American court hearing recordings and interviews - QVC Group - Listen to the first bankruptcy hearing, held April 17, 2026 #QVC #HSN

Episode Date: April 17, 2026

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This is the new Weight Watchers, built for real life and real results, no matter what mode you're in. Maddie went all in for her big day and lost 33 pounds. Emily lost 85 pounds and hit her goal while still living her life. Weight Watchers gave me the tools and I feel amazing. Join the millions of members and lose weight with the number one doctor-recommended weight loss program. Lose more at Weight Watchers.com. At six months, participants in a clinical trial of Weight Watchers program lost an average of 12 pounds. All right. Good afternoon. It is Friday, April 17, 2026. We're here in case number 26-90447, QBC Group Inc. for the first day hearings. Please make sure to go to my web page and note your appearances there, but why don't we get appearances and then we can proceed.

Mr. Sussberg, I can't hear you for some reason. I can't hear you still. Ms. Whitworth, would you say something? Let me see if I can hear you. Good afternoon, Your Honor. Janow Whitworth for the other sister. Yes, I can hear you, yeah. Can you hear me now, Your Honor?

I can, I can, but now we're getting a lot of background. That is not me. All right. I'm going to have to turn on the hand-raising feature because we have quite a few people on and getting some background music. So just hit five-star one time. conference muted all right go ahead let's why we start all over mr susberg uh good afternoon

your honor Joshua Susberg from Kirkland and Ellis I'm here with my partner Aparnia Yenamandra and several other Kirkland colleagues thank you for making a time today your honor thank you Jana you want to go I'll go ahead your honor thank you and Jenna Whitworth for the West Trustee good afternoon you are John Higgins Porter Hedges appearing with Shane Johnson from my firm also co-counsel for the at QBC note holder group with the Davis poll team and I see miss Libyan all right good afternoon good afternoon your honor I'm Bill Walker seat chief financial officer with QBC group good afternoon sir good afternoon your honor

Brad Tom evening John Stroud Tower and Feld on behalf of the Windsor noholder ad hoc group good afternoon good afternoon your honor Lus Baker, Simpson, Thatcher, and Bartlett, on behalf of JPMorgan Chase Bank, on behalf of the Lender Group. Good afternoon. All right. Good afternoon, Your Honor. Good afternoon, Your Honor. Aaron Dexter from Millbank, LLP.

I'm hereing on behalf of the disinterested directors of Q-rate Retail Group, Inc. And Liberty Interactive, Inc. And I'm joined here today by my colleague, Dennis Dunn, and Liz Downing, also with Milbank. Good afternoon. All right. Anyone else wish to make an appearance? Mr. Brody, go ahead. Oh, hold on a second.

Let me unmute you. All right. Go ahead, Mr. Brody. Okay. Thank you, Your Honor. Josh Brody, Cleary, Gottliebitt, and Hamilton, along with my partner, David Boddard, here on behalf of certain holders of the debtors preferred equity.

All right. Anyone else wish to make an appearance? Good afternoon, Your Honor. Jason Brookner from Gray-Reed, proposed co-counsel to the debtors. Good afternoon. All right. If any, just one, one else, wish to make an appearance hit five star one time. All right, go ahead.

Thank you, Your Honor. Angela, Elizabeth from Davis-Polk and Warburne on behalf of the ad hoc group of the QBC Incinal holders. All right, thank you. All right. Anyone else? All right, Mr. Sussberg, you've drawn a crowd. We tend to do that sometimes, Your Honor.

Thank you very much. Again, I want to thank the Court and your chambers. We know we left you with lots of paper over the course of the night, and it's no easy task to get up the speed and I know that you did and we appreciate that I also want to thank the office the United States trustee I think we may be down to one minor issue so we should be able to breeze through hopefully what is a consensual hearing today we do have a presentation if it's okay with your honor to familiarize the court and everybody with QVC more generally absolutely go ahead do you do I need to give presenter rights to I believe that's how it works on

go-to meeting. Do we know which box to? The one that says Kirkland and Ellis content? There you go, Your Honor. Thank you. Now the presenter. I think, Your Honor, as you probably have seen through the pleadings and Mr. Wofford's declaration, this is a company that actually reaches 200 million households on a daily basis. And as I was preparing and collecting my thoughts yesterday, I still do actually have cable TV. And I went out on

Verizon Vios and flipped through. I got Channel 650, it was QVC, 651, 652, 653, 656, QVC 2, QVC3. I didn't buy any products, Your Honor, because we were still in the pre-petition phase and people are out to get us these days, so I stayed away, but we may just buy something here today, Your Honor.

As we go through the presentation, this is a story about adaptation and evolution. And as you'll come to understand, understand cable television linear TV has obviously evolved and people are now purchasing and getting everything at the click of a finger, literally on your telephone. And this company has adapted over the course of the 50 years it's been in existence to become a true Omnichannel presence, and we'll explain that. A lot of retailers talk about being Omnichannel. This company actually is Omnichannel. And notwithstanding several years of the leverage,

and various transactions. But we got involved last April of 2025, and I will give credit to the management team who helped steadfast in the fact that this company needed to de-leverage in order to deal with the trends and the changes and the way in which people shop and interact. We oftentimes hear stories about liability management, the new vogue.

It's not new. We've been doing restructuring out of court for years and years and years. But when we speak to a company and we speak to a business, board, we talk about, we ask the question to what end. And this management team answered that question and said we could kick the can and we could extend maturities, but we need to deliver this balance sheet. And I will tell your honor over the last several months, the press has been rampant and the press has been wrong, shockingly. The end of QVC, QVC will no longer be on the air, QVC is over. I will tell your honor, and I can state it with confidence, nothing could be

further from the truth. As we sit here today, we have massive consensus across our capital structure to deliver this balance sheet by $5.3 billion. This company will emerge from Chapter 11 with a little over a billion dollars of debt and equity dispersed amongst our lenders and note holders. The company will be lean, mean, and able to take advantage of the changes in the social current and all the different mediums on which it operates. And, This massive consensus was not easy to come by. It took many, many months, lost lots of hair, but we are thrilled that we were able to be here. Could we have been here sooner, potentially, but we were able to get there, and we appreciate all the efforts of folks across the platform

for helping us to do that. I will tell you, importantly, all unsecured claims. Every unsecured creditor in our capital structure will be paid in full in the ordinary course. There will be no impairment. And as Miss Yenamondra will explain, this was important to us. We've seen countless retail companies falter in Chapter 11, and we held steadfast again to core beliefs, the leveraging, minimal operational issues, claims riding through, and an expedited timeline. And that's exactly what we're going to have. So while we have lots of consensus, Your Honor, it's not surprising when there's a de-leveraging of over $5 billion, preferred stock, which is about $1.2 billion in common stock, will,

not see a recovery in these cases. And we sympathize and empathize with those parties, and we understand the investment decisions that various parties make. But the absolute priority rule says what it says. Five billion dollars is being exchanged into new debt and equity. And this company desperately needs to deliver. If Mr. Brody wants to have a conversation on a theoretical basis about valuation, I'm all ears, and he knows where to find me. So if we can go to the presentation, Your Honor, and I want to give you a flavor behind the scenes. The curated collections of products that this company pulls together, and they make it personal, and this company has always been different, but they make it personal through storytelling on all of its channels.

No better way to see that than to watch this video with no value. I'm told Your Honor needs to enable audio. I don't see where that is on my machine here, but Mr. Let me see. Is there a system setting here? It's not a problem. Otherwise, we can improvise. To unmute the content line?

All I'm getting is a... Oh, I see. Yes. Okay. Conference unmuted. Go ahead. But then I'm going to get all the background noise. See if it works now. Okay.

Conference, conference, unmuted, muted, muted. All right. This is the new Weight Watchers, built for real life and real results, no matter what Mojuran. Maddie went all in for her big day and lost 33 pounds. Emily lost 85 pounds and hit her goal while still living her life. Weight Watchers gave me the tools and I feel amazing. Join the millions of members and lose weight with the number one doctor-recommended

weight loss program. Lose more at Weight Watchers.com. At six months, participants in a clinical trial of Weight Watchers program lost an average of 12 pounds. The new Wigovi pill is now available through Weight Watchers. Powerful GLP1 results in a simple pill at the lowest price available. And with Weight Watchers, you can get doctor support and personalized nutrition programs. See if you qualify at Weight Watchers.com. Add not reviewed or approved by Novo Nordisk. Hold on a second. Just hold on one second. I'm getting some help here, so just hold on one second.

Conference muted. They were going to put it on the point. No, no. They were just going to do it over there. No, no, I don't know. They need a separate phone. Okay. Conference unmuted.

Okay, so what I've been told is that we need a separate phone by whoever is running the audio for them to for me to unmute and then mute everyone else we'll bypass it don't worry about it I don't know who's listening to music

I know but there's like almost 200 people on so let me mute the lines and then I don't know whoever is so whoever is so whoever is playing the video if they could just unmute their line hit 5 star one time

Right. So why don't you start all over? Because I think that they're the only people on right now. Mr. Sussberg, hit five-star again. I had muted you. If anybody else wants to speak, hit five-star again. So go ahead, Mr. Sussberg. Thank you, Your Honor. Took a few tries, but success. As I mentioned, Your Honor, we talked about Omni Channel retailers. And Omni Channel really means covering the entirety and scope of how we reach customers. As we talked about linear TV, there's the website, and we'll get to that in the background. There's a streaming app. It's on Hulu Live for those that watch and Direc TV. But my most recent favorite is the TikTok shop.

The first ever 24-7 live demonstration and sale of goods on TikTok was done by QBC. and QBC is now the fourth largest merchandise seller on TikTok. I don't know if Your Honor is familiar with TikTok. I wasn't. I now am. Here's the TikTok live demonstration right now. They're selling lipstick with a local celebrity, and it's on all day. Products all day long.

I can click on it and buy it from Miss Yenamondra's phone right now. If we go to the next slide, Your Honor, just briefly to set the stage, I want to do some key introductions, a little company background, and then turn it over to Miss Yenamondra, who's going to walk through kind of how we got here, what the restructuring looks like, and then next steps as far as the pleadings for today. If we go to the next slide, I want to introduce our key executives. Mr. Rawlinson is our president and CEO. He's been with the company since 2021. He was previously the CEO of Nielsen IQ and the president of Granger Global Online. He's held various appointed positions in two White House administrations, including George W. Bush and Barack Obama, and I will also note that he is a retired lawyer, so don't let him tell you any different. Mr. Wofford, who introduced himself, has 25 years of retail, consumer, and digital experience. Previously, the CFO of Everlane, J.C. Penny, he's familiar with his court, as well as the vitamin shop. And prior to that, he was in the advisory group at KPMG.

And then Ms. Del Soto is our general counsel. She has been in leadership positions on a legal function with QVC for 13 years. And prior to that, spent 11 years in private practice running the gamut of various corporate and securities transactions. It's an incredible management team. We've been honored to work with them. They work incredibly hard. And their vision has been shared by our capital structure as they explained the evolution of this company. As we mentioned, next slide, Mr. Wofford is our declarant today.

You saw his first day declaration. We also have Mr. Keyeson, who's our declarant with respect to the $300 million L.C. dip facility that we have in place. I want to briefly introduce, Your Honor, to the Topco, what we call the Topco Board of Directors on the next slide. These are the members of the board. This is the entity at which the preferred stock and the conference. common stock was issued, and obviously all sorts of services flow down through the capital structure, which will demonstrate and show in a moment. Mr. Meltzer and Ms. Flayton, who I believe the court are familiar with, were appointed as independent and disinterested directors, and I'll get to that construct in a moment. On the next slide, just briefly, Your Honor, the company's team includes Alex Partners, Kirkland, Evercourt, Gray Reed, and Cole.

you heard from Mr. Brookman. As far as the corporate structure is concerned, I wanted to just quickly explain this because while it is complicated when you first take a look, when you break things down and actually understand, we were able to synthesize and put together what really ultimately became the structure for solving our problems. As I mentioned, Kirkland got involved back in April of 25,

and the first thing that we focused on in a complicated structure with tax issues, and the like were the corporate entities and mapping out where the liabilities existed, what inter-company claims existed, and where there could be potential, as Your Honor would expect, for disputes and arguments. And as the next iteration of this slide will demonstrate, this company effectively had four different boxes of obligations. And so we thought about it from the perspective of four standalone, almost restructurings,

but at the same time, interactive relationships between the various boxes. And you could see the liabilities that sit at the Linta box, and we'll explain who the advisors are there. And then the banks and the notes sit down below at the operating entity, and then there's the parent company that holds, again, the press and the common, and then the Cornerstone entity, which has shared ownership amongst Linta and the notes and banks with no liabilities. And so in order to do this the right way and to dot our eyes and cross our T's, we appointed independent directors at four separate entities, as you'll see on the next iteration, all of whom retain separate counsel and have disinterested qualified and independent directors, many of whom are familiar to the court and all the parties involved represented by Cobrey and Kim at the Topco, Millbank at Linta, Katten at QVC operating, and sewering Tistle at Cornerstone. Go to the next slide, Your Honor. Just briefly, you've heard from some of these

folks already today, but the bank group, as we call them, are represented by Simpson and Lazzard. That includes commercial banks, but it also includes, and I'll note Silverpoint and SVP, two very familiar funds to many people involved in the community. They actually recently purchased very large positions in the revolver. And we've been negotiating with them over the last several weeks. And again, we were very happy to be able to reach an agreement with all of these parties on the overall holistic restructuring. The No Holder Group, as we call it, represented by Davis Polk, PJT, Porter Hedges.

We note the funds in there. We just like to make sure everybody knows who's on first and who's out there, so that ultimate accountability with everyone involved. is always held to the highest standard. We really appreciate the efforts of the no-holder group and Oak Tree, Golden Tree in particular, who've worked very hard to understand the business over the last course of eight months.

And then finally, on the next slide, it's the Liberty Group and Linta, as we call it, represented by Aiken and Centerview, Anchorage, Lizarre asset management, and brigade are the largest holders. Very briefly, Your Honor, I want to walk through the corporate history because it's important

because it talks to the evolution of this company. It was a company that was founded in 1986 by Joseph Siegel, and it went on air for the first time. On November 24th, day before Thanksgiving, 1986, it was the first U.S. television broadcast, and it reached 7.6 million homes on its very first broadcast. So we'll go ahead and click. You might even get audio.

So now it's time for you to see for yourself. Presenting QVC, America's newest cable shopping channel. Your key to quality, value, and convenient. At 1987, on the next click, we'll note that the company formed a partnership with Sears for a two-year agreement. I note that because this is something the company does to this day with various brand partners, whether it's Skechers, Dyson, Nike, you name it. unique relationships for products to be demonstrated across the platform, and that's something that's going to continue and continue.

1992, Your Honor, will be familiar with the name Barry Diller. He actually became the CEO of this company that was after he co-founded Fox and was the chairman and CEO of Paramount. And Mr. Diller's vision all along was developing online entertainment for consumer interaction. and he played an important role in the history. In 1993, as you'll see, our founder, Joseph Siegel, resigns and retires, and Mr. Diller obtained control of the company as the CEO.

And it was the first time we'll show that in 1993 that the company expanded into the UK and into Mexico. We click again. This is QVC. Welcome to the beginning of a new concept in television, where you, the viewer, play the crucial role. I'm John. And I'm Julia.

That clearly was the first showing in the UK, in case anyone missed that. In 1995, QVC was acquired by Liberty Media and Comcast together, and Mr. Diller resigned. Go to the next slide. 1996 QVC moves to the Internet, QVC.com. We'll talk about there's hsn.com as well. And again, I think this is just important to note when we talk about Omnuchannel and we talk about consumers. The new WeGovi pill is now available through Weight Watchers.

Powerful GLP1 results in a simple pill at the lowest price available. And with Weight Watchers, you can get doctor support and personalized nutrition programs. See if you qualify at Weightwatchers.com. Add not reviewed or approved by Novo Nordisk. Preferences and technology ever increasing and changing, this was a step in that direction. In 2000 and 2001, the company launched in Japan. And then in 2015, there was a major acquisition of a company called Zooli. This was a e-commerce site that specialized in daily flash sales at steep discounts.

And the idea here was to get into and penetrate a younger audience. And that was successful for a long period of time. In 2017, Liberty Interactive acquired, the remaining 62% of home shopping network. Now, home shopping network had existed before QVC had started, but now they were all together, QVC merged with HSN. In 2018, Liberty renamed to Corte Retail, and the group included all the various brands

that we had talked about, including HSN and Zooli. As we go to the next slide and get more present, in 2020, as everyone's familiar with, the COVID pandemic affected us all. QBC switched to Skype because in-studio performances were not available. And again, the company adapted and changed with the times and was quite successful in doing so and making sure that the delivery of product and the online entertainment and the storytelling continued. In 2021, as I mentioned, Mr. Rawlinson took his seat as president and CEO.

And importantly, and we talked about this in Mr. Wofford's declaration, we had the largest structural fire in North Carolina history at a very significant distribution facility for the company. It's our second largest distribution facility at the time, and it processed 25 to 30 percent of all sales value. That was devastating from the company's perspective, especially on the heels of COVID. But the company adapted and continued and moved forward and was able to really make sure that it did not miss a beat. In 2022, the company launched what was called Project Athens, and Miss Yenamondra, we'll get into this. It was really a five-year turnaround plan designed to address, number one, COVID, and number two, the changing in the e-commerce space and the ever-evolving world in which we live in with live streaming, TikTok, Instagram, Facebook, you name it. In 2023, the company sold Zooli to Regent.

It was not a core function of the business. It no longer made sense. And as I mentioned, this company has been active in managing its liabilities and reducing its debt when available over the course of time. This represented one of those transactions. And then we bring it full circle to 2025. And I will note, the company renamed itself to QVC Group and, importantly, launched a project called Win, which stands for wherever she shops, inspiring people and products. and newer ways of working.

And I mentioned that because the win strategy was the focal point of the business plan that this team put together last fall when we sat down with all of these stakeholders. And we explained to them that, yes, linear TV is shifting. And Ms. Yenamondra, again, will show you the curves and the decline and the cord-cutting, as we call it. But the reality here is that social media presents such an exciting space, a challenge and a world in which this company has actually been at the forefront, whether it be TikTok or any other medium. And I think that's what people were able to buy into, and that frankly is the thesis behind this restructuring and the $5 billion of the leveraging that we have so many

parties supporting. Always like to note, Your Honor, on the next slide, that there are a lot of lives involved here, more than 15,000 employees. And our job, as we've played, this management team is if we do it right, these employees are uninterrupted and unaffected and hopefully don't even know that this proceeding is happening over the next 60 days. And that goes to much of the relief that we're seeking today because the employees of a company are the lifeblood of a company. And uninterrupted access to their job, their wages, their pay, and their benefits is critically important, and we do not intend to disrupt that.

at all whatsoever. Next slide, just a couple statistics for your honor, to really show the breadth of this company, 182 million units shipped in 2025 alone, 400,000 unique products. And importantly, the way in which this company communicates with its customer base, 40,000 hours of storytelling,

reimagined and defined in 20 different soundstages across the country. all of which is demonstrated on the next slide where you see our footprint across the United States, as well as three different continents. I'd mentioned the U.K., Germany, Italy, Japan. You see the various places across the United States, including Westchester, Pennsylvania, where the company is headquartered. The triangles represent distribution facilities throughout the United States, and it's well-placed and strategic and thoughtful in being in a position to deliver 100,000.

is $182 million, $182 million products across the scope of this world every single day to the 200 plus million households that are impacted and directly viewing all of these channels. With that, I'm going to see the podium to Ms. Yenamandra, and then, of course, if Your Honor has questions, always happy to answer them. Thank you very much. Good afternoon, Your Honor, for the record, of Parneyanamandra from Kirkman and L.H proposed counsel to the debtors. Your Honor, this next slide double clicks on the pre-petition capital structure a bit because everything you need to know about the rest of the presentation is informed by this slide. QVC is really, as you probably gathered from the org chart, really four capital structures and one comprised of two operating companies and two holding companies.

The two operating companies are QVC Inc and Cornerstone, and the two holding companies are Linta and QVCG. So taking those in that order, QVC Inc. has approximately $2.9 billion of bank debt, that is Mr. Baker's group. It also has approximately $2.15 billion of notes debt. That's Ms. Libby's group. Importantly, all of this debt is secured only by an equity pledge of QVC Inc. stock. Cornerstone is the other operating company. It does not have any funded debt, and it is owned currently by the two holding companies.

Turning to the holding companies, then, Linta has approximately $1.48 billion of funded debt, that's Mr. Kahn's group. All of that debt is unsecured, and then turning to QVCG, that is the parent company of the entire organization. It doesn't have any funded debt, and it's the entity that has issued the preferred and common equity. Your Honor, we have a footnote here, footnote two, not shown intercompany claims, but the intercompany claims in this particular capital structure are particularly important. In a lot of Chapter 11s, the intercompany claims are not a cornerstone of the restructuring for a variety of reasons.

That may be because the lender base overlaps, so the lenders that would want to pursue those claims are the same lenders that would recover from those claims. Oftentimes it's because you have secured debt that soaks up all of the value, so there's no value left for general and secured intercompany claims. Or it might just be that your inner company claims are ordinary course transactions. None of those things are true for QVC. As we mentioned, it's about four capital structures in one with very little lender overlap. As I mentioned, at QVC Inc.

The only equity pledge is an equity pledge of QVC Inc stock and all of the rest of the debt is unsecured. And while there are normal course everyday intercompany transactions, As we detailed in Mr. Wofford's declaration, there are also MNA transactions here, liability management transactions, tax sharing agreements, shared services agreements. And so as we thought about what a holistic restructuring would look like, this slide was sort of the initial point that informed all of that because the two things that stand out on the side are, one, the need to deliver and bring that $6.53 billion number down, which doesn't even include the $2 billion of equity on the balance sheets, and two, resolving the intercompany

claims in a holistic way. We can click ahead. Before we get there, though, as Mr. Susberg said, this restructuring really began a couple years ago as detailed on this slide, and really the starting point was the decline in what we call linear TV, but which is effectively cable TV. Since 2018, linear TV has dropped about 50%. And for a company like QVC, that is the equivalent of a national department store chain, choosing to close approximately 50% of their stores. And as an additional data point, in 2020, 58% of all the minutes that Americans spent watching videos, including cable TV, was on cable TV.

By 2025, that 58% had dropped to 40%. So, almost 20% drop in about five years. QVC saw these trends coming, as you can see from this chart where live TV is declining and streaming TV is increasing. So starting in early 2022, they launched this two-pronged effort that Mr. Sussberg alluded to, which is detailed in Mr. Wofford's declaration called Project Athens and Project Wins. And what these did overall, they worked hand in hand to achieve a couple of goals. The first was cost cutting.

The second was redeploying capital and resources towards streaming and away from cable and focusing on initiatives like TikTok, Hulu, Netflix, Roku, YouTube Live, Sling. And third, re-exploring how and where they met their consumer. In an environment where people certainly aren't shopping in stores or shopping on cable channels, even less. It became clear that, you know, content creation has sort of overtaken as the primary way to reach consumers. And that had a video played earlier in Mr. Sussberg's presentation, you would have seen that KVC has leaned into the live content creation model.

Project Athens has since concluded, and both efforts have been tremendously successful. Mr. Woffer's declaration details the positive $500 million-addjusted Owebeta impact of Project Athens and the wind strategy, which is all about how we reach the consumer, has resulted, as you see on the right, in an increase in users on streaming services at a rate that is growing over 5% a year. And while we are a relative newcomer to TikTok, we are already the fourth largest seller on TikTok shop, and that's later to double in 2026. And so with a lot of the operational restructuring ahead of us as we go to the next slide,

the attention turned to the financial restructuring. And hopefully, as your honor has gathered over the course of this presentation and Mr. Wofford's declaration, in order for QVT to remain a leader, it needs to say, lean, and it has to have the ability to adapt and reinvest as consumer preferences adapt. And right now, under the labor of over $6 billion of debt and $2 billion of equity, it just can't adapt as quickly as it needs to. And so a year ago, as we moved to the next slide, a year ago when QVC brought on Kirkland and Evercore and Alex, as we start to walk through on the next slide, we focused on sort of the building blocks on what a financial restructuring would look like. As Mr. Susserick said, the first point was making sure the right governance was in place, as he detailed, while the special committees started looking at the intercompany claims and historical transactions.

transactions, the company's management team and advisors worked on formulating a business plan for what the art of the possible was for a business once it wasn't laboring under $6 billion of debt. Once that work was done, our organized groups had formed at that point, the Simpson-Lezard group, the Davis-Bose PJT group, and the Aiken Centerview Group. And so we turned to them and started to negotiate in earnest. You might imagine, they rightfully so did a tremendous amount of diligence to ultimately inform their views that supported entry into the RSA.

And while they were doing that work, the special committees were working through analyzing and ultimately working to get to an agreement on the settlement of intercompany claims with the goal of developing creditor support for those settlements, which support was ultimately developed and which became one of the cornerstones of the RSA. And so as we go to the next slide, the ultimate restructuring here, one more side, the ultimate restructuring here was informed by a couple of key principles. The first and foremost one was what is the right exit capital structure for QBC Inc. As you can imagine from the company's perspective, we wanted as little debt as possible

and that's why we stand here today, poised to confirm a plan that de-levers by over $5 billion. dollars, but there was a lot of work in negotiation around what is the right exit debt level and what is the right liquidity number for a company that is working capital intensive. The second principle was what does the Chapter 11 look like? Are we going to need to use any of the tools of the code to operationally restructure? And given the success of Project Athens and the wind strategy, it became clear to us that the answer was to make this restructuring as minimally disruptive to the operations as possible, which is why our RSA and plan unimpares all Gucks, and we have not filed any

foreign proceedings, nor do we intend to. So the foreign footprint that Mr. Sussberg walked through will be completely unimpaired and uninterrupted over the course of its restructuring. The third kind of key principle was the settlement of the intercompany claims. And then the fourth was Cornerstone. Your Honor has heard a lot about QVC and HSN. Warnerstone, as Mr. Woffer's declaration details, is primarily the catalogs business that has about 1,500 employees, and we wanted to make sure that we did the least amount of damage

to that business, too. You see the missing puzzle piece here, and that's the company and its management team and advisors having determined these were kind of the four pillars we needed to resolve, we then turn to how do we get support for the resolution of these pillars. from a creditor perspective that overwhelmingly and understandably became how do we allocate value across our four capital structures. And going through each of the four capital structures, QVC group again has no funded debt. Its largest creditor is QVC Inc as a result of the intercompany claims. And what the RSA ultimately supports is a resolution with QVC Inc as well as releases for the holders of press who have historically received dividends.

and the unimpairement of all remaining Gox at QVC Group. QVC, Inc., our main operating entity, now has the support of the Full Simpson and Davis-Poke groups, and we expect to work to expand the support from currently holders that aren't in either of those groups. Those holders will get QVC cash, approximately $1.3 billion of exit debt, as well as 100% of the new equity subject to the most,

MIP, that I say approximately 1.3 because the actual number toggled a little bit down or a little bit up depending on what the exit ABL ends up looking like. And all other general and secured claims will be unimpaired. If we click through to Linta, as a result of the intercompany settlement, the only tranche of debt there is now the Linta notes, Mr. Kahn's group. And so subject to the satisfaction of any other administrative priority or gut claims, that we're not aware of but to the extent they exist, subject to those claims being satisfied in full. All of the remaining cash at Linta as well as a $23 million cash contribution from

Inc will go to satisfy the Linta notes. And then finally that takes us to Cornerstone, which will be unimpaired. All claims that Cornerstone will operate in the normal course and be unimpaired. And at Exit, Cornerstone will go from being a sister company of QVC Inc. to a subsidiary of reorganized QVC Inc. And so, Your Honor, with the allocation of value established, that took us to the RSA as we click through to the next slide. We started, as I've said, now by the time we signed the RSA at some unholy hour yesterday,

we had significant creditor support across every single funded debt constituency across every one of our four capital structures. As we noted, as we click through, we are delivering by over $5 billion, so our $6.6 billion in change will be about $1.3 billion. The third cornerstone, no pun intended, is that all general unsecured claims will be unimpaired. Our fourth touchpoint and a bit unusual but important to all parties here is that reorganize QBC will be public. And finally, given, you know, we've been active for almost a year on the company side and almost eight months on the creditor's side and given the level of consensus and unimparment of GUCS, we are looking to move through the process as quickly as possible.

And as you'll hear from my partner, Ms. Hensley, when she goes through the scheduling motion, we'll be asking, Your Honor, to schedule confirmation at the end of next month and try to emerge as soon as possible thereafter. And so that leaves as the final piece of the puzzle that we haven't yet solved but are actively working on the exit ABL. We started the efforts on the exit ABL pre-petition with both third party and existing creditors, and our goal and expectation is that we will have a committed exit ABL facility heading into confirmation. And so with that, Your Honor, we've laid out our projected dates on the next slide, which Ms. Hensley will walk through more when we get to the schedule.

motion. Happy to stop there if there are any questions, but if they're not, Your Honor, we have organized the order of which of the creditors will speak in which order, if your honor, is ready to move to that before we get into the first day agenda. Sure, that'd be fine. Thank you. Great. Thank you, Your Honor. With that, I'll pass the podium to Mr. Baker. All right, hold on. Everyone who is going to speak hit five star one time. All right, I think I've unmuted everyone. Your Honor, can you hear me?

I can. Thank you. Good afternoon for the record again, Nicholas Baker, Simpson, Thatcher, St. Patrick, Bartlett, for J.P. Morgan Chase Bank. Your Honor, JPMorgan is the administrative agent acting at the direction of a group of revolving lenders that collectively hold around $2.8 billion of the $3.2 billion exposure under the pre-petition revolver. Members of the group are also going to be providing subject to approval to D.

Kelsey facility. This group consists primarily, as Mr. Susser pointed out, commercial banks, but there's been trading, and now there's some investment funds within that group as well. We're the largest credit constituency in this case upon the reorganization.

This group will hold over a majority of the equity. So this is really important to us, and we're obviously signatories to the RSA, and we support this restructuring. We think this is a really value maximizing deal leveraging that's going to be smooth and quick and we really think it gives QVC a bright future. Beyond this voting and supporting the plan through the RSA, Your Honor,

we're also supporting this reorganization through the DIPLC facility. You'll see that later, but as stated in the key declaration, letters of credit are critical to this business. And our clients want to know that it will be business as usual. You've heard a lot about maintaining stability and letters of credit as part of that. So we think that facility will give a vote of confidence that this company needs to maintain business as usual. Finally, Your Honor, just wanted to thank you in your chambers. I know a lot of paper was thrown at you very late in the game. When the DIPLC is in front of him, I'm happy to answer any questions to the extent you have any.

One quick question. The Keys Declaration talked about the Citibank being, talking talked about the Citibank LC, but the DIP credit agreement has JPM as the agent. Is Citibank just the fronting bank? Yeah, so let me explain that, Your Honor. Citibank is a issuing bank and lender within the DIPLC facility. They also have a bilateral LC on the side, which will effectively be kind of treated next to, but similarly to the DIPLC facility. All right.

Thank you. That explains it. Thank you, Your Honor. All right. Who's going to be next? Your Honor, I believe that's me, Angela Liddy from Davis-Pulken-Wordwell. Great to be for your honor, and I want to echo that things to your chambers. We are here representing the ad hoc group of QVC note holders.

That's actually a bit of a misnomer because while our group is the primary representative of those holding QVC notes, we definitely have the most significant holdings of those instruments. We also have meaningful holdings in the RCF and in the winter bonds as well. So on behalf of that group in particular, I want to just echo again what others have said, which is that getting to this point has truly been a feat that has taken months of work amongst the folks on this line. And in particular, it really does just speak to the investor community that is involved here that Mr. Sussberg put up on a screen in front of you at the very beginning of this presentation.

investors and their professionals really came together to work together over a period really starting last fall, you know, through now into spring, with the ultimate goal here being to develop the broad global consensus and really to do what's right for the company, right? So these are holders who, from an absolute priority perspective, are of course entitled to better treatment than what they are getting, you know, under this plan. But as we have seen in a number of cases, they've come forward, they're prioritizing the business, they are prioritizing employees and trade and customers and really coming together to support this business on a go forward basis.

So with that, Your Honor, we are looking forward to hopefully very, very quick case and really looking forward to watching this company and being a meaningful part of its equity going forward as it launches the next chapter in QBC's history here. Thank you. Your Honor, Brad Tom, can you hear me? I can hear you. Great. Thank you, all right.

Thank you, Bradton, Adrian Gumstraster on themselves on behalf of the ad hoc group of Linton note holders. As you have heard from Miss Indiana Madroby, our party to the RSA. I'll reiterate what both Mr. Baker and Ms. Livia have already said. The RSA was the product of several months of hard-fought, good faith negotiations between the various parties.

As to Linta, there were considerable issues to work through, including a number of the various thorny inter-company company issues that Nisiana Landrovs spent some time alluding to. Ultimately, our clients believe that the restructuring and the settlements embodied in the plan really are in the best interests of all creditors and this company going forward.

And we are quite supportive of this restructuring going forward. I'm happy to answer any questions your honor may have, but otherwise I will see my brief time up here. All right. Thank you. All right. Anyone going next? Yes. Your Honor, I believe I'm next.

In our director, Josh Brody from Puri-Dotli, on behalf of certain holders of the that is the deemed preferred stock. Now, Rihanna, if I actually start one small housekeeping item there, I'm looking to make the rest of the hearing easier, I had gone through the various first-day motions with Mithy and Mondev and we've resolved any issues that I've had.

There was one item with respect to the NOL trading motion that we've resolved. I'm just telling you're on about that now, so I'm not going to have to speak up later in this way the flow can go when you get to it. Got it. Now, with that said, And I, of course, hate to be the only person who's standing up in front of your arm today,

is not being in kumbaya. But as you might imagine, you have a little bit of a different perspective on the debtors' proposed plan than as much as your software laid out. Now, of course, I want to note, I think a lot of what the debtors and the professional and the various creditors have accomplished is, from my perspective, actually fantastic. I think saving these companies is hugely important. Saving all those jobs is a fantastic idea. I don't have an issue with most of what the debtors and the various creditors have are trying to accomplish. The problem that I do have, Your Honor, is that, to my client's perspective, at a high level,

it seems that all the various parties got together and decided that they were going to take the assets sitting at the holding company, which, as has been noted multiple prompts, has zero debt, and we're going to use those assets to help fund recoveries at the various subsidiaries. Now, unlike what Mr. Sostrad pointed out, this has nothing to do with the asking priority rule, it doesn't do with valuation. It has to do with the simplicity of corporate separateness. The Holt Co has no obligation. It's not on the hook to any of the subsidiary debt.

And the fact that it has assets, which has only really there to be distributed at this point to the preferred holders, and it's being used to actually fund recoveries at the various subsidiaries. And the basis for doing this is this, quote, unquote, intercompany settlements, which candidly gives a very short shrift to in the disclosure statement that I've seen so far. And it's just, oh, so how there's a new $400 million intercompany claim, which has never been previously disclosed in any of the debtor's SEC files. And this is a claim that somehow is now created that is going to suck all of the value out of the Hullcoe and send it down into the subsidiary to fund recoveries.

And I think, Your Honor, if I'm reading the papers correctly, This is really, I think, the only intercompany claim that's going to be getting a recovery. And so, absent this settlement that they've proposed, there would be actually a meaningful recovery to the preferred. So I think from our perspective, Your Honor, and I'm not asking for any release today. Obviously, there's what to come. But I don't think that from our perspective, the court should appreciate we think that the equity is not being adequately represented and that there is a need for an official equity committee in this case, something we will obviously take up in the first instance with the U.S. Justice's Office. But I didn't want the hearing to go by, and Your Honor has shown all these wonderful things, many of which are,

wonderful but there's a problem where I think our clients pocket seems to be getting picked and that's something we're going to have to address so again not that's been released but one think your honor was aware all right thank you all right anyone else hi your honor can I can I um can I follow up on query comments sure can you hear me yes sure thank you very much my name is way dong I am calling because I owned preferred shares in QVCG And since Kirkland went through the details of QVC's background, I will also go through my background in detail. However, I don't have a video or a slideback. So I was born in 1978 in China.

However, I will preempt you and tell you that I am not a communist. I'm an American citizen naturalized in 2000. I got married to a wonderful lady in 2013, and we have two kids. and 11. If I had a slide, I would show you the pictures, along with my monthly bill, to support them. I go through these seemingly irrelevant information because I want your honor to understand that the preferred shareholders are numerous. And there are people too, despite the fact that the debtor doesn't seem to treat us like

one. We are listed and weak individually, but the preferred is a 1.4 billion. class. And most of these prefer to help by mom and the pop collectors. So the decisions you make this case intact a lot of people, not only the employees and the senior secured debt holders. So let me get to the point. The point is I woke up this morning like all mornings and hopefully in future mornings happy and content. However, to my surprise, I found out that the QDC chief entity has been robbed. So the

better and opco lenders contend that there is a $400 million claim against QVCG that magically appeared last night. So therefore, they rated the holding company of all this cash. In addition, the debtor and Ophco lenders decided to transfer the QVCG's 62% stake in cornerstone away from QDCG without an explanation or explain how that was transferred in the first place. So I would ask Your Honor to scrutinize how these assets are transferred away from QG and whether they make sense. So I would emphasize that there's over 400 million of value that they're trying to transfer away, and this is a sizable amount.

Asset now, as clearly has said clearly, there's no debt in the holding company. And as far as we know, aside from the IRS, which is a different matter, there's no claim against these other, against this box of acid. And as far as I can tell from the plan of reward, the reasons for this land graph are non-existent and therefore less than weak. Also, there are two holding companies in this structure, as Kirkland had pointed out,

Linta and Topko. The Dagger decided to treat Linta and Topco differently when both holding companies have similar characteristics. Lenta and Topco both have both have cash in their respective boxes and both have stakes in Cornerstone, but they've decided to raise the top coach cash and ownership stake in Cornerstone while leaving Netop alone. I would like to know why. And I would like the Debtor Council of Kirkland to, first of all, get through a video to work

because I'm sure I missed a lot of important information there. And second of all, to present to the Corps and all of us detailed rationale for this transfer the value away from UDCC and its preferred holders. And I want to ask, for just take it lying down, why did you make me wake up unhappy today? That is not cool, and certainly not gentlemanly and scholarly. Why, I should say, also not gentle, womanly, a scholar, thank you, your honor for this time.

All right, thank you very much. Anyone else? All right, Ms. El-Farro? Again, for the record, Your Honor, Parmagnanamander from Kirkland and L's proposed counsel to the debtors. I think, as your honor might imagine, we'll address all of the issues that were just raised in due course as we had into plan confirmation,

but I don't think any of those issues affect any of the first-day relief that we're seeking today. Before I turn the podium over to my colleague, Mr. McCormick, to take us through the first-day motions, And I was remit in forgetting to ask your honor to please move Mr. Wofford's declaration, which is at docket number four, into the record for purposes of the release being requested today. All right. Does anyone object to the admission of the declaration of Bill Wofford, which is found at docket number four and on the witness and exhibit list at exhibit number one as his direct testimony in connection? with the first day hearing subject to cross-examination.

All right, hearing no objection, they will be admitted. Do you also want to move in the declarations of Mr. Keyes at docket 21 and 48? Sure, that would be great because I'd forget to do that too. Does anyone object to the admission of the declarations of Jason Keyes, found at docket number 21 in support of the All-Trade motion, and found at docket 48 in support of the DIP facility as his direct testimony in connection with this hearing subject to cross-examination. All right, hearing no objections, those two declarations will be admitted. So all three declarations are admitted.

Thank you, Your Honor. With that, I'll see the podium to my colleague, Mr. McCormick, to start with the cash management motion. Thank you, Your Honor. Can you hear me? I can hear you. Yes, sir. Thank you. Alan McCormick on the Kirkland-El on behalf of the debtors. Your Honor, I'm going to take you through four of the first day motions today, A, B, C, and D. The first one being the cash management motion.

Your Honor, this is the customary cash management motion to maintain the cash management system to to maintain existing bank accounts, business forms, books and records, to continue reform intercompany transactions, as well as grant administrative expense status to the intercompany transactions between the debtors and between the debtors and non-bettor affiliates on related relief. Your Honor, the debtor's cash management system, an integrated complex system, customary of businesses of this size. It, Your Honor, consists of 170 bank accounts owned and controlled by the debtors at 16 cash management banks.

We consulted with Ms. Whitworth with the other consenting stakeholders incorporate their comments into the proposed form of order. I'm happy to answer any questions, but I'd, you know, submit that we'd like to approve the form of order. The order reflects their comments, and if there are any questions, happy to discuss. All right. Does anyone else wish to be heard with respect to the cash management motion? Yes, Your Honor. Dana Whitworth for the U.S. trustee. You want to be heard, Judge?

Yes, sir. Yes, ma'am. Thank you, Your Honor. I will echo Mr. McCormick's statements that we worked earlier to speak on the form of order and the language. We've got some sending requests, but we're working with the Kirkland Ellis and the Gray team to get it all done. So we have no opposition to the entry of the proposed order, interim order at this time, Judge.

All right. All right. The I know that there was some discussion about when the second days would be. Do you know when the second days would be? Your Honor, I don't think we've determined the date that works specifically for us to know. Mr. Brookner might know. Mr. Brookner, if you're on and have that information, would you hit five star? Well, I did have a chance to review the cash management order and I do agree that this is

in the ordinary course of business and that, you know, having to comply with many of the aspects of the guidelines would be disruptive. I just, I would just like to know I can, I'm going to grant the motion and enter the order, but I need to find out when we have set for the second day. So just give me one minute. Oh, okay, I guess we still don't have a deal. All right. Well, maybe we can just pick one. How far out do you want it? Your Honor, I think three weeks.

I think there would be May 8th around thereabouts. You know, tentatively, we have to confirm the books on our sign. Of course, all the parties that appear here today. But, you know, three weeks' time, I think it was something to circle. Okay. So I can do it at a... 11 o'clock on May 8th, if that works. 11 o'clock, May 8.

Yes, Your Honor, we'll certainly come back if there's a difficulty or there needs to change. All right, hold on a second. Yes, that works. Okay. We'll make the objection deadline May 14th. Thank you, Your Honor. Okay, with that, I'll continue the next item on the agenda.

Hold on a second. Let me just go ahead and, and sign this. That's been signed and sent to docketing. Thank you, Your Honor. Your Honor, the next item on the agenda is docket number seven, agenda item B, the motion for the order authorizing the editors to redact certain confidential information, certain personally identifiable information, waiving the requirement to file list of equity security holders and approving the matter of notice to to creditors, the commencement of the cases.

Your Honor, because of the size and complexity of the debtor's business, they filing with the notice requirements to notice the very security holders would be unduly burdensome. Additionally, Your Honor, we have millions of customers, thousands of business counterparties and we are regularly in session of information that we would otherwise be required under the bankruptcy rules and code to produce in papers. Your Honor, the requested relief here is perfectly tailored to protect the debtors and again hundreds of thousands of customers for which it serves.

We, again, shared the order with the United States trustee and the other contending stakeholders. We believe it represents an agreed form of order. So without, you know, abstinent any questions, we request to be entered. All right. Does anyone else wish to be heard with respect to what I call the redaction and noticing order? Hearing no objection. I had a chance to review this against this is a type of order that is routinely granted

in cases where there are significant, you know, number of notice parties that would have to be noticed. So I'm going to go ahead and approve that order. So give me a minute here. All right, that's been signed and sent to docketing. Thank you, Your Honor. The next item is item C, the waitress motion, docket number eight. Your Honor, this motion again seeks customer first air relief for the vast amount of compensation and benefit programs that enable the debtors to employ and retain thousands and thousands of employees, as Mr. Susberg mentioned, are the lifeblood of the company. The programs covered on the wages motion include regular way compensation.

all of the different health and welfare coverage and programs that we walk through in detail in the papers, various retirement programs, time off benefits, other additional benefit programs. Your Honor, as we went into the hearing today, we were down to one point with the United States trustee. We do in this motion request for relief to pay certain former employees under certain non-insider severance programs over the priority wage cap. Your Honor, in our agreed form of order that we filed in paragraph three, we have a notice structure with the United States trustee, another part and the other contending stakeholder groups where we, whereby we would provide seven days in the proposed order advance notice.

We've discussed in Ms. Swarth, and I think we've agreed, we've had agreed. agreed on changing that period to 14 days, but otherwise are agreed on the form of order and additionally agreed on the form with the other contending stakeholders. So with that, there are no questions, request this be entered as well. All right, does anybody else wish to be heard

with respect to the pre-petition wage order? Thank you, Your Honor. Janet Woodward for D.S. Trustee was concerned that some of the requested, compensation. So compensation was significantly over special tar caps. We wanted to ensure that the court and all parties involved receive notice of these payments and had the opportunity to respond. So we negotiated the notice provision in paragraph 7.

And the question, that just a little bit additional time to provide that notice. So with that one change, Judge, to expand the notice period to 14. days the trustee has no other objection to the entry this order. All right. Does anyone else wish to be heard? I changed the order to say 14 days advance notice, so we don't need to do that. Thank you, Judge. Thank you.

All right. So obviously the employees are the lifeblood of this company. There's over 15,000 employees, and I think that in connection with this restructuring, trying to minimize the impact impact on the business, which is primarily the employees, is paramount. So I'm going to approve the employee wage motion. So give me a minute. That has been signed and sent to docketing. Thank you, Your Honor.

Your Honor, the final item that I'll be handling before I turn it over to my colleague, this Abbe, is the utilities motion, docket number nine. Your Honor, this, again, is a customary request to approve our proposed form of adequate assurance of payment for future utility services, prohibits utility providers from altering, refusing or discontinuing services, and it approves our proposed procedures for resolving adequate assurance disputes. So, Your Honor, the procedures are detailed within the motion this is also an agreed form of order with that I'll you know for no

questions and submit the order for signing I'm happy to walk through anything regarding the procedures or answer any questions might have no I did review the motion I didn't have any comments with respect to the procedures is anyone else wish to be heard on the utilities order the way that I read 366 you you need to provide if somebody objects you need to provide um a hearing within the first 30 days so um so although i don't anticipate that you will need this at all but i'm going to give you the uh a hearing at 830 on may 15 um thank you're to the extent you need that and You know, it would be virtual.

I'm going to be in a hotel room in Chicago, but we could do it early in the morning at 8.30. And again, that's just a placeholder. It's not here. It's a placeholder. It's not a hearing date, but to the extent that a dispute comes up within the first 30 days, that's the way I read 366, so I'm going to give you that because the 30th day falls on a week, on a weekend. Understood. I enjoy the windy city.

We like it very much. Thank you. All right, hold on. Give me a minute to do the order. All right, that has been signed and sent to docketing. Thank you, Your Honor. With that, I'll send the podium over for the balance of the first day motion to my colleague, Ms. Abe.

Thank you. Good afternoon, Your Honor. Gabrielle Abbey of Kirkman and L is proposed to the debtors. Your Honor, the next item on today's agenda is the Daughters' Customer Program's motion, which was filed a document number 10 and its agenda item number E. Through this motion, the debtors seek an order authorizing the debtors to maintain, continue, and administer their existing customer programs, their private label credit card program, their distribution program, and their charitable programs, all is further describing

the motion, as well as to honor certain pre-petition obligations related to such programs. They also seek the ability to modify, supplement, or terminate these programs. in the ordinary course of business consistent with past practice. The relief sought through this motion is to help maintain those relationships with the debtors over 10.3 million customers. We shared this motion and proposed order with the U.S. trustee and the consenting stakeholders and incorporated comments there too. We believe the filed order reflects all of these comments and unless you have any questions,

we would ask that you enter the order. All right. Does anyone else wish to be heard on the customer programs motion? All right. I did have a chance to review the proposed motion and based on the information and the testimony provided in the declarations. Having a seamless transition for the customers, which is the revenue base, I think, is very important in this case.

So I think entering in continuing the program. and not impacting them is a proper exercise of the debtor's business judgment. So I'm going to go ahead and approve the order, so give me one minute. Thank you, Your Honor. All right, that order has been signed and sent to docketing. Thank you, Your Honor. The next item on today's agenda is the debtor's insurance motion. This is filed at docket number 11 and its agenda item F.

Through this motion, the debtor seek authority to pay pre-petition insurance costs, and maintain their surety coverage as well under the existing insurance policies and surety bond program and to pay related preposition obligations in the ordinary course of business. They also seek to renew, supplement, modify, or purchase insurance and surety coverage in the ordinary course of business on a post-petition basis. The debtors maintaining approximately 93 insurance policies with 67 different insurers. Other than one policy, the debtors typically pay these premiums and the premiums associated with these policies at their inception.

The debtor's ability to maintain and renew the insurance policies and enter into new policies is essential to preserve the value of the debtor's business and assets. Indeed, maintaining such coverage is not entirely optional. In many instances, the insurance policies provide coverage that is required by statutes, rules, regulations, and contracts that govern the debtor's commercial activity. as well as the bankruptcy code and the region seven guidelines for debtors and possessions don't forget miss withworth he requires it too yep so we shared we preview this motion with the US trustee and the consenting stakeholders incorporated any

comments there too and believe that the filed order reflects these comments unless you have any questions your honor we would ask that you would enter this order as well all right does anyone wish to be heard on the insurance motion All right. I'm going to go ahead and grant the motion. I think it's absolutely essential that the debtor maintain, you know, appropriate insurance to continue to operate in the ordinary course. So this one doesn't need a lot of discussion.

Thank you, Your Honor. All right. That, hold on. That has been signed and sent to docketing. Thank you. The next item on the agenda is the debtor's motion for entry of an order, approving notification and hearing procedures for certain transfers of and declarations of worthlessness of the debtors common and preferred stock.

The motion was filed at the document number 12 and this agenda item G. By this motion, the debtors are seeking an interim order approving certain notification and hearing procedures related to certain issuances or transfers as declarations of worthlessness of respect to, better QVC group, inks, existing classes of common and preferred stock. This motion includes standard noticing procedures that will enable the debtor to monitor and object to ownership changes that threaten their ability to preserve their almost $5 billion of tax attributes for the benefit of the estate. To note, Your Honor, the procedures requested herein are commonly approved in this district

and do not affect any party's substantive rights. Rather, they require the filing of certain notices on the docket in these districts. We shared this motion with the United States trustee and with the consenting stakeholders. As Mr. Brody alluded to earlier in the hearing, we agreed to only seek to have this internet on an interim basis at this time and would ask that unless you have any questions, do you enter the order? All right.

Are you going to upload a new order because the order that I have is a final order? It's just a final order. Yes, we are happy to upload a revised form of order. Right, and then just put the hearing date for that May 8th at whatever, what time did I give? May 8 at 11 with the objection deadline on May 4th. And just alert Ms. House whenever you upload that. So. Thank you, Your Honor.

Again, you know, the company's tax attributes are a significant asset that it's in the exercise of the debtor's business judgment and their fiduciary duty to protect those, that asset, which is their tax attributes. So I'm going to go ahead and grant the motion and I'll wait for an order that makes it an interim order. Thank you, Your Honor. The final item on today's agenda that I will cover before passing it over to my colleague Ms. Hemsley is the debtor's taxes motion, which is filed as docket number 13 and is item H in the agenda. Your Honor, the debtor's timely payment of taxes and fees is critical to their continued uninterrupted operations, and if the relief isn't granted, the taxing authorities may seek

to recover unpaid amounts directly from the debtors, officers, directors, or employees there by distracting such key personnel from the administration of these Chapter 11 cases. As such, through this motion, the debtors seek entry of an order authorizing the debtors to negotiate, remit, and pay their taxes and fees in the ordinary course during these Chapter 11 cases without regard to whether such obligations accrued or erodes before, on, or after the petition date. They also seek the ability to undertake certain tax planning activities. The ability to engage in tax planning activities if necessary without delay is essential to

be to maintaining effective ordinary course operations and often the least structure the debtors go forward business. Notably, such tax planning activities will not alter the substantive rights of the debtors' stakeholders in these Chapter 11 cases, nor they anticipated to impose material adverse tax consequences upon any of the debtors, creditors, or equity holder. We've shared this motion with the United States Trustee and the consenting stakeholders and incorporated comments there too. It's my understanding that parties are supportive of the motion and we'd ask that you incur the order. Right. Does anyone wish to be heard on the taxes motion?

All right. Obviously payment of taxes, generally taxes are priority claims, which have to be paid ahead of unsecured creditors. and this is a proper exercise of the debtor's business judgment to go ahead and continue to pay taxes in the ordinary course, which would ultimately have to be paid anyways. So let me, I have signed that order and sent it to docketing. Thank you, Your Honor. And with that, I will pass the podium to Ms. Hensley. Good afternoon, Ms. Hensley. Oh, did you hit five?

Hold on a second. All right. Try again. Can you hear me not? I can't. can't. Good afternoon. Good afternoon.

Gabriella Hensley, Kirkland and Ellis, proposed counsel of the debtors and debtors in possession. I'll be handling the final three items on today's agenda, starting with the all-trade motion, filed at docket number 19, that's agenda letter I, Ms. Anamandra earlier entered, or you entered, Mr. Kise's declaration, but for purposes of the record, that's at docket number 21. As you heard from several speakers throughout today's presentation, all major creditor constituencies are supportive of us paying our trade vendors in the ordinary course. We are a retailer. We have over 2,000 vendors.

We do not manufacture goods. So the employees and the trade vendors are the core of this company. And in light of the fact that all trade is expected to be unenufactured, impaired and with the plan supported by our consenting stakeholders. We ask that all trade be paid in the ordinary course to minimize business disruption. We shared this motion with the United States trustee and all of our consenting stakeholders in advance of the hearing. We incorporated feedback, which is already reflected in the order that was filed with

the motion. And unless you have any questions, I would just ask that, Your Honor, enter the order that we filed with the motion. All right, does anyone wish to be heard with respect to the all trade motion? All trade motion is always my favorite motion in the case. So obviously in connection with this case and the proposed plan that unimpairs the trade and in an effort to minimize any business disruption, I think this is a proper exercise of the debtors of business judgment.

So let me just put in the dates. All right, that order has been signed and signed. sent to docketing. Thank you, Your Honor. Next up is what I will imagine is probably not your favorite motion, our dip motion, which can be found at docket number 53, agenda item J, Ms. Janamandra also asked you to move into evidence the supporting declaration at docket 48, so that is already in the record.

Your Honor, this one came down to the buzzer a little bit, and we will have a few revisions to the order. after the hearing, but I do believe Ms. Whitworth was really rather remarkable and got comments to us, notwithstanding the fact that I think she got this order at 1 a.m. and our lenders, as Mr. Baker said at the beginning of the hearing, are very supportive of the business and like this facility entered, and they have already reviewed Ms. Whitworth's comments, and they now have a revised order in their inboxes that we should be able to hopefully submit shortly after the hearing just a few changes to the default procedures and in the event that you know we unlikely that we end up defaulting on this facility um your honor would you like me to provide a brief overview of the

facility given the timing of the i actually had a chance to read it and miss whitworth filed her notice of appearance at 420 this morning so um I was on the docket and it kind of surprised me that she would be up at that time, but she was working. I can attest to that. Yes, she's had a very busy week and we are very, very grateful for how responsive she's been to us in line of the caseload we know she has. So, well, with that, I mean, if Your Honor doesn't have any questions. I don't have any questions. No, I actually, you know, spent some time after I got it. on it so and i thought that the declaration for mr keese was very helpful in setting the

late setting the basis for the need number one the need and uh the reason why you do it so mr baker oh did i go ahead go ahead can you can oh okay oh i had nothing um i was just coming off camera in case you have questions but nothing more for me all right miss withworth anything further General or for the U.S. trustee for the record. The changes that Ms. Hensley is discussing, Judge, just a woman to comport with the complex cases that the court has the say over the automatic say, and it's just, it's nothing significant, Your Honor, it just pulls it into line with what the court normally requires.

Yeah. Understood. So in this case, I'm going to go ahead and approve the DIP facility on an interim basis. In this case, what we really have is a DIP facility that is secured by cash to support letters of credit that are absolutely critical to support vendors, customs bonds, surety bonds, the things that the debtor needs on a daily basis. basis to operate and that this gives the counterparties who are, in essence, extending credit to the debtor, the comfort to allow them to do business with them. And having a cash deposit on the letters of credit is not unusual in any way, shape, or form.

So I'm going to go ahead and approve that. And, again, I'll wait for the revised order. Thank you, Your Honor. And I did, I forgot, I promised Mr. Brody before the hearing, and I'm sure Mr. Carn will appreciate it as well. So the record is very clear. The only parties that will be obligated on this facility are the debtors that were party to the pre-petition credit facility. So we've heard about our capital structure. This doesn't touch Cornerstone Topco or the intermediate holdco, which you've heard referred to as Linta.

With that, the last item on the agenda is, guess. So the scheduling motion can be found at jacket number 41, the agenda I letter K. I think I could sum this one up in just a sentence, which is that, you know, we want to go fast, but not too fast. So we're not seeking to shorten the deadlines. We want to make sure there's proper notice and due process. But we're hoping to, as is typical in prepack, not expend resources preparing soapsed schedules, not hold the creditors meeting until we see if we're going to be in beyond our plan timeline, which would put us at a combined hearing approximately at the end of May.

I think we proposed May 26th, subject to your availability. We began solicitation before the case, so we would ask that that hearing cover both confirmation and formal approval of the disclosure statement. And unless your honor has any questions or any adjustments to the dates, we shared this motion with Ms. Littworth and with our consenting stakeholders as well, and have revised for any feedback provided in the order that was submitted with the initial filing. Anyone else wish to be heard on the notice motion? Your Honor, Jenna Whitworth and the U.S. Trustee, Judge, you have heard? Yes. Your Honor, the U.S. trustee doesn't have any issues with the U.S. trustee.

scheduling the deadline, it looks like the 33 days of notice between the solicitation launch and the deadline to object or to opt-in, opt-out deadline. I would call the court's attention to the fact that the West Trustee continues to assert its objection to the use of the opt-out procedure to confer consent. We have filed an answer to the PSA container store and hold that course. And the back of the court just today just to acknowledge and verify that the U.S. trustee was all right to object to that issue. And then the other ones that we, I'm drinking from a fire hose here, Judge, and so I'm not sure anything

else that might be sectionable. I mean to go through with a little bit more than a couple hours of sleep and two cups of coffee. But I would appreciate just a statement on the record, Judge, that the U.S. trustee and our rights are preserved to confirmation to do with the issue of soliciting a plan that includes opt-out for the release of third party claim. Thank you, Judge. All right. I'm well familiar with the U.S. trustees' appeal in the container store case. So, you know, I don't think it, I mean, I'll certainly say it,

but I think even if I hadn't said it, all the U.S. trustees' rights are preserved with respect to that matter or any other matter for that, for that fact. I mean, all I'm doing is conditioning approving the disclosure statement for solicitation today and at the hearing, I'll approve it on a final basis if it's appropriate at the time. But all the U.S. trustees' rights are confirmed. Yeah, so the deadlines are fine. We can have the combined hearing on May 26th. I don't know exactly the time.

Let me see if I can find that out. We're going to do it at 9 a.m. on May 26th. Let me write that. Let me do that. I think that's the only date that I had to write in. Is that correct, Ms. Hensley? I believe that is correct, Your Honor. All right.

All right. That has been signed and sent to docketing. Thank you, Your Honor. Once again, just tremendous thanks for reading all the paper. We are painfully aware of how much. paper at once and really do appreciate your time I will feed the virtual lectern back to my partner miss yenamandra thank you your honor I I muted just to echo the comments from miss hensley thank you to you and your team and the u.s trustee and i know she doesn't have a team so just

the u.s trustee for staying up all night with us for several nights um and uh we look forward to seeing you next then all right mr brookner oh i have no thank you i in just to a yeah go ahead I pop up in just to apologize to you you had me on the master mute and my camera was not cooperating so I was unable to respond I think if your honor knows I would never purposely not respond to course I apologize to the court no no no problem all right so I'm waiting on the utility I'm waiting on the NOL and the dip orders so as soon as those get uploaded just make sure to contact miss house and and i will uh i'll review them as soon as i get them we'll do thank you your honor all right thank you all we'll be in recess