American court hearing recordings and interviews - Listen to the Saks bankruptcy court hearing of May 13, 2026

Episode Date: May 14, 2026

emergency motion

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must assume or reject executory contracts filed that docket 2262. So why don't we get appearances of counsel first and then? I can proceed. Good morning, Your Honor. Kelly Norfleet from Haines and Boone on behalf of the global debtors. I'm joined on the phone by our co-counsel at Wilkie Far and Gallagher. All right. All right. Why don't we start, Ms. Duggan?

Good morning, Your Honor. Alex Steven at Bradley on behalf of the S.O.5 digital debtors. All right. Mr. Salucci. Good morning, Your Honor. Martin J. Salucci of Paul White's on behalf of the At Hufford. Ms. Feldman. Good morning, Your Honor, Betsy Feldman for Milky Fire and Gallagher on behalf of the global debtor. All right.

Mr. Lozano. Good morning, Your Honor. Aaron Lozano, Jackson Walker, on behalf of the CCLC real estate partners. All right. Ms. Ravi Ali Ali, I mispronounce that, I'm sure. Good morning, Your Honor. Jennifer Revelli of Kelly Dry and Warren on behalf of certain landlords, including GEPP and Brookfield office. All right.

Ms. Besper. Good morning, Your Honor. Maggie Vesper of Dallard Spar, LLP on behalf of certain landlords. Mr. Farreoli. Good morning, Your Honor. We're asked Jarioli, Morrison, and Forrester, on behalf of the official committee bunch of church creditors. All right.

Does anyone else wish to make an appearance? Thank you, Your Honor. And thank you very much for hearing us on an emergency basis. I know you have a very full schedule today, so we will try to keep our remarks brief. As Your Honor noted, we're here on the debtors, joint emergency motion for an order extending the deadline to assume or reject unexpired leases of non-residential real property under Section 365D4. We filed that motion on May 3rd at docket number 2182.

Under Section 365D4, the 120-day deadline runs today, May 13th, and so the debtors have requested- And August 11th is the 209th day. That's exactly right, Your Honor. We've requested a 90-day extension through an including August 11th. Your Honor. We filed the motion in accordance with the complex case procedures. We set it on regular notice in reliance on the automatic bridge order provision of paragraph 30, which I know Your Honor is very familiar with. However, yesterday counsel for certain landlords reached out to us and indicated their view that the automatic bridge order does not apply to extend that deadline pending the court's consideration of the motion. In our view, we disagree. We think the automatic bridge order does apply. But nonetheless, given the significance of the unexpired leases to the debtors' business operations going forward,

the debtors could not take the risk that this dispute percolates later, and a court finds that the deadline was not timely extended. And also the debtors did not want to spend their time and resources litigating this issue while they're pushing towards confirmation, which, as your owner knows, is scheduled for just a few weeks from now. And so as a result, we filed the emergency motion last night to bring this to the court's attention as soon as possible. And we've been working through informal comments on the proposed order that we've received from counsel for certain landlords. We filed a notice last night of a revised proposed order. That's at docket number 2264.

The clean order is at 2264-1. As of this morning, Your Honors, my understanding that there is one party that has not signed off on that order. But the remaining parties who reached out to us have signed off. So we'll let that party speak at the appropriate time. Your Honor, the debtors request entry of the revised proposed order at 2264-1. I am happy to go through what's outlined in the motion, but given Your Honor's time sensitivities did not want to be, you know, overly wordy on this. All right. Let me hear from anyone else who wishes to be heard.

Good morning, Your Honor. Alex Dukon, Alex Dugan on behalf of the S. S.5 digital debtors. We'd just echo the comments from this North Fleet, and we appreciate the judge hearing up on short notice this morning. Thank you. Your Honor, me have you heard? Yes.

Thank you for the record again, Jennifer, Valle, of Kelly, Dry, and Warren. Your Honor, we've been in discussions with counsel to the debtors since the motion was filed, and a lot of, we don't oppose the extension of the 365 D-4 deadline. in general. They have made a lot of changes to the order that address our concerns. There is one remaining concern that we do have. I'm not sure if we were counsel that Ms. Grop Fleet was referring to. We had a call yesterday with counsel to SACS, and we were concerned that the language in the revised order would allow the debtors to change a lease at or remove a lease from the assumption list after the entry of the confirmation order.

I believe that is our only remaining concern. I've reviewed. the proposed orders that the debtors filed on the docket last night. We've requested additional language be added to the order, making it clear that while the debtors make their decision by the confirmation date, we have no issues with the fact that a motion may be pending post-confirmation and the assumption will not be effective until perhaps the plan effective date. We're not opposed to that. Our concern is the decision of the debtors has to be made by confirmation.

They should not be able to change that decision post-confirmation. My understanding from a call yesterday with fact counsel is that they want the flexibility after the confirmation order has been entered to change their mind on the lease disposition. That's the portion that we disagree with, and we've asked for clarification in the proposed order to make it clear that a motion can be pending, but the debtor shouldn't be able to then change its mind after the confirmation order is entered as to how a lease is going to be treated in the case. So what about the circumstance where there is a motion pending, there's a cure dispute, and you prevail on the cure dispute? So then would that compel them to assume it, or because of the fact that they lost on the cure dispute they could reject? We didn't get into the details of that issue with them, but I understand that Judge Isger has previous. had an opinion on that and said that if a debtor loses a cure dispute, then they would have the right to reject it because essentially the landlord has won and out gets their safe

back. We would not oppose that. It's more the issue of you have a motion to assume on file and then a week after confirmation, the debtor just says, we don't want to assume it anymore, we're going to reject it. We think that's a leverage point. We think that there's a reason the code is so clear in the language. It says the decision has to be made by the date, the confirmation. order is entered and after that the only thing we should be waiting on is either the effective date to occur or your honor to make a decision on a motion to assume or reject. All right. Governor, if I could respond briefly and I would invite Ms. Feldman to correct me if she disagrees

but I don't see this as a today issue to be honest. I think the language that we proposed for the extension order was revised to track as closely is possible the terms of the code. There is a proviso that if the debtors file a motion to assume or reject prior to the extension deadline, then there's a further bridge until your honor can decide that motion. I don't think any of that goes to what's contained in the plan

and what the plan permits or doesn't permit. The assumption list is due to be filed on Monday under the terms of the conditional disclosure statement order, which is 14 days before the objection deadline. parties will have ample opportunity to review that list to object to raise objections about what the plan says about what the debtors are or are not permitted to do with those lists and so I think that those are issues that are better taken up at confirmation all right anyone else wish to be heard let me just review the order again with that with that issue in mind How are you guys? Good morning. We need to be used to that.

And we have their lines, please. Can everyone mute their lines, please? I'm going to go ahead and mute the line so hit five star conference muted so paragraph two is the the paragraph that addresses the bridge order past confirmation I don't read anything in there to suggest the language, Ms. Ravale that you're suggesting. I tend to agree with you on the leverage point issue,

but I think that, again, I think Ms. Northfleet is correct. I think that's something that we need to address at confirmation. So I think that, I think the entry of this order is certainly without prejudice to your position with respect to, you know, once, At confirmation, the debtor has decided to assume that subject to the one carve-out that we discussed about the cure amount, that probably is the correct answer. And, you know, I haven't studied that, but that seems to me to be correct.

So anyone else wish to be heard? All right, I will go ahead and approve the order as filed. Thank you very much, Your Honor. We appreciate you hearing us today. Okay. We'll be in recess till 10 o'clock. Thank you. Thank you, Judge.

Your Honor.