American court hearing recordings and interviews - Season 2. Episode 6. September 13, 2023. In re FTX Trading Ltd., et al., chapter 11 bankruptcy case number 22-11068, audio of hearing held in the FTX/Alameda et al. bankruptcy proceedings pending in Delaware, USA #crypto

Episode Date: September 16, 2023

official publicly available audio

Your Honor, I see that there is another sign-in sheet with some names on here that may not have got up to you. May I hand that up? Yes, that would great. Thank you. Good afternoon, Your Honor. May it please the Court. Tim Brown from Lendous Raffin-Cobb, appearing today on behalf of FTX Trading Limited and its various debtor affiliates. Your Honor, a set forth in the recently filed amended agenda. There are several matters that have been adjourned. Those are items 1 through 5. items six through 11 have been resolved with matters submitted under certification of counsel

there are however three items where orders have not been entered yet those consist of item eight the debtor's fifth contract rejection order item number 10 the interim fee application of Morgan Lewis as counsel to the emergent debtor and item number 11 the case management order in the FTX trading versus Samuel Bickman-fried adversary just entered that order before I take the bench. Wonderful. Thank you, Your Honor. So that leads us with item number 12,

which is the coin monetization motion. Item 13, which is a related, motion related to the investment advisory agreement. Item number 14, the status conference in the Almeda Research First Platform Life Sciences adversary. And finally, item number 15, which is the interim fee application. And that has been submitted also under certification

of counsel. But if your honor has any questions, we are, of course, available. I'm still waiting for the, I haven't received the report from the fee examiner. So once I get that, I'll be able to. Certainly. We will ensure that that report is transmitted over to you momentarily. And your honor, unless you prefer otherwise, at this time, I'll cede the podium over to Mr. Dietrich, who will be providing a case update. Okay, thank you.

Sure. news, or the beginnings of good news, I hope. We, as Mr. Gluckstein mentioned in the last on-the-bus hearing, are now after filing our draft plan July 31, what I would call the active stage of plan, discussions, and negotiation. We released publicly on Monday morning a fairly comprehensive deck of materials about the debtor situation in case, consistent with what we tried to do in the case, periodically providing more comprehensive public reporting than I think is the case. been standard for debtors given the number of people who are following what we do.

We had meetings, as I think Mr. Gloxtein mentioned, over the last two days, with stakeholders in New York City. Those meetings were very well attended. We had representatives of the Official Committee of Creditors, representatives of our ad hoc group of non-U.S. customers, class action plaintiffs who filed the adversary complaint on customer property issues were there as well, representing both U.S. and non-U.S. customers. in that adversary. We had principals, we had advisors.

The ad hoc group itself had over $850 million of claims represented at the meeting. And if you include claims by the others, it's well over a billion dollars of customer claims in particular represented in those conversations. We talked about the range of issues that were raised in the draft plan, soliciting feedback on its structure, and also the specific kind of study

questions we gave everyone. And I'm happy to say we had consensus on many issues. including general plan structure. There's still open issues, of course, but we also have consensus, I think, on having a next meeting with the group to try to resolve those open points. We also, I think, have broad consensus

on the timetable for the case, which is, as previously disclosed by the debtors, still aiming to file an amended plan and disclosure statement in the fourth quarter of this year, marching toward solicitation in the first quarter of next year, and hopefully, confirmation as early as the beginning of the second quarter. Those were constructive conversations, and I think we really, in our sense of the debtors,

as people made a lot of progress. Obviously, lots of different opinions on intercreditor issues in particular, but as I said, a broad consensus on that we at least had the right general approach with some variables and some moving pieces to be filled in. The JPLs were not at those plan meetings yet, but we also are pleased to report we've had put from the debtors' perspectives and very constructive discussions with the JPLs. So we're looking to have meetings with both the JPLs and with the other stakeholders in the coming weeks, and hopefully we'll spend the rest of September and October trying to get everyone

on the same page so we can file a plan that is roughly consensual, hopefully, with most of the people you've heard from so far on the case. Judge Fitzgerald has been very helpful. She is effectively on call and available to the extent we need her in mediation, both for the JPL and for plan issues. I'm uncertain at this time whether we will need her or not, but we certainly have discussed schedule with her and timetable with her and available dates, so we'll have that capacity in October as well if it's a part of the picture.

So I wanted to report that again, no concrete news, no great announcement, but I think at least from the debtor's perspective, we think this process of trying to be inclusive and maximizing public information has been, we've had two very good days. So thank you, Your Honor. Thank you. I'll see the podium to Ms. Cranesley,

I think we'll talk about the coin monetization motion and those can you quickly, yes. I'm trying to thank you. Kempasqually from Paul Hastings for the official creditors committee. I think from the committee's perspective, just reacting to what Mr. Dietrich just said. We believe the meetings were productive and substantive, certainly moving in the right direction.

I think Mr. Dietrich acknowledged there is a lot of wood to chop and all the parties who are at the meeting are starting to do that chopping. I think from the committee's perspective, Your Honor, the most important item of consensus is that all the parties agreed to expedite the plan process as much as practicable. What that means for the timeline is yet to be seen, but we all agreed the sooner we can get that process rolling

but better. So thank you. Thank you. Good afternoon, Your Honor. I'll address items number 12 and 13 on the agenda, which is the coin monetization and the related motion to authorize the debtor's entry and performance into the Galaxy Asset Management Agreement.

Your Honor, we filed revised forms of order yesterday evening and this morning, as you see from both of the revised forms and this afternoon. Yeah, and this afternoon. Yes, right before the hearing. I think as you can see from the orders, there was a lot of redlining,

but this is reflective of the fact that we have worked very closely with all of the parties, the U.S. trustee, the creditors committee, the ad hoc committee, Galaxy, the SEC, and numerous other parties who reached out both prior to and after we filed the motion. We're pleased to report that,

as far as we're aware, everyone's concerns and questions have been addressed in the form of order that we filed right before this hearing, as well as for the Galaxy Retention Order, the order that was filed last evening. Does that include the two pro se claimants who filed letters to the court, which I took as objections to the motion? We have not heard from those pro se claimants. They have not reached out to the debtors, and so we have not had any contact with them other than seeing their letter filed on the docket yesterday evening. Okay. I do have a question about the motion as it relates to. those objections from the pro se claimers?

It's a fundamental issue, I think. The debtor's motion talks about monetizing the debtor's digital assets. Those objections raise a question about whether or not certain digital assets that the debtor holds are the debtor's digital assets. How is that being addressed by the motion? Your Honor, the debtor's view is that digital assets that we are selling, which may include the assets that are alleged in those claimants of the claimants. objections are assets of the debtors.

That from the debtors perspective, those claimants have not asserted or demonstrated any evidence or commenced any actions to demonstrate their property interest in that property or the fact that that property interest is traceable specifically to them. We have also had extensive discussions with both the ad hoc committee as well as the class action plaintiffs on these points and our understanding is that they both support the relief that we've requested. Isn't there a, correct me if I'm wrong, wasn't there an adversary proceeding initiated by the ad hoc committee about whether or not the digital assets belong to the debtors or not? Yes, Your Honor.

And that hasn't been resolved yet. That has not been resolved, Your Honor. And we understand that they support the relief that we're seeking in this motion. I need to hear from the ad hoc committee. How is that so? How do I say I can enter this order that the debtors can just sell assets that might not belong to them, according to your complaint? Your Honor, Matthew Harvey from Morris Nichols-Arts-Sentonel on behalf of the AdHod Committee of Non-U.S.Cus Customers at FDX.com. I don't – as the debtor opened to hearing what there were productive discussions over the past couple of days on the substance and contract of plan, as well as the committee highlighted the timing of a plan,

and we are hopeful these issues will be resolved in a value-maximizing way for FDX.com customers in connection with a plan. Without prejudicing those discussions, the confidentiality of discussions, we are supportive of this motion at this time as a way to preserve and maximize value for the debtors of states, given the information we've been privy to and given the status of these cases. Now, I'll pause to your honor and see if my co-counsel Aaron brought her because on the phone has anything to add on that. Well, let me ask, is there a way to know? I assume there is because we're talking about crypto.

assets here which are supposed to be traceable so are these assets traceable to someone who specifically deposited them with FtX trade I'm gonna defer to mr. Dietrich on next I think he's gonna have a strong review on it one way and then I can respond as well your honor so I'll see the podium to the debtor in the first instance and then I can rise to the extent further necessary okay to say that's a good question your honor would be an understay the easiest way to address this is to acknowledge that the customer letters don't actually assert, identify to us any particular crypto owned by the customers. Generally, as we've said before,

customers have deposited, made deposits on the exchange. The exchange, when we say made deposits on the exchange, what we mean is the customers sent usually the yacht currency of some sort to a bank, sometimes crypto, but usually fiat currency, and had an app on their phone or a computer terminal that showed them that they had a account to which some cryptocurrency, at least on the screen, related. You've finally broken loose from work. Three friends, one tea time, and then the text. Honey, there's water in the basement.

Not exactly how you pictured your Saturday. That's when you call us, Cincinnati Insurance. We always answer the call because real protection means showing up, even when things are in the rough. Cincinnati Insurance. Let us make your bad day better. Find an agent at CINFIN.com. The burden is on them to specify.

We've done our review. Even if they did, however, say, I owned exactly, you know, I know soul. We still would not make assets. and none of the assets. On that basis, at least our reading of this, is that although there's potentially interesting, I'll call them constructive trust arguments on behalf of the customers as a group,

when we dispose of cryptocurrency in this motion or otherwise, we will be making sure we have books and records about where it came from. So if the cryptocurrency was in the customer pool, we'll keep track of that, and those proceeds will be able to be able to be able to be able to be able to be. available to customers, classification in our plan,

et cetera, subject of confirmation. If the crypto is in the kind of the general pool, or Alameda, or one of the other debtors, we'll note that, and the proceeds will be attributable to that thing. So again, to the extent the customers have been interested property as a group, we'll be able to say where the proceeds will go.

But we're not to a point where we think there's any evidence whatsoever that a customer has a unique entitlement to the particular cryptocurrency we're selling. We're not, for example, selling NFTs, which are individually unique. We're only selling these assets that are at most kind of a fungible bulk, if that makes sense. I guess I understood from the beginning of the case that customers could deposit their crypto assets with the debtor, at least FTX trading, and that there was a term of service that said that those those crypto assets remain the assets of the party who was depositing them and they did

not become the property of FTX trading. Is that not correct? It's not precisely correct. I mean, I think people can read the terms of service for the U.S. and internationally in different ways. There's contradictory language in those terms of service, I think it's been pled in the – I know there's – there's issues about it, but my concern is that issue hasn't been resolved. Well, no, that issue was not – that issue was not – that issue is not – been resolved. But it, and it is true that customers could deposit cryptocurrency, just like they could deposit cash. But whether they were depositing cash or cryptocurrency, it really just

appeared as a number on a screen. The underlying assets are not traceable to the individual customers. If that makes sense. So it's not like there was each customer, if Sally had deposited three Bitcoin, we don't have an account that says three Bitcoin for Sally. Joe had deposited three Bitcoin. We don't have an account that says three Bitcoin for Joe. What we have is some Bitcoin, some in the customer kind of pool and some of the Alameda pool, but not attributable to individual customers. And so when we dispose of this, we'll be turning it into cash effectively, and the cash

will be available for distribution pursuant to the plan. And that's kind of the reality of the situation. If that weren't the reality of the situation, the customer, you know, kind of tracing, So what is really the allegation here is not that the Bitcoin is just fungible, which is more of an allegation of, you know, there's something here that we should trace. That tracing argument, of course, is infinite in its capacity that would apply to every asset in the estate at some level. But a customer could say, I know I have three Bitcoin on the exchange. Might not know which particular Bitcoin it is, but there's three Bitcoin on the exchange that belongs to me.

That's their argument. And I want it back. I want the Bitcoin back. I don't want the cash. I want the Bitcoin back. Because I think that's more valuable to me. How do I deal with that? Well, I think that, again, I would say

that the burden of proof is on the customer to approve an interesting property, and there's been neither a specific allegation nor the assertion of an interesting property. Let me hear from the committee, because you guys represent these people. What's the committee's been called. Good afternoon, Your Honor.

Ares Gillod. Paul Hastings is on behalf of the official acquitted committee. I think it's fair to say that until now the committee hasn't adopted a formal view. We haven't interplayed as of yet in the pending adversary proceeding that Your Honor alluded to earlier. I would say this. Building off of what counsel just mentioned, the assertion of a property interest is specific to the specific property held. So stated differently, it's a customer-by-customer account-by-account basis. And just to amplify the point that counsel was making, so far there's only been one formal pleading as to the assertion of a property interest, which is that suit that was referenced by Your Honor, the Atmoser Proceeding file by the Adda Committee.

That group, though, is in support of this motion. So they are clearly comfortable that net net, the relief sought in the motion, yields, I would say, an incremental value to their position relative to the estate. The overall concern that we have is that the debtors have a substantial multi-billion dollar token portfolio available to them right now. And they want to be in a position to maximize that value, to de-risk their token portfolio, and ultimately to dollarize the tokens so that they can maximize cash distributions at the end of the case.

And in order to implement best practices, they retained an investment advisor to do that over an appropriate period of time utilizing a value maximizing strategy. And to do that, we need to begin that process now. Where the debtor is forced to wait on the relief that's being requested, they would be forced then in order, if they were to try and facilitate cash distributions to the estate, they'd be forced to monetize a significant portion of digital assets over a shorter period of time, which we are concerned could result in less optimal pricing. So from our perspective, we do think the Court has before it the necessary support from

the parties that have actually asserted the actual property interest. And in terms of what is in the overall net benefit of the estate, we do think the relief is appropriate at this time. Okay. Thank you. Thank you, Ron. Did the ad hoc committee want to say anything further? Thank you, Your Honor.

And again, for the record, Matthew Harvey from Morris Nichols-Arston-Tunnel on behalf of the ad hoc committee. Well, we don't necessarily agree with everything the debtor said about the traceability of property interests or the creditors committee in the context of where we are with our litigation, including if you, and Your Honor probably has not studied our complaint, but including that one of the ways in which the complaint is pled is in what I will colloquially call to is a pool or common pool trust theory based on the issues the official committee highlighted about the need to dollarize these assets and liquidate them in a market favorable way an over appropriate period with the assistance and expertise of experts in the area we are supportive of the motion at this time okay all right let me ask before I come back to you mr. I have I think one of the pro se claimants is on the line here he's enlisted as Sam

customer are you one of the pro se claimants who filed the letter with the court mr. Sam can you hear me he has hand raised you give me hosting rights too by is the any of the are either of the two pro se claimants who filed letters with the court on the line okay dear thank you your honor one thing I would just add again Matthew Harvey from Morris Nichols on behalf of the Adahawks for the is it's exempted any of the customers on the line or otherwise who have had issues with us or reached out to the court for sent letters have questions. The council of the ad hoc committee, the ad hoc committees, advisors are available for folks to contact, and we're happy to engage with people within the constituency. That's been part of what we've tried to do, and we've been very open about taking phone calls that come in.

So just wanted to get on the record that if folks are on the line and have questions, they can reach out to me or my co-counsel, if ever sheds, and we're happy to engage with those folks. Excellent. Thank you. Your Honor, I have a couple practical solutions if you're possible. So the first is, look, we think we can do this because the burden, as I said, is on the customer to specifically allege an interest in property and they have not. We would note that 363F4 allows us to sell property that's subject to a bona fide dispute. So the code does contemplate the idea that if property is disputed, the estate can go ahead and sell that over the objection. But again, these customers clearly had noticed of today's proceeding and have noticed to write a letter, and they have not even identified the specific property they're legging an interest in.

So we think that probably stands. It is possible for us as the debtor to potentially identify what crypto would belong to these folks. We have not conducted that process. But another possibility here is to go ahead and do that and potentially carve it out from the relief. leave, we'd rather not do that because it ended up being a slippery slope that's potentially inferred other customers. Thank you. All right.

Anything else? All right. Oh. I'm just going to see if you're any questions done any of the blocklining. No. Okay. I did have an opportunity to review it before I took the bench. Well, given that the only outstanding objections are the two letters which I entered on the docket

and took to be objections from certain process. claimants, and neither of those pro se claimants have appeared to establish their ownership interest in any particular Bitcoin that the debtors might hold, or cryptocurrency that the debtors might hold, and that all of the other parties in interest have agreed to the form of order that is requested to be entered. I will overrule the two pro se objections, and I will approve you were. Thank you very much, Your Honor. Your Honor, related to item number 12 is item number 13, the debtor's motion for authorization to enter into and perform the Galaxy Agreement Order. And that was filed last evening along with a revised version of the Investment Management Agreement that likewise has and incorporates all the comments from all the parties.

And so we understand that that resolves everybody's issues and concerns as well. And I have reviewed that. And do you know, anyone else want to be heard on that before? MS. Honor, for the record, Juliet Sarkesian, on behalf of the U.S. trustee, I do believe that the changes that were made to that order do resolve the U.S. trustees' issues. I actually rise primarily, Your Honor, to introduce you to a new trial attorney with our office.

His name is John Lipsche. Welcome. Thank you, Your Honor. And, Your Honor, he will be working on the FTX cases going forward, so you will be seeing him in your courtroom, or of course, in other cases as well. All right. Thank you, Your Honor. Thank you.

Anyone else? I'm satisfied that the motion is appropriate. I will enter that order. Thank you, Your Honor. Do we have the final versions of those both uploaded? Yes. Okay, we'll get those in. Nice up.

Good afternoon, Your Honor. Brian Gluckstein, Sullivan, and Cromwell for the debtors. The next item on the agenda, Your Honor, is item 14, which is the initial pretrial conference in the Alameda v. Platform Life Sciences et al. adversary proceeding. Your Honor, with respect to this case, we have endeavored, as we've tried to do with all of the adversaries that have been filed so far, and we will continue to do, to negotiate and submit to the court consensual schedule orders to obviate the need for unnecessary

hearings and conferences for the court. Your Honor, we're here today because we're here today, because we did submit a proposed case management plan and scheduling order in this adversary proceeding that was negotiated with all defendants and includes all of the necessary initial schedule and milestones the issue your honor simply is one of the defendants in the case platform life sciences informed us that they would not agree and sign on to the scheduling order. As we understand it, and there's a provision that addresses a negotiated briefing schedule that was contemplated this order, that platform life sciences intends to file a motion to dismiss

on the grounds that the court lacks personal jurisdiction over this defendant. And as we understand it, they don't want to be bound by the scheduling order and participate in the case with respect to the milestones that are scheduled to start going forward in November. We have initial disclosures and discovery to commence on November 10th in this adversary proceeding. It's the debtor's position, Your Honor, that the scheduling order provides for a reservation on no waiver of jurisdiction. We don't believe that this scheduling order binding all parties would prejudice this defendant for any motion that it will make with respect to any of its jurisdictional arguments.

We do think it's important if this case stay coordinated with respect to the defendants, that when we hit these milestones in November, everybody be subject to the initial phases of discovery. The court under the schedule that's proposed and that was requested by platformer science would have their motion to dismiss fully briefed by November 20th.

And we know the court will address that promptly thereafter. To the extent that that motion is not granted, we don't believe that it makes sense for this defendant to be on a different schedule. So very simply, Your Honor, we would like and request, respectfully, that the scheduling order to be entered in the case, but we've done so with respect to all the time. Okay.

Thank you. Mr. Cornfield, I see you raise your hand. Are you on for Platform of Life Sciences? I am indeed, Your Honor. Thank you so much for the record, Alan Cornfield, Pachoski, Stanley, and Jones for actually two defendants. There's platform life sciences in Canada. Mr. Cornfield, I'm going to ask you to maybe to, you're a little hard to hear. I can hear you okay, but I think other people in courtroom might not be able to hear you.

How is this, Your Honor? Is this better? It's about the same. Might have to raise the volume on your microphone. How is this, Your Honor? That's better. So, as I was saying, Your Honor, there are actually two platform life science defendants that are merged together in paragraph 21 of the complaint. I represent both of them.

There's Platform Life Science, Canada, and there's Platform Life Sciences, Delaware. As Mr. Glegstein said, usually a case-banded order is something that is negotiated, it's resolved. it ends up being non-controversial. The situation is different here. And by way of background, let me try to quickly explain why it's different. Platform Life Science, as its name implies, is incorporated in Canada. It's a life science company. It does medical clinical trials in developing and media.

and medium-income countries. It's designed to provide clinical trials in those countries that with respect to the world of clinical trials are marginalized. Platform Life Science, Delaware is a wholly owned subsidiary of Platform Life Science. Canada, it has no functional operations other than to operate as a payment processor for 11 U.S. employees. According to the complaint, Platform Life Science, Canada received $53,000,250,000 in funding by wire to its Canadian bank. The plaintiffs that provided the funding are Alameda, a British Virgin Islands Corporation, and FDX, which is Antiguan and Barbudan corporations.

The transfers to Canada came from Alameda and FDX bank accounts in Antigua, Barbuda, and Bertola. No part of the transactions or allegations to the complaint against PLS Canada have a connection to the U.S. Transactions all occurred outside of the U.S. No acts that give rise to the allegations against PLS Canada happened in the U.S. What we plan to do with respect to motion practice on behalf of PLS Canada is to file a 12B2 motion on Friday and we will keep the schedule that is set forth in the pretrial order in a case management order. And we will complete briefing pursuant to that schedule. With respect to PLS Delaware, we will file a 12-6 motion.

Now, how does this background relate to the case management order? The problem we face is the problem of waiver of the personal jurisdiction of offense, Third Circuit in Inri asbestos products liability litigation, a 2019 case, and the Supreme Court in, for example, Insurance Corp. of Ireland versus Company, Dave Bocke, which is a 1982 Supreme Court case. And for the record, the asbestos products liability litigation case is at 921 5,398. The Third Circuit explained in that case that the law is clear with respect to personal jurisdiction that words alone are insufficient to preserve a personal jurisdiction defense where conduct

indicates waiver and defendants can forfeit the defense even though that conduct is involuntary. And the court goes on to say, in essence words don't matter. saying, I want to preserve, I reserve, I reserve all rights with respect to personal jurisdiction, doesn't do it. Courts said behavior that is consistent with waiver and which indicates an intent to litigate the case on the merits is sufficient to constitute waiver regardless of whether the parties also express an intent to preserve the defense. Well, we've expressed to the debtor, the intent to preserve the defense and will express that to the court in the motion that will be filed on Friday. But turning to the case management order, the case management order explicitly,

not implicitly, explicitly requires PLS Canada to litigate the case on the merits. And if we sign on to that case management order, we have indicated the intent to litigate on the merits. We've said we're going to make additional disclosures, we're going to engage a document discovery, we're going to engage in deposition discovery, we're going to go to a mediation, we may make a summary judgment motion, we're litigating on the merits, and when we sign on to that order, we're indicating an intent to litigate on the merits. So despite the words in the case management, order which arguably if not somewhat weakly seem to say there is some preservation of jurisdiction

but it's more it's it when you look at the reference it's more geared to stir jurisdiction and personal jurisdiction but even assuming even assuming the words in the case management order are a reservation of rights. That is not enough. So here's the workable solution to this conundrum that we're in. We're going to comply with the briefing schedule that is set forth in the case management order.

That briefing schedule, subject to the court's availability, would allow us, again, with court approval to have a hearing on the motions in the December on the December omnibus. Frankly, after that hearing, we have a status conference. We can figure out where we are based on what the court decides and either the case, at least with respect to PLS Canada, maybe someplace else, or if it's in this. court we may not have the waiver problem that we would have at the present time. So that's our explanation of why we are where we are here and the proposed solution doesn't

appear to prejudice the debtor because the case management order with respect to other parties pushes briefing out until it's until later in this year, the only thing we would really not be doing that is comfortable to the case management order is making our initial disclosure and engaging in the document discovery. Your Honor, that's the reason, again, we are where we are. I'm happy to answer any questions. Well, I'm here from the debtors to see what the response is.

Thank you, Your Honor. Brian Glofstein for the debtors. So I'm not going to respond on the merits of the personal jurisdiction motion. We'll address that due course. Suffice to say we disagree. We believe the court does have jurisdiction over the PLS defendants. With respect to this issue, Mr. Cornfield hits on the issue on the head. We believe that this could be.

briefed if your honor would like, but we do believe that the case law is clear that it is a question of what is the level of engagement of the defendant. The schedule that's been set out here and the Third Circuit case in Asbestos products liability litigation make very clear when you read that case, Your Honor, that the facts and circumstances in that case were very unique to that situation. You know, here the question is whether or not all the defendants will be commencing the litigation pursuing initial disclosures and importantly starting discovery on schedule. The schedule that's reflected in the motion for the briefing of the 12B2 motion was agreed to

in the context of these defendants being part of this schedule. To the extent that they're not going to be part of the schedule, Your Honor, we would like to have motion heard more swiftly, and on the schedule, we would actually propose that they proceed quicker on the schedule set forth in the rules. But, Your Honor, we think that all defendants should proceed together, document discovery should convince together, the service and response to document discovery while their motion is being considered by the court and heard. We do not believe waives their defense. We think that defense is preserved, and we think that it's important for this case, for all defendants,

and for the plaintiffs, to begin moving this case forward in lockstep together, Your Honor. Thank you. Well, I agree. I think the motion, Mr. Cornfield, you said you're going to file your motion to dismiss on Friday, this Friday? Yes, Your Honor. Yes, Your Honor. Why can't we move up the, speed up the briefing and get this heard before the end of October instead of the end of November? From our perspective, Your Honor, that's what we would propose to do.

If we think the simplest thing to do is, as we propose, to have everybody bound by the order and to proceed on the schedule. But I agree, Your Honor. If the court and Mr. Cornfeld want the court to consider their 12 motion in advance of the commencement of the schedule, which has a kickoff effectively to the substantive dates in here is November 10th, then we would like a briefing schedule that would allow that motion to be considered by the, as your honor says, by the end of October. Under the rules, we could have it briefed as quickly as October 6th. We could extend that slightly, but we don't want to be a situation where if that moment, as we believe it will be is denied that this defendant is on a different track.

Okay, so when are you proposing you would follow your response to the motion to dismiss? We could, I mean, you know, it's 14 days under the rules. We could, we could do that, Your Honor. We could extend that by a week and extend their applied deadline a week out, get us to the middle of October. But we are happy to proceed on the schedule that would be provided with. If they file it on Friday, we could respond in 14 days on the 29th. Okay, why don't we do that?

Response in 14 days? The reply brief would be due when, six? It would be the sixth number bulls, yes. So we'll do that as the schedule for the briefing on a motion to dismiss for personal jurisdiction. And we'll have a hearing on October 26th. Well, let's do, let's do a... Let's do October 19th. I will be kicked out of my courtroom that week because of the judges, we have seven

courtrooms and eight judges, so I'll either be in a different courtroom or we'll do the, since it's only an oral argument, we can do it virtually. That's fine with the debtor, Your Honor. Okay. Fine with us, Your Honor, thank you so much. All right. And then we'll deal with the scheduling order once we get passed the motion. Okay, that's fine, Your Honor.

Thank you very much. Thank you, Honor. May I big skis? Yes, thank you. All right. Anything else for today? Your Honor, very briefly, Mark Hancock of Godfrey Conn on behalf of the fee examiner. Obviously, you have item 15 on the agenda, which is the Inter-Bee applications. As Ms. Brown said, there's been a certification of counsel filed. The fee examiner's report was also filed on September 5th at docket 2427.

I think the agenda didn't have a reference to that, and I'm not sure whether it made it in the electronic binders that is provided, but it is there, and I know Ms. Brown can get you a copy of that. I can answer any questions you may have about the fee examiner process, but the fee examiner is also here and can make a couple of brief remarks here. If you'd like to, yeah, that'd be fine. I know we're skipping over some of the fee requests this time around, right? For some reason. Thank you, Your Honor.

Catherine Stadler of Goddray and Khan, the fee examiner in these proceedings, Yes, we are skipping over, or I should say, holding in advance to interim fee applications because we are in productive discussions with those professionals exchanging information that may well resolve the concerns that we've articulated. If that should happen, we will work with local counsel for the debtors to submit appropriate orders under a certification process or in some other way if those issues get resolved. I did want to note just because we came all the way here from Wisconsin that I should stand up and introduce myself and just tell you a little tiny bit about our process.

The fee examiner process in my view is designed for one primary purpose, and that is to make the court's job in assessing reasonableness and necessity easier. If there is anything that we could do that would make that job easier that we are not doing, we're happy to hear that feedback from you, whether that's data, teeing up disputed issues on a real-time basis, reporting formats, anything that we can do to make that job easier, we're happy to do. The issue of the reserved issues, and since you didn't get the report for some reason, you probably haven't read about this yet, but what we attempted to do in our current report

is to identify specific issues on which the fee examiner reserves rights to revisit the issue at the conclusion of the case or at a later interim fee hearing. the reason for that is because of my assumption, and my dad told me never to do that, but I assumed that Your Honor and the parties would prefer to have disputed fee issues dealt with when there aren't so many other moving parts in the case. I also believe that there is a decent chance

of some of these reserved issues that watching the case play, out over time could change my view and would alleviate the need for any contested proceeding at all. So for that reason, we have tried to delineate in our report with respect to those applications that are recommended for approval, that there are some issues in those applications that we do need to continue to address at an appropriate time. Of course, everyone always has the right to object to a final fee application and all All issues are technically always reserved,

but the course of dealing of parties in these Chapter 11 cases tends to be the expectation that issues will be aired and resolved on an interim basis. Here, the interim fee periods are only three months long, and our reporting cycle is 45 days. So it doesn't give a lot of time for a long view of some issues that really require a long view. And so with that,

I just wanted to point out to your honor that that's the way we have structured this report and our process We're trying to be Thorough without being Picayune We're trying to be Responsive without being beholden to professionals or anyone else And we're trying to be thorough but not Overblown and if at any point we're not walking that line correctly I hope you're on our own will let us know and know that we will respond appropriately.

Thank you. No, I'm happy with the reports that I've seen so far. I think everything is going appropriately. And I think your approach is the right approach so that we don't have to. We can reserve some of these issues if we need to for the long-term view, as you said, and just so we're not getting jammed up on fee disputes

in the middle of other issues that are going on in the case. So I'm happy with the way things are going. I'm not sure what happened with the... the report I don't know why I didn't it wasn't brought to my attention I don't somehow but we'll we'll figure that one out you want to address back in thank you I'll step down thank you thank you thank you good afternoon your honor Kim Brown from Landisck and Cobb the report was submitted in connection with the interim fee finder and index that was provided last Wednesday and I think what

might be helpful going forward if your honor would like perhaps once the fee report is filed we submit that separately and then also include it with respect to the binder so you have it in both places but it doesn't get lost in the shuffle and since the hearing is started we've also emailed a copy two chambers and included miss fadler and mr handpack on that transmission all right thank that's fine that would work better i think certainly happy to do there's a lot of paperwork is following i am very aware your honor and happy to assist chambers however we can all right thank you all right anything else for today Appreciate the update.

I appreciate the audience of counsel, and we are adjourned. Everyone have a good weekend. Thank you.