American court hearing recordings and interviews - Prima Wawona bankruptcy hearing January 17, 2024 (In re MVK Farmco, Delaware bankruptcy case 23-11721)

Episode Date: January 27, 2024

MATTER GOING FORWARD (DIP motion) Debtors’ Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to (A) Obtain Senior Secured Superpriority Postpetition Financing and (B) Use Cash Collateral, (II) Granting Liens and Superpriority Administrative Expense Claims, (III) Providing Adequate Protection to Prepetition Secured Parties, (IV) Modifying the Automatic Stay, (V) Scheduling a Final Hearing, and (VI) Granting Related Relief [Docket No. 463; 1/8/24]

Please be seated. Good morning, Your Honor. Dave Gremlin of Kirkland and Ellis, on behalf of the debtors. I'm joined in the courtroom this morning by my colleagues, Joe Barry from Young Conaway, Jamie Fidel from Kirkland and Alice, and Mike Slate from Kirkland and Alice. Do we want to do appearances or? No, okay, great.

All right. Well, then, Your Honor, good morning. We're grateful for you accommodating us today, and throughout these cases, we're grateful that you continue to make time for us in your courtroom. and we are aware that we often have done so. I know that was an option. Well, we're aware that we've often done so on short and notice,

so we want to say thank you anyway as we try to bring these cases to a speedy and efficient conclusion. If it's okay with Your Honor, I'd like to do a brief general status update before diving into the dip, which I believe is the only item on today's agenda that you haven't already entered in order for. Yes. Okay, so with respect to general status, when we were last in front of your, Your Honor, you approved our disclosure statement and our solicitation procedures.

Some issues came up in the context of the disclosure statement that we thought were related to confirmation. It was clear that there were some parties that had issues that were unresolved at that point. And we told Your Honor that after that hearing, we were going to engage in negotiations with all stakeholders in an effort to broaden the consensus and the support around our plan. And we've done just that in intervening time. In fact, when we left the courtroom, we and then of the stakeholders who are in the room again today, went directly over to Young Connoe's offices,

some others appeared by Zoom, and we started in earnest the negotiations for a global settlement. Those conversations have continued through today, and we expect them to continue afterward. And I'm happy to report that we believe that we've reached an agreement in principle with the committee, that's, you know, as of late last night or early this morning, subject to documentation. And for that reason, there's not much that we feel that we can say publicly at the time. this point. However, we're optimistic that we'll get to a deal in the near term. That deal should provide meaningful recoveries to holders of general unsecured claims in this case. And we think that the terms will be likely reflected in a motion under Rule 1919 and or an amended plan, which we

would file on the docket. And we're optimistic that after that we'll be able to get to global consensus ahead of confirmation, which is just a reminder that hearing is scheduled for February 8th. and that will proceed with confirmation on a largely consensual basis. And Your Honor, we've been pushing hard on settlement because, as you'll hear in the context of the dip, this isn't a case where we think it makes sense to spend a lot of time and money litigating extensively over confirmation issues or other issues. And so for that reason, the dip has been designed to get the debtors the short way from here to confirmation and emergence, which we think can happen in about a month, maybe a month and a half. but as I said, we're very optimistic that will reach a settlement with the committee in the very near term and global consensus before confirmation.

And we look forward to filling you in on February 8th and carrying our burden at that time. And that's my general case update. I'm happy to dive into the dip if you'd like, unless you'd like to see if anybody else wants to be heard at this point. If anyone else wants to be heard by way of general status, I'm happy to hear it. No takers. All right then. As I said, I think the only motion on the agenda that is up for today is the dip. Your Honor, the debtors are seeking authority to enter into the dip facility.

We filed our motion at docket 463. And the current form of order that we're asking, Your Honor, to approve is at docket number 498. Do you have that motion? I mean, that order, I think we filed it yesterday in the evening. Yeah. Okay. I'd like to proceed as follows, if it works for your honor. I'll map out the relevant filings just because there were more than a handful.

I will request movement of our evidentiary declarations into evidence. I'll give an overview of the facility and where we think it takes us. I'll address the two objections we received in your honor. I'd like to note that we did receive some comments from the United States trustee. We incorporated those comments into the first revised form of order, and we can get those of all been addressed. and then up to you. Step number five would be answering any questions or comments that you might have on the order.

Let me ask this. Do we still have outstanding objections? Are the objections still outstanding? It is my understanding that we are partially resolved with the committee, the not completely, and I, unless Mr. Zadz tells me otherwise, I think that the agent objection is still outstanding. So, Your Honor, in terms of docketed items, the motion and original, order. We're at docket number 463. We filed four evidentiary

declarations, two from John Boken at dockets 464 and 491, and two more from Mr. Ryan Sandall. Those are at 465 and 492. We received the committee objection. That's a docket number 482. We received a second objection from Rabo Bank and the Royal Bank of Canada. That's at docket number 488. And just a reminder, your honor, the Robo Bank and the Royal Bank of Canada are under the pre-petition opco facility and the pre-petition bridge facility.

Robo Bank also serves as the bridge administrative agent and the bridge propco collateral agent. RBC also serves as the opco agent and the bridge opco collateral agent. We filed a reply to those objections. That's at docket number 490. We filed an initial revised form of order at docket number 493. Filed a credit agreement at docket number 494. That's because the motion was originally filed. just a term sheet and we've since broadened that to a draft credit agreement.

We filed another revised form of order at docket number 498. That was yesterday and then we filed just this morning a revised debt budget at docket number 499. On to the evidence, as I said, we have two declarations from Mr. John Boken. Mr. Boken serves as the interim chief executive officer of the debtors. His first declaration was filed at docket number 464. Mr. Boken is in the courtroom this morning. He's available to answer any questions that you or any other party might have.

And if there are none, I would respectfully request that the first Boken declaration be admitted into evidence. Are there any objections? I hear none. The first declaration of Mr. Boken is admitted. We filed a supplementary declaration from Mr. Bokin in order to respond to certain arguments raised in the objections. That's a docket number 490. Mr. Boken, I believe, is still in the courtroom and available to answer any questions that Your Honor or any other party might have. And if there are none, I respectfully request that the second Boken declaration also be admitted in evidence.

Does anyone object to Mr. Boken's second declaration? We also have two declarations from Mr. Ryan Sandall. Mr. Sandall is the managing director at Hulahan Loki, and he is the lead of the debtor's investment banker team there. We filed his initial declaration at docket number 465 with our motion. Mr. Sandal is also in the courtroom today available for any questions, and unless anyone has any, I would respectfully request that his first declaration be admitted in depotence. Our final declaration is a second declaration from Mr. Sandal that also was intended to be responsive to certain points raising the objections. That's filed at docket number 492.

Mr. Sandals in the courtroom this morning. And if nobody has any questions, I would respectfully request that the fourth and final evidentiary declaration be admitted into evidence. Does anyone object? I hear none. Mr. Sandel's supplemental declaration is also admitted into evidence. Thank you, Your Honor. On to the dip itself, as Your Honor is well aware, we commence these cases to implement a last look sale process, which would be backstopped by an equitization with the debtor's pre-petition lenders,

whereby they would take debtor's assets through a Chapter 11 plan. Your Honor is aware that that is where we are today. We're pursuing that Chapter 11 plan, and you're also aware, as we've asked you to bless our use of cash collateral five times now, that we began these cases without an immediate need for incremental financing. However, as Mr. Bennett previewed at the first day hearing, there would likely come a time that we would need incremental financing, and that's because the revenue generation of the business is inherently

cyclical. Stonefruit is the main product that the company produces, and sales peak in the summer, and they bottom out in the winter because they're in season in the summer. And we commence these cases late in the summer, early in the fall, so on the heels of the peak sales season, which gave us ample liquidity at that time. But we foresaw that we were entering a period for several months, where upkeep of the debtor's assets and expenses were very likely to exceed revenue. And so we thought that there may come a moment where we would need incremental financing and simply put, we've gotten there. Mr. Gremlin, before we continue, let me ask, does anybody want to cross-examine,

either Mr. Sandal or Mr. Bolton? Okay, I hear no one. And are any of the objectors going to put evidence on? Okay, that's fine. Okay, I just wanted to make sure the evidentiary record was complete and it is. So, okay, please, sorry, should have done that before you started, but proceed. Thank you, Your Honor. So as I was saying, the time has come to inject the debtors with sufficient liquidity to cover their administrative costs

to the extent necessary to bring these Chapter 11 cases to a quick and efficient resolution. And though I said at the outset we're optimistic that we're on the precipice, of reaching a global settlement and will soon confirm our plan. We do expect by as early as next week to have insufficient liquidity to meet some basic needs, including day-to-day business obligations, and that includes payroll, by the way. We think that we will have inadequate cash to confirm and fund our Chapter 11 plan. We think that without the dip, there is a high chance that we would become administratively insolvent and be unable to meet the estimated cost of one.

winding down the debtors' estates. Accordingly, in our view, the dip financing is absolutely essential to bridge these conclusions to an orderly conclusion in the next month or so. And as to who the dip lenders are, Your Honor, they're a group of the debtor's pre-petition lenders. Some of them are represented by Moore and Van Allen and Morgan Lewis. And collectively, they constitute the required lenders under each of the pre-petition opco, pre-petition propco, and pre-petition bridge facilities.

And so, Your Honor, we do think that they are the largest and sort of the focal economic constituency in this case. And so we think it's appropriate that they're the ones who have stepped up to the plate, so to speak, and are willing to fund a $22 million dip facility that will enable the debtors to fund these cases to a conclusion and ensure that the debtors can meet all of their administrative obligations along the way. Your Honor, not only is the dip completely essential is very straightforward. It doesn't have many of the bells and whistles that courts office. and scrutinize in dips that are proposed on the first day of the case. For example, there's no roll-up of any other claims.

Additionally, the committee's challenge period has been addressed through the prior cash collateral orders. The interim dip order doesn't seek to modify those. It doesn't seek to short circuit any other key protections in this case. The dip doesn't enhance recoveries of any other claims held by the dip lenders, arrest control inappropriately from other parties in this case. It simply provides the debtors with the funding that they need, with certainly we think reasonable safeguards for the lender's incremental investment. And as discussed in Mr. Sandahl's declarations,

debtors believe that there is no other financing available to the debtors under the facts and circumstances in this case. As to the terms of the dip facility, it's a $22 million delayed-draud new money term loan, up to $6 million of which will be available after the proposed interim order, but before the proposed final order. The dip budget, the debtors' advisors, and the dip lenders worked on it, in consultation with the committee and their financial advisor. It contemplates the payment of all administrative expenses, as well as reimbursement for professional fees for the dip lenders

and each of the pre-petitioned agents, including the agents that are objected in this morning, by the way. And we are confident that it will provide the funding needed to see the debtors through the final dip hearing, which we ask will be scheduled for the same day as the confirmation hearing. That's February 8th. Interest in fees.

The proposed facility includes interest in fees that are consistent with what was agreed in the pre-petition bridge facility. It's in line with current market conditions. Those are set forth in the DIP term sheet and the DIP credit agreement. In terms of liens, Your Honor, the DIP comes in subject to a carve-out for professional fees. It is secured by priming first priority liens on substantially all better assets with certain exceptions. And, Your Honor, just so you're aware, it does include a lien on proceeds of avoidance actions, but not the avoidance actions themselves.

There are three real property assets listed on annex B to the dip term sheet. And with respect to just those assets, the dip is actually not priming all of the debt. It comes in junior to the lien securing the bridge new money loans. So in summary, it is priming on all assets, well substantially all assets, except for those three specified real estate assets. They're just a handful of milestones designed to keep us on track. in the tail end of these Chapter 11 cases. They include entry of the interim dip order by January 19th.

That's this Friday. Filing of the plan supplement by the same day. Entry of the final dip order by February 9th. Confirmation of the plan by February 9th. And just if for some reason, Your Honor would confirm the plan in a ruling from the bench, but it might take some time to enter the confirmation order. There is a separate entry of the confirmation order milestone. That's February 12th.

The adequate protection package, it might look familiar to you. It's pretty similar to what was included in each of the prior five cash collateral orders, and it's consistent with the pre-petition intercreditor agreements. It's primarily consists of adequate protection liens. Those are subject to the carve-out and dip liens. And to the extent of any post-petition diminution in value, lenders would receive adequate protection super-priority claims, also subject to the carve-out and dip super priority claims.

Your Honor, I think it's worth noting that we think that particularly in light of the dip, diminution in value is really, really unlikely in this case. The debtor's assets are primarily real estate. There are also trees and other plants on which the debtors' stone fruits grow, and a large part of the purpose of the dip is to provide specifically for the upkeep of those fruit-bearing assets. And so we think that the land is unlikely to diminish in value in the next approximately month, month and a half. And we think that the dip itself provides for the upkeep of the other assets over that time,

which would be subject to a significant risk of reduction in value if this money wasn't spent to preserve those assets. Do I have evidence on that? Is that in the Declaration? I believe it was addressed in Mr. Bokin's declaration. I'm happy to flip through it. Double check. Okay. You can continue.

Thank you, Your Honor. The adequate protection package also provides for adequate protection payments, including the cash reimbursement of fees and expenses of the agents and compier Ag Country in MetLife, each of whom are pre-petitioned lenders and dip lenders. As I said, there is no roll-up. under this facility and I want to be clear your honor there are waivers of the debtors 506 C surcharge rights and the 552B equities of the case exception we're asking for both of those on a final basis this morning which is part of the basis of the objections I'm happy to address that now if you'd like but I was planning to tackle it in connection with the objections in a moment and so your honor is aware we do currently anticipate and This is what the plan on file provides, that any outstanding dip loans as of the effective date will roll into an exit dip facility, thereby ensuring that the post-effective date entities are well capitalized.

So, Your Honor, in summary, the debtors believe that the dip is fair and reasonable, a maximize value for the debtor's stakeholders, and as a sound exercise of the debtor's business judgment. The debtors believe that the dip facility is the best and really the only financing available, and for that reason, should be approved. And I would like to address the two objections that were filed, if that's all right, with you honor. Please. Sure. The first objection is the committee objection.

They raised two main points. The first is the means on avoidance actions and their proceeds. Again, I think there maybe was a misunderstanding on that point. We intended to only grant liens on proceeds. Of course, if the committee sees something that they're concerned grants, that they're concerned grants the means on avoidance actions. We're happy to take that feedback. But I think we were resolved on that point with the committee for this morning. And so I'll turn to their other objection, which is the propriety of the Section 506C waiver and the 552B waiver of the equities of the case waiver.

And Your Honor, we recognize that granting those waivers in an interim dip order is unusual. But frankly, we think that these circumstances are unusual and that the final waiver of those rights may be warranted here. specifically because we're three months into the case. Your Honor has granted five interim cash collateral orders, which I believe provided for interim waivers of those statutory provisions. Yeah, okay. Sure they didn't. Well, they shouldn't have.

Let's put it that way. Okay, I apologize. That may be a misstatement. But in Your Honor, we believe that the dip is simply the dip lenders stepping up here to ensure that there is sufficient liquidity to finish the Chapter 11 process, including providing for the carve-out, including payment of all admin claims, including the reimbursement of professional fees. And we think that these are all features that will protect the value of the collateral,

rendering it at least very unlikely that the debtors would have any occasion to exercise for charge rates or that the equities of the case would come into effect in this case. And the agent objection, Your Honor, I want to address a couple of things. I think it's worth level setting on what the Asian objection is, notwithstanding the fact that early in the objection, they say that the dip motion should be denied. We believe that their real concern is in their proposed modifications, as they call them in paragraph 20 of their objection,

because they suggest those modifications and go on, we believe to say that they would not oppose entry of the order with those modifications. Those modifications include the 506 waiver being granted on only an interim basis and the inclusion of an express reservation of rights regarding the relative priority of the exit facility that's contemplated under the plan and the promissory note that's contemplated under the plan. I'll address those in a moment. First, I want to address their assertion in their objection that Opco does not need

the money and is better off without the debt. First, as I noted, I'm not sure that they have courage of their conviction there. as they seem to not have a full-throated objection to entry into the dip facility. But I'll briefly note that as set forth in the Boken declarations, Opco does need the money. The agents suggest that without the dip, they're just convert or dismiss the cases, go about taking and liquidating their collateral and be better off.

We think there are two main problems with this. First, it completely ignores that there are other creditors at the Opco. There are administrative expenses, and there are general and secure. claims. Each of those groups we think is better off with the dip with respect to the administrative expenses is simply because the dip is being put in place to ensure that administrative expenses are able to be paid in full. And with respect to general and secured claims, I acknowledge that the plan on file does provide nothing for those creditors. However, as I've said, we're very

near a settlement with the committee that would provide meaningful recovery to those constituencies that does turn on us being able to continue to administer the Chapter 11 process and likely turns on our ability to confirm a plan. And I don't think without the dip that either of those steps is practically possible, as we would immediately be converting to Chapter 7 or dismissing the case, essentially locking the general and secured creditors in at a zero recovery. So we think when they say that Opco does better without the dip, We think that they mean that they do better without the dip.

And our second point is that we're not sure that that is true either. And the main reason for that is because without the dip, Opco would convert its cases of Chapter 7 or dismiss it. All of the cash that Opco holds is cash collateral that the required lenders under the Opco facility, who again are the dip lenders, have not consented to using outside of the context of these Chapter 11 cases. So that path is at the very best an unfunded fire sale of Opco's collateral. And additionally, the promissory note that they negotiated for themselves under the Lunders support agreement,

we believe that the only really reliable path to obtaining that is through confirmation of the plan. The reason for that is simple. The LSA contemplates the owner of the Propco assets, and for now in the foreseeable future, that is the Propco, and it expressly says not the Propco lenders will be the obligable under that promissory note. And I'll remind your honor that none of the debtors, including Propco, are party to the LSA. So the only document that exists today where Propco itself contemplates issuing the promissory note, and again, Propco has contemplated to be the issuer of the promissory note is the plan. With the dip, the plan remains a possibility for the OPCO lenders to obtain the benefit of that $30 million promissory note.

Without the dip, it's very unclear, at least from the debtor's perspective, how they would go about getting the promissory note, and they might be left with some version of a breach of contract claim against the Propco lenders based on their read of the LSA. So in some, we don't think that there is any constituency of the OPCO that is better off if we are not able to enter into the DIP facility. As to their proposed modifications, I talked about the 506C waiver, which they raised, so I won't get into that again. And as to their reservation of rights regarding the priority of the promissory note in the exit, we don't have a real position on it. We think it's unnecessary and potentially a little confusing to include here because we don't think that that. issue is implicated by the dip. I think it's maybe it's a confirmation issue,

maybe it's a contract interpretation type issue, but we don't think it's germane to the question of whether we should be allowed to enter into the dip. There is no exit facility today. There is no promissory note today, and the dip doesn't prime the promissory note simply because the promissory note right now doesn't exist. Accordingly, we don't really view the reservation of rights as necessary, and for what it's worth. We don't think that anything we're doing today forecloses their right to raise arguments with respect to the priority of the exit facility and the promissory note in the future at a time when the issue is raised.

And that concludes my comments. I'm sure you have questions. Well, I would ask you to address their adequate protection argument. So we think that the adequate protection package that they're receiving is a pretty standard package. And I'll also note that adequate protection is not defined. in the bankruptcy code and I think that the debtors and their stakeholders with the dip being placed to allow the debtors to continue to keep up their collateral and maintain its value as opposed to converting to Chapter 7 or

dismissing their cases with no greater source of financing and up to either maintain their collateral, which again, Your Honor, in this case is living assets that will die in the absence of the appropriate care, which somebody will need to do and somebody will need to pay for. And so we think that the alternative to the dip being placed is a much more value-destructive in terms of the actual value of the assets that secure the preposition lenders claim. We think that that outcome is significantly worse for the debtors, the value of their assets, and their stakeholders. And so for that reason, we think that the dip adequately protects their interests,

in that it protects their interests significantly better than placing no dip at all, which is the only alternative that we see. Thank you. I hear from the objectives. Morning, Your Honor. Andrew Bellman from Lohenstein on behalf of the committee. As Mr. Gremlin noted, we have very, very narrow issues today, which is why I'm rising with no notes in my hand. Our sole and limited remaining issue with respect to the debt is the grant of 506C and 552B waivers on a final basis at the interim stage.

We have no reason to believe, as I stand here today, Your Honor, that this estate will end up administratively insolvent or that we would need to go try and surcharge the lender's collateral, I guess, more appropriately, that somebody on behalf. of the estate would have to go try and surcharge the Blenders collateral. But we don't see any precedent for that. We don't see any reasonable basis for it here. We don't believe it's an issue that should be granted at the interim stage. It's not a customary thing. And as Mr. Gremlin, I think, acknowledged it's not routine. It's a little out of the ordinary.

We don't oppose entry of the dip. We do believe that our financial advisor has been working very closely with the financial advisors for the other parties. we do believe that the dip is necessary. We do believe that the funding is necessary. We don't want to step in the middle of the fracas between the various lender groups. That's their issue, not ours, but we do believe that some incremental funding

is necessary here for this case to continue. So we do not, by any stretch of the imagination, oppose approval of the dip as a general matter. Thank you, Your Honor. Morning, Your Honor. Andrew Zatz, a blatant case. on behalf of Robo Bank as bridge agent and pre-petition lender. As the debtors noted, we filed a joint objection to the debtor's dip motion along with RBC,

which is the Opco facility agent and also a pre-petition lender, a docket number 488. I will refer to Robo Bank and RBC as the objecting parties, and I'll note that I'm joined in the courtroom today by Mark Collins of RET. Richard Slayton on behalf of RBC and I see some folks from the team at Sidley Austin who also presents RBC on the Zoom. As stated in our objection, this dip facility presents some serious issues, including that it cannot adequately protect lenders for non-consensual priming liens at the OPCO entities and that it is not necessary or justified for the OPCO entities to be obligated under it. Ultimately, however, the issues raised in our objection relate to an ongoing commercial dispute regarding the lender support agreement that was entered into pre-petition by the objecting parties and the required lenders, copy of which was filed at docket number 371.

I'll note at the outset that the objecting parties intend to live with the deal reached in the lender support agreement if the few very legitimate commercial disputes are resolved. But the issue for today is that the DIT motion impairs parties' rights under the lender support agreement and those ongoing negotiations. We are not asking the court to adjudicate the party's rights under this contract, which is between non-debtor third parties. Nor are we asking the court to rule on the validity of direction letters delivered by the required lenders or any of the underlying loan documents.

Rather, we request only that all parties' rights under those contracts be expressly preserved and unimpaired by the DIP motion. We thought that this is all non-controversial, but to date, the required lenders who are also the DIP lenders, I refuse to include proposed modifications that would preserve the parties' rights with respect to the lender support agreement. We can get into all of that and demonstrate our views, but if the Court agrees with us that this is really about preserving parties' rights, this can be a very short presentation. The modifications we seek are, first, that all rights are preserved with respect to the relative priority of the exit facility that the DIPP facility is pre-wired to convert into, on the one hand, and a $30 million promissory note from Propco to the Opco lenders as provided for in the lender support agreement, on the other hand. I think on that point, Mr. Gremlin from Kirkland made our case for us very succinctly.

These are not issues that are before the court today. There is no exit facility being approved today. The promissory note does not yet exist. It's meant to be put in place post-effectiveness. That is not before the court today. The issue that we have is that the dip facility would put priming liens in place and our concern is that the required lenders would try to use those priming liens as a means to say

that the issue is predetermined that those liens can then convert to exit liens that would come ahead of the promissory note. We're simply trying to leave everyone's powder dry, preserve all rights to have that dispute when and if we have to have it. And hopefully, negotiations continue and result in an amicable resolution, and we're simply trying to buy the time necessary to reach that without skewing the playing field.

The second modification we requested was deferring the 5060 surcharge waiver to final order because the waiver of surcharge rights is a large part of the lender support agreement, and we are simply trying to make sure that nothing is being locked in until negotiations resolve themselves. So, Your Honor, I will pause there because we really feel like while the dip does present some major problems and some objections that I think are entirely legitimate. We are trying to provide an off-ramp here, and my hope is that we can take that off-ramp. But if you'd like to hear more about the underlying objections and why we feel they're legitimate, I'm happy to expand on that.

It sounds like the off-ramp decision is a decision for the dip lenders, not me. I can't force them to take an off-ramp. I think what I'm hearing is that the debtors think it's not a today issue. The objectors think it shouldn't be a today issue, but are concerned that the entry of the order makes it a today issue because it skews the playing field. That's what I'm hearing. I can't make somebody take the off-ramp.

So if the lenders collectively, all of you, cannot agree, then I can hear the objection, but I have no intention on interpreting the lender support agreement, the underlying documents, or anything. I think the issues for today are if the parties can't agree, and I'm certainly willing to give them time to talk again, whether this dip can be approved and I think the adequate protection issue is what I assume I'm going to hear about

and whether OPCO should be subject to it are real issues so I'm happy to give the parties more time to talk about whether they want to go down this path of an objection

to the diplome which I'm not sure that anybody really wants sustained, but might be. And I'm happy to give time to talk or we get to the objection. Why don't we take 10 minutes? And then you can tell me if we want to continue or not. If you can agree to disagree, that's something y'all need to do, but not in front of me. So I'm going to give you your time and you decide if you can resolve for today. Let's take 10 minutes.

And then if you need more, I'm happy to give you more. We're in recess. You can go have your minions. I assume that all your back office work is done in India somewhere. So do you just send it there? Yeah, to the magic dip order. Right, the dip order team. Yes, sir.

I do not promise you that the Morgan Lewis delay. Give me that anyway, since it hasn't found its way into my inbox yet. Your Honor. Mr. Siegel. The continuing skirmish between the non-REC lender, non-O-REC lender creditors and the rec lender creditors, with this language included in the dip order, will be deferred. I should say as a general matter, we've agreed that we will defer the 506C waiver to the final hearing. at which time we will, if the order is entered, we will have paid all the administrative expenses anyway.

But nonetheless, so this is the language we've agreed on. We're going to read it to the record, but it will be included in the order. It says, and if anybody tells me I've got it wrong, please stop me. Nothing set forth at this order, including the dip liens, dip obligations, and priority granted hereunder. Shall or shall be deemed to affect or waive any party's rights under. The lender support agreement, which is docket number 371, including with respect to the relative priority of any exit facility and the $30 million promissory notice provided for in the lender support agreement, and no determination as to such priorities made or intended in this order. Two, the pre-petition loan documents. Three, the inter-creditor agreements, or four, applicable law, in each case, including without limitation with respect to any actions taken to date.

by the parties there too, and any and all rights are hereby reserved. That's what it says. At the risk of exploding what I think a deal is, this is my short version of this, the dip order is entered, and we can fight about anything else we want on any other day. Is that fair? I add something to that. Your Honor, Andrew Deths from White and Case on behalf of Bravo Bank. I rise not to interpret the language.

It's preserving parties' rights. That's the intention. And this language has been agreed by the objecting parties. As we indicated in our objection, if we could get reservations that got us comfort on the ongoing lender support agreement negotiations, that would resolve our substantive objections. So with the reservation incorporated and the 5060 waiver deferred to final order, we'll withdraw our remaining objections. Thank parties for cooperating on this. I do want to make one clarification.

I believe everyone's aware of this, but Robo Bank and RBCR. under the pre-petition facilities as well as lenders but we're glad there's a little be resolved and we hope that the ongoing negotiations ultimately do bear fruit thank you your honor thank you the only remaining issue is the committee's 552b correct or is that resolved by this as well where does that stand that's being deferred as well we're deferring Okay, fabulous. Just for good order, the debtors agree with everything that was just said.

But it occurs to me that you might have comments on the order as well. No, I don't have comments. We're well into this case. It's not a first day. I've got parties who are represented and who have raised the issues that they deemed appropriate to raise. They've now been resolved by deferring. the two committee issues to final and by the agreed to language that will be put in the order, and I have nothing to add.

So I will look for the form of order that's revised to resolve the objections as has been put on the record, and we'll get signed. And I encourage the parties to continue to talk, and work out all issues for confirmation, including, but not limited to, the inter-lender issues, intra-linder issues, whichever, the lender issues. Intra among the separate ones and inter-among the two, perhaps. You can include a reservation of rights on that as well, to the honor. On everything.

On everything. Okay, so is that that's it for today, correct? That's all from the debtors, Your Honor. Okay, very good. Then we're adjourned. Thank you.