American court hearing recordings and interviews - November 10, 2025 Bankruptcy Court Hearing (The Dolphin Company/Leisure Investments Holdings LLC, et al.)

Episode Date: November 11, 2025

The subject matter of the hearing is sale of the company in the US bankruptcy.Sorry the volume is low. This is the court recording that was docketed on November 10 as docket number 725. https://veritaglobal.net/dolphinco/document/list/6300

Please rise. Please be seated. Good morning. Good morning. Good morning. For the record, Your Honor, Alison Milki with Young Conaway on behalf of the debtors. With permission of the court this morning,

of the court this morning's hearing for the sale of the debtor's marine land assets has been adjourned to Wednesday, November 12 at 10 a.m. And just as an administrative matter, we didn't want to have confusing agenda. So we'll file an additional agenda after the status conference is over with the Zoom information and the other attendance information after the status conference. We are here to provide your honor with the status of the matter and an overview of the events that have occurred since we last appeared before you on October 27. We heard Your Honor's comments at the last hearing, and it should be noted even though we had been responding to various members of the coalition

in advance of that hearing, we did have the opportunity to engage with Mr. Joyce, who was retained by a company called Number One Apex Association LLC, which was retained by the Rubles. That has been extremely helpful, Your Honor. We were able to connect with him extensively over several occasions. After the hearing, we provided Mr. Joyce with a packet of information about the cases, the history of the cell process and his client's involvement, a form APA for marine land as a going concern,

the bidding procedures, and a specific list of items that we would need to see as part of a bid package in order to identify a bid as qualified. We explained to Mr. Joyce that if the coalition wished to have additional time to submit a bid for the marine land assets, then the debtors would extend the bid deadline for the coalition to October 31st, 2025. On October 30th, Mr. Joyce reached out,

explained that his clients needed some additional time to submit a bid package, and the debtors agreed to further adjourn the bid deadline to November 3rd, 2025. During that time, we did have extensive conversations with Mr. Joyce. November 3rd came and went. We did not receive a bid from Apex or other members of the coalition at that time. We understood from discussions with Mr. Joyce that Apex

and the members of the coalition had been working with various individuals to try to submit a bid and to get the paperwork and funding required to submit a bid, but had met some significant challenges, and it was unclear whether the coalition could or would be able to get a bit together. So we proceeded to submit our replies and a proposed order. And then late on the evening of Thursday, November 6th last week, Apex submitted a bid to the debtors for marine land as a going concern.

The bid package consisted of a markup of a form APA that we had provided to Apex. a budget, and copies of certain account statements to demonstrate sufficient funds for the purchase price. The debtors had additional questions about the bid submission, including with respect to various regulatory issues, and counsel for the debtors and Mr. Joyce extensively discussed the terms of the proposal and how it would work in practice. Thereafter, on Friday and through the weekend, the debtors, their advisors and counsel, the lenders, their counsel, met numerous times, and also discussed with counsel for the UCC to assess the economics of the proposal, which included an analysis of the net proceeds that the estates

would realize as a result of closing on either transaction. After comparing the economics of the proposal submitted by delightful development and also from Apex, the debt is determined that the Apex bid, which provided for 6.5 million cash, assumption of all contracts, retention of employees, and no contingencies would allow the debtors to realize significant cost savings for various things, wind down costs, the savings resulting from the legal fees associated with documenting transfer agreements, etc. Given that cost savings, the debtors, financial advisors put together a comparison and determined that the bids would result in essentially equivalent value of both bids, with the Apex bid coming

ahead very slightly. With that development, we spent the weekend finalizing an APA with Apex, and it's now in a form that the debtors would deem acceptable. It has been executed and submitted to the debtors this morning, and the debtors have deemed it a qualified bid. We should note that The debtors are hesitant to disrupt the cell process. We've extensively considered the available alternatives, and we've determined that the best possible path forward for maximizing value and to ensure a thorough process is to reopen the auction and proceed with additional bidding.

So that is how we would proceed, Your Honor. We have contacted the participating bidders, which includes the backup bidder as well, Hudson Company's LLC, which submitted a bid for 7.05 million. And it has indicated that it may participate, along with delightful development with its bid at 7.1 million and then the Apex Association bid at 6.5 million plus all of the other added cost saving benefits. We have a transcriber available. The debtors are prepared and ready to go forward. All parties have received links for the auction, which will be held

by Zoom. In terms of auction process, the bidding procedures will continue to govern. The bid increments will remain the same. We have normalized the bids to account for the additional value provided to the estate. And again, because the bids are almost neck and neck, that's a fairly simple and straightforward process. So we expect it to be a relatively straightforward auction. We anticipate meeting with each bidder before the auction commences to provide the overview of how the value is breaking down so that all parties are aware of what the bid increment is and how the debtors have determined value. It was an important component of the discussions with the debtors and the bidders to be able

to close promptly given liquidity challenges. And both the bids are scheduled to close currently during the first week of December. Your Honor, that's an important point, and it's both a process point and a substantive point. raised it in our replies, and I think that you'll hear from Mr. Keenan, who's here on behalf of the lenders today, that this process, it's important that this process proceed efficiently and properly. The debtors will need cell proceeds in order to continue to operate. It's not expected that there will be additional debt funding. So we need both this process and the Mexican asset cell process to continue without delay so that we can realize those sell proceeds and finalize the cases. Your Honor, once the best bid has been selected after the auction today, we are prepared to come before you on Wednesday for approval. That will be an evidentiary hearing, assuming that Your Honor can accommodate that. We anticipate that with the additional process that has been provided, that are substantial

engagement with all parties and various conversations with parties that the Wednesday hearing will hopefully be more streamlined. In addition, as part of finalizing Apex's bid, an understanding and realizing the value proposition that it presented, Apex, Felicia Cook, the Rubels, and Mr. Caswitz, I understand, have all agreed to withdraw an objection to the theater of the C-sale, which we also anticipate to go forward on Wednesday as well. With that, Your Honor, I'll pause to answer any questions that you may have. I do not have any questions.

I think that Mr. Keenan may have some kind of. Comments. Mr. Cater. Good morning, Your Honor. Paul Keenan from Baker McKenzie on behalf of the first lien note holders and dip lenders, namely Prudential Insurance Company of America, Prudential Legacy Insurance Company, New Jersey, Cigna Health and Life Insurance Company. Your Honor, we haven't had occasion to come to the podium too much yet in this case,

And that's because I think that, you know, from the lender's perspective, things were proceeding as best as they could under the circumstances. But the lenders are becoming increasingly concerned about the financial state of this case. And we just want to make sure that we sort of sound the alarms early and often so that none of the stakeholders are surprised by any events that might transpire a few months down the road. first off your honor in terms of the item that's before the court today that is reopening the auction for this afternoon and continuing the sale here until wednesday the dip lenders do support that i will say that they support that somewhat reluctantly and there's two reasons for that the first is that the reopening of the auction was premised i think based on keen realty and greenhill treating this bidding group unfairly. I think if Your Honor has taken the opportunity to read the debtor's very detailed response in the bankers' interactions with this group, I think that was a very unfair mischaracterization, and I would less like to take a moment to complement the work that Keene Realty and Greenhill are doing in this case. This is a very difficult case with an unusual

collateral package, and I think they're really doing a yeoman's job of the work thus far. The second reason why they're a bit reluctant to reopen the auction and reschedule the sale hearing is because we are in approaching a very precarious financial condition in this case just to remind everyone because it hasn't come up in this case very often but the dip lenders put funded a hundred and seven million dollars pre-petition I think almost six years ago at this point and there is second lien debt to the tune of about $100 million as well. The pre-petition first lien and second lien debt is over $225 million. But for the dip lenders, their pre-petition funded indebtedness is just $100 million.

The dip loan in this case has already grown to an astronomical size. Just to rehash it very quickly, the interim dip loan. back in April was 8 million. An additional 10 million was provided in June to bring it up to 18. And then in September, just a short while ago, the dip loan was upsized again by $25 million. The amount of the dip loan now stands at $43 million.

That's in new money. That's not roll up or anything. So let's all just pause and think about that for a moment. The dip lenders whose pre-petition funded indebtedness was about $100 million has already funded a $43 million dip loan. Personally, I don't know that I've ever seen a dip loan that high in terms of the percentage of the pre-petition debt. And they've done that for several reasons, right? First and foremost, like any pre-petition lender, they want to protect their collateral, they want to preserve going concern value, so that they can stabilize the situation

and have an orderly going concern process. I don't think anyone at the outset imagined that that would cost $43 million. And as you've heard previously, a lot of these parks are, let's call it cash flow neutral. A lot of this money is going to professional fees. And there's a reason for that. And his name is Mr. Al-Bore.

From the very beginning of the case, Mr. Al-Bore did everything he possibly could to thwart the sale process and to thwart the, you know, just the transition in general. I mean, among other things, he engaged in numerous, he initiated numerous litigation actions in Mexico that, quite frankly, don't border on vexationness, they are vexatious. From the outset of the case, he committed numerous agreed-to-stay violations to the point of actual armed takeovers of the corporate headquarters to the point of

I think as the debtor reported the last hearing an armed takeover of one of the parks in Mexico and in doing so he also thwarted or impeded the transfer of financial information from the corporate headquarters

to the CRO to the independent director and that prevented Greenhill from putting together sins for the Mexican parks until about late August And it was only in late August that Greenhill could really go to market on the Mexican parks. So all of this is to say that the 43 million dollar diploma, which is where we're at right now, was not something that was anticipated at the beginning of this case.

It's certainly not the fault of any of the debtors professionals, the CRO, the independent director, or any of the investment bankers. They're doing all the best that they can under the situation. But there is a limit as to what the difference. blenders can do here, and quite frankly, they've reached that limit. In looking at projected dip budgets under different scenarios, it appears that if Gulf World and marine land sales do not close by early December, the estates could be out of cash by December 21st. This is a company that has over 30 parks in, I think it's eight different countries.

countries and three different continents, 2,600 employees, and a lot of marine mammals. I don't even want to think about this estate running out of cash. I don't want to even contemplate what that looks like. We need both of these trails to close in December. That is early in December so that this estate can live to fight another day and finish selling the parts of Mexico and Caribbean in January and February. I am very concerned about the ability of Apex to close. Just the way this whole thing has transpires,

the dip lenders, we have consultation rights, we've seen all the packages that came in in various different forms. I've seen the evidence of wherewithal. It is not what you typically see in these situations. I am very concerned about their ability to close. And I'll stop here in a moment, but what I just want to preview for you

is what you might hear on Wednesday, okay? which is that when it comes to 363 sales, as we all know, the debtors must use their sound exercise of their own business judgment to determine which is the highest and best offer. Highest is simple. The bankers can create a spreadsheet. In this case, it's not just a dollars-for-dollar comparison because there is a cost to winding down the park and relocating the animals in the event of a sale to delightful real estate developer. And that cost, arguably, doesn't exist if you sell to the Apex group, right? But it's not just about highest. It's highest and best.

And in the circumstances of this case, where we are at this point in time, best also means certainty of closing and timing of closing. Closing at the end of December is going to be a disaster in this case. And so what we need is a deal that is the highest, but also the best in terms of wherewithal ability to close and all that. So we'll continue to monitor the auction this afternoon. We'll continue to vet the apex bid. But I just want to make sure that this court understands that we have a lot of concerns

about the liquidity of the case coming up in December. Thank you. Is there anyone else who wishes to be heard? Anyone in the courtroom first? You went on Zoom. Mr. Joyce. Good morning, Your Honor. Mike Joyce for number one Apex Association.

Your Honor, first to start, I just wanted to confirm for the record that after communication with the debtors, their professionals, and having a better understanding of the theater of the C bid, and also when further, or I'm sorry,

the theater of the C transaction, and also in furtherance of the APEX paid, Your Honor, we have agreed to withdraw any objection to that transaction. And, Your Honor, I just wanted to quickly respond to the lender's comments. We would acknowledge, Your Honor, look, the rubles, the principles of Apex, they are not commercial parties who typically engage in Bank 363 sales, Your Honor. So we would acknowledge that, you know, Getting here today was somewhat of a bumpy road.

It was done with a lot of work by the rubles and the individuals that are helping them, along with the debtors. And the rubles look forward to this afternoon, Your Honor, and have the ability to close. And we hope we're in court on Wednesday seeking approval and asset sale to apex. Thank you. Who else? Okay. It's milky. I appreciate the update.

And bringing me up to speed, I did read what has already been submitted to better understand the process it unfolded. As Mr. Joyce indicated, his clients are not commercial players in this field, and so it obviously created some challenges. But I will grant the debtor's request to reopen the auction, which I understand is taking place this afternoon by Zoom. All parties are aware, including the projection. particularly the success bidder's choice of successful bidder and backup bidder, as well as the apex bid. And yes, I am available for an evidentiary hearing on the 12th at 10th.

And we will proceed then. And at that time, the debtors will present to me what they have determined in their business judgment to be the best and highest bidder, considering all of the economic and other considerations that the debtor considers. And I will do my job. So, and then I do understand that the sale of the Three Dolphins, Soleil, Capri, and Sandy will also go forward on Wednesday, and I understand that is unopposed at this point.

By the individuals noted, Your Honor, yes. By? The individuals noted. Yes, by the individuals noted. Who knows what will pop up between now and Wednesday, but yes. There's a little fluid. It is. Okay.

Very good. Anything else for today? No, no, we'll see on Wednesday. Okay, thank you. We're adjourned.