the plan. We filed an amended plan overnight on Wednesday and to Thursday at docket number 2601. We then filed a further amended plan overnight last night, a docket, number 2651. As I've been by those filings, we have made a number of modifications to the plan since the

solicitation version was mailed out, but none of those were material. And I won't go through them line by line, but instead I think it's helpful to the court if I explain just the categories that those changes fall into, and there's really a handful of that. One is documentation of the UCC settlement and the litigation trust construct. Second, is resolving informal comments from landlords, many of whose counsel are on the phone today have appeared. Third, is properly accounting for the settlement we reached with Ms. Borden and her clinic. Fourth is accounting for the disclaimer of certain equity interests,

and fifth, resolving informal comments from both the ADL lenders and city of the pre-positioning. We also filed a confirmation order on May 29th. That was a document number 2387, and overnight prior to the hearing, we filed a revised. I'll tell you. I'll tell you. The number you need it. No, I know the number. Hold on a second.

It is 2655. Thank you for the assist, Your Honor. So document number 2655, the purpose of nearly all the changes in that document is to reflect resolutions both formal and informal objections that we've been receiving. Again, just so that you can understand the categories in that red line. The objections in the comments came in from a number of the debtors insurers, the surety bond providers, landlords and other contract counter parties, at least one bank, the confirmation or valuable settlement with an ad hoc group of lenders in the top host structure who've been in contact.

In 2015, for the U.S. trust, informal cure objections and several informal reachouts. Our plan does give us the plan already working. If for some reason we cannot reach our resolution, we will bring it back to the purposes of today's hearing. We continue to work with those. Any particular questions? And there are any growth to the parties that are very easy for those forms were mails to document it in our affidavits of service. We know that it was easy to up our due pharma bank or gain receipt. That court was unequivocal that and the global matters.

Do you have anyone else wish to be heard with respect to confirmation? Good morning, Your Honor. Your Honor. Your Honor. Mr. Pyr Park, Ashman, LLP on behalf of the long list of vendors. Perhaps not as long a list as Mr. Lehaines. But if you'd like me to repeat them, I can. Your Honor, my clients consist of some of the debtors' most important and iconic high-fashioned luxury vendors.

These vendors have numerous executory contracts with the vendors, consisting primarily of concession and consignment agreements. We follow the reservation of rights at docket number 2000. with respect to the plan, which provides for the assumption of all executory contracts, if not specifically identified for rejection, as well as a limited objection to certain of the plan supplement documents that listed some of our contracts with a unspecified cure amount. You want to putting aside the fact that no cure amount was identified for these contracts, our basic concern has been that would be very difficult just given the flow of commerce to identify the precise cure amount as of a given date,

and I know, Your Honor, there are numerous business issues that are being worked out, particularly as it relates to concession agreements among the business people, that don't require the court's attention. Your Honor, to be clear, my client strongly support confirmation of the plan. We have worked very constructively with the betters throughout this case. We recognize the importance of tax for luxury retail market, and the reorganization, contemplated by the plan has our full support and confidence. Continuing the theme of working constructively, since we follow the resolution, We reached out to counsel to the debtors and we agreed that the reservation of rights

and the objection to the plan supplement documents to be resolved by using the following language into the record. And if your honor will indulge me, I'll do that now. Go ahead. The agreement to the global debtors and the vendors consisting of David Yeoman Enterprises LLC, German Retail North America LLC, Go ahead, New York, Incorporated, Caring Americas incorporated, LVMH, Mulay, Hennessy, Louis Vuitton, Inc., Rishmont North America Incorporated and Intra LAC Holdings LLC and each of their affiliates, brands, and mesons, other than Louis Vuitton, USA, Inc., collectively refer to as the vendors. The vendors do not object to the assumption of their executory contracts with the global debtors

under the plan. The executory contracts will be deemed as of the effective date, and the parties will work in good faith to consensually resolve any disputes related to the cure of such contracts with any agreed amounts paid in the ordinary course, subject to the party seeking further relief from the bankruptcy court in the event the parties are unable to resolve any disputes consensually. And, Your Honor, with that, I think I'm done. If Your Honor has any questions, I'm happy to answer them. No, thank you very much. All right. Thank you, Your Honor. Let's start, Ms. Borty.

Okay. Can't hear you. Can you hear you, Your Honor? I can hear you now, yes. Okay, thank you so much. I just wanted to repeat and reiterate the tremendous amount of work that went into this uncontested confirmation behind the scenes, as I'm sure you're on our nose. A smooth hearing means, you know, many, many, many hours of work behind the scenes, and the debtors council and ad hoc group worked very constructively with Exotic to resolve the objection that we lodged on the first day of the cases, which we, you know, continued to press throughout the entire case.

We are supportive of the plan that incorporates the Exonic settlement that was reached and was filed at docket number 2365. and which will be approved by the confirmation order. And I just had one very small confirmation point that I wanted to make, which building on Mr. Maramesey's painstaking comment with respect to what's being released and what's not being released, I just wanted to make clear. There's a statement in the retained causes of action. I think it's clause B that says that causes of action involving HBS Global,

properties will be retained. But then there are two more specific clauses referring to the Exonic Settlement, which is C, and the causes of action related to the HBS lender, which is clause H. Those will be released pursuant to the Exonic Settlement and a separate settlement. So just wanted to make that statement clear on the record and express my thanks and appreciation to the debtors, the ad hoc group, and committee council. All right. Thank you.

Mr. Galardi? Thank you, Your Honor. I just wanted to make two points one. Mr. Metrick does still consider it is still objecting, and I would like to ask Mr. Weinstein about 20 questions in support of that objection. All right, Mr. Let me get the other people, and then I will come back to do that.

Okay. So Ms. Ravi, Raviel. Thank you, Your Honor. for the record, Jennifer of Ellie of Kelly Dry. Can you hear me, Your Honor? I can. Thank you, Your Honor. We filed objections at docket number 2524 and 2550.

Your Honor, I just rise to acknowledge our appreciation for both the Wilkie and the Mofo teams and working with us over the past few weeks through many calls and emails to get where we are today. I'm pleased to note that the plan embodies changes that sacks their lenders and the committee has agreed to that address all of the concerns listed in our objection. The only exception to that, of course, is Cure, which Ms. and Claire mentioned and will endeavor to resolve that promptly post-confirmation. I just wanted to note that in reviewing the revised plan confirmation order that was filed overnight, our team has identified some language that needs to be modified to align with

the settlements embodied in the plan. We've already reached out to a little key team about this, specifically Mr. Brant, who I believe is sort of the keeper of the confirmation order, and we're confident we can get that wrapped up quickly. But I just wanted to know on the record that it is a live issue. I'm happy to walk through the details of the changes that remain to the plans, which are concerned at any point in this hearing. If you have any questions, otherwise, that's all I have. All right. Thank you. All right. Um, Mr. Prostock. Thank you. Your Honor. Jeff Krostock for Salesforce. You know, we do not have an

objective to the plan. It's a reservation of rights. Salesforce has a number of pre-petition contracts that were entered into with the debtors. The parties have been working to resolve issues with respect to cure amounts. Those contracts are going to be assumed. There's still some discrepancy between the actual list of the contracts that are going to be assumed and the share amounts that the parties are continuing to work to resolve those issues. There are large contracts, Your Honor, and important things to both the debtor and sales force, and what we're asking for, and what I think the plan provides, and what we're hearing today,

is that both the Dennard sales force will reserve all of their rights with respect to the assumption in an assignment requirements under 365, including the cure amounts. And with that, those are based on the insurance, we support confirmation. All right, thank you. All right. Mr. Paul Sefelt.

Good morning, Your Honor. Safety National is the global debtors general liability insurer and the provider of various other policies commercial order and workers come. To be clear, SACC National supports confirmation of the plan and assumptions of policies is provided in the plan. We simply have one minor issue, actually one line of the plan, we believe is incongruent

with the law and the intent of the plan. We attempted to work out language in the confirmation order, but we didn't get all the way there yesterday with debtors. I don't actually think there's a legal disagreement, which is all the more the reason it's surprising we couldn't get there. surprising you couldn't get there. If your honor would turn to plan section 7.16. Hold on. Give me a minute. What page is that on?

Oh. I'll find it. Hold on. 96 on docket number 2652, you're honest. My PBS page 107. 7.6 did you say? 7.1. 7.1.

6. Okay. Okay. About halfway through that paragraph, there's a line that starts such sir. Yeah. And it reads, such sir shall be considered satisfied pursuant to this plan through allowance of the general unsecured claim solely up to the amount of the actual serve or deductible. So this is not a unique issue, Your Honor, and this course looked at this many times.

So off the top of my head, Judge Lopez and the NBC International case, Judge Jones and the Valer's case, the Taylor Brands case, Judge Isger. So courts have consistently held that the SIR satisfaction is a policy term. And whether a particular claim satisfies the SIR is a policy-specific inquiry and a claim-specific inquiry. And that's all appropriate for the state court. I think what the debtors are trying to do with this language is get a finding that their financial obligations to claimants are satisfied with claim allowance. And we don't agree there. What we do disagree with is that the policy term is satisfied by allowance of a claim.

Those are different issues, and there's a potential waterfall of issues that arise between safety and claimants that are seeking coverage and safety and debtors if a policy term is triggered. So all we're looking for is one of listening to the plan or the confirmation order that says satisfaction of the SIR and Safety Nationals policy is subject to. the terms of the policy and applicable law. Thank you, Your Honor. Ms. Sinclair? Your Honor, if we could be heard quickly on this point, suffices to say, I think all of Safety National's rights are adequately reserved under the plan,

but my colleague, Mr. Brennan, will address this specific objection. Okay. Good morning, Your Honor. So first I'll just note that Safety National did not file an objection to the plan. They raised this issue with us yesterday, but notwithstanding that we're willing to address

this. In our view, Safety National's language that they've been proposing over the past day has attempted to inject a substantive issue into plan confirmation, and it's not necessary to do that. As we understand it, Safety National's concern is that they would like to make an argument potentially in certain cases that as counsel for Safety National acknowledged is grounded in the terms of the specific policies. And he also acknowledged it's something that's been addressed by different courts. So this is a hypothetical future argument that is dependent on specific policy language, certain jurisdictions, certain specific claims, and will have to be adjudicated on a case-by-case

basis. This is not a universally applicable principle that is in any way contradictory. by the plan language. So under those circumstances, the global debtor's view is that the appropriate way to deal with this concern is not to have a debate and address in the plan confirmation order that potential hypothetical argument, but rather to make sure that all of the parties' rights are adequately reserved. And that's exactly what we've done.

So if your honor looked at a couple of sentences down in the same provision of Section 7. point one six. It writes, for the avoidance of doubt, nothing herein or in the confirmation order shall modify or impair any of the global debtor's insurers' rights to be reimbursed or paid in the ordinary course according to the terms of the applicable insurance policy, including without limitation with respect to any amounts owed to the global debtors' insurers under an applicable self-insured retention. That language, from our perspective, adequate reserves Safety National's rights. It addresses Safety National's concern that, as Mr. Koltzafel said,

they want to be able to make any argument as to what the policy says and what rights they have under the policy. We had discussion about this yesterday, and Safety National indicated that language was not clear enough for them. We disagree, but in the interest of resolving this, we added language to the confirmation. order that specifically reserves safety national rights. And this is paragraph 197 of the proposed confirmation order at docket 2655, page 101.

The language that we added there reads, the rights of the global debtors and of safety national casualty corporation. relating to or arising under any insurance policies that had been issued at any time by Safety National to the global debtors or any of their predecessors, and all agreements, documents, and instruments related there too, including but not limited to any defenses to coverage arising under the safety national policies, are expressly reserved and not modified or impaired by any of the terms of the plan, including without limitation, And for the avoidance of doubt, section 7.16, which is the section that are, from our perspective, the rights of safety national and any other insurance carrier here are sufficiently reserved very clearly. This is an issue of interpretation of policies.

If Mr. Hotsifel is right that there is an argument to be made under an applicable policy as to how the self-insured retention is exhausted. Nothing, the plan and the confirmation order are very clear that they reserve the right to make that argument at any time. If he's not right and that's not supported by the policy, then this is irrelevant and there's no need for any additional language. So, Your Honor, we would submit that the existing language in both the plan and the proposed confirmation order sufficiently addressed this.

Mr. Hilsipel? Yes, Your Honor. For the record, I take the good file an objection and joined her to the Shubb Insurance objection at docket 2614, and that does appear on today's agenda. As far as the substance of their argument, I can just see a state court, Your Honor, looking at this plan and reading that line and saying, well, right here I see that the surer is satisfied. by allowance of a claim.

It does not sound like we disagree legally that whether the Sir is satisfied is a policy issue. All I'm looking for is clear language, I can point or safety can later, really defense counsel and state court can later point to in the confirmation order that says satisfaction of the Sir and the safety national policies is subject to the terms of that policy in applicable law. I didn't hear anything in that argument that disagrees with that point and, frankly, was not given a reason yesterday or today why that language is not an acceptable resolution of this issue. I think... If I could briefly respond, Your Honor?

Yes. So what Mr. Holstaffel is proposing is delving into a substantive issue. It's delving into this issue of whether the, the, sir, in this particular case for this particular policy, in a certain jurisdiction, is governed by the terms of the policy. And we understand his argument is it is governed by the terms of my policy, but each policy is different. Each policy may say something different about a self-insured retention or a deductible or any other provisions. And so going so far as to say that the safety national policies, the self-insured retention is governed by the terms of the policy, yes, to a certain extent that's true, but we are starting to delve into an issue that that Mr. Holtz-Fel at the beginning of this argument needed to cite examples of cases that

have dealt into that issue, and I think he would admit have not done so consistently. And so this is, again, delving into a substantive issue in a way that is not necessary. If he's right that the policy supports this argument, then there can be no doubt that his right to make that argument is preserved clearly both in the plan and in the country. information order. Why don't we add a sentence to paragraph 197 that says, notwithstanding any anything here in or in the plan, all of safety nationals' rights under the policy are reserved and leave it at that way.

That would work for the global debtors, Your Honor. I defer to your honor if you think that addresses the issues. I think it does and I don't think it tilts it one way. the other because your policy is being assumed so it comes with all all of your rights under the policy we agree your honor we don't think anything in the plan can modify an executory contract and so right thank you your all right so thank you all right so i think miss besper you may be the last mr flisher mr mr mr flasher the morning on your honor margaret vallard's bar on behalf of certainly

words, I won't repeat the full list again to save some time. I echo the comments of Ms. Revelli. We appreciate the global debtors working through the issues that we raised in the objection filed a docket number 2545. We are continuing to work with the global debtors to finalize issues around the Somerset Stocks location and we otherwise look forward to working through the Cures with the global betters post-confirmation. Otherwise, we thank the global debtors for working with us and we're continuing to review

the revised proposed confirmation. to ensure that it aligns with the changes made to the plan to revive our resolve our issues with the plan and I'm happy to answer any questions your honor me have all right mr. Fleischer yeah I have no questions good morning when you're on it can't okay okay okay okay great again for the record Scott Fleischer on behalf of landlords affiliated with Urban Edge Properties and Westfield LLC we went through the revised plan and confirmation order and just had one remaining issue which is really a

an adequate assurance point, which was that the plan and confirmation order refer to the revesting of assumed leases in the global debtors on numerous occasions, which would be fine with our clients. However, there's broad rights in the restructuring transactions concept and the restructuring steps plan concept as well that making clear that there's a lot of flexibility in terms of the go-forward corporate structure. So we sought some clarity as to what that would look like and whether the leases would remain at the same entity and the same general structure going forward

and weren't able to get a sort of clear answer on that. So we had proposed some language saying that the restructuring transactions couldn't violate the terms of an assumed lease just to try and get some clarity there and that don't believe was acceptable. We were on some emails, you know, just prior to the hearing as well, trying to work something out. But that was our concern, right,

that you can't start moving entities around, you know, without a notice and an opportunity to be heard from an adequate assurance perspective. All right, Ms. Sinclair. Your Honor, we were on mute. Deborah Sinclair will be far for the record. Your Honor, I don't think that we can, from an administrative perspective, agree to Mr. Fleischer's language,

in the sense that it would require me to review every single on-expired lease we have and make sure there's no football. But I think that there's nothing in our plan that would allow the company to override the provisions of any lease post-emergence. We assume, at any lease, we assume, subject to all of the obligations the global debtors have they're under, and any counterparty to those assumed contracts and leases will have whatever rights and remedies they have against us if there's a world where we were to violate any of the provisions of those contracts.

I don't think there's any end run being proposed around either 365 or any of the provisions that would live inside the leases of Mr. Fleischer's client. As to the illusion that there is an adequate assurance issue, I think our disclosure statement shows that the debtors are going to be significantly well capitalized following the emergence. No one including Mr. Fleischer has raised any objection to that concept. So that candidly to me is a new issue. But as a relief to assumption and assignment, we satisfied the requirements of the bankruptcy code and to the extent there was a post-emergence dispute the party's rights are reserved. Your Honor, Mayor, respond? Yes.

Go ahead. Sure. I'm not concerned about the global debtors from a no pun intended global perspective, financially speaking. There just needs to be some clarity as to getting what the go-forward corporate structure will look like just to make sure that the tenant entities that our clients have under the soon leases are in a similar position to where they are now and besides the post-effective date issues if there are some transactions that take place to prepare for the effective date post-confirmation you know the pre-effective date they're going to have squad

language in there that there could be assignments and other sort of corporate transactions that take place. So again, just looking for some certainty that the structure is going to remain generally as is. Well, I'm generally not going to limit the ability of the debtor to have, you know, a more tax-efficient corporate structure of those kinds of things. I think you reserve all of your rights and to the extent that, you know, you think that those rights have been violated. Obviously, you can come back to court and say that.

But to basically limit what steps the debtor can take to have a more tax-efficient organization or to eliminate unnecessary subsidiaries, those kinds of things that really at the end of the day have no particular impact. I don't think we can kind of hamstring the debtor. So I understand the nature of your objection. But I think that you, you know, if your lease is being assumed, you retain all of your rights and to the extent you think that at some point the debtor does something that is, you know,

either in violation of the lease or would have changed the adequate assurance or calculus, then I think you're free to come back to court. So. that with that with that with that position on uh on find to rest for now thank you all right thank you all right mr finestone mr vinesstone i can't hear you are you muted no i can't hear you hit five star that you thank you your honor sorry about sorry about that for the for the record ben findstone is somebody with background no okay uh for the record ben

fine stone quinn manual they have a phb strategies your honor so your honor for about a week now we've negotiated language that would obviate the need to object to the plan. The language is found in paragraph 185 of the proposed confirmation order. I could share my screen, Your Honor, or if Your Honor is looking at it, then obviously there's no need to share. In any event, the language was acceptable to my client. It was acceptable to the debtors in possession, and it was, in fact, acceptable to the statutory creditors committee. last night without any notice to me there's a red line filed to paragraph 185 it has some language at the end and not only was it without any notice to me after an agreement but it has the powerful language of saying not with any notwithstanding anything here and to the contrary and so it basically overrides all of the work that I really appreciated doing with the debtors leading up to today your honor I'm in the effort to be constructive, what I would propose is that I don't really object to this language, provided that

the debtor's in possession and the creditors committee both affirmatively agree that the effect of rejection, that all parties reserve rights with respect to the effect of rejection. And what I mean by that, I'll be more specific, is just that a debtor can reject a contract. That's a business judgment issue. It's not an issue I planned on contestant. But to the extent I had property interests granted to me under that contract, which I did, rejection doesn't eviscerate property interests, as judges who are recently held, not so recently anymore, as time goes by, but recently held in Sanchez.

And so if they're going to put this language in that says the contract will be rejected to the extent of executory, I'd like it not to override the general reservation of rights that we all agreed to about what this plan does to my property rights and to the contract. So I would wait to hear from the debtors in the committee whether or not they agree to this proposition. I don't like doing things this way, Your Honor, but this was red line filed on the document either last night or this morning. I didn't have any notice about it. All right, Mr. D. Your Honor, Your Honor, Your Honor, we actually thought that there's no problem with action to be dealt with later. And the effect of, I believe we may have language to add to the order.

Yes, I can hear it fine. Thank you. the record, Brian Kotler of Morrison and Forster on behalf of the committee. Your Honor, the debtors change that Mr. Feinstone referred to was news to us this morning. The HBS proposed changes we just heard about on the line. We're also news to us. We're okay with that with the concept, Your Honor.

The parties had bounced around some language, I think, that would resolve this, either through the representations made on the record or through language that we can agree to in the confirmation order, we're fine with the reservation of rights that Mr. Feinstone. on loan. Thank you. Well, you're just to clarify. I believe it was Mr. Butterfield from the Morrison Forster firm that provides the language. So we may have some crossed wires here, which we'll sort out, but I know I will work that out.

Thank you. All right. I mean, I think that Mr. Feinstone stating a pretty uncontroversial law to the extent you have property rights, you have property rights regardless of your, of a rejection of a contract. So, all right. That should get resolved. So I guess any other person wish to be heard? Thank you.

With respect to confirmation and otherwise we'll go back to Mr. Gilarity. Yes, Your Honor. Can you hear me? Yes. Again, Your Honor, for the record, Roiser of Elkins-Calt on behalf of S.F. Walsher, B.H. LLC. So, Your Honor, Bruce Lee, my issue is very limited. I won't take up much of the court's time.

Your Honor, my client holds a security. against a vacant real property located in Beverly Hills, California. It's adjacent to one of the debtors flagship stores in Beverly Hills. Your Honor, prior to the, we filed a reservation of rights that's stock entry 2587. We've been working with the debtors and with the lenders in the back. grounds on precise treatment to be given to my client's secure claim, which is claim number 4144. We have been working for several months.

I appreciate the efforts by counsel to try and reach agreement on the treatment. We're not there yet. My understanding is that the principles are still talking and trying to arrive at an agreement. Your Honor, right now, my client. claim is addressed in the very last paragraph of the confirmation order which was submitted this morning. And it's paragraph number 198. And it provides that unless otherwise agreed in writing between SS Walsh BHLLP and the global debtor's honor prior to the effective date in full and final satisfaction, compromise, settlement, release, and discharge of claim number 4144.

on the effective date, SS Walshra BH LLT as the holder of such other secured claim shall receive that the election of the global debtors and subject to the reasonable consent of the required consenting fifth-term loan lenders, the collateral securing its other secured claim. The issue we have, Your Honor, is that this is somewhat open-ended and still uncertain as to what the treatment will actually be between now and the effective dates. Again, we're trying to resolve this, and my hope is, that we will.

All I ask, Your Honor, is that there be a reservation of rights at the end of that paragraph that provides that something to the effect of if there is any other treatment selected by the debtors that SMAF BHAB will reserve all of its rights with respect there to. I proposed something to that effect last night, and I would, and then I was told that this new paragraph was added to the confirmation order, which might address my concern, but for the reasons I just did and I don't believe it does.

So it's just paragraph 198, which starts unless otherwise agreed to in writing? Yes, Your Honor. So when I read the paragraph, it's either you agree to something in writing or they're going to, you know, tender, Yeah, it's a collateral. Right, we don't have any. Sorry to interrupt. Your Honor, I don't have an issue, obviously. If the paragraph were to state that they actually will do that,

I wouldn't have any issue. The problem is that there's that qualifier of at the election of the global debtors and subject to the reasonable consent of the required consenting tips from loan lenders. It leaves room there for a different decision to be made. And so all I would ask the honor is that, to the extent that such other decision is paid that we reserve all rights with respect there to. All right, Ms. Sinclair.

Your Honor, I think there are only two choices here, which I think is the point that you were getting at. So it's a better option is to just cross out these, you know, of purported ambiguity. I would be happy to do that. But from the debtor's perspective, it is either re-reaching consensual deal or this creditor will receive the collateral

that secures this other secured claim. All right, so we'll just strike at the election. from at the election to so we'll strike at the election of the global debtors and subject to the reasonable consent of the required consenting dip term loan lenders. I actually

thought that that was more having to do that the required consenting dip loan lenders had to agree to your deal as opposed to that they had to agree to something else but I think that

I don't think there's any yeah I think it's either either A or B, either reach a deal, the three parties reach a deal, or you get the collateral. So maybe you can just take that out or clarify it. I don't think this is an issue. That address is the issue. Thank you, Your Honor. Okay.

Are we ready for Mr. Weinstein? Has anyone else have a, have a, any question? Ms. Strickland, go ahead. Thank you, Your Honor. Can you hear me? All right, I've battled the mute button. For the record, Rachel Strickland, Brooks, and Gray on behalf of Richard Baker and Ian Putnam. They are former officers and directors of the Global Zetter's, and Mr. Baker's objection was filed at docket 214,

and Mr. Putnam's objection was filed at 2578. We have four total exhibits among the two. They're filed at docket 2649 and 265-0. And I would note that there are some redactions in there which we redacted at the request of the debtors. So I'd like to move to admit those exhibits into evidence. Thank you. All right. So as it relates to Exhibit 2649-1 is the consulting agreement.

And 2649-2 is the amended consulting agreement. And 26-3 is the notice of termination. So those exhibits will be admitted. And what were the other exhibits? 2650, Your Honor. Okay, so then these are Mr. Baker's exhibits. And that is 2650-1 is the separation agreement. And that will be admitted.

Correct, Your Honor. Thank you. So obviously, we're at first. confirmation, but it's important to go back to the petition date because that's what sets the stage for the issues in our objection. For years, Mr. Putnam and Mr. Baker served as opposition directors for more than 30 separate debtor entities that all filed petitions on January 13th. And while the debtors are now, based on their exhibits, going to point to timestamps on petitions, the agreements themselves, as well as both sides' conduct, indicates what these agreements are now. were to provide for. The global debtors, who are the parties that are bound by these consulting agreements,

were really directing the run-of-show for these cases. And in the run-of-show, what they orchestrated, what by those debtors, was to have Mr. Putnam and Mr. Baker resolve as directors to commence the cases on January 13th and thereafter agree to separate from the debtors on the close of business on the day the cases were to be commenced. So the debtors could have just fired my clients, but they didn't want to because they needed them. And my use of day is very important.

Just as over 30 debtors employed and agreed to indemnify my clients, many of them also needed services for covenants from my clients to continue. And this is all noted in the agreements that we filed in the exhibits that we just admitted. In those agreements, Mr. Baker and Mr. Putnam agreed to their termination. from the company group and the direct and indirect parents and subsidiaries and affiliates. And in exchange, they accepting ongoing material obligation. And in return, among other consideration, the global debtors expressly reaffirmed and preserved

their indemnification rights. So with Mr. Putnam in particular, that agreement provided consulting services of at least 40 hours a week regarding the debtor's real estate portfolio. He repeatedly met with the creditors committee to help unlock value in these cases by doing real estate deals that are really the crux of the recovery in these cases. He also agreed to cooperate with these cases. He sat for the special committee's investigation twice voluntarily. He also sat with the UCC. He also agreed to valuable non-compete, non-solicit, and non-disparagement obligation.

Mr. Baker, whose agreement is filed as, Exhibit 1 also agreed to be bound by valuable non-compete and non-folicitation provisions that went on, in some cases, for 24 months after execution, and in others for 12 months. He also provided documents in response to both the Special Committee and the UCC's investigation. There's no ambiguity in the agreement. For Mr. Putnam, it says, company group shall indemnify and hold you harmless. to the fullest extent permitted by law and the applicable company group's member bylaws or other organizational documents for your good, safe actions, or inactions as an officer-director, employer, agent of the company group.

And for Mr. Baker, it expressly preserves his right to seek indemnification claims against the company. There's no restrictions on the language. It's not limited to the duration of Mr. Putnam's role as a consultant. it is only as long as Mr. Baker complies with this destructive covenants. So there was a full reaffirmation of everything that is already provided for in many, many of the debtors' organizational documents. Despite their stepping down from the role of officer and director, the debtors were agreeing to preserve their indemnification rights,

which arise under those orthodox. And so now, having extracted many of the benefits of the agreement, offered to them, the debtors seek to use the confirmation process to strip away the protections they promised them return. And what's their justification for doing so? First, they said, in their objection, the response, that the counterparty to the agreement filed a few hours after this was executed. Your Honor, I would submit that this is a gotcha.

Even if all of the global debtors filed hours after the agreements were effective, it's difficult to believe that that's really the debtor's position. Did they knowingly enter into an agreement with key executives and directors as they were authorizing resolutions, prepping, and filing petitions with no intention to comply? I don't think that's the case. The debtors, however, are talking out of both sides of their mouth. The next make an argument in their reply that even if these are post-petition agreements, well, Your Honor, they say we should have gotten approval for it and we didn't. That's a really strange argument for counsel to read now. They amended the agreement a few months ago.

They reaffirmed the terms of the original one that remained, quote, in full force and effect. And again, just last month, when Mr. Putnam was sent a revised consulting agreement for more work, nobody talked about seeking court approval at any point. So they can't claim their failure if in fact what it is as a defense. Further, if the debtors didn't think the agreement was enforceable, they had a responsibility to say so to the office and directors who they were advising in the boardroom and just signed resolutions to file these cases. Of course they thought it was enforceable.

This is a post hoc rationale. But that's not good faith. That is the use of the bankruptcy process as a sword to cut away obligations that the debtor voluntarily contracted for and benefited from after the petition was filed. And the issue here is whether the getter can reap the full benefits of a post-petition agreement when it voluntarily entered into extended and relied upon throughout these proceedings, while simultaneously claiming that the agreement is ineffective stripping away the protections that offered in exchange.

And yet, that's exactly with Section 6.4 of the plans It permits the debtors to have it both ways. In practical terms, the proposed plan would render meaningless the indemnification protections that the global debtors expressly committed to preserve in the separation agreements after they got all of the benefits of the agreement. Strangely, it also seems to imply, while not saying so directly, that even if the contracts as they argue were pre-petitioned and rejected, that my clients wouldn't even have unsecured claims that they could recover on against each of the entities that agreed to indemnify it.

That's just not the law. And not only that, it's another inconsistency in the debtor's behavior. At the opening of the hearing, Ms. Sinclair noted that parties that were receiving no recovery on account of unsecured claims got opt-in ballots. Well, my clients got opt-out ballots, which by Ms. Sinclair's own recitation would imply, that they were entitled to receive a recovery on account of general unsecured claims. Well, that's not what 6.4 says with respect to their unsecured claims on indemnification. Again, they can't have it both ways.

But even setting aside the consulting agreement, Mr. Baker and Mr. Putnam's indemnification rights exist independently under Delaware law. Your Honor, Section 1129A3 requires that a plan be proposed in good faith and not by a means forbidden by law. The proposed plan fails on both counts as it tries to get your honor to approve a bait and switch. We're not asking the court to derail the global debtors reorganization. This is not a request for special treatment. It's a request that the global debtors honor the bargain that they struck,

comply with the law that governs their corporate obligations, and refrain from using the plan confirmation process to accomplish what they could not lawfully, accomplish outside of bankruptcy. So we respectfully ask that the court sustain this objection and require the appropriate modification to the proposed plan that honors Mr. Baker and Mr. Putnam's indemnification obligations against each of the debtors. Thank you, Your Honor. All right, Ms. Sinclair.

Yes, Your Honor. Mr. DeKampi, we'll be handling the argument on this point. All right. Good morning, you're up for the global debtors. I do intend to respond to Mr. Strickland's argument. Obviously, we completely disagree with both the law and the description of the facts on that. But I do know Mr. Galardi had some, Mr. Weinstein. I don't know.

All right, we can do that. So is Mr. Weinstein available? He is. Your Honor. We can make it work on the camera here. All right. Mr. Weinstein, would you raise your right hand? You solemnly, sir, affirm to tell the truth, the whole truth, and nothing but the truth.

Go ahead, Mr. Galardi. Thank you, Your Honor. Mr. Watson, have you reviewed the confirmation brief? Okay. And is it your understanding that Mr. Metrick and will add Mr. Baker and Mr. Putnam will have only pre-petition claims for indemnity? Yes. And is it your understanding that those claims will or will not, what is your understanding of whether those claims will or will not receive a distribution as a pre-petition unsecured claim? Go ahead and answer the question if you can, Mr.

Wainston. I'm sorry, can you repeat the question? If you're Mr. metric under the plan in your understanding receive a distribution on account of any pre-petition unsecured indemnity claim.

I'm not certain. And Mr. Weinstein, do you have an understanding that certain directors and officers have indemnification claims that will be paid in full under the plan? I don't know what claim.

I'm not aware. Do you know if any directors and officers would be indemnified for any investigation done by the UCC in connection with potential claims given to the liquidation trust? I'm not certain. There's, you know, insurance. I don't know what claims could be brought against them

and I don't know whether they be covered. Well, do you know if they would be indemnity? unified, do you understand that the debtors have said that they will be paying certain directors and officers and denification claims under the plan? Certain? Yes. Okay. And with those claims in your mind, and again, not as a legal conclusion, also be unsecured pre-petition claims if they relate to events that occurred prior to the petition date? I'm sorry, I'm not sure I understand the question.

If there's an investigation with respect to events that happened prior to the bankruptcy case, and those claims are indemnified, are those pre-petition claims in your view? If they occurred prior to the filing, in my view, yes. Okay. And are those claims being paid in full for certain officers and directors? Not in a position to answer that now. Do you know the names of any directors and officers who are receiving full payment on account of their pre-petition, on account of indemnification for pre-petition claims? Yeah, I'll give you a running objection.

Go ahead, Mr. Weinstein. Thank you. I'm sorry, can you repeat the question, please. Mr. Weinstein, do you know the names of any officers and directors whose indemnification claims will be paid in full under the plan of your organization. Again, without knowing the nature of the claims, I don't think I can actually, you know, answer that question completely. Okay.

And do you know of any consideration that any such officers and directors gave to the company in exchange for having their indemnification claims paid in full under the plan? Not aware. And do you know if any of those claims, would fall within the class 4E of the plan of reorganization. I don't recall like 4E is off the top of my head. Do you want to do you know whether for a Mr. metrics unsecured identification claim fell in 4E

would that ring any refresh your recollection at all? No. Okay. I have no further questions, Your Honor. Any redirect Mr. T. Pompeo? No redirect. All right. Thank you, Mr. Your Honor, may it be... Yep, go ahead.

Go ahead, Mr. Galardi. Your Honor, it may be good for me to place my objections along with Ms. Strickland's on the record now, so the debtors can apply to them all at once, if that works. Yep. Thank you, Your Honor. First, I would join in... Yes, go ahead, Mr. Cartier. Yes.

Go ahead, Mr. Thank you. Thank you. Your Honor, in addition to Ms. Strickland's objections, and Mr. Metrick had... entered into a separation agreement that was negotiated by Mr. Baker about 10 days before to filing. Um, you would add the following objections. Your honor, in their confirmation brief, they argue the following. First, that preemption, that the bank, that, that there is a conflict between Delaware law requiring that the indemnification obligations, um, honored, whereas the bankruptcy

code will treat them all as a pre-petition claim, which is respect. to that objection, if the debtors do in fact believe that, then every one of the indemnification claims, whether they were from Mr. Metrick, Mr. Baker, Mr. Putnam, or any other director and officer would all be unsecured claims. Your Honor, there is, which affects such unsecured claims. Therefore, when you look at classification to plans for bankruptcy, though, it is the classification of claims and they must be treated similarly unless the debtors give a reason for treating them separately.

Importantly, the plan does treat our unsecured claims and the metrics unscured claims, but there is no class that has been established in the indemnification claims of any other directors and officers. You give the treatment. In that sense, what I would say is if you honor thinks about critical vendors, it's often case in plan that you'll have certain vendors become general unsecured creditors and other vendors become critical vendors and they will get separate treatment. There is no such classification here. and by the preemption argument, all of these claims are pre-petition claims.

And so we would argue that there is a failure to classify these claims in a plan. So our first objection is a confirmation objection. Second, Your Honor, we would argue that with respect to the directors and officers, as Mr. Weinstein could not identify and did not identify, we would also argue that treating those individuals differently, without a consideration, violates 50C. So we would also argue that the plan violates 50C by treating those before directors or whether they were critical to the reorganization.

They are insiders by definition directors and officers. And therefore, we think that the plan violates 503C. So for those reasons, while we would just ask for a modification of the plan to make sure that either the identification claims of all people are treated the same, reserving all rights to argue on a claims objection that we too have provided post-petition benefit under the separation agreement that the debtors had accepted and that we have administrative claims that arose during that period. All right, thank you.

All right, Mr. T. Pompeo. Thank you, Your Honor. Christopher Napier, Your Honor, before I respond to the arguments, I would just like to on confirmation. Yeah, is anyone, yeah, it's a good point. Is anyone have any additional evidence or argument? All right, so the record is closed. So, Your Honor, as you heard already, the arguments here from these former officers and the report of the plan.

Probably know or have heard Section 6.4 provides full new indemnification obligations for the go forward. Indemification for former officers. But I do think before we get into the specifics of the arguments, and I do think it's worth making some broader points that I think will frame it. It does need to be observed that itself is. I think it's even more extraordinary. I think that it would prove it is clear that the level I think it fails.

So even in the world, it seems to be that the... Raise your hand again. No. Go ahead. But he also has a consultant. I think we should start. Mr. Rickland and Mr. Galardi. Thank you, Your Honor.

Can you hear me? For the record, Rachel Strickland, Ropes, and Gray, um, past Mr. Putnam and Mr. Baker. So I want to go back to just that, the facts as they unspooled here. The clients that I have are sitting in the boardroom, they've been sitting in the boardroom, working with the same council

that's presenting them with agreements across the table. These are employment arrangements, I'm sure they had employment council. And what the agreements provide after they, you know, they vote to resolve to file these petitions and they're actively involved in these cases is something that overtly writes right on the document at the close of business on the 13th.

There's no reason for that language to be there unless the sequencing is important. I would say that there was a little bit of a tone in Mr. D. Pompeo's argument about the reason these guys are different is because they're bad guys. not getting releases and everybody else, I think he said, was critical and providing ongoing services. Well, they didn't pay Mr. Putnam lots of money out of the goodness of their heart. They did it because he was critical and providing ongoing services. And in fact, they are seeking critical ongoing services from him still.

The provisions in the consulting agreements, both of them, arise with respect to indemnification about preservation. They are not providing indemnification that was not provided for under the organizational documents. So terminating the consulting services, which is where the provision that Mr. DiPonpeo noted in the consulting period paragraph on page two that says, we won't have to provide you anything after we terminate the consulting services, does not get rid of things that don't arise under this agreement, but instead arise under the corporate documents of the company. And when you look at Mr. Putnam's agreement on page six, where it provides the director

and officer indemnification provision, it provides that the company is agreeing and reaffirming that the company group members, not the signatory, wherever they filed, whether it was one hour before or one hour after, a technicality, I would submit, is bad faith to submit now and doesn't matter, will indemnify you and hold you harmless to the fullest extent permitted by law and the applicable group members bylaws or other organizational documents. And it also provides a carve-out that says, notwithstanding anything here into the contrary,

the company group is not required to indemnify you for losses resulting from an act or omission that constitutes fraud, willful, misconduct, gross negligence, or any breach of your employment agreement or disagreement. So neither of my clients are saying if, in fact, somebody demonstrates downstream that they did something, which, again, even the termination notice that we received last week provides that it's not for cause. But even if later on, this isn't a circular situation where the trust demonstrates something in bad faith or willfulness conduct, and they're asking for indemnification, that's expressly carved out.

And if you look at the mandatory portions of DGCL, what they cover is actually indemnification after an officer or director has demonstrated that the claims against them are not the case. That under the mandatory provisions of DGCL are where they're entitled to indemnification. So we have the sequencing of my guys are on the board. They're being consulted by counsel to the debtors about this whole process. They enter into agreements that provide for what's going to happen over the course of the next 24 months in some instances, 12 months in other instances, and they've got a whole deal. And really, the company has to pay them money, pays Mr. Putnam money for consultation services, also pays for all of his expenses and cooperation. I don't think Mr. Guy Pompeo disputed that pending even under their version assumption or rejection,

those obligations are required to be paid by the estate. But then there's an ongoing obligation that under the org documents, not under this agreement, they are going to reaffirm and provide for them and explicitly in Mr. Baker's agreement that those are not released. And they get stuff for it. And so what I would say is they can't have it both ways. They talk about estate resources and how everybody would have to weigh in. Then they talk about how much money they've been paying Mr. Putnam throughout all of these cases. Plenty of estate resources.

Why? Because he's worth it. Because he has been the linchpin in hundreds of millions of dollars for value for these cases. So I don't think the bad guy overlay argument works, A, because they're not bad guys, and if you look at those consulting agreements, which were done at the moment of, you know, before they filed those who were negotiated, there are statements by SACs and the global debtors acknowledging the appreciation and the good works that they have and will continue to do. So I just I think there's been a lot of sort of blurring of the lines here and as a court of equity, I think we have to look at the fundamental facts. If the sequencing is, I know I'm going to be approving a bankruptcy filing for 30 plus entities, not one entity that's a signatory on this agreement, but 30 plus that have agreed to indemnify me under their org documents where I sit on the board and in many instances where I'm continuing. to provide critical value, and I've got a whole agreement governing the relationship post-filing, which everybody knows it's going to happen, to say, oh, we didn't really mean it.

We meant just until we reject your agreement. So in the first instance, I would say this is a post-petition agreement, and I don't think they can hide behind we didn't follow the law. That's a them issue, not an us issue. But on the flip side of it, even if it is a pre-petition agreement, I do think that it was helpful to get clarification today that they're intending to acknowledge the claims that our clients have against every single one of these entities. And I don't think that circularity arguments regarding the trust hold water in light of what the indemnification actually provides for. So we object to this narrow provision in 6.4 in the plan.

There's nothing preventing these debtors from confirming. But to the extent there are valid claims warranting, indemnification, not bad guy acts, because those are all carved out, our clients are entitled to that indemnification, and we think that should be reflected in the plan, Your Honor. Unless you have questions for me. No, thanks. Mr. Galardi, and then I'll go to you, Mr. Hopkins. Yes, Your Honor.

Thank you. One, reiterate Ms. Strickman's comments, the two, I think if you look carefully at 6.4, it actually says the existing bylaw's corporate governance documents are. reinstated, you know, whether that's assumed, rejected, whether their contracts or not, it is the existing agreements, the existing organizational documents that are assumed. That's the first thing. Second is taking the opposite side of Ms. Strickland and so, or in response, let's assume they were all pre-petitioned claims, us and the other directors.

Then the fact of the matter is those are unsecured pre-petition claims. You have to classify pre-petition claims into classes. They did not separately classify them. They are treating them differently. They give a reason, but that reason fails in our mind under 503C. So, one, we do believe we have administrative claims for all the reasons in Strickland said. And two, we think the plan fails. It was a failure to classify all of the pre-petition unsecured claims of other directors

and officers and then give the treatment, as I said, like you would, a critical vendor, justify that treatment and satisfy 503C, which we don't think they do. Your Honor, and I will just cite two cases. Your Honor is too familiar with SERDA. The SIRDA indemnification claims are valuable, and there's a distinction between the way our claims are being treated and their claims. And then I would cite to a transcript of Judge Wiles where in Mercon, he actually denied a confirmation where they gave insiders in that case a release, but an indemnity is very

similarly. We're indemnifying for any claims, pre-petition, or otherwise. And so the facts there, he said, they didn't put on the evidence to show they satisfied 503C to give insiders this benefit. So we would stand on that and our objection to the plan. All right. Mr. Hopkins. Thank you, Your Honor.

Chris Hopkins was Paul White for the ad hoc group of dip leis and on all. I'll be brief. We obviously echo many of the debtor's arguments, but there's just a few points I want to make for the court. I'm Mr. Gilari's 1123A4 argument. I mean, we would reiterate that this provision of the plan is intended to ensure that the directors, officers, and employees who are going to be part of the effort

to make this business a success on a go-forward basis are protected and can focus on running that business for the benefit of the brands, our clients, thousands of other general unsecured creditors that rely on this company on a go-forward basis. I reject the premise that that is treatment on account of pre-petition claims these individuals may have. Second, I didn't hear anyone talk about the discharge of 1141D of the code. And so to the extent that Mr. Clind or Mr. Galardi are arguing that DGCL override 1141D of the bankruptcy code with respect to pre-petition and denification rights,

whether they arise under a contract for the organizational document, I haven't seen or heard any authority for that proposition, and I think it's a novel argument to say the least. And then finally, as Mr. DiPontayo said, I think the PGCL, to the extent it applies, is exceptionally clear that with respect to indemnification or other rights arising under organizational documents, this court's order trumps.

It's not really a question about preemption. The statutory scheme under the DGCL expressly authorizes this court through an order to modify bylaws of the debtor, full stop. And I haven't heard any rebuttal or engagement with the effect of DGCL 303 on the arguments that they're making. And then finally, to the extent the argument Ms. Strickland is making is that these are post-petition obligations and that if the debtors violated the law, that's on them, I would beg to differ, because provisions like 503C and provisions like 549, which allow the court to invalidate improper post-petition transfers,

exist to protect creditors and other stakeholders of the estate. So whatever the debtors may have done, the purpose of notice and court approval is to protect the estate. and to protect my clients, Mr. Marinusie's clients and the people he represent, that cannot be done under cover of darkness. And the notion that our clients, who obviously are supportive of confirmation and supportive of the reorganized debtors emerging, a strong, healthy go-forward company, would sign up in support a plan where their dip is impaired,

they're funding $500 million of new money, and they are allowing a trust to be established, the purpose of which, in part, is to pursue potential claims against Mr. Metrick, Mr. Baker, and Mr. Pallum. And then those individuals would have 100 cent claims against the reorganized business is absurd. And so, unless Your Honor has questions for me,

those are the only points I wanted to make, but we support the debtors and believe these objections should be overruled. Mr. DeFumphail, do you have it? I believe Mr. Mariniuzy may. Oh, go ahead. Mr. Mary Nusie, go ahead. Thank you, Your Honor.

It's pretty obvious that we agree to make that hot group of elections and there's a reason that the corporate officer should be approved by a court order. We don't believe in any of the arguments make any sense. We can't imagine a world where we're identifying the targets of the litigation vote by a litigation trust. After the level of negotiations, we went through to create the list of excluded parties. Mr. Putnam provided services. He was handsomely compensated for those services,

so it's not as if he did this voluntarily for free. Unless the court has any questions, we just think the debtors are on the right side of this argument as a matter of law in fact. All right. Thank you. Mr. R. J. Pompeo. Your Honor, there's obviously a lot more we could say,

but I think in the interest of time, I won't, unless your honor has questions. I'm happy to answer them otherwise. We'll rest. Okay, thank you. All right. It's 11. Why don't we come back at 1130 and then I'll issue my ruling