American court hearing recordings and interviews - Prima Wawona bankruptcy hearing Oct. 16 2023 (In re MVK Farmco, Delaware bankruptcy case 23-11721)

Episode Date: October 22, 2023

For more information about the chapter 11 debtors' bankruptcy cases see: https://cases.stretto.com/primawawona/ The chapter 11 case numbers/debtors, according to that website are: 23-11721 MVK FarmCo LLC 23-11722 MVK Intermediate Holdings LLC 23-11723 Wawona Packing Co. LLC 23-11724 Wawona Farm Co. LLC 23-11725 Gerawan Supply, Inc. 23-11726 Gerawan Farming LLC 23-11727 Gerawan Farming Services LLC 23-11728 GFP LLC

Please be seated. Good afternoon, Judge. Ryan Bennett, of Kirkland and Ellis, on behalf of the debtors. I'm here today with my colleagues, Ms. Fogelberg, Mr. Jacobson, Mr. Pavlovich, and our trial partner, Mr. Slade. It's great to be back before you, Judge. Thank you first for accommodating our filing and scheduling requests. Thanks also to the Office of the United States Trustee for reviewing our papers

and providing helpful comments beforehand. We're with us in the courtroom today is Mr. John Bowdo. of Alex Partners, he's our interim CEO and our first day declarant. The, as indicated in our papers, you know, the, while this is the first day of the bankruptcy case, or the first day hearing in the bankruptcy case, it's not the first day in the debtors restructuring process. Since March 23rd, the debtors have been, March 23,

the debtors have been engaged in a sale process and been working with Hulahan Loki, our proposed investment banker and a steering committee of our lenders to maximize value. This also included pre-petition bridge financing that was provided by a group of our lenders to provide the debtors liquidity through a trough that we experienced earlier this year so that we continue operating in the ordinary course. That liquidity that was provided along with cash flow from operations is the basis for the cash collateral that we have. ability to fund our operations consistent with past practices. Our majority lenders have provided their consent for that cash collateral use and their support for our filing. We intend to deploy a toggle structure with respect to this bankruptcy case, running a sale

process with a $275 million floor for a third-party cash bid or bids or a potential credit bid, or if no such bids are received or acceptable to the lenders and equitization, of the lender's debt position. In the coming weeks, the debtors intend to file a Chapter 11 plan reflecting that toggle structure. In the case of a third-party credit bid, that plan will be a liquidating Chapter 11 plan. And in the case of a we toggle to an equitization, the plan will be a Chapter 11 reorganization plan. But time is of the essence, judge. We are projected to hit a liquidity wall in January when the company's revenue cycle.

ends and shifts to a net spending type structure. And with no present dip commitment, the debtors must move swiftly through the sale process. Likewise, a confirmation schedule on that toggle plan will map on to the

sale process that we propose. Judge, we've prepared a brief slide deck as an introduction to the company, or introduction to the court of the company and the process that we've been playing out the proposed path forward and if your honor would allow I'll can walk the court

through that briefly thank you all right I'm not going to go word for word on the slides we've actually printed some hard copies for the courtroom so folks can have as a reference guide you know easy easy to review here's our roadmap for the presentation your honor I'm not sure if you're aware but of our products but the we are a market leader in stone fruit production these are peterines, apricots, peaches, most in plums and various varietals of the two. We can find our products in retail establishments throughout the country. We produce on a scale that I think is unsurpassed in North America in terms of the number of products that we grow and package and sell.

As I discussed earlier, this is a plan for our bankruptcy case with a sale transaction, a plan transaction toggle. We have our lenders have gotten together and aligned with a lender support agreement. The debtors are not a party to that agreement, but the debtors are assured that their lenders are working together, whereas in certain circumstances, the lenders might not be. Here we are speaking with one body, and I believe they'll be addressing the court in some context later this afternoon. Here's our business line. You can find us in all these establishments throughout the country. Costco was there the other day and was pleased to see the not just that we were buying them, but the woman behind me in line was buying them. So it was promising. So throughout the country,

here's how our market position maps out. As you can see, despite popular opinion or belief, Georgia is not the leading producer of peaches in the United States. It's not even second. South Carolina is second tracking our substantial contribution to the production in the great state of California. Well, Delaware is the peach state. That's true. You'll have to teach me why that is, but yeah. You've got to learn your Delaware history. I do, I do. Here's a little corporate history. Like any company of this scale, right, it is a combination of merger and growth and development over many decades where the farming company, Grawin Farming, merged with a packing company,

we'll own a packing, and then developed and expanded throughout the 20th century and 21st century to yield the vertically integrated company that we have now. Here's a demonstrative relative to our vertical integrations. We have the farming and then the packing and then the supply chain, which gets us to our customers, which are the large retail establishments

that market to consumers. We've got a number of facilities that play into that supply chain and packing and production with cold storage at each of them, located throughout the Valley in California. There's, of course, people behind all of this. This is our board of managers. Made up of folks who have been in the agriculture industry for a long time, and they've been very focused on this process, very involved,

weekly board meetings, weekly board updates, sometimes more often, you know, as we've navigated this process with our lenders and dealt with the various cash flow issues that the companies encountered. We have established a special committee. Aaron Schwartz is an independent director who was added to the board earlier this year, and that committee is made up of Aaron and Mr. Boken to address and handle restructuring-related considerations and transactions. The debtors professionals, applications will have been filed. and will be filed are in front of you there, Judge. And then, of course, our SteerCo.

Again, I think they're all represented here, or most of them are represented in this room, and these are made up of the lenders who are, most of lenders who are in the two different, the three different facilities that the debtors have, the property, Propco facility, we'll call it the Obco facility, and then the bridge facility that provided us

with the liquidity early this year. And then they are joined, represented by FTI consulting as well. Our capital structure, again, it's set up in, you know, what you typically see in large agricultural operations like this where there's an operating company silo and a property company silo, and the property company then leases the property to Opco, Opco generates the revenue, sends the obligations or the payments back to Propco relative to the, you know, under the terms of that lease.

And our capital structure, as we've detailed in the papers, you know, is made up of of the three facilities. Well, really, yeah, the, the, the, yeah, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the project facility, to total, 678 million, approximately. Corporate structure, you know, here's, here's how it's basically been rolled together in connection with the various mergers over the years with the, I can show you, we've got the opco and propco on the far left relative to the two different silos.

So the borrower, the borrower Oblore, guarantor situation maps out. You know, we talked about this in our papers. Why are we here? There are several circumstances operationally that we encountered a large recall in August. of 2020 related to salmonella. The debtors were not identified to be responsible for any of that salmonella operate, but nevertheless, out of an abundance of caution, we complied and issued the recall ourselves and brought back all the peaches

that we distributed over a two-month period, which was a substantial amount of product during an important revenue cycle for us. Of course, the wildfires everyone's familiar with that impacted California in 2020. COVID-19, of course, impacted operations like most companies, during that time. And then you've had varying, you know, degrees of drought and flooding that have plagued that part of California throughout the past few years. The, and then there's just also been operational challenges to the, to the company. Pricing issues, while people are buying peaches, right, they maybe aren't purchasing them

at a price, right, that really covers as much of our costs as, as we would prefer. and then labor market challenges in California. We've got a cyclical labor situation where labor, seasonal laborers come in to service the property, and we need them, but sometimes they're not there. It's hard to get to them or hard to pay the wages relative to them because California tends to be a very wage or labor-friendly state and makes it very competitive when it comes to the labor costs.

And then Sun West Lease, we did an add-on of a significant amount of acreage. last year and in the and then that add on required a significant amount of capital improvement to bring that property up to the level of premaruana standards with the respect to the trees and the irrigation and the fertilization and so there was a lot of capax put into that so that hit our our balance sheet significantly as well now you know one of the things judge as I mentioned this is not the well it's the first day hearing it's not the first day of our process and we've been running that for quite a while, and you can see from this timeline, you know, the process that's been run by Julianne Loci with the restructuring committee's supervision. And at this point, it's been determined in consultation with the lender group that given the company's horizon in terms of the amount of cash collateral it has on hand available to it, to initiate the bankruptcy case, run a process albeit, you know,

relatively abridged, but nevertheless enough that we believe will flush out the market and get it to us, get us to a sale transaction that yields maximum value. So path forward. You know, as I mentioned, times of the essence.

We need to move quickly. We are, you know, just ending our revenue generating period of the season. And we have pooled, a, you know, considerable amount of cash, but we will begin having to net spend as early January and by then we're going to be in a situation where we're running out of cash and we're either going to need to close a sale, close an equitization, or find alternative credit to

continue. But ideally, it's the, it's one of the two former. The proposed sale process we have, you know, we're working out, but we filed the bidding procedures motion. I believe that's set for a hearing. Maybe we haven't said it yet, but we'll get to that this afternoon if your honor would oblige. We'll set a bidding procedures hearing and then we've got various dates. Understanding we don't have an order from your honor yet in the bidding procedures, but we're going to operate under a proposed order and under the schedule we propose and, you know,

take any feedback from your honor as we as we move ahead there but again because we've run this process effectively since march we you know we're relatively confident that you know we're going to be able to identify the purchasers or purchaser during this you know relatively short window that we have given that you know hula hain has been out there um you know a flogging the company for so long and uh and your honor i um i don't do not have any further comments on this i can answer your questions judge or yield to my colleagues who will come up in um who can come up in and and then uh provide i think mr jacobson's going to come up and talk about cash collateral and then actually before i do that mr zatz from whiten case was going to come up and make a comment on behalf

the lender group thank you judge good afternoon your honor andrew zatz from wheyton case on behalf of robobank is the pre-petition bridge agent uh we would like to thank the court for commenting the debtors today, given the Friday filing and the amount of papers that have been filed. Debtors have accurately described the pre-petition capital structure, which includes three pre-petition secured facilities, a bridge facility which is secured by substantially all the debtor's assets, an Opco facility, which is secured by assets at the Opco entities, and a Propco facility which is secured by the company's real estate and equity in Propco, which is the real estate-owning entity. Roblobank is agent under the bridge facility, RBC is agent under the Opco facility,

and Wilmington Trust is agent under the Propco facility. The bridge facility was put in place in April of this year and was used to provide the company with necessary liquidity to pay operating expenses and fund the marketing process for the sale of the company. Robbo Bank is a member of a steering committee of lenders across all three facilities. The members of that steering committee are Robo Bank, RBC, MetLife, Compere, and Ag Country. We represent Robo. Robo Bank, RBC is represented by Sidley Austin. MetLife is represented by Morgan Lewis.

And Compere and Ad Country are represented by Morin Van Allen. And all of the parties' advisors are in the courtroom today. Steering committee was formed early this year when the company approached the lenders and explained it was facing a liquidity crunch. Since then, the Stierco has been in close conversations with the debtors and their advisors, and these conversations ultimately led to the company's out-of-court marketing process and the bridge facility. Ultimately, when the debtors out-of-court marketing process did not result in an actionable binding offer, the conversations turned to the filing of these Chapter 11 cases. The process has been open and collaborative, and we are pleased to announce that the required lenders across all three facilities

are supportive of the relief requested today, in particular the use of cash collateral, which is of crucial importance to the success of these Chapter 11 cases. Required lenders are also supportive of the debtors bidding procedures motion, which is not before the court today, but will hopefully be before the court in short order. These Chapter 11 cases are the result of a long and involved pre-petition relationship between the company and its lenders.

Debtors' lenders have been supportive of the company at every turn, as evidenced by their willingness to provide, up to $100 million of new capital pursuant to the bridge facility and to shut off mandatory repayment requirements under the bridge facility during these cases in order to conserve cash. It has always been the lender's hope and desire to facilitate the sale of the company to a third-party buyer for an acceptable price. The company has had a multiple round and extremely far-reaching and comprehensive marketing process. That process yielded a significant amount of interest and we remain hopeful that a third-party sale will materialize and be actionable in these Chapter 11 cases.

We want to make very clear that the lenders view these cases as the end of that marketing process. A bid deadline has not yet been set, but has been requested for November 17th. The purpose of this bid deadline from the perspective of the lenders is to create a last opportunity for any third-party to present their best offer, absent which the lenders will swiftly pivot to an equitization. The lenders are fully prepared to support the debtors and move quickly through these Chapter 11 cases, which is evidenced by the lender support agreement attached to the debtor's first day declaration at docket number 13, which lays out the arrangement between the Opco and Propco and Bridge lenders on the allocation of proceeds based on a third-party sale and an agreement on a lender credit bid for the company if necessary.

As such, the lenders are fully aligned on an endgame to these cases, regardless of how the sale process plays out, We are confident that this company will be positioned to close on a sale or equitization transaction by the end of the year. We will continue to work with the debtors to that end, which has been a very amicable and productive process so far. I will close by reiterating our support for the approval of the debtors requested relief today. Thank you, Your Honor. Good afternoon, Your Honor. Rob Jacobson of Kirkland and Ellis on behalf of the debtors. Your Honor, I'd like to start by – we filed John Boken's first day declaration, and I would like to start. by moving that into evidence if that would be all right.

Mr. Bokin is in the courtroom with us today and available to answer any questions. But otherwise we would ask to admit his declaration. Thank you. Thank you, Your Honor. So I will begin today's agenda with the cash collateral motion. That was filed at docket number 14, and that is item number 13 on the agenda.

Prior to the hearing, we filed a revised interim order that reflects additional comments that we received from the United States trustee. That revised order can be found at docket number 65. I do have a hard copy, Your Honor, of the red line, if that would be helpful and you would like a copy. Yep. Okay. May I approach? Your Honor, I'm pleased to report that we are here before you today with an agreed interim order with the United States trustee and our pre-petition secured lenders. And I want to just take a brief moment to thank Ms. Sierra Fox. of the United States Trustees Office and all the councils to our lender group for working

with us collaboratively over this past weekend and over the course of today on the revised order. To echo Mr. Bennett's opening presentation, the debtors are before your honor to achieve either a value maximizing sale transaction or if a sale transaction proves not to be achievable to confirm a Chapter 11 plan that would result in a change of ownership to the debtor's secured lenders. From the get-go, I want to note that the debtors have consensus from our entire lender group on our contemplated sale process and related sale timeline. Mr. Zatz alluded to that earlier. And the consensual use of cash collateral is a very important step toward achieving that

goal. As of the petition date, the debtors have approximately $26.9 million in cash on the balance sheet. Based on the analysis and forecasting performed by the debtors advisors and management, the debtors anticipate that cash on hand and cash collections from the debtors' 2023 harvest season will be sufficient to fund all payments contemplated by the debtor's first day motions and the debtors post-petition operating and restruction-related costs, as well as to achieve the debtor's marketing and sale process on a timeline that Mr. Bennett set out in his presentation. I do want to note that the budget includes cash expenditures to maintain all of our owned and leased land consistent with past practices. A notable feature of the interim order is that we have attached a nine-week budget rather than the standard 13-week budget.

The pre-petition secured parties preferred that the company focused in the first instance on a budget that carries through the contemplated sale timeline. So that is why our budget is nine weeks through December 15. But to be clear, the debtors believe that they will have sufficient cash on hand all the way through January of 2024. But we have included the nine-week budget in this interim order at the request of our pre-petition secured parties. As part of our agreement for the consensual use of cash collateral, the interim order includes a standard and customary adequate protection package for our pre-petition secured parties. The adequate protection package includes adequate protection liens and adequate protection super priority claims to the extent of any diminution in value. Adequate protection payments in an amount equal to all pre-petition and post-petition

accrued and unpaid interest on account of the pre-petition new money bridge loans, standard and customary financial reporting, and payment of the reasonable and documented fees and expenses of the pre-petition agents and the members of the steering committee and their professionals. In the proposed order, we've also agreed to certain case milestones, Your Honor, including obtaining a bidding procedures order by day 28 of these Chapter 11 cases, obtaining a final cash collateral order by day 35 of these Chapter 11 cases, and complying with any deadlines described in the bidding procedures order

once Your Honor has had a chance to approve it. I would also note for the Court that many of the standard protections afforded lenders, such as the 506 waiver and equities of the case waiver under Section 552B have been pushed only to the final order, so we're not asking for approval of those items today. As set forth in our pleadings, the debtors have an immediate need to access cash on hand and cash flow from operations to fund their working capital needs, capital expenditures, for other general corporate purposes and for the administrative expenses of these Chapter 11 cases. The ability to satisfy these expenses as in when due is necessary for the debtor's continued operation of their businesses during dependency of these Chapter 11 cases and the successful implementation of our restructuring process.

The debtors have the consent of the pre-petitioned secure parties to use cash collateral, and we believe that the adequate protection set forth in the interim order is fair and reasonable and reflects the debtor's prudent business judgment, or an exercise of the debtor's prudent business judgment. As I mentioned at the outset, the proposed orders in agreed form with the United States Trustees Office and the pre-petition secure parties. There have been no objections filed with respect to the cash collateral motion. Your Honor, I'm very happy to answer any questions that you may have, and otherwise I'd respectfully request entry of the order. Let me ask if anyone would like to be heard with respect to... I do have some questions and some comments with respect to the freedom to just flip

through it. Okay. But let me ask you this. I'm assuming that the budget does not include the fees and expenses of the lenders and their respective counsel, agent, etc. I believe that's correct. Oh, it does. I'm sorry, Your Honor. Okay. And where is that reflective? I ask in this case because there's a significant number of firms that are representing the various agent, the two, three, three agents and the various lenders. Your Honor, if I'm not mistaken, I believe the line item that would reflect those amounts should be other restructuring fees, but if I'm misunderstanding that. Okay.

Thank you. So we'll come back to a confirmation. on where that is. Not look for the changes that were made, so I'll do that at the same time. And Your Honor, I'm happy to walk you through the redline if that would be helpful, but otherwise it can let you review.

Two items I don't want to forget to address. When we get to them, one is what I call the LLC issue, which unless that's been changed in the red line, is still extant in the order. And second, it appears, that from the termination events that the debtor was paying, making payments under the pre-petition credit documents, which I assumed was not the case except for the bridge loan,

but that's not what it appears to be in the order. So I don't want to forget to ask about that as well. But I'm assuming that's not the case. Let me address the first question about the LLC issue. I believe we've taken care of that. in the red line. Let me find the appropriate. I'm starting with the easier one that I know off the top of my head, Your Honor. Paragraph 29. That's paragraph 29 of the red line, Your Honor. We'll take a look at the provision because I'm not sure that'll do it. Okay.

Okay. Let's walk through then. Okay. I'm ready when you are, Your Honor. hosted all secured parties. Before it says it means the pre-petition propto-secure parties and the pre-petition opt-secured parties which did not include the bridge party. So I'm assuming because this was talking about adequate protection that it was extending to the bridge vendors as well.

Yes, it is. That might have just been a drafting mistake, but it should cover the bridge as well. And I could be, I could have it wrong because I didn't have that much time with this. document and I haven't lived it as you guys have but there were definitions in various places in the motion some in the order some in an annex with definitions it was sometimes hard to trace it through and they didn't necessarily cross-reference each other so I did my

best the next real comment I have again in paragraph J I'll try to look at the most recent, the red line. On page 8, before the provided, it says that the, based on the motion and the record, the use of the pre-petition collateral, the proposed adequate protection arrangements and the use of the collateral are fair and reasonable, reflected that as prudent exercise of business judgment, okay,

and constitute reasonably equivalent value and fair consideration for the pre-petition agents and the pre-petition secured parties. Why is that under the parking? Your Honor, I think it's included in here. You know, I think what it's trying to say is that the adequate protection being provided this year secured parties is this is the deal, the consideration for them allowing us, for them consenting to the use of cash collateral. And I believe what we're simply trying to express here

is that that consideration is reasonable and fair and equivalent value. Well, in conveyance language, and I'm not making any decisions on whether there will be any diminution, whether they're entitled to adequate assurance or not, ultimately, if this were ever, God forbid, tried. but so I think that language is not appropriate. I'm not making a finding that it's reasonably

equivalent value in fair consideration because I don't see how I can make that. It's what's been offered, it's reflected at it's proven exercise of its business judgment. I don't have a problem with that. But this sounds more like an ultimate finding unless someone can explain it to me at the get-go. I'm not, later on, there's an acknowledgement

nothing in this order construed as an acknowledgement by the pre petition secured parties that this is adequate protection. Right. They're not agreeing that this is adequate protection and I'm not finding that they're actually entitled to it. So it's the same. So that language concerns me.

Okay, Your Honor, I think from the debtor's perspective we're okay adjusting that language or removing it but I'll defer to the lenders if that's okay. getting head nods, I think we're okay to remove that. On page, now page 10. And I see the language that's been added after the final order in previous paragraph. I think that's appropriate. No liability to third parties.

This is forward-looking. Part of it is forward-looking. It wants me to find that in permitting the debtors to use cash collateral, that might be okay, that the secured parties are not in control, not be deemed to be in control, but in accepting the initial budget, in the future approved budget, in taking any actions permitted by this interim order,

that's all future looking. And if, for example, we ever end up in a situation where the lenders foreclosed or exercise their remedies, I can't tell you, or make a finding that, they aren't to be deemed in control of the debtors' operations once they certainly once they take remedial action. So. Thank you, Your Honor.

Likewise, I think we're okay to remove that language and, you know, make this one easy. We can just take that out, of course. So nice to see you. It's nice to you back in Delaware. I would just note in that paragraph, this is, as you know, fairly standard language, and typically we have the same when you have environmental concerns.

sort of where the owner-operator type language is coming from. I would note that this is qualified by any actions permitted by this interim order. Clearly you're not future foreclosure or anything that is operating pursuant to a budget. Those actions permitted by this order do not. I'm okay with that concept, but I think you could read this paragraph to say, and eventually, because the order does permit after a remedy's notice period, the debtors to take action. that's permitted by this order. So I think this language that says any actions

permitted by the interim order is broad. I was curious in paragraph three, on page 12 now, the use of the word aggregate appears in multiple places here, which we don't usually see. So, for example, in the first sentence, to the extent of an aggregate amount equal to any aggregate diminution in value. I'm curious if that has a specific meaning,

here or not? Your Honor, I'm not sure and I might defer to counsel for our lenders if they have a different view. My read might be because there are three different facilities here. I don't want to guess, Your Honor, so I'm sorry. I don't know the answer. That's my guess, but I don't know either. I would suggest that's the answer, Your Honor, aggregating three different... In that respect, are any of the liens or super priority claims that are being granted? as adequate protection, providing any lender with the position on collateral that they didn't have before in some priority? I believe the answer to that question is no. That there's no priming. With respect to the role of what?

So, Your Honor, if you go to Annex II, priorities are set forth. So as part of the bridge pre-petition, there was a new money $100 million loan together with the $100 million roll-up. With respect to that roll-up, it crossed both facilities, Propco and Opco, on a junior basis with respect to certain collateral, which we were entitled to do under the existing agreements with required lenders. Some of the collateral, not all of the collateral. not moving for a dip facility or moving the goal up into the post-petition, but to answer your specific question,

that did afford on a pre-petition basis consensually through the required lenders. Access from Promco to certain Onco, Collateral, and vice versa, they didn't otherwise know. Okay, and that happened all pre-petition. Correct. And with the adequate protection means and or claims them that are being provided, there's no additional cross-collateralization if you... Well, there's no addition, they're not receiving additional collateral, but they didn't have some position on at some point pre-bankruptcy. That's correct, John.

Okay. It's like it's on page 20. This is the page that prompted the previous question about are all of the fees in the budget. But also, second sentence from the end says payment of any amounts set forth in this clause see shall not be subject to disgorgement. and this is being paid as adequate protection. And in the event that there are challenges, successful challenges, or for whatever reason the lenders are not otherwise subject to adequate or entitled to adequate protection, there needs to be a provision for disgorgement.

Understood, Your Honor. I think we endeavored to address this issue with a new paragraph in seven. which is on page 28 of the red line and the intent of this language is to be you know a catch-all that provides in the event of a timely successful challenge that the court will be able to grant any appropriate relief so I think that language is intended to address that issue certainly addresses the challenge issue I'm not sure it addresses fully the adequate protection issue as to diminution and value

and ultimate entitlement to an adequate protection payment even if there's not a successful challenge. Understood, Your Honor. Perhaps we could work on revising this language, the debtors and counsel for the lenders. Yeah, and it might be as long as the lenders understand that it's subject to

challenge, but again, I'm not deciding that there is diminution at this point in time. Understood. Perhaps a... You could give adequate protection in the event there is. Understood. Perhaps a potential language fix we could make this sentence subject to that paragraph. If that would be okay.

Understand the import of this on page 22. Subordinating any intercompany liens among the debtors to all of the adequate protection means. I'm not sure I understand, why now I don't understand, what intercompany liens there might be, and the import of the subordination vis-a-vis, perhaps creditors other than the lenders who have agreed to this.

It's not a provision I know that I've seen before, maybe because there aren't, do you know what they are? And two, what's the, again, what's the import vis-a-vis parties who aren't in the room today? To answer your question, Your Honor, I'm not sure I'm aware of what intercompany liens there are. I'm not sure if others in the room might know. And so I think, you know, obviously that relationship has to do with... I will leave it for a committee to take a look at this provision and see if there is any possible impact on third parties from this.

I see there have been changes made to paragraph seven. Let me take a look at those. Yeah, in paragraph seven, the language in paragraph B, which makes standing in the requisite authority subject in all respects to any agreement or applicable law, which may limit or affect such entities' right or ability to do so, I assume, is the reference to Delaware's LLC statute. and why doesn't that language just come out and we can have the

language that's in what paragraph or maybe paragraph 39 needs to refer specifically back to paragraph 7 because I think it needs to be crystal clear from day one that I will not permit as a part of a lending and inability for the committee or any other party in interest to raise whatever challenges they want to raise within the time frame that they're permitted to do so.

And that language makes it, I think it's unnecessary, unless there's some other reason for the language, which I don't understand, and makes it confusing because it's not until multiple pages later that we see something which attempts to address this. And I don't want this language showing up in my next orders without being qualified, without something multiple pages later. So unless there's some other reason that I don't understand for that language, which would be a legitimate reason, I would like it taken out.

You can contest standing other than that if there is a basis, but I'll see what it looks like, but yes, let's move the qualification up where the language is. And even though I said maybe you can raise any other standing issue off the top, I can't think of what that would be. But perhaps there's something. Okay, paragraph 8, limitations on use of cash collateral. Paragraph B. Romanette B, whatever, it's not a Romanette, little B. Preventing, hindering, impeding, or delaying any pre-petition agents or any other pre-petition secured parties,

enforcement or realization upon our exercise of rights. My concern here is that this does not permit the debtor to come before me during the remedy's notice period and ask for relief. And in paragraph C, seeking to amend or modify any of the rights or interests granted to lenders under this interim order would suggest the committee can't negotiate for better or different treatment under this order. Can't negotiate the terms of a final order. Or for that matter, the debtor can't chime in on that.

And they have to be able to. Thank you. Paragraph 11. 506 claims starts on 36. I'm looking at 37. We see the changes that have been made. the last sentence, yeah, last sentence says nothing contained in this interim order

in the final order shall be deemed to consent. I don't know what the final order is going to provide, and I don't think it's really necessary to reference it here. Okay, paragraph 16, termination events starts on page 39, 6, on page 40. It's like four o'clock lines down. Makes a termination event. Any events of default under the pre-petition bridge credit agreement?

Okay, I don't know what those are, but okay, as long as they're just a termination event. But C says the failure to pay pre-petition op-co obligations and pre-petition propco obligations on a current basis. And that's, I think, where I had some question about if that's how to pay. Why are we doing the whole adequate protection thing? So is that happening or is that not happening? Excluding anything. That's why. Okay, thank you.

Excluding. Yes, okay. Okay, well, that's why I was wondering, but as I said, I don't have as much time with these agreements as you do with these orders. Here, see, the change was made in the paragraph D on page 42. Thank you. Okay, we need to make a similar change in paragraph F then. then to reflect that I will permit anyone to bring any issue in front of me during

the remedies notice period so you know unless the court orders otherwise during the remedies notice period or if no party in interest contests something then upon the expiration and without further notice the automatic stay etc. Understood I I think G also a parallel change in the parenthetical there unless the debtors trying to risk I mean sorry unless the lenders are trying to restrict the debtors to contesting whether termination event occurs but I think there needs to be a parallel change here as well other than the right to contest during the Remedies notice period and again I think consistent in parallel paragraph 17 B

Subject to the debtor's rights under paragraph 16E and F, there's no order, after the Remedies Notice Period. I don't think it's after the termination date that stuff happens. It's after the Remedies Notice Period without an order entered by the court. Then all the remedies can take place. Then you can sweep proceeds, apply proceeds, do whatever. But we need that period. you can stop use of cash collateral. That's fine.

And I know that there's some permitted continuation, but in terms of exercising remedies, that needs to wait. Okay, I see the change in paragraph 20 credit bid. That's fine. Okay. Then paragraph 22, the limitation of liability paragraph. Again, the only concern I have with this is the more forward-looking, which I see in the last sentence.

and actually that's a declaration of the legal principle. You have whatever, when you're exercising your remedies, you have whatever duties you have under state law, you have whatever rights you have under state law, but why am I declaring what they are in the absence of knowing what they are? So I'm not sure I can, I'm okay with the rest of it, but that sentence I think goes too far. I understand, Your Honor, as I said, I think some of this language is geared towards circumstances where you have more environmental concerns.

So I think the takeaway is understand the last sentence needs to come out, it is what it is, and then in general you're uncomfortable with sort of forward-looking proclamations about control or control. All we're looking for is the acknowledgement that approving the budget in and of itself is not control. And I don't have a problem with that, and I don't think the... This interim order itself is imposing any obligations or duties, I think, but I don't know how in the future things will unfold or how remedies will be exercised. It's similar to paragraph 23. So long as the pre-petition agents comply with their obligations under the loan documents, I don't know what those obligations are, shall not be, the pre-petition secure party shall not in any way or manner be liable or responsible for the safekeeping of the collateral.

Well, I don't know. If you exercise a remedy and you're holding on to the collateral and you're deciding what's going to be done with it, then you have whatever liability you would have under at least state law. I think clearly you do. So this I view as totally forward-looking and would have to do with the exercise of your remedies. And I, again, and I also don't know what the obligations are under the pre-petition documents. Okay. Let us work on this, Your Honor. Okay.

paragraph 25 does this maybe this is fixed by the we can do whatever remedy it's probably duplicative of something previous but I think it certainly needs to be qualified to the whatever remedy is available the 7 F your honor that's certainly a but once we get it once you fashion your remedy that makes sense to clarify your honor do you want a specific cross-reference there because I get concerned about once I start cross-reference referencing the whole point of inserting the paragraph in dealing with the United States

trustee was so I think we just govern the entire order and we aren't picking and choosing where we specifically insert it okay don't cross reference I'm sure the committee will take a look at this as well okay paragraph 33 priority in terms I don't generally like provisions in one order that try to undo provisions in other orders I think it's up to the parties to make sure they don't give me an order that's inconsistent with something I've already done. So certainly the order controls over the motion. The interim order, I would say,

would not control over the final order, and the order would control over any agreements. But again, I don't want to have to worry about every order that I'm entering being subject to this order. The party shouldn't put in front of me something that's inconsistent. So this should not reference other orders entered by the court. And I think you do have larger protections already for a whole host of other orders, confirmation order and dismissal order and all that.

So I'm not sure this serves any other purpose. Understood, Your Honor. And I see the changes made to survive over the interim order in 34. And I'll take those. Those are very specific. I know what we're looking at. That's okay. But not sort of generally anything that's put in front of me.

Parties shouldn't have to think, oh, is this order final? Is it subject to some other order? Okay. Those are my changes, my comments. Having gone through that, I can rule, based on the declaration that was submitted, admitted into evidence that the debtors have a need for the use of cash collateral. It's reflected not only in the declaration but in the budget. The, assuming that the lenders are still comfortable lending on the terms as I've suggested they need to be adjusted,

then it is consensual use of cash collateral. at this point with no objections to the use, subject of course to a final order, assuming we get to one, and every party's ability to take a look at the interim order. But the use is necessary. The terms were negotiated at arm's length. There's no suggestion. Otherwise, and I will approve use of cash collateral. if I receive an order that's consistent with the dialogue we've been having.

Thank you, Your Honor. I didn't want to leave the podium without answering your earlier question about the budget. I do have an answer for you now. So the non-debtor professional fees, they are captured in the other restructuring fees line item, and they are accrued and reflected in week five. So if you see there, there's a spike in week five. And then you would see another spike in week 10 if we had a 10th week here. And so that is where you can find those.

Okay. Thank you. Thank you very much. And then also thank you to Ms. Hegel for helping me out through the order. I don't see to Ms. Hegel. With that, I'll see the podium to Ms. Collins from Kirkland. Thank you. Good afternoon, Your Honor.

Lauren Collins of Kirkland and Ellis on behalf of the debtors. I will be taking us through agenda items 3, 4, and 10. Item number three on today's agenda is the debtor's joint administration motion filed at docket number two. The debtors in this case are comprised of nine affiliated entities. By this motion, the debtors seek entry of an order directing joint administration. and procedural consolidation of the debtors Chapter 11 cases. This will save time and money and ease the administrative burden on the court and all parties in interest. No party has objected to this motion.

Unless Your Honor has any questions, the debtors respectfully request entry of the proposed order. Thank you. Does anyone wish to be heard with respect to joint administration? I hear no one I reviewed the motion. It's appropriate and I will approve it. Thank you, Your Honor. The next item on today's agenda is the debtors creditor matrix motion, filed at docket number three and listed as item number four on the agenda. This morning, the debtors filed an amended proposed order reflecting comments from the United States. Trustee at docket number 65.

I do have a copy of the red line here, if you need it, please. By this motion, the debtors seek entry of an interim order, authorizing the debtors to file a consolidated creditor matrix instead of submitting a separate mailing matrix for each debtor and to file a consolidated list of the debtor's top 20 secured creditors as this relief will help ease the burden on the debtors' estates. In addition, due to the need to protect the personally identifiable information of certain individuals, the debtors are requesting relief to redact the home addresses and email addresses of natural persons from certain publicly filed documents. No party has objected to this motion.

Unless your honor has any questions, the debtors respectfully request entry of the proposed order. So anyone wish to be heard with respect to the credit or matrix motion? Can you come up so we can hear you? Thank you. Welcome back. Thank you. On behalf of the U.S. Trustee. Your Honor, I only wanted to note that the request did change based on our comments, the debtors are no longer requesting to serve parties by email.

Thank you. That was the one thing that I know. noted as well okay thank you very much anyone else okay well I did review the motion the one concern I have has been addressed so I will approve the request as revised thank you your honor again Lauren Collins of Kirk Lennon Ellis for the record the next item on the debtors agenda is the utilities motion filed at docket number 10 and listed as number 10 on the agenda, the debtors obtain services from 24 utility providers for utilities such as gas,

electricity, internet, and waste management. The complete list of utility providers is attached as exhibit C to the motion. By this motion, the debtors seek entry of an interim order, prohibiting the utility providers from cutting off service, establishing certain procedures for adequate assurance of future payments, and approving procedures for resolving adequate assurance requests. No party has objected to this motion unless your honor has any questions. The debtors respectfully request entry of the proposed order. Anyone wish to be heard with respect to the utilities motion?

I hear no one. I have reviewed it. It is appropriate and necessary to provide the adequate assurance so that the four utilities under Section 366 of the code. The only comment I have is with respect with respect to the orders paragraph 14, which again we'll see in many of the other orders, and it's what I was just discussing in the dip. It says notwithstanding anything here, any payment made here is subject to the approved budget.

I don't like the cross-reference. I'm assuming that everything is in the budget and that the debtor is not requesting relief that it doesn't have whatever permission it needs from its lenders. and it's in the budget. So I would like that stripping. Understood, Your Honor. We can submit a revised form of order incorporating that comment. Thank you. Thank you, Your Honor. That concludes my presenting this afternoon. And with that, I'll pass the podium off to my colleague, Mr. Pavlovich.

Thank you. Good afternoon, Your Honor. Chris Pavlovich of Kirkland and Ellis on behalf of the debtors. I'll be walking, Your Honor, through agendas number 6, 7, 9, and 10. Your Honor, the first motion I will address is the CAST management motion, item number six on the agenda, and file the docket number five. Today, the debtors seek entry of an interim order authorizing the debtors to continue to operate their cash management system and maintain their existing bank accounts, honor certain pre-petition and post-petition obligations, maintain existing business forms in the ordinary course, and continue to perform in your company transactions consistent with historical practices. The debtor's cash management system consists of six bank accounts, all with Wells Fargo,

which is an authorized depository under the U.S.C. guidelines. Because access to the cash management system is imperative to the debtor's business operations, any disruption to this cash management system could have an immediate and significant value-destructive effect on the debtors' estates, to the detriment of all stakeholders. accordingly the debtors submit that the relief sought in the motion is necessary and appropriate under the circumstances prior to the filing you received and incorporated comments from the lenders in the usfd and no party has objected to this motion subject to removing the approved budget comment that you've made unless your honor has any other questions the debtors respectfully requests entry of the proposed order I hear no one. I have a question. The, um, suggests that the intermediate holding company is the

owner of the bank accounts, but the motion and maybe the, yeah, the list suggests otherwise. So I'm curious who owns the bank accounts. You're, you're correct, Your Honor. That's a, um, that should be the packing co and the farm co. The Packing Co LLC owns five of the six bank accounts and the Farm Co owns the other. So this schematic, we can submit a revised schematic that changes the MV Key Intermediate Holdings to Packing Co and Farm Co, respectively. Okay. I don't know that you can do that if you like. I just want to make sure I understood which debtor owned which accounts. Yes, the Packing Co owns five out of the six.

except for Farmco, which owns account number 6132 on the right side of the schematic, the top right. In paragraph 19, F, I'm not sure I understand. I don't think this cash, does a cash management motion doesn't create any lien. So what's the reference to F in here, opposed to do? What's the import of that?

I think it's just a reservation of the debt and the pre-petition agents rights to make just to ensure that a catch-all reservation of rights I believe for the pre-petition agents but we can strike that language if needed barring any comments from the pre-petition agents I don't understand it in the context of this this motion so if the lenders have a reason for whites in here I'd like to hear that your honor Andrews that's from Wayne case again I just want to make sure I'm looking at the same thing. Is this paragraph 19?

Paragraph 19 F of the cash management motion. Right. So there are stipulations in the cash collateral order as to the pre-petition agents liens. I think nothing in this order is meant to be an admission as to the validity of any other lien. I think that's effectively what clause F is meant to get at. I think this language, unqualified. by the first clause is in the other orders. I have to double check. But I guess I didn't understand the qualification

in this motion because this motion doesn't grant anything, right? Right. Okay, I guess I'm not all that concerned about it, but I don't understand if it plays some role and what you're telling me is it really doesn't. But it is different. The unqualified, the language of the language other than that first clause is in the other orders.

So sorry, your honor, just so I understand it, you're saying the opening clause carving out the liens for the pre-petition agents, that's not in the other similar. Correct. So we'll coordinate with the debtors and just make sure it's consistent across. The point is we as the pre-petition agents

do not like the idea of some broad stipulations or some broad carve-outs saying that the debtors are not stipulating as to the any liens because in the cash collateral order, they are stipulating as to our liens. So we'll put our heads together to make sure it's consistent and make sense across each order. But I don't want this language added to the other orders.

None of the orders other than the cash collateral order, as I understand it, grant any liens to anybody. Right? So while I hate these, catch all this order doesn't do about these six things, because quite frankly, it doesn't do anything other than what it does. But we're going to point out it doesn't do these six things. right okay so nothing contained in this motion is intended or shall be construed or

deemed to be other than with respect to the liens in favor of the pre-petition lenders or pre-petition agents and admission so it suggests that it is an admission in this order somehow that this order does something that I don't think it does right okay so I understand the court's concern I think we can find way to fix it okay okay so with the fix on that and the paragraph 22 which we've already addressed I will approve the cash management motion on an interim basis and conclude that it's necessary to avoid immediate and irreparable harm to permit the debtors to continue uninterrupted to use their banking facilities thank you

Your Honor. The next item on today's agenda is the debtors' wages motion. Item number seven on the agenda filed the docket number six. The debtors seek entry of an interim order authorizing but not directing the debtors to pay all pre-petition wages, salaries, commissions, and reversible expenses on account of the compensation and benefits, and to continue administering the compensation and benefits in the ordinary course of business, including payment of pre-pre-pre-pre-preciation petition obligations in an aggregate amount not to exceed 1.6 million on an interim basis. The debtors employees are essential to the continued operation of the business. They directly employ on average in a calendar year around 8,000 employees.

As of the petition date, the debtors have approximately 140 full-time employees and approximately 600 seasonal employees. The full-time employees include the debtors' executives, sales professionals, farm management specialists and pack line management among others. Most of the debtor's seasonal employees work during the harvest season, which lasts from approximately April through September. Seasonal employees generally either work at the farm at the debtors farms or in the processing plants, where they thin and trim trees and pack the stone fruit. The debtors have shared the copy of the motion and the order with the lenders and the U.S. trustee,

and they have had the opportunity to review the form, and no party is objected to this motion. Unless your honor has any further questions, the debtors respectfully request you enter this proposed order, with the caveat that we will remove the approved budget language. Thank you. So anyone wish to be heard with respect to the employee wages motion? I hear no one. I have reviewed the motion. The debtor has detailed various benefits it provides and the cost attended there too. I will approve as requested the motion on an interim basis,

noting that the debtor has placed a cap on the amount to not exceed $1.6 million, and that this request for continuation of benefits programs does not implicate 503C of the code, and I will find it necessary to avoid immediate interrupable harm so the debtors employee base can remain intact and so that employees can pay their own bills. Thank you, Your Honor. Next on the agenda is the critical vendors motion, which is agenda number nine and file the docket number nine.

The debtors seek entry of an interim order authorizing but not directing the debtors to pay in the ordinary course of business, pre-petition amounts, owing on account of critical vendor claims, and an aggregate amount of up to six point, roughly six million, all of which is expected to be due in owing prior to the hearing to consider entry of a final order. The debtor's business depends on uninterrupted flow of farming supplies, inventory, and other goods

through its supply chain and distribution networks, including the processing and shipment of the debtor's stone fruit, The debtors' business is heavily reliant on the receipt of such goods and materials because failure to receive the raw materials necessary to grow the stone fruit would render the debtors distribution and sales infrastructure irrelevant. Without these critical trade vendors, products and agreement to continue an ordinary course relationship, the debtors cannot operate profitable, successful business. To be clear, the debtors are not seeking to pay all trade.

claims immediately, but rather in the ordinary course with their normal accounts payable procedures as they become due and payable. The debtors do not believe that any of the vendors contemplated to be paid under this interim order or a party to any existing contract. The lenders in the U.S. trustee's office have had the opportunity to review the form of the motion and the order and no party has objected to this motion. Subject to the caveat that we will remove the approved budget language unless Your Honor has any questions.

The debtors respectfully request that you enter the proposed interim order. Does anyone wish to be heard with respect to the critical vendor motion, which also includes packet claims, lien claims, 503B9 claims. I hear no one. The claims addressed by this motion are about $6 million. Can you give me any sense of what the trade claims are generally? Yeah, the overall trade claims outstanding is around 22.5 million. So I believe if my math is correct, it's around 25% that we're asking to be paid on an interim basis.

Okay, I've reviewed the motion. I do have a question and a comment on the order, but I will approve, subject to my comments, this motion recognizing that the debtor has established with its lenders a process to determine critical vendors, the debtors otherwise are subject to the pack of laws as everyone else is, and 503B9 claims have a priority under the code. So I will approve it as necessary to avoid immediate and irreparable harm and to continue important relationships with various vendors. The first question I have is on paragraph 8 of the order.

And the question I have is really in the proviso. I have certainly no problem saying all undisputed obligations related to the outstanding orders are granted administrative expense priority in accordance with 503B1A of the bankruptcy code. But then it says provided, however, that the debtors can terminate any outstanding orders, which clearly they can do, prior to delivery, and any canceled orders are not afforded administrative priority I think it needs to say they're not afforded administrative priority by virtue of this order I'm not cutting off anybody who's not in front of me who

wants to raise whatever they want to raise with respect to a claim they may have against the estate understood your order we understood your honor we can make that change to the order in paragraph 12 I have a question we have reservation of light's language in the first sentence. And then it says the debtors do not concede that any claims satisfied pursuant to this interim order are valid. And the debtors expressly reserve our right to contest the extent validity, affection, or seek the avoidance of liens and priority.

And the implication of this is that the debtor's going to pay claims and then they're going to object to the claims they've paid? Yeah, I believe, Your Honor, this is relevant in the scenario where maybe we have overpaid on an invoice or there's some discrepancy where more money than needed was sent out of the estates, and it's protecting that right for us to dispute that amount. Okay, well, certainly I would think you certainly have the ability to dispute in the ordinary course. Okay, if that's what that goes to. find them. Okay. With that clarification and the change that I would like to see in paragraph a as well as the general claim change you've already discussed, if I didn't, I guess I already

did approve this. I've approved this. Thank you, Your Honor. The last motion I have before you is the debtor's customer programs motion, which is item number, agenda number 11. and file the docket number 11. The debtors seek entry of an interim order authorizing the debtors to maintain and administer their pre-petition customer programs and to honor pre-petition business practices there too. The debtors' customer programs consist of discounts, credits,

billing adjustments, and price accommodations, which include, among others, discounts based on the amount of produce or customer purchases, pricing concessions based on negotiating with the customers, and certain invoice adjustments to maintain customer satisfaction and loyalty if a product receives damage, if a customer receives damaged produce. Debtors seek the relief requested in the motion to assure their customers that the debtors have the ability to continue to respond to their needs, including when customers

receive damaged and unsellable produce. This motion has been shared with the U.S. trustee and the lenders, and no party has objected to this motion. unless your your honor has any questions the debtors respectfully request entry of the proposed order noting that we will take out the approved budget language thank you does anyone wish to be heard with respect to the customer programs motion okay I hear no one I've reviewed it I really view these types of motions even though they're called customer program motions is just routine business practices in terms of pricing and crediting customers or appropriately and I will permit the debtor to continue with that practice. Thank you, Your Honor. That concedes my portion of today and I will hand it over at the podium over my colleague, Trent Husky. Good afternoon, Your Honor.

Trent Husky of Kirkland Ellis on behalf of the debtors. I will be taking you through the rest of the debtor's agenda today. Getting the outset, I am the end. So the next item on today's agenda is item number number. is item number five, which is the debtor's application to retain strato as a claims a noticing agent pursuant to section 156C of the bankruptcy code. That was filed at docket number four. So in this case, we have more than 200 parties in interest and therefore, pursuant to local rule 2002 1F, there is a requirement to approve and appoint a claims and noticing agent.

The debtor solicited the The debtor solicited proposals from at least two other court appointed claims and noticing agents, but ultimately selected strato for having the most competitive price structure and for the experience in running Chapter 11 cases. In support of this application, the debtors have submitted a declaration of Ms. Sheryl-Bittance, which has, which was attached to the application as exhibit B. Unless your honor has any questions,

we kindly respectfully request for you to enter an order approving strato as claims and noticing agent. Thank you. Does anyone wish to be heard with respect to the retention of strutto? I hear no one. I reviewed the motion. I do note that the better complied with the procedure and considered other

claims agents. I have no questions with respect to the form of order. I did review the declaration of Ms. Batons, and I will approve the motion as requested. Thank you, Your Honor. So the next item on the agenda is item number eight, which is a debtor's tax motion, which was entered at docket number 7. By this motion, the debtors seek authority to remit and pay pre-petition taxes and fees. These tax and fees will be comparable during the pendency of these Chapter 11 cases. These taxes and fees include, among other things, franchise taxes, sales and use taxes, vehicle registration fees, property and water taxes, and regulatory taxes. Your Honor, we're seeking authority to pay up to $12,000 in tax liabilities that accrued and will be

comparable in the interim period on approval of the interim order. We had shared this motion with the U.S. Trustee's office as well as Lenders Council and incorporated in the comments that they had prior to filing. We did note the language of the approved budget language that is in the order at paragraph 11. We'll make sure to cut that. Unless Your Honor has any questions, we request that you enter the proposed interim. order. Thank you. Does anyone wish to be heard with respect to the taxes motion? I hear no one. I reviewed it. The motion sets forth the different types of taxes that the debtor incurs in the

ordinary course of its business. I note that the bulk are property and water taxes that are most likely to create liens with respect to the debtor's property. I also know that sales and taxes which are probably passed through the the interim order sets a cap at $12,000 during this interim period and I will approve it on that basis noting that again it meets the requirements of rule 6,003 thank you your honor and the last item on the debtors agenda today is item number 12 which is a debtors insurance motion which has been entered at docket number 12 by this motion the debtors are requesting an order authorizing them to continue to perform their obligations

pay their obligations under the current insurance policies as well as authority to modify supplement renew and enter into new insurance policies within the ordinary course of business pursuant to section 1112b4c of the Bankruptcy Code It is a requirement for the debtors within these Chapter 11 cases to maintain insurance coverage where failure to do so would pose a risk to the states or to the public. In addition, the U.S. trustee guidelines require the debtors to maintain certain insurance coverages. We had worked with the U.S. trustee's office and Lenders Council, and we had incorporated any comments that they had prior to filing. Again, noting, I believe this time it is paragraph 10 of the order, the approved budget language, we'll make sure to cut that. Unless Your Honor has any questions, we request that you enter the proposed interim order.

Does anyone wish to be heard with respect to the insurance motion? I hear no one. I've reviewed it. It is necessary for the debtors to continue to carry insurance, not only for the requirements of the United States. obviously the United States trustee but to protect the assets the debtors assets it's a large amount 2.8 million dollars it's going to is that the interim yes yes the interim amount but the premiums are what they are I noted that most of the policy terms just began

effective as of September 30th. So the initial payments, I take it or due. And the debtor will be permitted to maintain its insurance and pay premiums as appropriate. Thank you, Your Honor. With that, that wraps up for the debtor's first aid pleadings for today. Thank you very much. Okay, thank you.

Then I will look for forms of order. When you upload, items to the system CMECF please notify chambers so that we look for them thank you very much thank you judge we're adjourned