American court hearing recordings and interviews - QVC Group - Listen to the bankruptcy hearing held May 1, 2026 #QVC #HSN

Episode Date: May 4, 2026

What does this hearing sound like to you? If I was doing business with QVC, like a supplier, let's say, I might be worried because the case was supposed to be a quick in and out of bankruptcy court to shave off debt.I am not a supplier. I am a lawyer but not one practicing in Houston from out of state on the phone, like the lawyers on the call. My legal practice in New York years ago entailed making court appearances in person and doing trial work. My practice predated the telephone lawyer on the phone with the judge in a jurisdiction where I am not admitted thing. Which is to say I am not part of this scene whereby New York lawyers are yelling on the phone to a judge in Houston.To me it sounds like the lawyer arguing to the judge is trying to get his firm paid out of the bankruptcy estate and make sure other professionals at other firms aren't hired and paid. To save money. So then did his law firm bill for the "work" and the "emergency" court papers fighting the other lawyers' billing?If there were lawyers in Sodom and Gomorrah they would make arguments like this lawyer in the opening of the hearing speaks. And he cites Google, lol, charging how much per hour??? Maybe he should at least quote Claude or the Judge should tell him to shut up or address the court per the applicable rules for making a presentation and including factual assertions.

Your Honor? Yes, I can hear you. Thank you. Joshua Susberg from Kirkland and Ellis on behalf of the debtors. Thank you for entertaining our request for a status conference, and also thank you for allowing us to do this hybrid. I think it's going to go to saving the estate expenses and administrative burn, which will be thematic of some of the things I wanted to comment on.

And this is just a status conference, so I'll note that at the outset. And we're here on Mr. Brody's motion that was filed at docket 133. There was a joinder filed by Mr. Glenn at docket 156. And then Mr. Stark filed a motion a couple hours ago at docket 169, all of which seek to appoint or consent to a committee of equity holders, whether it's preferred or common. Your Honor, Mr. Mr. Mr. Mr. Mr. H. Hold on just a second.

Let me just call the docket. So this is case number 26-90447 QVC group. And it's Friday, May 1st, 2026. Let me just get appearances, and then I'll let you proceed, Mr. Susberg. Mr. Vody. Good afternoon, Your Honor. Josh Brody from Cleary-Dowley on behalf of certain preferred equity holders here with my partners, David Botter and Luke Barefoot.

And our local council, Margie Vina. from the moment cool sniff all right mr stark good morning your honor can hear me okay i can hear you fine thank you it's robert sarah from brown wedneck appearing on behalf of other shareholders we did file a broad reach a motion i don't believe you're honest have an opportunity but hopefully we'll hear from this today all right yes you can do miss woodworth good afternoon judge peddust good to see jennie wetworth's the u s trustee all right mr glenn Well, I don't, you need to hit five star. I think you're, you're muted.

All right. Go ahead. Thank you, Your Honor. Thank you. Andrew Glenn, Glenn, Ager, Bergman, and Plentes, on behalf of an ad hoc committee of preferred shareholders joining Mr. Vody's motion. All right. Is anyone else wish to be heard hit five star one time?

All right, Mr. Sussper, go ahead. Thank you, Your Honor. For the record, Joshua Sussler, Kirkland Ellis. on behalf of debtors. I said it the first day hearing, Your Honor, that we synthesize and emphasize with preferred and common equity holders in these cases because of the economic reality of these cases. And that was true. But with the benefit of a little research on Google, I'm going to make clear that that is not

the case as it relates to Mr. Brody's three clients or Mr. Glenn's clients. And I'm in the process that I'll spend the weekend looking through Google searches. with respect to Mr. Stark's clients. And I'll explain that in a second because I think it's important context. And none of this is personal, Your Honor, this is all business. I go back two decades with Mr. Brody, Mr. Shark, and Mr. Glenn. They are zealous advocates. They are some of the best around in the business from highly sophisticated law firms,

and I consider them friends outside of the office. We have our disagreements. Mr. Brody used to assign me first-day pleadings in the Pormelot milk dairy company back in 2003, and I happily did them. But today's about an issue that I think is really important. And that is, this is solely one issue, and it's about risk and fee sharing. That's it. And I want to explain why.

Every single day, at least from a debtor standpoint, restructuring professionals here over and over again, how expensive Chapter 11 is, and why it's become impediment to actually appropriately reorganizing companies. And it is difficult to stand in front of that and explain over and over again. But one of the reasons why are the various motions that have been filed on an emergency basis in this case. We did not ask for a preferred equity committee. We did not ask for a common holder equity committee. In fact, we were explicit with our stakeholders. I remember sitting in a meeting in November of 25 with the major stakeholders in this case. And I said, we want to do this efficiently

and effectively to keep costs down. We need to deliver significant, significant indebtedness and allow this company to move forward in a new age with streaming and TikTok and the like, all of which Your Honor heard about. And we didn't want this to be a professional food frenzy. So we're standing in opposition to these various motions for that very reason.

But again, we're here on a status conference. But I want to unpack for your honor to give you some contacts for scheduling purposes as to who we're dealing with. and what we're actually dealing with as far as these movements. And I say this with all due respect to the movements. I have no issues with them being opportunistic investors, which is what they describe themselves as.

Everyone's entitled to make a living, and that's all fine and good. Just a question of whether we should pay for the benefit of seeing their bet through. And I personally think their bet is wrong, and we're going to have a moment in time where we have that adjudicated before Your Honor, and it's a question of whether it happens in the context of these motions or at confirmation. But either way, we need to do it the right way, and I want to explain why. Because what we have right now, Your Honor, is tantamount to someone placing a bet on a UFC

fight at Caesar's Palace and then calling Caesar's Palace and saying, you know what, I want you to pay for my hotel, my flight, my meals, whatever entertainment I may like to see. So I have the benefit of going to the UFC fight and seeing if my bet turns out to be. appropriate. And so to unpack that, and again, AI is not necessary. This was just Google. Okay, Mr. Brody's largest client is Cygnus Capital. Its own website says, and I quote, it is an alternative asset manager focused on investing in distress, special situations, and opportunistic private and publicly listed debt and equity securities. Now, we now know from footnote four in Mr. Brody's pleading that Cygnus was one of the original

holders of the preferred in his group when he reached out to us in late February. Believe it was February 27, 2026. And at that time, Mr. Brody indicated that he represented one to two preff holders that held approximately 1 to 2 percent of the preferred. And that tracks with the information we have, Your Honor, because the last report we ran on preferred holders suggested that Cigness Capital held 1% of the press back in late 2025. So what does that mean, Your Honor? That means between February 27th and May 1st, probably before that because Mr. Brody filed his 2019

a week ago, Cygnus has tripled its bet, and they now hold 9% of the preferred. The other members of Mr. Brody's group, Mr. Pullman and Mr. Barnes, I saw their submissions to the United States trustee. Mr. Pullman said on April 21st that he is an investor in New York with decades of experience in bankruptcy, the stress investing, and is available at any time to talk to somebody. Mr. Farns, likewise, has served on multiple committees, and he has an investment banking and asset management backgrounds. That was in correspondence to the trustee. As for Mr. Glenn's clients, and again, Mr. Glenn filed a joinder.

One client, Mr. Kenneth Grossman, and again, this is Mr. Grossman's bio I found personally on Google. Mr. Grossman is the president and director of signature group holding. That's an entity, interestingly, that emerged from bankruptcy in 2011 and has over $100 million of cash and tangible tax assets to its benefit. Mr. Grossman served at a $3 billion hedge fund where he was in charge of a $300 million distressed credit arm. And interestingly enough, Mr. Grossman is a prior bankruptcy attorney and specialized in creditors' rights in his prior life. As for Mr. Guy, Mr. Glenn's other client, I wasn't able to find as much on Google, but I did find a Reddit chat room where someone identified Mr. Gee and said, I quote, he buys a certain number of shares when a Chapter 11 file and the stock drops

and then he works to profit in some way. So why did we request the status conference, Your Honor? I think it's simple. Mr. Brody's motion attaches no declarations and submits no evidence. It simply says the holding company has $192 million of cash as of the petition date and a 62% interest in cornerstone. Now, they filed that motion, and Your Honor knows they bear the burden of proof and evidence to demonstrate that they satisfy the standards. But instead, what they're trying to use is the absence of evidence to have a committee appointed. Now, the standard here, Your Honor knows well as two prong, right?

prong number one, are we going to be able to demonstrate Mr. Brody, Mr. Stark, Mr. Glenn, that there's a meaningful distribution available for preferred and equity holders? And number two, the court gets to consider various other factors, including whether the parties are adequately represented. And I'm going to get to that in a second. But as to the first prong, and the reason for the status conference is one of scheduling. Because for purposes of the motion to appoint an official committee, if we're going to do it in the context of their motion and not a confirmation, we need to do it right.

And we need to submit evidence supporting the $400 million intercompany claim. And from our perspective, this is going to involve four to five witnesses, Your Honor, because we are going to speak to the billions of dollars that went one way, from Operating Co Inc. up to the holding company. Just as a pure example, in 2023, 343 million. dollars of dividends went up to the holding company. That's not to mention more than $500 million that has gone up over the last several years for tax sharing payments and that are over the tax amount that was due. And that's because the debtors would estimate the tax liability,

send the money upstairs, and they pay out the taxes. But if there was money left over, it's sat at the holding company. That's been disclosed for years and years and years. It's in all the documentation, but no one seems to recognize it. And, Your Honor, again, if we're going to hear the merits on a motion to appoint a preferred committee, a common committee, whatever committee they may want, we have to do it the right way with the appropriate evidence. Our view was to do that at confirmation, but we're happy to do it in the context of these motions. And I want to make very clear, we have no issue having that fight, and we'll have that fight any day and time, but we wanted your honor to be aware of what was involved in that fight because it's not as easy as filing an emergency. motion and having it up for Friday or for Tuesday without your honor understanding from the scheduling perspective what is involved. As for adequate representation, Your Honor, other than

first state pleading that we filed at the outset of this case, the vast majority of dockets entries are from preferring common holders. Brown Rudnick, Glenn Agree, Cleary, have multiple lawyers participating in this hearing. Again, these are some of the best law firms in the United States of America and the world. You're some of the best lawyers, have the utmost respect for them. For these folks to argue that people aren't adequately represented is a farce. They are adequately represented. It's just the question of who is going to pay. And, Your Honor, these sophisticated investors that are represented by Mr. Brody and Mr. Glenn, whose motion we're here on for scheduling purposes today, they should have the courage of their convictions.

They should stand behind their bet. I certainly will stand behind ours, and I'm confident that when presented with the appropriate evidence, there is absolutely no recovery whatsoever for preferred and common equity holders. And I'm not standing here to shove that and push that in the space. It's the economic reality of the situation. But they're not without a remedy. Because if I'm wrong, and I'll stand behind our bet, and we set up our governance structure appropriately over the course of the last year, we had independent directors vet all of these transactions, which we're going to talk about, to demonstrate the billions of dollars that went upstairs to the holding company.

But if I'm wrong and we lose, they are not without remedy. They can make a substantial contribution claim. The holding company has $192 million of cash, and I'll be the first one to say, I won't object. I'm a man of my word. I lose a bet. I pay a bet. And I think these holders should do the very same. And so, Your Honor, I think it was important from a status conference perspective just so you understood what was involved if we entertained these motions.

We're happy to do so. We need to have the appropriate time for the appropriate record to be developed on the intercompany settlement. And if it happens at confirmation, we'll do it then. If it happens before, we'll do it at that point in time. But again, it's four to five witnesses and probably a full day. I can't imagine Mr. Brody, Mr. Glenn, or Mr. Stark won't want to depose the witness. that we put up, so that'll get half to take into account. But all of which says, Your Honor, we're prepared to move however the court would like to

proceed, but we oppose, absolutely oppose the appointment of a preferred or common equity committee, and with the appropriate evidence, will demonstrate why neither prong is satisfied, and that, frankly, these holders are way more than adequately represented by the folks on the screen today. All right, Dan, let me first hear from the U.S. trustee, and then I'll go around the room. General, what works to the U.S. trustee? Your Honor, the U.S. trustee doesn't take a position today. As you can imagine, we received multiple numerous requests from various parties, as Mr. Sussler mentioned.

In response to that, we forward it to the debtors council to give them the opportunity to respond. They have provided a response. We spoke with some of the attorneys on the stream to discuss the U.S. Trusted position prior to their filing the motion. Your Honor, we have to process. We have a process that we have to go through to analyze the request. And the timing of attending confirmation just did not provide a specific. time so the motions were filed obviously and at this time your honor the

trustee we don't take a position the fact that a motion has been filed and now it's in your capable hands judge to make a determination and we stand willing and able to do whatever the court orders us to do but we don't take a position because we not really have the opportunity to thoroughly analyze on all of the information that's that's flowed between all a party. Thank you, Judge. All right.

Mr. Brody, I'll go Mr. Boady, Mr. Glenn, and then Mr. Stark.

Thank you, Your Honor. Hope you can hear me okay. I can hear you. Thank you. You know, it's funny. I actually do remember

giving Mr. Sussberg work 20-something years ago. He worked product back then was not bad, but one thing that has definitely gotten better

is he has become way more entertaining. And, you know, I'd like to hear He was entertaining back then. He was entertaining back then. No, fair enough, Your Honor.

But I honestly think if you can imagine such a thing, it's gotten better. I think that's why he has the old Johnny Carson Tonight Show backdrop behind him on the screen. Your Honor, I want to send a couple of spots. I think first, in some respects, which is also the desire to sort of, I don't know, for lack of a better way to say, or after my clients individually, I think highlights exactly what we are talking about here. Because the fact of the matter is,

they are just a couple of a few of the holders. The equity, the preferred equity, which is what I'm speaking for, extremely widely held. I've heard, as you might imagine, from a number of holders, candidly, all over the world. And the fact is that what a couple of holders, and I don't think anything that they've done here is something that is unsurprising or untoward. I'm sure Mr. Sussberg asked the exact same question of when the various lenders in, who are taking the equity or doing, or at the QVC box, when they bought their claims and how much they paid for them.

I think the only, Your Honor, that is really just not relevant. The fact of the matter is that as we stand here today, there is unquestionably significant value sitting up at QDCG at the Holtco. And the only thing that's pulling it away is a intercompany claim that by all accounts was really just created in the last couple of weeks or months based on alleged amounts that directors at other businesses, boxes claim that they have and claims against the holding company. And the fact of the matter is whether or not those claims are valid, as Mr. Sussler said,

that's correct. I think that is a confirmation issue. So it's in front of your honor, what our motion puts in front of your honor is a different standard. It's not about the full viability of those claims as dubious they seem to us. It's about the fact that right now there is a standard that the court, that first looks to in deciding whether or not an equity committee should be appointed. And from your honor's perspective, again, I recognize.

I'm not as Mr. Sufford's, I do agree with him. This is not adhering on the motion. But candidly, I don't think there's any additional evidence that your honor needs. I think it's very straightforward based on the record that the debtors had created with their own public filings. It makes it clear that an equity committee is needed here. And those things are very straightforward. There's no question that there's value at UVCG. That's there.

The claims that they say are alleged are not going to actually be crystallized until your honor actually were a rule on the, on the, on the viability of that settlement, at confirmation. So trying to put that piece now is definitely putting the cart before the horse. And aside from the fact, Your Honor, again, it's absolutely not, I don't think it's debatable, but the need for the preferred folders to have actual representation,

you know, again, I don't assume Your Honor necessarily read the disinterested director of statements that were filed. But it's really interesting. I did read them. I did read them. Okay. Well, then, Your Honor, hopefully,

would notice that every single box that the interested directors managed to have a conversation with their constituents. The only exception is with the interested directors at TVCG, who knew we were around with successful development. He saw our letter, they saw our letter, they couldn't be bothered to talk to any of the preferred holders. So the idea is this adequate representation in the context of creating that settlement, I mean, the answer is that is obviously not.

And so when you start to look at it from that perspective, and then again, I don't want to get into other elements of, the things that a course look to in deciding to appoint an equity committee. But again, at a surface level, like, it's undisputed that the asset value is significant. The cost aspect of it is going to be smaller compared to that of the total asset value. The case is unquestionably complex. I mean, again, the Institute Director's statement making clear they've been looking at these things for months and months and months. And frankly your honor, I'm going to sort of put the marker down now.

I mean, I think the current schedule is completely unnecessary. The RSA does not require confirmation of the plan until I think I do my math correctly around June 30th. And they're trying to have a confirmation forward in about 20 days from now, 75 dates from me. It's just, you know, objection to that I think in less than three weeks. It's just completely unnecessary. We do as fast as we could. Obviously, speaking to me with the stress, and actually, I would like to say, I don't know if I'm going to say it's at the outset, I would like to say thank you to Ms. Whitmore for making time for us last week.

And she was very helpful in the conversation of explaining her process. So we knew that we were going to need to go quickly to file. this motion that we filed on Monday. So in the day, you know, Mr. Sufford is talking very big about having someone else basically bear the burden, but at the end of the day, right now the preferred holders who are very, they're all over the place. They deserve and they are entitled to have an official committee and the estate that has hundreds of millions of dollars in value should be the one that actually bears that burden.

I mean, I got into an argument, because I'm not going to disagree with Mr. Susberg. In some respects, part of this is about cost sharing and having a lot of, level playing field. And it seems currently stand right now, it is not a level playing field. And trying to put the car before the horse and tell the furholders that, hey, you need to basically fight just to get your own shot at having

an official committee. I think, Your Honor, it's totally, it's just a jam job, and I think it's inappropriate. And I get where Mrs. Sussarver who's coming from, and I understand that the lenders who are involved with the QVC inbox really don't want to have to pay for this, but the fact of the matter is right now, for furt holders

do not have adequate representation. You're having to take on just to keep the value that is unquestionably theirs, subject to, again, are there intercompaned claims? I don't know, but the process that seems to have been laid out doesn't seem all that great, and in some respects creates more questions than those answers, and the discovery is going to be not insignificant, and forcing us, and the preferred holders generally, to have to do this on their own when their debtor is unquestionably solvent, it just strikes us as completely inappropriate. I think the schedule needs to be pushed. And I think your honor really should.

Again, I know what I'm arguing the motion, but it kind of lends itself from pushing the request now, Your Honor, that your honor should appoint a direct of the U.S. trustee to appoint an official preferred equity committee. And that I'll kind of see you'll be on the podium, Your Honor. Thank you. All right. Mr. Glenn. Thank you, Your Honor. Andrew Glenn to the record. I don't want to repeat too much of what Mr. Bodie said. I'll try to be brief as well. So we, Mr. and I have done several equity committees and obviously the fundamental question in each of these cases is, is the debtor hopelessly insolvent? And in that context, we litigate or we provide proof of valuation because in most cases, honestly, we know that equity is far out of the money and that's why you put people who file these motions to that test. I think this is unique in that there's absolutely no dispute as to the core asset value that's available at QBCG.

It's cash. It's equity value from one of the subs we believe will flow up. So there's no dispute about the asset value. All we're really talking about here is whether intercompany claims that, as far as I'm concerned or undocumented, disputed and subject to litigation, somehow swamp that value. And there's no case that I'm aware of in this context where a party seeking an official equity committee is put to the proof of disputing claims to get to the asset value that's at that box. We're not talking about funded debt. We're talking about a company that I believe has trade claims in the teens. And the peculiar thing about the situation is that those creditors are being paid, I believe, in full.

And so the value is just breaking to a point where the unsecured creditor are getting recoveries and the preferred shareholders are not. That's a situation that demands an equity committee because there's value there. And the question is who's entitled that value? And in this case, that is subject to litigation, and there is no one there to represent the interests of the preferred shareholders in that fight. We're left with independent directors who will put to negotiate these matters with the view of filing this case. And if that were the standard in every bankruptcy for adequate representation, then there would never be an equity committee because there's always directors. In terms of Mr. Sussberg's concerns about cost, those are valid concerns for valid concerns in every case, but they're also the cost of getting relief from this court. And while Mr. Sussberg's offer, I believe, is a good strategic one from his perspective,

at the end of the day, costs can be contained by budgets. There's been ample cases where judges in this position have set budgets. Obviously, if the case equity prevails, and that budget would not be sacrosancts, but that's how you can deal with that issue. And there's no guarantee that any of us are going to be here. My clients have a relatively small stake in this, and we really need someone who's going to represent and negotiate, hopefully, with the company on a collective basis for the benefit of all preferred stakeholders. If the three of us litigate this, and the three of us might have very, very different views, I think if there's going to be a subsequent settlement, it will be value added to have an official equity, committee with fiduciary duties that can put its stamp of approval on that settlement.

With that, I thank you, Your Honor, for your indulgence, and I will cede the podium. Thank you. Mr. Stark? Thank you, Your Honor. Can you hear me okay? I can hear you fine. I thought we were here for a status conference. I thought we were here to talk about when the next hearing was going to be.

But if you allow me, Your Honor, I'm... I have some things to say. And some of it's going to overlap with Mr. Brody and Mr. Glenn's presentation. So, but I'm going to extemporate because I thought we were going to have scheduling discussions today. So forgive me a little bit. I have to start doing something that I don't really like to do. I have, Mr. Susberg and I have done many very interesting cases together over a number of years. And I have a lot of affection for him.

and we fight like dogs, we have drinks afterwards. And so I expect a presentation, as Mr. Brody did, like the one that we received at status comments. What I don't expect, and I hope that your honor has the same reaction that I do, is that homin attacks against movements. And I'm saying it's not only about my clients, which we just filed a 2019 statement as we're required to,

I guess he hasn't gotten his associates to do the Google searches yet. But that's not right to go after Mr. Brody and Mr. Glenn's client. I know some of those people and they're upstanding human beings and I don't like that very much. Let's say to the merits, if we can, because from all other things, if you want to use the military analogy, screaming like that proves the weakness of the position. It is the faultful whisper that is the strength. And so with that, Your Honor, I'm going to keep my voice low, okay?

and hope that that proves out the accuracy of that old statement. I think you're honest, read all the papers. It's not that hard. You've got a parent company with just a ton of value in no debt. That was disclosed to everyone up to the petition date, and then comes the great reveal that we decided, amongst ourselves, to hand it over to creditors at companies below as debt resides. And we also know that those negotiations were awfully difficult.

They left for the long time. There's lots of parties that were battling, lots of directors, lots of law firms. And now they have to backfill the decision to solve problems by effectively taking that parent company money without any risk told to those shareholders that it would be structurally blended, be removed, sub-com of purposes, structures would not be maintained, and it now has to go to creditors down

below. That's a big issue, right? They've known that's a big issue for a very, very long time. They didn't come into this bankruptcy knowing that stockholders wouldn't show up and say, that ain't really the way our jurisprudence says we're supposed to deal with things.

And that seems an important component of bankruptcy, as I was taught. And so where a value resides in the corporate, structure is sort of obvious. It's conceded by the debtor and all their filing. It's conceded in the first day declaration that's on the docket. We understand it because it's what they told us both pre-petition and now they backfill the quote-unquote 2019 rationale post facto. And that's the issue, right? That's Mr. Glenn is absolutely right. That's the issue. Is that right? Is that wrong? contextualize that issue please allow me on the timeline just so that we have the date

handy the plan objection deadline is May 19th it's May 1st the voting deadline is May 19th it's May 1st they're already soliciting okay the confirmation hearing is May 26th and the effective date is June 8th they are deriving that that part forward. Okay? And this is not driven by liquidity or business necessity. There is no gift or cash collateral order here because the company is sitting on a mountain bottom lumber to cash. Milestones are a creature of financing or are there a creature of some business necessity that's imposed upon the case. Otherwise, are there jurisprudence predominantly straight out of the Fifth Circuit, right, starting with subrosa ideas,

is that we don't do this, but there is no necessity here. They shut up on the first case, the third day of the case, and said, we would like to move this quickly on the procedures, because it's all wrapped up in the bow and we'd like to finish it. Well, look, they didn't tell you, Your Honor, we've got this big issue that now needs to be attending to, and stop there's a saying, not so fast, and they're saying, no, too fast, we have to move fast. Well, car horse, car horse, okay? But we can't go let it.

Neither Mr. Burney, nor Mr. Glenn, nor my client, can wait because we know how this game is played. It's got multiple different attributes to it. If we don't stand up now and say appoint the committee, they're going to say, too late to stop on your rights, you waive the opportunity. We get the joke. We've been down this path before. So because they got their honor to enter an order without the context delivered fully on

the first day, we're now wasting against time to figure this out. Pause for a moment, Your Honor, on the magnitude of the company, the size of it, the issues, the structural issues, 6.5 billion, 14,000 employees, right? Millions of units sold every day. I mean, they telegraph the monstrosity of this bankruptcy case and how it has to be done in the nanosec. Not so quickly business, but because that's what we need and that's what we want. Right? So we're left now saying, oh, you know, we need to pause

and they're going to say too late. But leaving that issue aside and the procedural gamesmanship about that, we actually don't read, I agree with Mr. Brodian, we don't need to wait, right? We all know what the debtor's response is because, among other things, they filed a series of special committee statements. I've been a bankruptcy lawyer for more than 30 years. I've done a lot of equity committees and supported that.

Never once have I seen back, right? Let me tell you, Judge, within 48 hours of Mr. Brody's filing, let me tell you, written by lots of different law firms on behalf of lots of different special directors, nothing to see here, right? And what their argument is, if you distill it down, is we have a special committee that serve as, reliable proxies for an official committee, defer to them. Don't entertain an equity committee because the proxies are sufficient. And the obvious retorts, because again, we're no longer in a status conference, we're arguing merits, is threefold.

It renders 11.02 out of the code if you can so actuate your way out of the official committee status, right? If I just appoint a special committee, then I'll never get an equity committee. committee in any case because Mr. Sussberg will make sure that the special committees do erode that away. Second, it nullifies our jurisprudence, which tell us that we're supposed to have an adversary process. We're not supposed to do ever since Pepper v. Lytton just do whatever the debtor tells the world, right? We need to have a contrarian voice sitting on the other side of the aisle, otherwise we never are assured we're going to get to a fair outcome. right and the third point even the lower 1990 settlement right is not it's a dixit it is not fair and appropriate because mr susberg and the board and the subcommittees that they self-appointed say so

your honest fact-finding and legal determinations are based upon facts and context not because they just say so. So this position that they're advocating is let's not do this because I have special committees. He's a remarkably dangerous precedent violates so much of our law and renders your honor into bureaucratic or percent whatever Mr. Susslerberg tells you. Now here I want to pause just a few more minutes if you don't know hear me out. I think we have to take stock of the infrastructure, the infrastructure. For soundified by Mr. Sussberg today is that's hominem attack, right?

But notice the infrastructure fully, okay? In their backfilling of why this deal, there's nothing for Sopold is because he say so is to fix it. There is this lady don't protest too much componentary that I mentioned about before, never before. I have seen all these special committee files. never have I seen the debtors' counsel get off and literally go at hominem against the people who say, wait a second, maybe this isn't right.

Not with that being victim, and not in succession, language is almost near identical as you go from no bank's filing to impetus filing to patents filing or paragraphs that are listed from each other. They were sitting waiting for this, okay? And this is where we have to hone in specifically on what Mr. Sussberg said and what he's trying to do. We're ready for the trial. We want the trial, right?

Let's have a trial over the underlying merits of whether or not the settlement is there as a conditioned precedent to appointing the Equity Committee. Pause on that for a moment because it blew my mind when he said it. Our statute, our jurisprudence, does not condition

the appointment on proving the negative about the fairness of his settlement, our statute and our jurors' truth says appoint to test the fairness and legal sufficiency of his settlement. But notice further why he's doing it. Kirkland, Davis Polk, no back by tweet, Aiton of Gunn, Catton, Sewerton, Sewerton, staging of special committees, bankers, advisors, of course Mr. Susperd will stand up and say, we have hundreds of millions of unencumbered cash and no limitations on a budget to go smash the smithereens, anybody who dare state that our insidictive contention might, in fact, not be legally appropriate.

So I welcome the trial, says Mr. Susberg. Pony up, you small ponies, because I got a great big horse standing in front of my car, or a great big cart standing in front of your horse, right? I understand the infrastructure and what he's doing because it is absolutely inconsistent with our jurisprudence and how bankruptcy is supposed to work. And again, that is an incredibly dangerous thing, and this and every other case that I'm involved in.

Our jurisprudence recognizes the asymmetry of the power dynamics in Chapter 11 case, and does not hold that the underlying merits of the issue of the conditioned precedent to be pointing in decision, quite the opposite. That, Your Honor, Paul, and Steve, I'm not having any questions from me. No, no questions. All right. Mr. Sussberg? Your Honor, can you hear me okay? I can hear you fine.

I don't want to be too loud to bother Mr. Stark, so I don't want to speak too loudly. Joshua Susberg, behalf of the debtors, Mr. Stark laughs. I actually don't think it's funny the reference to add homin in the tax. I was just literally reading documents that I found on Google to give a court a flavor for the investors and to demonstrate these investors are more than capable of standing behind their bet. And I made the comment that there was no ill intention at all. People are entitled to make a living in distress or otherwise. A lot of people we know do.

It's just a question, and it's demonstrated by the comments made by Mr. Brody, Mr. Glenn, and Mr. Stark. The only question is who's going to pay for it. And that's where I started, and that's where I ended, and that's what this is about. Every single equity committee motion, C&J, Lintech, everything, is done on an evidentiary basis. Just pointing to $192 million of cash and presuming solvency without taking into account the 10Ks that have, filed that noted dividends, distributions, and tax sharing for all of the last several years is inadequate. Doesn't satisfy it. We will demonstrate that.

And again, if your honor wants to do that in the context of these motions, if you're happy to do so, we need to schedule the appropriate time. If you want to do so at confirmation, we're happy to do it then. That was the purpose of this. So thank you, Your Honor, and we're happy to proceed however you would like. Yeah, so I think what I'd like to do is, have you all confer about teeing this up in a motion, seeing how long you need. Obviously, the sooner the better.

If you all are ready to go, I could probably do this a week from today. If you're not ready to go, then we can just find some time, but I could do it. I would have time next Friday. QBC is already coming back at 11. Maybe we could start a little earlier and then take. the other motions and then finish this up. But I'm not, obviously this was a status conference. I think based on the various pleadings, I got a good flavor for what was going to come.

But this has been helpful. And what I don't want to do is have, you know, I don't want to move the confirmation. hearing unless obviously something untoward happens. So I'd like to address this sooner rather than later. Very well, Your Honor. We're happy to confer with Cleary, Glenagree, and Brown Rudnick, three against one here, but they're not adequately represented. We'll confer with them.

We'll get this scheduled. We'll figure out if they want to take depositions, and we'll go from there. Thank you, Your Honor. All right. Thank you. Thank you. Thank you. Thank you.