American court hearing recordings and interviews - QVC Group - Listen to the bankruptcy hearing held June 10, 2026 starting 1:30 pm

Episode Date: June 11, 2026

closing

Your Honor, we have paper copies as well that on the Senate is circulating. Thank you. May I approach? Yes, yes, please. May I proceed? Yes. Thank you very much, Your Honor, for giving the preferred shareholders the opportunity for the first time to have a real voice in this case.

You've heard many things about us discussed in the opening presentations of the other parties, but this is not about who we are and what we've done. This is about the debtors and what they've done and whether they have satisfied the requirements to pass through this court and confirm a plan of reorganization and to get approval of a Rule 19-Settlement. So let's start with the introduction. This is the debtor's case.

This is the debtor's 1919 settlement. It is their burden and their burden alone to show that this purported intercompany settlement is fair and equitable. Now, we're going to talk about the claims. The evidence indicates that the threatened claims were weak at best. The real strategy here, as Mr. McCain said, over and over and over, is to present a mountain of claims so that all these weak claims look like a strong claim to justify this settlement. How do we know that? These intercompany claims were never publicly disclosed, and the debtor CFO testified that he had never heard of these claims

until after the bankruptcy filing. The evidence clearly, unequivocally, and irrefutably shows that the debtors did not settle this intercompany claim through any form of arm's-length negotiation. They simply capitulated. There is no evidence, no evidence before the court, that any of the court, existing preferred shareholder would benefit from the releases and there's no preferred shareholder that's before the court expressing any support for the settlement now QVCG this is something we didn't know and I'm going to talk about this later in the presentation we now know

the QVCG only had upon the bankruptcy filing 220,000 of real third-party trade claims the rest were director claims and the lion's share of those claims or tax priority claims that take priority over the intercompany claim itself. There is no preferred shareholder of the $1.4 billion now, I believe, is the approximate right amount of liquidation preference. No preferred shareholder has supported the settlement. So my presentation will confirm that the 1990s settlement does not satisfy bankruptcy rule 2019.

The plan was not proposed in good faith. The evidence confirms what I told you when this case started, that we have been the sacrificial lamb, and we have been the ATM machine in this restructuring process, and the design, which Mr. Baker has now confirmed to the court, this process was designed from the get-go to satisfy the subsidiary creditors of QVC, Inc, who did not have parent company guarantees, no claim at all. And so this is the antithesis of good faith with respect to QVCG. I have no doubt at all that QVCI, Linta, all those plans satisfy this test. But that's not how Your Honor has to look at this. You look at each debtor individually.

And we still, as we sit here today, have no impaired non-insider accepting class of creditors. They violated 1129-8-10. the claim that they're allowing is clearly impaired. It's receiving both less than 100 cents on the dollar, and it's being paid in part through cornerstone equity, which the debtor is completely ignored in their papers, and they've ignored in the evidence, and they've ignored in their closing.

So let's get to the unrefuted facts that we're going to present to Your Honor. Unrefuted fact, number one. Claims relating to dividends from the QVCI against QVCG, or weak at best and likely merrilyness. How do we know that? We know that because the special committee of our debt or put it in writing. The fundamental prerequisite of the claims for clawback of dividends via fraudulent conveyance is a showing of insolvency. Insolvency requires proof via discounted cash flow, comparable company, and comparable transactions analyses. None of those were presented while this intercompany settlement was being

negotiated other than what we see in the second highlighted part, the Duff and Phelpsolvency opinion. Now that was procured in connection with the 2022 settlement. That is the only dividend. That is the only dividend in this case from QVC Inc to QVCG. They label all these enter-company transactions dividends, but payments under the tax sharing agreement are not dividends. The dividend allocated debts that might have funneled through us, we didn't have any debt, That was used and funneled to pay debts of other debtors, not us. Now, Mr. Woffer, the CFO of the company, who they've cited as being concerned about the company's financial condition, he was around when this company was going through this process, and he's received not only the solvency opinion from 2022, but there were solvency opinions after that when the dividends were made by QVCG to the preferred shareholders.

All of those showed robust solvency, not by $100 million, not by $500 million, but by over a billion dollars. It was not even close. That's why Mr. Woffer says that those analyses, those solvency opinions were prepared in good faith. Now, you didn't hear anything about the equity market capitalization as of December of 2022. But if you look at the company's equity trading chart, There's over a billion dollars of market cap, well over a billion dollars of market cap, when this cash management dividend occurred, adding up the preferred and the common. That was never presented to your honor by them.

Now, what was presented by them was the Evercore data point, as Mr. Meltzer said. He agreed that it was not necessary and sufficient to prove insolvency. It was just a data point. Now, we saw the chart. The chart indicated that Evercore provided, Evercore being the financial advisor for all of the debtors in this case, it provided the three trading charts at the bottom of the slide, it omitted the three data points at the top of the slide. Now, I ask, Your Honor, this. Why? Why did that happen? It happened because this process was stulted from, from the beginning to do what Mr. Baker said he wanted done, what his clients wanted done,

to get that money back so that QVC Inc. could confirm a plan. Mr. Meltzer wasn't aware that those data points were excluded. He didn't know until the day he was cross-examined in this court. So you have incomplete data, and the only explanation for that data is that it was used to justify a result. unrefuted fact number two. There have been allegations made that somehow this sophisticated company with tax professionals, a publicly reported company with Pricewater House Coopers as its tax advisor, with KPMG as its auditors, somehow accidentally, intentionally, what have you, overpaid its tax obligations. Mr. Sussberg, in his opening argument, told your

honor, he told you that QVCI had overpaid its taxes to the tune of the of $500 million. And I asked Mr. Kearns that. I asked him very, very carefully, very explicitly. Was that correct? And the answer was he did not agree with that. That was not correct. They paid everything they were owed under the tax sharing agreement, not a penny more, not a penny less. Now what they're saying is that somehow you can measure the parent company's tax liability with the QVC Inc subsidiary tax liability. But the tax share share agreement draws a very, very clear distinction between those two things. QVC Inc. was obligated since 2004, not 2023, not 2020, 2004 to pay that separate return tax liability. That contract

is well beyond any fraudulent conveyance challenge period. So there's no basis to say, well, you know, we were insolvent, we can get those money back, you know, we can get those alleged overpayments back, I would argue number one, you had to comply with the tax sharing agreement, you did comply with the tax sharing agreement, and there's no basis to avoid the tax sharing agreement. And that's why this public company did not make a mistake. They were careful, they were considerate, they had advisors, and they paid exactly what they were supposed to pay.

How do I know that? Not only did Mr. Kern say that, but the CFO, the company, said that all the payments were in compliance with the tax sharing agreement. You're on a practice in this space for decades. You know about these tax sharing agreements. You know how they work. There's nothing uncommon about tax sharing agreements. This is how complex multinational companies navigate tax issues, and this is just how it's done.

Then we get to the deferred tax liability issue. Those claims are weak as well. How do we know that? We have first Mr. Curranes. He obtained a tax opinion. And that was a requirement for the insurance I'm going to talk about. That tax opinion had the second highest level of certainty, Your Honor, that that tax would never hit the company. Now, we argued over percentages.

First, he said 70 or 80 percent, and then he said 65 percent. The bottom line is there is a very, very high degree of certainty in that. And Mr. Keglevik, on his examination, confirmed that the Kirkland and Ellis firm issued a should opinion as well. So we have the company, we have, it's the company's in-house tax expert, we have the company's CFO confirming the company's position in his personal opinion that the tax liability would not materialize. We have Priced Waterhouse Coopers. And we have something that has not been addressed, which is that what this claim really

is about is an indemnification claim by the subsidiary, QVCI, against the parent. What we didn't see in any negotiation process was they knew they were going to file bankruptcy. Section 502E1B would disallow this indemnity claim if it were actually litigated before the court. Yes, we would take the risk of an IRS claim, but we're willing to take that risk just like they are. That ammunition was never used in these negotiations. Then we get to the insurance coverage. And I think this is just something I think is a mathematical. intuitive matter, but there still seems to be some disagreement about this.

You look at the insurance premium, $35, $36 million, whatever's been testified to in that range, and you have $925 million of insurance coverage. That is the first loss that will be incurred if this so-called $2 billion of liability ultimately hits. So the people most at risk are the first loss people. not the second lost people. And if you add up $36 million by $925 million of coverage, you get 3.8%.

No insurance company is going to charge a client $36 million. If a $925 million risk really is a 50% risk, that would be economically irrational, that would be an insane investment. And that's what the insurers are. We're not taking the position that PWC should have very much should have issued a different level of opinion. All we're saying is, Your Honor, the people with the money on the line, the insurers, the ones who are taking this risk, this is the dollar amount that they have put on this risk.

No other party has put a precise amount of risk on this other than these insurers, and they did that after Pricewaterhouse issued their opinion. Now, if they agreed with Pricewaterhouse to the penny, right, and we take the range, 65 to 80, percent probability, you'd see a much, much higher insurance premium number. They know, and everybody knows, the Pricewaterhouse-Coopers is a conservative institution, and they're not going to stick their neck out and give you the absolute highest probability that that risk might occur. That that risk might occur. But that's what the insurance companies have assessed.

Now, they cited Mr. Kearns, he said, oh, that's not, I can't make that percentage leap between the premium, and the amount of coverage. I can't do that. That's not right. But the Fifth Circuit in this court has said that's exactly right. It is well known that the premium rates for liability insurance are based upon one, the risk insured, here $925 million, and the potential amounts of liability covered. So this is not a novel thing.

This is not some Perry Mason moment that we've discovered here. This is math. This is how insurance works. Next, the probability of success in litigation. The record is unequivably clear, unlike the insurance policy that we saw, showing that 3.8 probability of success, showing the PWC percentage of 65 to 80%. The testimony is clear, the record is clear, that there was never by QVC group, any attempt to assess the probability of success in the underlying litigation on these intercompany claims. I asked Mr. Meltzer before the court, and he said very clearly,

I did not come to a view any more than I came to a view as of whether we would succeed in defending it. That is, he didn't assess QVC inks chances of succeeding, and conversely, he didn't assess QVC group's chances of succeeding. Now, if we were quibbling over a several amount of, you know, the preferred shareholders get $100 million versus $150 million, I'm sure it would be a much different analysis here because then you're quibbling over things that really involve some aspect of business judgment. But what we're talking about here is zero, right? We're talking about a 0% probability of success for QVCG to prevail. Now, the only way you can come to that kind of view on a settlement is if you haven't looked at the probability of success because there's no way to justify a 0% chance of success in

a settlement such as this. And this is the testimony where Mr. Meltzer confirms this. This isn't just my gloss on this. It's obvious from the facts, but Mr. Meltzer himself in his testimony, he recognized that this settlement before your court recognizes no possible. zero percent chance the QVC group would ultimately prevail. Correct. Those are his words.

Now, we've spoken a lot about the cost of litigation, and it's used against us in every possible way. They say they admit this litigation would be costly. QVC Inc. admits that this litigation would be costly. But we get no credit for that. Mr. Meltzer testified, yes, without putting an estimate on it, this would be costly. We get penalized for that. But the bottom line is, when Mr. Meltzer decided to enter into the settlement, he had no idea what the litigation would cost, and he was unable to use that.

He never used that, as we all use that in any negotiation, the cost of litigation to get something from the other side. he didn't even try. And that's a very good segue to the next point, Your Honor, which is the QVC group at every step along the way failed to negotiate at arm's length. As we told, Your Honor, at the start of this trial, and the evidence is now confirmed, QVC capitulated. It folded the tent and left. Going into this negotiation, I think this is an important background fact for your to consider. QVC Group funded on a net basis $75 million of professional fees for this process. It funded $9 million to start and it's gotten some amount of reimbursement. So what kind of dynamic does that create when the parent company is essentially gifting

because we haven't seen any evidence of any contract or any mechanic for it to be reimbursed? We're gifting our adversaries to run a restructuring process that is going to be used to gut us. I would never go into a settlement meeting with that kind of a dynamic in play, but the reason that happened was that it just happened. Even though Mr. Meltzer's job, as he said, the first question I asked him was, isn't your job as a conflict director to protect QVCG in conflict transactions where another debtor is on the other side? That was his job.

That was his only job. But what did he do? He just let it happen. It happened. And we go into a settlement negotiation with our cash dwindling, the others, Warchest staying at least static. That's not a good place to go into negotiations. So let's fast forward to February 6th of 20206.

Now, this is a very, very critical point in time. This portion of the deck, is a status report your owner saw that was provided to the full QVCG board, not the disinterested directors. This is the full board with the interested and allegedly non-interested directors. So here is the company's status report on the negotiations. So we would have thought because the disinterested directors were supposed to protect our box from conflicts, that they would be leading the charge in these negotiations from day one.

But what we saw in this deck, the negotiations with the disinterested directors had not even begun. So we see the company making a proposal on day one back in October. Everything stays in place. The pref gets the cash. The pref gets cornerstone. That's the starting point. And then we see by the middle to January 26th of that year. the subsidiary creditors, the ad hoc groups, Mr. Baker's clients, Ms. Libby's clients,

tell the board of directors that they are going to give the PEP no cash at all, a tip, maybe a piece of the cornerstone equity, maybe a piece of the reorganized QVC equity. I don't know why those negotiations occurred. Why is the company, the conflicted elements of the company, the conflicted professionals. Why are they negotiating with these ad hoc committees when this is supposed to be done on an arms-linked basis? The reason for that is what Mr. Baker said. It's what Mr. Baker said. What is happening here is that the company needs to satisfy the subsidiary creditors to get a deal done.

And I don't blame them for that. I don't blame. There is no dispute that QVC Inc. is the centerpiece of this restructuring. And we're happy for QVC Inc to emerge and for this business and to preserve these jobs. I think what we're going to tell, Your Honor, is that that's not a basis to gut us, to wipe us out, as Mr. Meltzer has testified, was the threat from the beginning and the outcome of this case. So the creditors whose consent is required are putting their stake in the ground, and the stake in the ground is that they want the preferred to get nothing, and they want their money back from QVC group.

Not that it was their money, but that's what they said. So where do we go next? Six days later, we have a Cobrey and Kim update to the disinterested directors. Six days after the creditor said we get nothing. Now, I spent a lot of time with Mr. Meltzer on this. And I want to take a step back. Mr. McCain went on and on and on about tax claims, billions of dollars of tax claims, billions of dollars of dividends,

billions of dollars of all these things. And he said, I have a mountain of evidence, Your Honor. I have a mountain. And so all this really is on $3 billion is an 8% risk. This is obvious we should have done this. That is an ex post facto justification for, what really happened here. As Mr. Baker said, they wanted the money, the money had to be returned to them for this plan to work. And so we have the deck of Cobrey and Kim of February 12, six days

after the February 6th meeting. Now, I showed your honor that this page was redacted when I took Mr. Meltzer's deposition. This is the earthquake that collapses Mr. McCain's mountain. This is the landslide that makes that mountain go away. Why is that? No negotiations by these disinterested directors had even started. In a real arms-link negotiation, you go in, do you know what you're going to get? Do you know that the potential recovery is only a release? If there's 300 million, $400 million of value, maybe you can't say 100% going into that mediation. Maybe you go into that mediation and say, hey, it's a toss-up.

It's a toss-up. We can get half the cash. Or you say, hey, the creditors really want the cash. Let's angle to get the preff cornerstone. There's something there for them. A mix of those two things. Let's strive to do our best for our box, because that's what Mr. Meltzer said his job was. Mr. Meltzer said the first question I asked him, what is your job?

Your job is to maximize value for QVC Group. How does this slide align with that job description? The answer is it doesn't because he knew, because he had been told by Kirkland and Ellis, he had been told by other advisors, I don't know who, he had been told that this is what is needed to get this restructuring done. If you don't deliver this, we're not going to be able to do a prepact. I didn't show you on the last slide with the February 6th meeting, but all those creditors made very clear that they wanted a prepackage.

plan of reorganization. And the only way to do that, the only way to get their consent was to give the preferred shareholders releases. Again, this was preordained. Before Mr. Baker spoke today, I thought it was preordained in January when the negotiation started and that cash grab was articulated. But what Mr. Baker told, Your Honor, is that his clients were upset because this company, after our dividend had already been suspended in 2025, drew down a billion dollars in cash. And they were upset about that. And you know what? I would be upset about that if a company like this did that to my clients.

So it's a natural, reflexive reaction. You took us from us a billion dollars. You need to give us $300, $400 million back. And so to get this prepackage plan done, to get their consent, you had to give them what they wanted. What they wanted was to take it all away from the preferred shareholders. Next day. Next day is the official exchange of position statements between Cobrey and Kim and Kat and Mucon representing the group directors and the Inc. directors, respectively.

This deck is a fig leaf. This deck has no basis in reality. This deck was to create a record for your honor so that it was a record for your honor so that someday they could say, hey, we negotiated at arm's length. We put our positions on the table. We let the other side know what their strengths and weaknesses are so we could get something from them. They say all the right things in this deck.

They articulate all the positions that we are making before your honor today. The headline of this presentation is the claims by ink, I'm sorry, yeah, the claims by ink against group are not likely to be viable. They cite much of the evidence that we're talking about, but how do I know this is a fig leaf? I asked Mr. Meltzer whether he knew that this position statement had ever been transmitted. And what he fumbled on and ultimately admitted is that he didn't. He learned about it after the settlement was done. Why was that?

Because the outcome was preordained. This is a check-the-box process step that they have to go through because someday they know they have to show your honor, Your Honor that they have done what they believe is an arms-in-link negotiation, but it was not. So the next step in the process, Sunday, February 22nd, right before the in-person meeting that was scheduled, the Inc. Special Committee sends a settlement proposal, which was not a settlement proposal at all for $400 million. Now, going into that meeting, we heard from Mr. Keglevick a bunch of concessions about why Inc. would have settled this case for something as opposed to nothing. And it was nothing. This is not a settlement that provided

anything of value. Even assuming it is, the question is, what did Mr. Meltzer do to try to do his job to maximize value for our estate? one cost, right? Mr. Kegovic was highly motivated to do a fast and final settlement. Those were his words. What he said was, even in a successful litigation, QVC Inc. would net less. Mr. Meltzer did not use that argument. Delay. Any litigation would preclude the fast and final solution, the settlement that he wanted, and that was his primary objective. Risk. He himself recognized. recognized there was risk of loss. He himself conceded that he had never been in a negotiation where the other side just gave up entirely in the first stroke. Mr. Meltzer did not use

the tools at his disposal. He did not make the argument that Mr. Kegovik conceded in his testimony that the litigation would have been ugly. It would have hurt the estate and all of that is bad. Litigation would have been much worse for QVC Inc than the settlement. They did nothing. An arms-link negotiation requires some proof that you're trying to do your job to maximize value. If the standard articulated before the court, which I really believe is the standard that they're espousing is, we had a disinterested director. They met, they got advice.

Whatever happens. Whatever happens in that negotiation satisfies bankruptcy rule in 2019. That can't be the law. That's not the law. It's nonsensical. So here is the first settlement term sheet. We know from the get-go that $400 million unsecured claim against our company was going to capture all of the asset value of our estate. Now, you heard Mr. Meltzer say from the get-go that he was worried about these claims because they could wipe out our estate.

So the first proposal that was made was, in fact, to wipe out our estate. What comes back? On the 24th, the day of this in-person meeting, we have the markup. We have a meeting that lasts two and a half to four hours in a Kirkland and Ellis conference room. Maybe we have a Zoom before that. But what we don't have is an arms-link negotiation. What we have is a pre-ordained outcome, and that pre-ordained outcome. and that preordained outcome was, in fact, capitulation, no recovery for preferred shareholders.

Now, what we have here is the COBRA comment to this. And I don't even understand why they did this. The testimony is clear that, in their view, $350 million intercompany claim accomplishes exactly what Mr. Maltzer was concerned about. It wipes out our box. Now, their counter, their first counter here. is $350 million, wipe out. Treatment of preferred, and treatment of preferred at our box, get nothing, wipe out.

So that's not a counter. That's not a negotiation. There was a vague illusion that there was a $25 million offer made, and it was rejected. That's also not a negotiation. Now, I talked about with Mr. Meltzer some things he could have done in a negotiation, whether in exercising his purported business judgment he considered certain realistic on-the-table outcomes, right? This is not something that we invented as, hey, you know, hindsight, you could have gotten insurance for this, right? You could have done a better job based on tools that you didn't even know about.

What do we see here? Mr. Meltzer concedes that there was tax insurance, and so the demand was, you owe us money for a potential indemnification for this alleged tax liability. Insurance is on the table. Did you consider saying, hey, we've got a $200 million war chest. We'll pay that $35 million. Let's move on to the next issue. He didn't even try.

He didn't even try. Now, I asked Mr. Meltzer whether his job was to maximize value. He said yes. and I've used this terminology insisting on a preferred shareholder recovery. There's no difference between that and maximizing value because I'm going to get to the slides that Your Honor saw. Where would this money go? If there's a settlement that leaves something meaningful on the table at QVC Group, where would that money go? And his job was to get that money into our state, put it down the waterfall.

The evidence is going to be very clear. This is a zero-sum game between the preferred shareholders of QVC Group. and the stakeholders of QVC Inc. And so if you think about negotiation dynamics, and I was astounded by Mr. Meltzer's testimony, what he told, Your Honor, in words and substance, was this. What Mr. Keglevik wants is what Mr. Keglevik gets. Mr. Keglevik made it very clear that he wanted everything.

And that's a rational, fair, understandable position by Mr. Keglevick. But that's the position that does not have to be accepted by QVC group. Going into this bankruptcy, there was no funded debt, there was no financial distress, there was no

event that required this company to file Chapter 11. Yes, Mr. Meltzer knows that the subsidiary creditors want that. And yes, it's a laudable goal to have a holistic global solution in the case. And so yes, maybe you

continue negotiating. But if the choice for you is you have to give up everything so that they're supposed to be a global restructuring, then Mr. Meltzer is not doing his job, Your Honor. He's not doing his job. He's subordinating the rights, the obligations, the interests of our debtor so that other debtors can accomplish their goals. That is not what a fiduciary is supposed to do. And this is the metaphor for this. This is the metaphor. I asked Mr. Melton, whether he considered whether he could have walked out of the room that day, that faithful day at Kirkland-Nellis. He said, yes, I could have. He recognizes that that's something he could have done. We all do that in a negotiation when the other side is being unreasonable, when they're asking for everything, and they're

not compromising as bankruptcy rule 2019 requires. He did do that. So his perception was that Mr. Mr. Keglevick would control the destiny of these negotiations, and that was his perception. Even if that's true, even if that's true, you have to use your tools at your disposal. You walk out of the room. You send the message to Mr. Keglevick that it's not, that Mr. Meltzer is not reporting to the QVC Inc. stakeholders. He's reporting the QVC group stakeholders. And to get a fair deal for the QVC group stakeholders, you have to walk out of that room. Otherwise, you're telling Mr. Keglevick, a deal has to get done. A deal has to get done.

Any deal has to get done, Mr. Keglevick. So if you're going to require this, and that's what I have to do to get a deal done, I'm staying in this room. He stayed in that room. And that's why he capitulated. So the next day or two days later, February 26th, even though $350 million dollars wipes out top co QVC group our debtor, our disinterested directors capitulate yet again. They say, you know what, you can have your $400 million claim.

Even though no one believes that the asset value of the company was $400 million, you can have it. Again, because what Mr. Kegovic wants, Mr. Kegovic gets. And it doesn't really matter because he's getting it all anyway. He's wiping us out. Now, going into that meeting, I mentioned he never mentioned the insurance. Now, what Mr. Meltzer testified to on his directive, he was satisfied with the information that he had going into that negotiation. Why?

Because all the other stakeholders had the same information so they were negotiating on an even playing field. I would respectfully submit, Your Honor, that that's not how you maximize value. You don't just rely on the information your adversaries have. You line up all the arguments, you line up all the tools at your disposal. Why? To do the job that Mr. Meltzer acknowledges that he has is to maximize value. He had this tax advisor. He claimed that this person was a superstar, in my words, and he didn't bring that person to the room.

He didn't have them on the Zoom. He didn't care if they were there. He didn't want to advocate for our position. He could have hired a financial advice. He could have hired a financial advisor, he could have hired a banker, he could have hired a solvency expert. He chose not to. He chose not to why? Let's go back to February 6th.

He didn't need that to get a release of the preferred shareholders as his objective. You don't need these experts, right? That's just a negotiating dynamic. That's all you need. Now, Mr. McCain addressed this on in his presentation, and Mr. Kearns testified about this. there is a theoretical risk that the tax liability would be higher than a billion dollars and there's risk of everything in this world so I'm not going to say it wasn't a risk we believe it was a low and very weak risk but in the negotiating dynamic that we have here

mr. Meltzer is protecting 300 350 400 million dollars of value and he's aware of this insurance policy And what I asked him was, if you offer the creditors this insurance to mitigate this risk, by offering that insurance policy, you would have offered them more asset value to satisfy this claim than the entirety of the asset value that we had. So they have our cash, they have the insurance policy, and what's effectively happening is instead of us paying a $35 million insurance policy, Your Honor, we're paying a $400 million premium for that policy. So what is another indicia that this was not done at arm's length in good faith?

Even though they're extolling the virtues of the preferred shareholders getting released, and we think that's yet another fig leaf, they have given up all of the claims, and this isn't just our box, this is QVC, Inc., right? QVC Inc. probably has claims against directors for authorizing these illicit transactions if they were, in fact, voidable. But what Mr. Meltzer testified to is what they did, what the QVC group did. And he said, we're giving a release, and we're giving that release as a result of an investigation conducted by Cobrey and Kim.

We have found zero evidence in the record that that, in fact, occurred. So what we put on the screen, Your Honor, is the statement that the special committee filed in connection with the support of the intercompany settlement. They acknowledge that they conducted an investigation and an evaluation of the intercompany claims. There is nothing in the record other than Mr. Meltzer's testimony, which is completely vague, unspecific. We have decks that make no illusions to this purported investigation. Again, this also was preordained. In a restructuring, the directors and officers often get released. That's the goal of debtors' counsel in all these cases. In a world where we are

being wiped out, we would expect that our fiduciary again to perform his job to maximize value would perform that investigation. It didn't get done. Because all this was about was getting that money to the subsidiary creditors, not in fact maximizing value. Now, we get to the next day. The day after there's an agreement on a $400 million intercompany claim. And Mr. Brody sends the company a letter. There was a lot of testimony about this, Your Honor. And the way I interpreted Mr. Meltzer's testimony is, he read this letter like a 300-page asset purchase agreement, something like that, where he parsed the words and tried to figure it all out. But the message that Mr. Brody is conveying

is, if the board would like to discuss these matters further, our clients are willing to engage in a constructive dialogue. Now, we know that this intercompany settlement negotiation happened behind closed doors. There had never been any discussion publicly that it was occurring. The existence of these claims was never disclosed. So what Mr. Brody says, I'm here. If you want to know what our views are, we would like to talk to you. And so what would a fiduciary who's trying to maximize value for his company do in the face of that overture? It would engage.

There's no doubt it would engage. because that's exactly what every other disinterested director did in this case. QVC, Inc, they had two law firms behind them. Linta had Aiken. We had no one. So we show up, and if someone really cared about what the preferred wanted, they would have picked up the phone and asked. Now, what we've heard in response to that, Your Honor, is that, oh, well, Mr. Brody's clients only have one to two percent.

one to two percent is better than nothing. That's my first comment. If the message is, well, okay, you only have one to two percent, go out there and find more. Go out there and find more. Go out and find 10 percent, 15 percent, 20 percent, and then you'll provide something meaningful and we'll talk to you. But that didn't happen. It never happened.

Mr. Meltzer in his testimony acknowledged that he could have engaged with those shareholders. Again, he chose not to. Why? Because the outcome was preordained on February 6th for him, and in July of 2025 for the QVC Inc. lenders. Now, my colleague from Aiken came up and said, well, you know, these claims, there were other negotiating dynamics. There are other reasons why we got something, and you should be happy with nothing.

My response to that is what I told you in my opening statement, and I will repeat now, representation matters. Representation changes outcomes. An axiom in our business is screw the guy who's not in the room. It's really easy to do that because they're not there. They can't challenge anything, and we can pick their pocket because they're not in the room. Now, what happened with Linta? The independent directors in that case had a framework.

That framework was clearly deficient for the Linta creditors. So the Linta creditors had Aiken come in. They renegotiated the deal, and look what happens. And they can justify it anything they want, any way they want, but the numbers are on this page. They have a documented intercompany claim against Linta of $1.8 billion. They have threatened intercompany claims of $2.1 billion. All in, all in you're wrong. those are more claims than they even asserted against us.

Now, it wasn't enough for them to say, okay, Linta, you keep your cash. You keep your cash, you walk away. They could have said, okay, well, give us 25% of that. Give us some piece of that. No, they didn't do that. They went farther. They wrote Linta a check. Now, that wasn't accidental.

That happened because a law firm was there. A law firm was there to represent stakeholders, to be an advocate for their interests. And so when we look at this, we see the empty chair in the room getting wiped out, and we see vigorous advocacy getting something. And we hear, oh, there's a document intercompany claim, but oh, maybe it's not enforceable. Maybe we have claims.

That promissory note dated all the way back to 2020. No one has taken a position in this case of any consequence that the company was insolvent in 2020. So maybe that contract was grossly unfair. Maybe that contract was exploitive. But it doesn't matter. It was beyond any of witness. And to use theoretical arguments to justify this only proves our point. The outcome was preordained.

And anybody who was there to challenge that outcome got something. Because representation matters. Now, I heard Mr. Feinstein's presentation, and I got very, very upset, Your Honor. Accusations have been hurled against us that we've wasted people's time, wasted people's money, that the unsecured creditors are the innocent victims of this grand restructuring, and we are trying to block them from being paid. They can get paid everything they want from every single box. Because what we didn't know when this case started, because there was no schedules, there was no disclosure, there was nothing.

All we heard was, hey, there's $15 million of general unsecured claims. That's what we heard. We didn't know. So what do we assume? Okay, there's $15 million of claims. There's this intercompany claim. How do you balance that in the context of a plan where you're paying one party something and the other party has a disputed claim? that you're going to have to deal with down the road. We think you have to satisfy 1129 and we respect the provisions of the bankruptcy code.

So we said, okay, we have to come up with a plan because we believe there is going to be impairment of this intercompany claim if it's allowed in any amount. So if you want to confirm a plan, you have to structure that plan to satisfy 1129. What we've since learned and what we only learned under the bright light of discovery in this case is that there are only $22,000 of general unsecured claims. And it's even less than that now. They've made payments, and I believe they're post-petition, that numbers down to $189,000. Your Honor has issued a critical vendor order in this case.

And what it says is the claims are unimpaired, so let's keep them being paid so people keep providing credit. We're here to say, pay that $2,000. $1,000 or $1,8,000. Pay it tomorrow. Pay it today. Send the wires out today. We don't care.

This is a de minimis amount of money. This can't change the outcome of this case. And then we have a $900,000 director claim for a director that's getting a release that's probably unnecessary in this case. You know what? Pay that director to. We're not here to stand in the way of people getting paid. All we want is our seat at the table.

And if paying these creditors off now, accomplishes this. that, we're going to be constructive. That's not what we want. But what we have here is a bunch of tax claims. And as Mr. Meltzer acknowledged, those are all priority. They are totally unaffected by any outcome in this intercompany settlement. They are all unimpaired under the bankruptcy code. So those two can be paid tomorrow as well, but they certainly should be paid in a plan and they will be unaffected by any outcome of this intercompany claim settlement. And so what we see here is what I would call a convenience class. This is a convenience class.

This is not worth fighting about. But I hear that our clients are here to waste money when we could have followed through with our equity committee motion. We could have done that. We would have run up bills on their dollar with no risk at all to us. What did we do? We put our money on the line because we believe in our position. And I suffice to say, I'm sorry, I will say this, okay, I guarantee you that the Petrolski firm is building more than $220,000 in this case. I guarantee you that they're paying more than $1.1 million.

So for him to stand up and call my clients vultures, vultures, that we're trying to exploit this estate because we may, made the decision not to call witnesses after Your Honor heard from Mr. Meltzer and his total abdication from his fiduciary duties, the case was over after he took the stand. I didn't need to call FTI to show solvency. I didn't need to call anyone to prove any of the things that's their obligation to prove. So for Mr. Feinstein to say that somehow his creditors are vitally important to this process and we're getting in the way of getting them paid because we don't want to be steamrolled, that's offensive to me because representation matters. Now, then we get to this intercompany, I'm sorry, the preferred shareholder release.

I would like to tell your honor that we've looked. First, we have a dividends that occurred over many, many years. We've heard that the testimony is that the preferred shareholders are widely disparate. When was the last time people sued shareholders, preferred shareholders, preferred shareholders for dividends in the public markets for dividend transactions that have occurred years ago. It doesn't happen. It's a joke. Now, Mr. Meltzer seems to be confused about one critical thing, which is who is supposed to benefit from the bankruptcy process? The people who are supposed to benefit from the bankruptcy process are people in the waterfall. So I asked him a fundamental question. His objective from day one was to get the preferred shareholders release.

That's what it was. Now, that release only matters in the distribution scheme of this bankruptcy if those preferred shareholders are in the waterfall. Otherwise, if someone got a dividend three years ago and they want to sue them and they're not a preferred shareholder, have at it. Have at it. Because the trade that they are espousing to this court is you're not in the waterfall preferred share. shareholder, you think you're entitled to something, right? In the waterfall, instead we're going to give you something and that something is a release. In exercising his business judgment, I think it would have been wise to do some analysis

to determine whether the people in the waterfall, not today, not today, that when he was negotiating the settlement and when the settlement was consummated, that those people were getting something because they were out of the waterfall. He did not do that. He didn't even try to do that because it's a pretext for a preordained outcome. come. Stakeholder views matter. Now, Mr. McCain cited the case law talking about whether the court should take into account the views of creditors. And he is absolutely right that that's what that case says. No dispute. How many times before Your Honor are the preferred

or are preferred shareholders or common shareholders in the money? We are in the money, but for this intercompany settlement. That is an unrefuted fact. This settlement takes us out of the money. So those cases, what they're about is who is in the fulcrum, who is in the waterfall, who stands to lose or gain from the settlement? Don't you want to hear from those people, right? Because their assessment of the risk, because their value is being transferred away, they are the ones that should have some say in the cost-benefit analysis of this legislative and why wouldn't a shareholder want this claim to be litigated or at least mediated, settled on an even playing field basis when they're going to be wiped out.

But what you're hearing unequivocally from every other part of the capital structure here is, oh, you should be happy. You should be happy. This is a great outcome from you. Cobrey and Kim filed from the disinterested directors statement that said, this is a good This is a terrific outcome. Mr. Meltzer said that he wanted to avoid these claims wiping out our box. He was afraid that it would wipe out our box.

Guess what? That's the terrific outcome that Mr. Meltzer is using to justify this settlement. Now, when we thought there was $15 million of Gux, Your Honor, we said we don't know, we don't know who these claimants are. or $15 million, we think it's appropriate because we are subordinated to those folks for them not to get caught up in this litigation. And so our concept was we would fund the litigation trust with some money. And this is even before this discovery process where we understood the facts of this case, right?

We see our asset value going away and we say, what is the constructive response to balance stakeholder interest in this state? So what we said was the Gucks. shouldn't be, shouldn't lose value as a result of this process. So we said we will hold the Gucks claims in abeyance and ensure that that value is there for them in any circumstance and will put in $3 million of seed money for a litigation trust. No one asked us to do that. The directors have not exercised any fiduciary out in response to that.

But they haven't said what's wrong. They haven't said what they would need to do that. They just left us to guess at what that might be. And the answer is nothing will ever satisfy them because it will get in the way of the preordained outcome. I'm not going to go over the next few slides. We put them in there for your honor to align what I've given you to the... It's just like my old mentor said.

First you tell them what you're going to tell them, then you tell them and then you told them what you told them. Exactly. This is the told of what you told them. Exactly. Except one thing. I'd like to focus on the highlighted portion at the bottom. Even if this litigation were complex and even if it would last a long time, the reason that those factors don't matter in this case is that even if those factors apply, by

bringing this litigation, it will preserve at least a possibility of recovery, which has been taken away by the settlement by Mr. Meltzer's own admission. And we know that this was one of the factors that Mr. Keglevick said. On the one hand he says, we wanted a fast and final resolution, and he can still get that fast and final resolution, Your Honor. If you don't confirm this plan, I guarantee you that there will be a fast and final resolution. Litigation of that category will benefit no one other than us because at least we have the possibility of getting something. But there's downside in litigation for all of us and we're not saying anything to the contrary. No one is saying on our side we're definitely going to win this litigation.

We think we will, but that's just not what litigation is. Litigation is risky, but that risk has been used against us by every party, including our own fiduciary. So then we get into, okay, so then we get into the confirmation 1129 standards. And I want to highlight this again because it still has not been addressed, and I want to make sure you understand it. So we have a $400 million allowed intercompany settlement. Number one, that claim is not getting $400 million. It's getting what they claim is $187 million of cash. and they're also getting 62% or 62% equity stake in Cornerstone, valued it between $35 and $135 million.

So we don't necessarily agree with this math, but by the debtor's on math, they're getting $271 million, significantly less than the value of the claim. So the testimony is unequivocal. The QVC Inc. is getting Cornerstone. We own Cornerstone today. I have a comic strip that I used to love called Calvin and Hobbs. And Calvin and Hobbs used to go into this box called the transmogrifier. They'd go into the box, and they'd go into that box, and they'd become anything they wanted.

And looking at each other, they looked like what they wanted to come into in the transmogrification machine, but everyone else still saw them as Calvin and Hobbs. Okay. What's happening here is really no different. They're getting cornerstone in the settlement. The plan says, the plan treatment says, and here it is on the screen, they're not getting cornerstone. They're not getting cornerstone in the plan, right?

Under the treatment of the claim, they're getting distributable cash. Where is it? I don't see it there. Where is it going? How is it getting there? What is the 1129 factor that allows them to transfer this? It's a mystery. It's a complete mystery.

It's being transmogrified. But what we have here is in this restructuring steps plan. This was filed in a plan supplement on May 12th of 2026. And it goes through a bunch of convoluted steps, which we will put on the screen for your honor. There are step one transfer, and then there's a step two transfer, and then there's a step three transfer. Obviously they're jumping through hula hoops to get it where it's supposed to go, ultimately and the QVC group.

So how is this happening? How are they satisfying 1129 to do this? I mentioned to your honor that this was a gating issue. When was the last time your honor saw assets being transferred pursuant to a plan of reorganization without being run through the waterfall without being part of the plan treatment? You can't do it. You can't do it. And they're doing it.

And even though they're not saying it's the plan treatment, it's the settlement of the intercompany claim, and that's the only way it lands at the QVC inkbox. Now, you heard counsel talk about their theory, this 1123A4 theory, that there's some kind of a blanket rule of unimperiment, that any settlement in bankruptcy, once you agree to a settlement under 2019, and the plan gives you that treatment, you're by definition unimpaired, you don't to vote. That theory doesn't hold up. It doesn't hold up even under this plan because they did the exact same thing under the RSA, which I'll get to in a moment. But let's get to their case law

first. Mr. Sussberg talked about container store. He said container store, game set and match for us under 1129. But container store talked about opt out releases, opt out releases. So the question is whether if you opt out or you don't opt out whether that's some kind of disparate treatment under 1123. It's not, and it's not our case. We have this K-LUNN case, which talks about statutory impairment, treatment of tax claims under 1129A9D. It's impaired by the statute, not the plan. Armstrong. Armstrong.

This is an interesting thing. Armstrong was a contested case. There was an opinion rendered. But the treatment of the EPA under its. settlement was contested by no one. So that has no precedential value. That is dicta. Then we have Brightburn. Brightburn said that all members within the same class got the same treatment, but some within that class can receive less favorable treatment. The settlement claim, the way it's set up, does not satisfy that framework. So then we have

the next case that they've cited, which is Hanish. Or maybe we cited that because it goes against them. So the court rejected this 1123 a 4 standard because it only applies to that last framework where creditors within the same class receive the same treatment and agree to a less favorable treatment and it can't be a basis to justify separate classification of claims. So there's absolutely no precedent for what they're asking, Your Honor, to approve today. Now, how do I know that this is wrong? This is demonstrably wrong because, again, they have set forth contrary treatment within their own plan. We have their RSA. The RSA with the ink creditors. What does that RSA say? This agreement is part of a proposed settlement of matters that could

otherwise be the settlement of litigation among the parties. The disclosure statement says, this plan shall be deemed a motion to approve the good faith, compromise and settlement of all such claims, interests and controversies by and among the debtors, the consenting stakeholders, and each of the agents, trustees, pursuant to bankruptcy rule 1919. So if they're right, if they're right that 2019 is a cure-all for any right to vote on the plan, what are they doing? They're entering into an RSA that impairs that class and requires them to vote yes on the plan. that gets us to exclusivity and the path forward. What do we do in the face of this record?

If Your Honor doesn't confirm this plan, something has to happen. As I've said over and over and over, we are not here to be sports earth litigators. We're here to have a say with the table to get a fair recovery. And my hope would be is an officer of the court that we would negotiate to try to achieve that outcome, to stop further litigation and to achieve a fair recovery.

I don't know if that's going to happen. So what do we do? Do we go back to the table, allow them to negotiate another 1990 with a feckless set of disinterested directors who've already proven that they can't do the job? That's not an alternative. That's a bridge to nowhere. We've moved to terminated exclusivity for our plan. to litigate or settle these cases with an even playing field.

We're willing to provide funding. We are willing to pay for our fair share of the tax insurance. That's fair. That's appropriate. We're not here to hold anybody up. We're here for a fair and equitable outcome, which is exactly what bankruptcy rule 2019 requires. Now, they have told you over and over and over that they need to confirm a plan, jobs were at risk, this is a holistic global settlement,

and they might be right about that. But our part of this plan has nothing to do with that. Our part of this plan is to give them a bunch of cash, a bunch of assets, so they can walk away with more. They don't need it to confirm the plan. They're using it as a pretext, once again, to achieve the preordained outcome, which Mr. Baker said in July of 2025 was their objective, which is to take our money away. So this is their choice. This is their choice. They have set the ground rules, but you're here, you're the guardian of this dispute. They can't override your responsibility to enforce the statutory

requirements for confirmation of a plan for approval of a Rule 199 settlement. and they are free to confirm that plan. They are free to reserve their rights on that, and they can go forward if they want to. And if those jobs and those billions of dollars of assets are so sacrosanct to them, that's exactly what they're going to do. I'd like to conclude with this. We've explained very clearly why this Rule 199 settlement

does not satisfy governing law. But putting aside that fact, his settlement is wrong. Every stakeholder in this case knows this. But the ink stakeholders know that they'll profit from this. So they're willing to take their shot today before this court to see if they can take those assets and to exploit our debtor in the process. All we ask, Your Honor, is to please give us a seat of the table. This is a travesty of justice.

This is not what this court is for. This court is here to determine what is for. fair and equitable to do what's right. We plead with you to reject the settlement and to terminate exclusivity because it's the right thing to do. Thank you. Thank you. Ms. Whitworth? Good afternoon, Judge Pettis, Janow Whitworth for the U.S. Trustee.

Judge, I won't take up a lot of time today. As I previewed, gosh, August it was last week in openings, the U.S. trustee, we filed our objection to confirmation at Document 291. We have worked with debtor to resolve all the issues except for the third-party releases. Specifically, the U.S. trustee objects to the use of the opt-out procedure to infer consent. As you know, Judge, this issue is on appeal and the Fifth Circuit. So at this point in time, I'm just going to rest on the pleadings, the briefing that we filed and that the debtors have filed, and we don't have anything else to add, Judge. So just to be clear, the classes that are not receiving,

any distribution or opt-in. Right. Unsecured, general unsecured creditors and priority claimants are getting paid in full, right? They are, Judge. And so there's three classes that are impaired under the plans, which are the RFC, the QBC notes, and Linta, and those have all, have all signed on to the plan. So is there somebody else that the U.S. trustee is, or is it just the concept? It's just the concept, Judge. All right, because it doesn't seem that there's any real person that would fall in a category of somebody who is impaired and hasn't signed on.

That's true, Judge, but then as far as a concept is concerned, there's, even if they vote to accept the plan they were forced to opt out they don't have the opportunity to opt out no they're they can opt out they can't they can but if they don't opt out then that they are waiving those third party claims correct but they're but they've accepted the plan with the you know they've accepted the treatment that includes an opt-out so okay thank you all right thank you all right Mr. McCain, do you want to recess or do you? Your Honor, I would normally come running up here and just do my rebuttal.

I have been asked to confer with my colleagues, which of course I love doing. You good? I got a green light. Let's go. Unless you want to break, Your Honor. No, no, no. I wanted to go through lunch. Fantastic.

I don't want to mess with your technology. And to these, I mean, since Mr. uh, Glenn has the burden on exclusivity. I will let him have a final rebuttal only on exclusivity. So I don't know if you're going to touch that, but I'm going to, I give him a final rebuttal on that. I'll tell you. That's totally fair.

Your honor. I totally appreciate the procedure. Um, not going to go there. Um, your honor, I'm going to do, I'm going to rebut, uh, what Mr. Glenn said in many ways in the manner, in the order in which it came. I just think that's easiest. So, you know, this is not really an order of importance by any stretch of the imagination. Let's just start with the testimony from Mr. Wofford with regards to the dividend claims

and whether he got a solvency opinion. The fact that he believes they're in good faith, totally fair, but that doesn't mean they're right or that they're complete in any way. It's an objective standard that we all know is true. Turning to the trading prices. I'll be absolutely clear. This is page 11 where they introduced the short-term printing notes. When Evercore provided the indicative bond pricing and was presented, and that information was presented

to the dissenture directors, the Evercore poll did not include every tranche of notes. Didn't include everyone. This is on, so we're looking at page 11. It didn't include two tranches of very short-term notes and it didn't include two tranches of very long data notes ending in 24. and 267. What they've put forward

here is really just kind of a it's a demonstrified version of what they offered is PX 374. We responded, when we saw it, with Debtors Exhibit 507.

And the purpose of 507, if you look, is they cut the trading off on these notes on January 14th of 23. Now, the issue with this presentation, Your Honor,

is that these short-term notes were trading below par with yields of approximately 9 to 12% in December, right? They cut off the bond prices then. What Your Honor, it doesn't see and what you will see if you take the time and are so interested is to go to debtor's exhibit 507 is at the end of March of 23, when the fiscal year 10K for 22 came out and was released, right? That's the end of March 331. the prices on the 24 and 25 QVCI notes crashed, and the yields increased over 35%.

That's what the evidence shows. And so when you're doing a solvency opinion and you're trying to be objective as to what the company was looking like in 2024, I'm not saying this is gospel, but the trading prices certainly indicate that when the world found out about how QVCI was performing, as of the end of that year, after the horrific first half of the year that FTI highlighted, The notes crashed so that the yields are trading at over 35 percent. That's distressed territory. Now, if we transition over to the suggestion about the should opinion and what we can infer, if anything, from some of the testimony about the should opinion.

I have to start on page 17, and this is page 17 of the rebuttal. This is just pure error correction. When they say Mr. Keglevick confirmed that Kirkland issued a should opinion, that's wrong. He corrected that testimony on redirect. It's on page 60, lines 22 to 25. And the question was there was a reference to an opinion. Is that an official tax opinion? The answer was no.

There was no formal tax opinion issued by Kirkland. That's just demonstrably true. Your Honor has it under seal. Now, as to the broader issue of how do you place, value on these opinions and on these should opinions, I think what we've heard, and this really goes to, I think, slides 19, and I'm going to come back to 18 in a second, the idea that you could equate the risk profile on the insurance to the premium paid. One, that's absolutely tax testimony. How do you evaluate the market? What is the market? We had their, we had their

our tax director testify it. We had Mr. Woffer testify it because he engaged in the negotiations with the broker. I don't think an opinion from 70 years ago about pricing bears any much on the market. My birthday. Yeah. It wasn't a good, it was a great year for some things. But, you know, but I, we, 71. I don't think Mr. Greta's testimony on on how to price insurance markets.

What could have happened? Their tax expert, Mr. Drago, sat right over there in the back right corner on Tuesday. They could have called him. And we could have had this discussion because we had it in this deposition. Now, this suggestion that the hypothetical tax indemnification claims are weak. I need to address this just for my bankruptcy friends, right? They flag on slide 18 that under 502 E1B that this could be disallowed. bankruptcy friends say but C 509 which gives sub suburbation the word subrogation

claims as a backup so I don't think that gets them very far if at all and what they ignore is the tax man has a direct claim right the IRS and every other taxing authority can come at from joint and several irrespective of the indemnification claim as well as to the assessment of probabilities I want to address this a couple of different ways. But on slide 21, they take on the fact that he didn't come down to an explicit percentage. Frankly, Your Honor, that evaluation of the probabilities of success is ultimately the court's job. That's your responsibility. Their job is to be informed and engage and negotiated at arm's length, which they did. I think you also heard from the testimony from Mr. Meltzer

earlier, and you have the ability to evaluate his credibility over five hours, right? I think you also heard, and it's in our slide deck on page 60, that he did evaluate the strengths and the weaknesses of the claim, that he did engage counsel and discuss on those issues. So what are we left with? We're left with a false standard about what you need an artificial mathematical precision to negotiate and sell of claims. That's not the law. Turning to the process, I think we have to step back. The suggestion that the debtors and the creditors were talking while the distance the directors were evaluating and somehow it was pre-baked or predestined. You've seen the evidence.

You've seen the carve-out and the protection saying we are not just taking a position on the inner company issues. Ultimately, that is for the directors to do their work. And you saw that process. The fact that the, you know, like, in many ways what Mr. Glenn says both things, right? When it serves his case, he says, aha, look, the debtors and creditors. are talking about a whole list restructuring when the direct when they should you know when the directors are doing doing their job that's wrong but then when you talk to

the directors you have to engage with the creditors it's both right to get a comprehensive deal done right you have to deal with all of the debt and all the intercompany issues you want the debtors engaging with their creditors recognizing they can't dictator control where they've given a full delegation authority to the decision directors and you want the directors engaging amongst themselves and checking with their credit contingencies when you can find them. Right?

That's the biggest problem with the preff. They were so disparate. No one materialized. You don't think Hulahan Loki was trying in the fall of 25 to find a group? Of course they were. That's how they make money. Now, I have to do this for our colleagues at Cobrey and Kim, but it's also accurate and true. On page 29, this, this, this,

this criticism and critique of the COBRA and Kim presentation that somehow they were predestining, that the preferred were only getting a release. I mean, all of us have worked with individuals going into a negotiation. What do you have after four months of diligence and efforts knowing they're about to go into a meeting the next day, they're having a bring down and they're updating their clients about what they think, you know, the lay of the land might be at ultimately the negotiations. managing expectations that it's going to be really hard to get $25 million of additional money in light of everything that's going on. That's nothing. I encourage you, Your Honor,

to look at the entire deck and you'll see it exactly for what it is. It's what you would expect, a good law firm to do, to prepare their clients, and to manage their expectations about what the negotiations may or may not be after discussing the strengths and weaknesses of the claims, which is what they did. You know, when we get to our own, around like page 33 with the no arms length negotiations, we get to, we get to a discussion here of like we get, again, the capitulation, how many different times you hear that term. What we really are seeing here is just a myopic focus on the litigation on the dividend claims without a recognition of the other components of the deal, without the value that's

being granted for the releases, not just of the PREF, but for the tax liabilities as well. And it's also, I don't know at some point, Mr. Glenn's view is you have to push away even when there are non-starters, absolute non-starters. And it wasn't a surprise to anyone that trying to get an additional $25 million distribution to the PEP was an absolute non-starter. And that's, you know, where we start seeing kind of like the creation of an artificial expectation of what is necessary to negotiate a claim. you see it again on slide 41, where you didn't have a banker or a financial advisor, you didn't hire the solvency experts. We talked about that earlier today. Like, they want to bring the full litigation on.

You know, can you be informed enough to do so? Absolutely. And that's what we saw. They even criticized them for not bringing the tax advisor that they retained. Apparently, you have to be in the room. You can't be available by phone or other means of communication to get some input in terms of these settlement. negotiations. The other, the other I just, again, it's just record correction is on page 43.

Here, Mr. Glenn basically suggests there was no investigation of the claims against the directors and officers. You heard the testimony. I heard the testimony. Mr. Melzer was unequivocal about this. They absolutely looked at those claims. You know, the issue when they filed the statements, we knew that pref had already, they had already appeared in the case. And Each of the decision directors filed a statement in support of the intercompany settlement. It was all of them did it. All four groups statements in support of the intercompany settlements. Didn't mean they support they didn't support the other aspects of the plan. They did the scope of the investigation. You heard Mr. Meltzer say there were no guardrails.

There were no limits on what they do. Of course they looked at the decennial claims and there's testimony on it and the scope of the documents and you know covered it. When we get to slide 49 and Mr. Glenn starts talking about $220,000 of third-party claims, obviously that's of the date he chooses, which is June 1. Why? All trade order. Right? We're already paying down claims, you know, as the company's operating, so the size of the claims,

you know, is reduced. But what we really have to take issue with is this suggestion, and it came up both in the opening and in the objections. now here at closing that somehow everybody but the general insured creditors are unaffected by this deal and we know that's not true that the deferred tax liability is an administrative claim right absent a resolution of those issues at topco where they have no exposure on a go-forward basis i don't know how anyone any trustee right or any fiduciary could agree to release preferred tax claims, general unsecured claims, or otherwise.

You have to look at all of the potential claims that are at issue, and they are affected because of the tax liability. They just want to say that the tax liability is a fiction and that we made it up. I don't know how it's been on our, it's been on the 10K for Topco for years. It's a billion dollar liability. You've got professionals from PWC and Kirkland and other firms evaluating it, and it's a risk. it is a material risk. It's a one in three, one and four type chance. And you go back to the risk disclosure.

What does it say? There are no cases and no guidance on these issues. It's not a fiction. It's not made up. It's material risk. Now, I don't, I respect Mr. Glenn, and I'll just say it this way. on the 1990 settlement, we're asking you to rule in the merits.

I think he is too. At times, he suggests deny the plan. Deny the plan so they can force us in our room. Why? Not because they actually want to litigate this to the merits, but to buy us off. That's the suggestion. I don't think he means it.

I think he wants you to rule in the merits. We want you to rule in the merits, Your Honor. Now, as to some of the more code-related arguments, on slide 67 the suggestion that the plan is unconfirmable. I know this is Mr. Hoostick's notes because what I recognize his handwriting and he's the only, I don't

think a partner would say nonsense. But he does. He says absolute nonsense. Why? Because we could put them in the same class. And that's absolutely true. That is one of the easiest fixes that is possible. I believe I might

have skipped over something, Your Honor. Oh, as to the restructuring step plan, complicated, stipulated, Your Honor. It's your restructuring step plan designed by folks, including professionals, to make certain that we don't have a foot fault with regards to the transfer of assets and thereby unnecessarily trigger taxing issues. Nothing more than that. There's nothing hidden or untoward there.

It's been in the plan support agreement for over a month. And so, Your Honor, what does this really come down to? You know, candidly, we've heard nothing new. I think we addressed almost every aspect of what Mr. Glenn was going to say in our opening presentation. The debtors have undeniably carried their burden on 2019. We've carried the burden on confirmation. Plaintiffs haven't come close to their meeting their burden on terminating exclusivity and moving forward on an incomplete plan. And with that, we ask that you confirm the plan.

Thank you, Your Honor. Thank you. I don't think you really said anything on exclusivity. Even if you did, I don't think I would respond to anybody. You heard it all. All right, anyone else wish to be heard? All right, thank you very much. I will try to issue an opinion as soon as possible.

To the extent that I have questions, I may call a status conference, but there's a lot of evidence to parse, and we will, I'll get to that right away. So thank you. I'll take it under advisement. Thank you, I'm here. Thank you.