American court hearing recordings and interviews - QVC Group - Listen to the bankruptcy hearing held May 13, 2026 #QVC #HSN

Episode Date: May 14, 2026

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LG appliances, so much more. Make life easier with LG. See the latest models and savings now at LG.com. Right, good afternoon. It's 2.15 on Wednesday, May 13, 2026. We're here for a status conference and case number 26-90-447 QBC Group Inc. why don't we get appearances of counsel and then we can dive right in good morning good afternoon you're on mark taylor with king russell

uh here along with andrew colan at glen agor and josh proady and david water clear got me from here for the preferred note holders on shareholders i'm getting music oh no i think i'm mute i go ahead go ahead mr taylor thank you honor mark taylor again mark taylor again mark taylor king russell and that was not my music who's that was, along with Andrew Glenn, Glenn Ager, and Joshua Brody and David Bauder

clear got leave here on behalf of the preferred shareholders that have requested the status conference. Your Honor, can you hear me okay? I can hear you fine. Great. Arna Yandamandra together with Mark McPain from First and Ellis on behalf of the debtors. All right. Thank you.

Good afternoon. Your Honor, Brad Sandler, Petulski, Stangzeon, Jones on behalf of the committee. I'm here with my partner, I'll find out of mine. All right. Anyone else wish to make an appearance? All right, Mr. Glenn, are you going to take the lead? I am. I am. Thank you, Your Honor. I can hear you. I can hear you fine. Thank you. Again, Andrew Glenn and I go on behalf of the Committee of Preferred shareholders.

First, thank you very much for granting us this bad as constant. We think it's very important to inform the court about the pending motion to terminate exclusively that we filed. for the QVCG and status of 10 confirmation disputes. By way of background, this is filed on 8-15. Mr. Glenn, just to hold on just a second. I'm going to mute the lines and then have you hit five-star because there are almost 100 people on the line and I'm having a hard time hearing you.

Conference muted. So anyone who wants to have their line hit five-star, please. Thank you, Your Honor. I'll start again, some of you may. Again, Andrew Glenn for the record. Thank you very much for granting us this status conference. I think it's important to inform the court about where we are with the pending motion-determinated exclusivity for the QVCG debtor

and the status of very significant plan confirmation disputes. By way of background, this case was filed on April 6th, 16th, 2026th as a prepackaged plan. The court had scheduled confirmation from May 26th at 9 a.m. We were, as we're on a.m. before, Your Honor, before on a status conference on motions to appoint an equity committee. Mr. Brody and my clients decided to take Mr. Sussberg up on his offer of a substantial contribution claim rather than proceeding with a formal equity committee based on the case status and our client's conviction in this case.

The groups have consolidated and we've organized a very substantial portion of the preferred shareholders in our 2019, including large institutional holders as well. After we decided to proceed as an ad hoc committee, we wish, We issued discovery promptly thereafter to both the company and other case stakeholders. The document production began last week and we received documents literally within the few last few hours. We're told that more coming tomorrow and we don't know when that's going to end. For the confirmation hearing based on discussions that we've had, it appears that between

the debtors and our clients that we're going to have as many as 10 to 12 trial witnesses for the confirmation hearing. And in this case, that's because there are many, many hotly disputed issues which I'll go into. The debtors plan for QVCG, which is the ultimate Topco parent company that has no debt, is very straightforward. It's a liquidating debtor. the plan, nearly all the value of QVCG is being sent to its subsidiary, QBC Inc, to settle

a disputed claim under bankruptcy rule of 2019. Preferred shareholders would receive nothing. All the other stakeholders would receive distributions, and that is a very small amount of trade. We don't know the exact number, but we believe it's in the teams. this intercompany claim that's being settled not by way of motion but under the plan. Now that intercompany claim settlement involves hotly disputed issues concerning unfiled fraudulent convenience claims arising from transfers that occurred as long as four years ago

and potential intercompany tax claims that we believe are meritless and those are not claims that QDC Group owns. I'm sure the debtor disagrees. but we think that's what the evidence is going to show the court. Now, since all that value is being downstream from our debtors, literally every pocket of value in our debtor, we believe the settlement is really a capitulation, not a real compromise as bankruptcy rule in 2019 contemplates.

Since all the value in QVCG will either go to QVC Inc. if the settlement on the table is approved, or that value will flow to the preferred shareholders if the intercompany claims fail. This case really is a battle between the QBC Inc. stakeholders and the QBCG preferred shareholders, our clients. Seeing these facts, our clients determined that they would like to have that litigation prosecuted

rather than settled, and they were prepared to do so at their own expense. There aren't that many changes in what we would propose for a plan because literally it's a tug of war between those two stakeholder groups. We did this because we didn't just want to oppose confirmation, but the clients wanted to offer the court and parties a constructive alternative in J-Safe, and that's why we moved to terminate exclusivity. So instead of settling the litigation as the debtor has proposed and sending all that, value downstream, my clients have offered to provide funding for the litigation to de-wisket for QVC court. So we've not only opposed the debtors plan, but we've tried to propose a constructive alternative.

We thank the court for scheduling the exclusivity hearing on Monday, but given where we are today, we have many practical issues that I wanted to bring to the court's attention that will affect scheduling. We are not going to be able to complete discovery by the hearing on Monday, which begs the question of what is the scope of the exclusivity hearing and what does that mean with respect to confirmation. Now the debtors are trying to make the exclusivity hearing a hearing on the merits of their settlement that they propose and a mini confirmation slash

1919 hearing. They put on the docket, I believe, yesterday or the day before, and notice that they're going to present six witnesses on Monday, you know, on an evidentiary basis. Now, the standard for a motion, as the court will knows, is whether there is cause, not whether the debtors are going to win, not whether the plan is going to be confirmed. We think there is cause in this case, given legal infirmity, with the plan even apart from the 1990 settlement including our belief that is an impaired class at QDCG but there's no voting impaired class that would allow

the plan to be confirmed under 1129 a 10 now we don't want to burden the court with duplicative litigation we're here to be constructive we believe in our cause but we understand that this case is on a very rapid schedule, and it obviously does not make sense to have a mini confirmation hearing on Monday, certainly not when we don't have time to prepare for that adequately. We're certainly ready to present our case, or we're anxious to present our case, I should say,

on why exclusivity should in fact be terminated, but we need more time to finish discovery on the settlement. So if the debtor is going to insist on how, having all these witnesses just to oppose our motion, that it would duplicate the confirmation hearing, and we don't want to do that. So if that is in fact the case, we would ask the court to have our motion heard at confirmation.

If it's a more limited hearing, as we think is required, we can proceed in advance of confirmation. But we also have noted the court's schedule. We think that the confirmation hearing, given the number of witnesses, this is involved, the complexity of the issues, that the trial is going to take as long as a week, give or take. We've reviewed the court's public schedule, and we noted that I believe there's only a few hours on the 26th that have been allotted for the confirmation hearing,

and there's stuff on the calendar later that week. We think it would make sense to have the trial on consecutive days, given the number of witnesses and the complexity. So if the court would want to have that on consecutive days, and we couldn't do that on the 26th, starting on the 26th, we would ask to have the confirmation hearing moved as well, which would allow us to have a more reasonable discovery schedule. Again, we've been at this for days of your honor. They have been preparing for this proceeding since, I believe, as long as February and March. And so clearly there's an asymmetrical situation that is putting us obviously in a very difficult position. We could use that time to have a more reasonable discovery schedule and if people are interested, settlement negotiations or mediation.

Thank you so much for your time and consideration. Again, we're trying to be constructive and I'm happy to answer any questions. Of course. All right. Who's going to take the lead for Kirkland? Your Honor, I'll begin. Can you hear me? Yes, I can.

Again, for the record, Parney and Amandro from Kirkland Ellis on the behalf of the debtors. Your Honor, Mr. Sussberg is traveling or else he would be here virtually. And I am joined by my partner, Mr. Mark McCain. To the extent we need to discuss specific things like hearing dates or discovery and production, I will get kicked under the table. get kicked under the table if I'd play litigator. So that's why Mr. McCain is here to see me in check. Your Honor, we agree with Mr. Glenn that the right place to start is with a little bit of history.

And we obviously have a little bit of a different take on the history and in some sense think this is a deja vu moment. So to just go back for 30 seconds in time on April 27th, the preferred shareholders filed their motion for official committee status. we had a status conference on May 1st where the debtor said that the legal standard for appointing an official committee is a two-prong test, the first of which is whether the move-ins could demonstrate that they were entitled to a meaningful distribution. And to decide the fact that this was move-ins burden and not the debtors, we were prepared

to answer this question. The answer that we would have proven up with evidence is that there's no chance of a meaningful distribution of equity because of the intercompany settlement, and in the absence of the company settlement, would have put on the evidence on the value destructive litigation that would have eroded value for everybody, including but not limited to the shareholders. And so to do so, necessitated putting on evidence in support of the intercompany settlement that is an intricate element of the plan. Having said that at the status on May 1st, three days later, they withdrew their motion.

Four days after it was to withdraw, and now 18 days ahead of plan confirmation, they filed of emotionally-speaking extraordinary and unprecedented release to terminate exclusivity within the first month of a large multi-billion dollar case. And the motion, much like the official committee motion, is an attack on the intercompany. When you buy LG, you get so much more than just an appliance. You get more done, more cost savings,

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Make life easier with LG. See the latest models and savings now at the next. It is right in the section 2B of the motion is quite literally entitled. The debtors have not demonstrated reasonable prospects for filing a confirmable plan, and among other allegations, based that the plan was not filed in good faith and does not satisfy the best interest test. And as the motion professes, as you heard from Mr. Glenn, there is a perspective here that the attack is narrowly focused on QDC groups,

which is neither complex nor tethered to the restructuring of the other debtors. This is also set forth in Section 2C and Section 4 of the motion. And that is simply not true. We said it on the first day of these cases. We said it in the first day declaration. The intercompany settlement was and is a critical building block of the plan as to all of the debtors. There is no plan as to any of the debtors without the intercompany settlement, and there is no intercompany settlement without all of the intercompany settlement.

And just to give your honor a flavor of the testimony, you will hear in. in due course, you will hear from the QVC, Inc. Special Committee that as they thought about intercompany settlements with the other boxes, complete resolution was necessary because they are the operating entity. They're the ones that interface with employees. They're the ones that interface with vendors. They're the ones most primarily focused on not having the Chapter 11 process be disruptive to the way they do their business. As you will hear from the QVC group directors, they're focused with on providing a much certainty and closure on a whole host of uncertain tax issues and potentially billions

of dollars in intercompany transfers that occur during the lookback period. And so to say that this motion is only about QVP group and that QDC group is not larger, complex, completely undermines the entire premise of the plan, which is that it is a plan as to all debtors and it is an intercompany settlement as to us. And without all of it, there is none of it. And so from our perspective, we're right back here saying the same thing we said on May 1st. If the first shareholders want to file pleadings that attack the plan without evidence, that by their own admission they don't have,

then we are entitled to defend the plan with the evidence and the witnesses that we do have. And if they don't have the evidence to meet their burden on motions they file and choose to file on an emergency basis, and they shouldn't file those motions. And we were ready to present our case on May 1st. We were ready to do it on May 18th. We're ready to do it on May 26th. And to that end, we started producing docs to Mr. Glenn and Mr. Brody before they even asked. Before we even had a protective order in place with a sort of gentleman's agreement that we would figure out the protective order so as to not slow the process down.

Those productions began on May 4th, and to date have included over 5,000 documents from the debtors and another 1,100 from the various special committees. And these have included, as Your Honor might expect, a whole host of email, analyses, records of negotiations, documents relating to tax filing, and Mr. Glenn is right, the productions remain ongoing. That's not a function of us, but the function of the fact that the case is on a truncated timeline, and that's why we started the productions even before we were asked for any documents. So, Your Honor, at bottom, we are ready, willing, and able, and, you know, like Mr. Glenn said, we two are eager to put on our case, whether it's in the context of a motion to appoint an equity committee to terminate exclusivity for confirmation. We didn't object to having this hearing on exclusivity set for 18th, and that's why we filed our witnesses of it list on Monday night, so there's no doubt on what, you know, the scope of our objection would look like.

We've also told Mr. Glenn that our witnesses are available for deposition in advance of that date. And so we're happy to go through what each and every one of those witnesses will say and why they're relevant to objecting to the sweeping allegations in the exclusivity termination motion as to the plan having not been filed in good faith, the plan violating the best interest test, the debtors not having large and complex cases in the absence of good faith progress. Ultimately, we will proceed on any timeline. Your Honor tells us we need to if you think this all makes sense to be heard at confirmation. that is absolutely fine with us. We'll present our case starting on May 26th through whatever date you tell us makes sense. Our sort of critical point that we want to make clear today, which echoes the point we made on May 1st,

is that we don't think that it is appropriate to cut off the debtor's right to object and the right to create the record we think appropriate, simply because the move-ins who are choosing to file motions on an emergency basis can't carry their burden on their own motions. Happy with that, Your Honor, to answer any questions or discuss dates for next steps. All right. Mr. Sandler, any comments from the UCC? Yeah, very, very, very briefly, Your Honor.

And just so your honor knows, we were selected to represent the committee at 1045 p.m. on Friday this past Friday night. So we are drinking from a fire hose. we are getting up to speed very, very quickly. I want to thank the debtors for being very cooperative with us getting us information. We looked at the emergency motion to terminate exclusivity, and sometimes you have to be careful what you wish for or ask for because you just may get it. And, you know, here they filed their motion that attacks the plan and the settlement that's proposed under the plan,

they came up with their own plan concept that, I will tell you, from the committee's perspective, seems to be half-baked. But nevertheless, they put the plan and the settlement at issue. And so they didn't have to do that, but they chose to. So now those issues have to be addressed. And it doesn't make sense to address them twice. I agree with that.

And so frankly, from our perspective, Your Honor, we think that the motion to terminate exclusivity should really be pushed after the confirmation hearing. If the debtor's plan is confirmed in, I guess, a little bit more than a week, 10 days, whatever it is, there's no need to hear the motion to survey. And if the preferred shareholders are able to defeat confirmation, which at least initially we think that's going to, to be an uphill battle for them, then the court can hear the motion to terminate and make a decision based on the evidence and the legal standards that it would have heard at the confirmation hearing. Frankly, I think going forward on Monday makes little sense. The most of the court is going to hear the merits of the settlement and the issues in the plan. So with that, Your Honor, I'll pause, and I'm happy to answer any questions.

Thank you. Anything further, Mr. Glenn? Yes, Your Honor. Thank you. So I just want to be very clear about what's on the table from our debtor's perspective. Our debtor is not restructuring. And the notion that there's an emergency for KVCG is one of the debtor and the QBC Inc. Debtor's own making.

The only thing that's happening in the debtor, this plan is that this intercompany claim is being allowed and the small amount of trade at our debtor is being paid. And so their decision to couple all those things makes our point in that we are effectively serving, downstreaming, providing all of this value for them to restructure, not for QDC group to disrupt. who is structured. We're giving it all the way. There is no RSA. There's no drip milestone that requires this to be done on an expedited basis. We're doing the best we can in the short amount

of time that they have provided to us. And I think this could all unfold on a more reasonable rational schedule, but we will take your honor's guidance because ultimately, your honor is obviously the arbiter of all of this. And we want to present this in the most efficient way possible to the court. That's all that. That's all the way on that. Thank you. All right. So as a practical matter, I think Mr. Suspert did too good a job telling me how there was tremendous amount of consensus, and I did set it for the 26th, but there's really only two hours available that day. So as a practical matter, this is just not going to finish that day. Then the question becomes, do we start, go for two hours, keep doing it.

more discovery and and and figure out, you know, when we can have, you know, at least a full day or maybe two days. So what I'm going to suggest is that we continue this status conference to the time that we had set the hearing on the 18th with the understanding that the hearing on the 18th will be pushed back to confirmation because it doesn't make sense to do it twice. And so at that point, and you all can reach out to Mr. Laws to see what dates make more sense. You know, if there are legal arguments that we can start with on the 26th, that's fine. But in other words, I don't, I don't, I want to make sure that the case that's presented to me has been fully developed by all the parties. and as a practical matter, as I said, you know, two weeks, the 26th is just really two hours that I have that day. And so that's not going to not going to work. Your Honor, yes.

Just as I suggested, like I said, we are drinking out of a fire hose, but we are confident we will be up to speed. maybe just again I'm just thinking about scheduling maybe it makes sense because you have two hours on the 26th is to start with openings and then to the extent you know we need the next the next day or the day after that whenever there would be flexibility in your schedule we could we could have the balance of the evidence on those days but at least we could get started on the 26th yeah well let's talk about that on Monday just because I don't what I don't want to do is have to the extent I once tried a confirmation hearing that went for six months we would do two weeks of hearings and two weeks of depositions

there were 10 expert witnesses and so we would depose the expert witnesses that were coming up and at the end of the day the judge denied all plans there were three competing plans so we don't want to find ourselves in that situation So why don't we and also I want to make sure that Mr.

Susberg's back so that he can be available. So why don't we just continue this status conference to what time do we have it? It's at one o'clock on and there's several other matters set at one o'clock. So we continue the status conference. to one o'clock on Monday. And if you would, just, you could meet and confer and figure out what makes sense in terms of timing and discovery and all those kinds of things.

Thank you, Your Honor. Your Honor, from a Mark Taylor, will that be a video conference or an in-person conference? No, I don't need everybody to spend the estate money to come down here to talk to me. That's fine. Thank you, Your Honor. I don't know whether there was going to be anybody here for the other hearings.

I think it's just a continued first day. So that and then so we will continue the emergency motion to terminate exclusivity to a date to be determined. And instead we'll have a status conference, this continued status conference. Your Honor, just while we prepare for that meeting, are you able to tell us just your availability the rest of that week? So we just sort of know what we're working with as a starting point? the 26th, it's not good. Understood on the 26th.

Yeah, no, the rest of the week. Your Honor? Yep. I'm sorry. I don't think we should burden the court with scheduling. I propose that we meet and confer today, tomorrow, and speak with Your Honor's clerk and see what's available and confer with federal witnesses and then we'll come back to the court, hopefully on Monday, with some kind of consensual way.

resolution to this. Right. Yeah, it, the rest of that week, you know, that's Memorial Day weekend week, so the rest of that week is, is pretty much, I'm pretty much tied up. It would have to be the next week where I would have some time. Okay. Thank you. All right. Thank you. Okay. All right. Thank you. Thank you. Thank you. Bye-bye. When you buy LG, you get so much more than just an appliance. You get more done. More cost savings. More peace of mind and more control, because LG appliances are designed to do more. Like washers and dryers with AI tech to take out the guesswork. Refrigerators that fit in tight spaces and keep food fresher, longer.

Or ranges with precise induction cooking and easy cleanup built in. All with the style you want and reliability you can count on. So you can get more from your home every day. LG appliances. so much more. Make life easier with LG. See the latest models and savings now at LG.com.