American court hearing recordings and interviews - QVC Group - Listen to the bankruptcy hearing held June 8, 2026 starting 11:57 am

Episode Date: June 10, 2026

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All right. Good morning. We're back on the record in case number 26-90447. You may proceed to counsel. Thank you, Your Honor, again, for the record, Robert Smith, on behalf of the disinterested directors of QVC Inc. Mr. Keglevick, you were shown an exhibit, I believe it was at tab 1 of your binder. It's marks JX33. Can we please bring that up, Mr. Lopez? Do you recall being shown this document? Yes. And if you turn to page two of the. document, do you recall being shown the executive summary on this document? Yes.

And if you fast forward further on page 12, can you go to page 12, it ends in Bates number 1850, should say tax issues. And if we go one page further, there should be a chart. I believe you testified earlier that a lot of the discussion around tax at this point time focused on insurance. Is my understanding correct? Yes. And nonetheless, during your discussions, there was there was discussion in this presentation about potentially deferred tax liabilities, the QVC Inc. would ultimately owe, correct?

Yes. If we fast forward then to what I believe is tab 3, which is the demand letter that you sent or that you authorized your counsel to send that's JX05. And if you could pull up the first page of the letter, Mr. Lopez, you recall being asked about this demand letter, correct? Yes. And I just want to point your attention to the very top of page three of this letter. Can you read the first line of this letter into the record, please?

The company is tax advisor. A advised company could incurrupted $2 billion to deferred tax liability. relating to Linta's outstanding exchangeable notes that deferred tax liability. So consistent with your testimony earlier on direct, you were asserting through counsel claims of up to $2 billion in tax liability, correct? Correct. And the page you pointed to me on Exhibit 1 also shows the excess tax payment calculation that I mentioned was $500 million roughly. Difference between what we paid and what ultimately they paid to the IRS. Now, Mr. Friedman asked you, we can take that one down. And if you could pull up pages 166 and 167 and Mr. Keglevick's deposition transcript,

you were asked a series of questions about math, as I understood it during your deposition, between $400 million and $780 million. Do you recall that? Yes. And do you recall Mr. Freeman asking you today about value as it relates to $400 million and $780 million? Yes. Did you factor recovery into the offers or the initial demands that you made of Topco and Linta?

Yes. And how did you do that? I'm looking at the available funds and who I'd have to share those funds with. So for example, there was no debt at Topco, so nobody to share with. Linta, there was a billion six of debt, so they had a billion six claim on the pool of 70 million to share with. In your mind, is comparing 400 million to 780 million versus your factoring into recovery, is that an apples to apples comparison?

Well, they're both claims, and they have a certain dollar relationship to each other, but they're not indicative of the amounts we would receive in settlement of those claims. And you are asked about taking all of Topco's money as part of the negotiated settlement. Do you recall that? Yes. What does the plan provide for general unsecured claims and admin fees at TopCo? They would be paid before the amounts were distributed, which is, I think, included in our term sheet. And so did you, in fact, take all of the cash that was available up at Topco as part of your

No, they were able to pay their unsecured creditors. Okay, let's talk about a world in which there are no releases. Can QVC Inc. emerge from bankruptcy and pursue claims against Topco and the preferreds if there is no settlement? Yes, that's my understanding. Can QVC group emerge from bankruptcy while your claims against it are pending? No. Not my understanding. My understanding is they cannot emerge from bankruptcy while the claims are pending.

And by agreeing to release or essentially by agreeing to release the indemnity of Topco, are you taking on risk as it relates to taxes on a go forward basis? Yes, known and unknown issues. So if there is litigation and even if top, CO were to prevail on the dividend claims we had been discussing, there would still be risk that Topco would have to QVC Inc. on the tax indemnity claims, correct? Yeah, there's risk and the cost of insurance that reduces their risk. Well, let's talk about that.

Even with insurance, what is the total size of the tax exposure that Topco would potentially have to QVC Inc? there is no settlement and release. $600,800 million was the demonstrative of Mr. Karns, but does not include the potential change of ownership and loss of interest rate, interest expense carry for us, which would increase those amounts. And would all of those issues have to be resolved before there could be any distribution at Topco? Yes.

All the claims would need to be resolved. before there's any distribution. Do you have any idea or an understanding as to how long it would take to resolve the tax issues at Topco before a distribution could be made? No, Mr. Kern's demonstrative had a three-year period and a six-year period. There's statute of limitations and then litigation and that would result after that. So I think he testified somewhere in that period of time would be right. And that seemed reasonable to me as well.

And in your experience of serving as a disinterested director, is it possible for a settlement to be fair and reasonable to both parties to a negotiated resolution? Yes. Nothing further. Anything? Nothing further, Your Honor. All right, thank you. All right, so it's five minutes after 12.

Why don't we come back at 1 o'clock? Does that make sense? Your excuse, Mr. Kelly. That's what I was. Thank you. Yes, exactly. Always important to release Mr. Kekovic. Yeah.

Your Honor, I appreciate coming back at one. Are the second witness of the day, Mr. Meltzer, I can assure you, Mr. Glenn is going to say, we'll take the remainder of the day. He does need to be out of back on his way to New York tonight due to other matters, personal and professional. Could we start earlier? Could we start at 12, 1230, 1245? and we have same word to be you're doing it for your benefit so 1230 is fine that's great your honor

1245 okay and you promise to get them out today and i say that actually because having heard that last examination i actually can compress my my examination okay all right let's let's go back 1245 and no breaks thank you your honor all right all right