American court hearing recordings and interviews - Season 3. Episode 7. August 7, 2023. In re Core Scientific, Inc., et al., chapter 11 bankruptcy case number 22-90341, audio of hearing held in bankruptcy proceedings pending before the U.S. Bankruptcy Court for the Southern District of Texas #crypto

Episode Date: August 25, 2023

For more information about the Core Scientific bankruptcy proceedings, including filings on the court's docket accessible to the public at no cost, see: https://cases.stretto.com/corescientific/

This is the docket for Houston, Texas. On the 4 o'clock docket, and I do apologize for the delay, we have the jointly administered cases in case number 22-90341, Core Scientific Inc. Folks, please don't forget to record your electronic appearance. That's a quick trip to the website. A couple mouse clicks. You can do that at any time prior to the conclusion.

We do have some folks here in the courtroom, perhaps everyone. If you are in the courtroom, do rise to speak. If you would, please come to the lecture. That's the only place that you can both be seen and be heard. If you are on GoToMeeting, have activated the hand-raising feature. You know you're going to be speaking. If you give me a five-star, I'll get you unmuted. You can, of course, change your mind at any time.

Either way, first time that you do speak, if you would, please state your name and who you represent. It really does help the court reporters do what is a very difficult job in the event that a transcript request is made. Finally, we are recording this afternoon. court speak and we will have that audio up on the docket available for your download short of that information anyone on go-to-meeting and think they're going to be speaking five-star and you're talking good afternoon good afternoon your honor with

clif Carlson for core and here with me is that at Securities right thank you Zacharyt's good afternoon afternoon your honor again for the record of Ted Secreides from Wogachal for the debtors and Christine Calabrese is with me as well. All right, thank you. Your Honor, I did put together a demonstrative to walk through if I could have control given over to Ms. How are you going to be listed with your computer?

It's my name, Your Honor. Christine Halebris. Mr. Sackeryz, I just couldn't hear. What did you say? What are you listed it? It's my name, Your Honor, Christine Calibrese. Oh, okay. I was looking for like wild presentation one or something.

Britt, you should have it. On my screen, Your Honor, it's showing the first page, but it looks like on the court's monitor. So I think we have hard copies. Is it easier if I just give you one, Your Honor? It's really just for us here in the courtroom. Sure. And I assume you folks have a copy on this?

We can get me one, Your Honor. And Your Honor, just a level set. This is the motion for summary judgment that we filed in connection with the claim that's feared filed. Right. Two parts. we hope there's no second part but we have two parts the first part is that they're not a party and the second part is limitations of liability and then depending on how that goes there was an agenda item that the schedule would be discussed so you're a honorable indulge me so the first page just take you through the issue really comes down to whether or not sphere is a party to the MSA and the orders that govern the MSA that's government the MSA that's a this rule of it comes down to. And there was some discussion in the papers

about whether you need to have discovery in order for you to rule on summary judgment. And the case also supports that you don't. If the facts are clear that they're not a party, you can rule on our favor. If the facts are clear that the limitation of liability applies, you can rule in our favor. And really what this first page shows is who are the parties?

The parties are Griffin and Corps. And in that MSA, which was in September, early September, sphere is not even mentioned. There was an order number one down on that same day. The sphere is not mentioned in that one either. And this shows, these are just excerpts. For the record, the MSA is at 1099-5, and order number one is at 1099-6.

And you can see here, Your Honor. And you can see here, Your Honor, Core Scientific, Griffin. Order number one, Core Scientific, Griffin. In fact, as I said, those two documents don't even mention Sphere. Now we've heard in Sphere's papers that Griffin was acting as a manager. That's not anywhere in the contract. And even if it was between the two of them, that's not really our business. Core has nothing to do with that.

So it's irrelevant. So what does it come down to? Order number two. And I put some slides in there just to show, Your Honor. We didn't make this point. And I think the point of this no third party beneficiary and no assignment is just to level set. That absent anything else, there is no third party beneficiary. There is no assignment. So let's get to the meat of the matter.

Order number two has an amendment to Section 8D. And Section 8D is a section in the MSA that says no assignment. The language is in front of you. This would be at 1099-7. That's order number two. And it says, Griffin can assign to sphere. It doesn't say that Griffin did assign to sphere.

It's something that can happen. So this document doesn't say any rights had been assigned. It only provides a mechanism for an assignment to occur. And then there's language at the end. There's language at the end of that provision. As long as sphere 3D corp satisfies company, that's core, requirements prior to. That's what it says. Now the other side will tell you, well, what does that mean?

What are the requirements? Well, we put in a declaration from Mr. Cannes, who you've met before, and you know him to be the head of mining, executive VP. pre-client services. The declaration affirms, he's familiar with the agreements, the relationship between the parties, and has personal knowledge of that relationship. He also knows whose core customers are and whose minors they're hosting. Whatever those requirements are, and he lays them out in his declaration, but whatever they are, they have to be at least one. And the other side had to satisfy at least something. Otherwise, that provision is meaningless, and that

goes against every candidate of interpretation under Delaware law or any other law. So they say, well, we don't know which ones they were. Our response to that is it doesn't matter. And we don't have discovery that you need from us. You, Sphere, had to do something. You had to satisfy company requirements. And if you did that, presumably you'd have some evidence of it. You have some email, something that went between the two parties. Nothing. What we do have to try to get out of summary judgment, first they rely on 56D. That's a federal rule. I'm sure you're well aware that if you believe that you don't have available discovery, you can make an application to the court to ask relief to put off summary judgment while you get the discovery.

Okay, well, but what discovery do they need here? That would not be in their possession. Again, if they satisfied a requirement, they would know. They would have sent something to somebody, and they didn't. So 56D doesn't really help them. If you flip the page to the one that has the invoice, it's page six on the slideback. All of the invoices, all of them have bill to Griffin, shipped to Griffin. nowhere is fear on any of these invoices.

And this one here is from May 12, 2023, and that's a date that's important. I'll come back to it in a minute. So what does fear say to try to get out of summary judgment? Well, they say three things, basically. Maybe four. The first one is they point to a sub-license and delegation agreement. That one will be on slide seven, Your Honor. The problem is we're not a party to that.

CORE is not a party of that agreement. Again, they could agree to whatever they want to agree. If those requirements were not satisfied, the condition for assignment did not occur. So that's sort of number one. But the sub-license agreement doesn't help them. So let's get to the heart of it. It's the next page.

They point to three things. A meeting with the former CEO of CORE, Mike Leavitt, in April of 2020. 22, a text message from someone at court reviewing a press release regarding Sphere and Griffin, and then a July 27, 2022 letter from Griffin's CFO to some unnamed person at court. None of these are sufficient to withstand summary judgment. We'll start with Mr. Levitt's conversation. Now, we deny that the statement was made, but that's neither.

here and or there for today. Even if it was, it's too vague a statement as to context, what was being discussed, or to support that Speer has rights under order number two, or that any requirements were satisfied. It also took place, according to them, six months after these agreements were signed. That can't change the contractual requirements. And again, all of the evidence that we have,

and they have documents too, if they have, if they had something different. All of the invoices say Griffin. So then let's look at the text messages. That one is at 1098-7. Your Honor, I'm going to pull that up myself. And that goes with 1099-3. And I apologize, this is part of a bigger document at page 61.

So the text message is referring to this press release, two different documents. So nothing in the text or the press release say anything about Core agreeing that Speer satisfied any requirements. Nothing. All the press release says is that Sphere and Griffin entered into an agreement and Core is going to be hosting some minors. Well, yeah, KOR is hosting minors, Griffin's minors, to this day. And we have the invoices to show it. Now, the reason I mentioned earlier that I'll come back to that date, the invoice was 2023, May of 2023, going to Griffin.

If, in fact, KOR had a contract with Sphere, based on that conversation that happened in April of 2022, this was a year later, and it's still going to Griffin. So there's nothing from that conversation. There's nothing in these texts or in the sphere of press release indicating a satisfaction of any requirements. None. And then lastly, this July 27, 2022 letter, that can be found at 1098-6.

Let's look at that letter. The CFO of Griffin, again dated July 27, 22, three months after the supposed meeting in April of 2022. And what does it say? To whom it may concern? Not dear CEO, not dear CFO. Just to whom it may concern, want to let you know that the money that was paid came from sphere. Okay, so what? That's all it says. Doesn't say that the contract and all the rights that Griffin had under the contract have been assigned to Sphere.

It doesn't say that. In fact, it's limited to just the issue of the money. Nothing else. Nothing that says, oh, by the way, they satisfied those requirements. Nothing. In fact, at the very end, it says notwithstanding anything above, Griffin doesn't waive or otherwise amend or modify any provision of the MSA. According to Griffin, it's their contract, not Spears. And again, three months after that meeting in Miami. So at the end of the day, as it comes to whether or not Sphere has any rights, we submit that summary judgment disallowing Spears claim is appropriate, because we've set out that they don't have any rights, they haven't satisfied the requirements,

and they haven't put any evidence in that they did. Can they ask you? Oh, I see them behind me. Yeah. Well, I was done with that piece anyway, so it's good. Thank you. Thank you. Thank you, everybody. So, Your Honor, on that first piece that I talked about, the, they're not a party,

that's our argument. We've laid out the undisputed facts. They didn't have anything in response, and there we are. Up to you, but I could stop there or continue on on the second piece, which is a limitation of liability. If they don't have any rights under the contract, the second part doesn't matter. Or I can just go and finish everything up and then take it all. So we're ahead and make the argument.

So if you reach this issue, this relates to the limitation of liability provisions that are in the MSA. If they have rights on the contract, they have all right, right, right? Right. Our argument is if they have rights, they're subject to these limitations. You can't get, you know, goose and or bittersweet, pick your metaphor, you know, idiom. So there are really two in the MSA. One we call as to type consequential incidental punitives. One as to amount, one month's fee.

So the one month's fee, if you have the flip book, we'll call it, page nine, that's of section 5D. And again, company is core. Total liability to client in the aggregate for the entire term, and regardless of whether brought during or after term, et cetera, will not exceed an amount equal to one month's fee payable to company pursuant to the applicable order. Now, there's debate about what that means. Our view, and we think it's supported by the contract, is that one month's fee would be the month before any alleged breach, because that's usually when this would come in. So we picked the month before we filed the motion.

They're pretty much the same as it relates to the sphere anyway, roughly in the 80,000 range. And the reason why we say that is you have to read, again, contract interpretation 101, the contract as a whole. And there are other portions of the contract. contract that tell us, well, what are they talking about one month's fee? Section 3. And again, the contract is at 1099-5.

And by contract, I mean MSA here. Company, this is A. Company will invoice client monthly in advance for all applicable fees for use of company facility and provision of services as set forth in the applicable order. then it talks about how clients going to pay these within calendar days, etc. So the way it works is they get billed based on the number of minors times whatever the cost is for hosting, and then there's a good true up later. But this is all based on what's happening at the facility.

So we say one month's fee, all right, let's say the month of May, it was $84,000 in that we have the invoice that we just looked at, which is part of the materials we showed you. number six, 84,658, sent in May. They say, well, wait a minute. It can't be that. It's got to be more because there are other provisions in order number two and most typical orders that I think you've seen in this case

that talk about distribution dates and prepayments and things of that nature. So they say, well, prepayments have to be factored in. Well, prepayments are not services. Prepayments are not fees. And I think one way to put a fine point on that, if you look at order number two, there's a section payment due prior to installation. So it doesn't say fee for services for monthly services. Payment due prior to installation.

And just look at the third bullet. $15 million in change, right? 30% of prepayment for March, 2022 to November. That's not a month, that's multiple months, and it relates to payments that are prepayments. They're not for services. So it doesn't make any sense what Sphere is saying, that look to the prepayments to factor in

what the one month's fee is. You look at the monthly fee for actually hosting. Another reason why it makes no sense, according to them, even if there were only 500 minors, but maybe under a schedule for a particular month there were supposed to be 5,000 minors even though they didn't pay for 5,000 miners to be hosted we should use that as a one month's fee.

Well, that makes no sense. That's the amount. 5C, which is no number on here, but it's page 10 in the deck. This is what we call as to type and it's pretty broad. Notwithstanding anything to the contrary in this agreement, in no event will either party, so either party,

be liable to the other party for lost profits, loss of business, loss of revenues, except that client, that's them, or Griffin, actually, shall be liable for any fees or other amounts owed to company. That's us. So the only exception to that is going in our favor. loss interruption, use of data, etc. Any consequential or indirect damages. This is as to type.

There's no question. Delaware law oppose provisions like this. They make some noises about fraud claims, intentional torts. With the exception of one thing about Bitcoin that they say we stole, which we'll have to deal with, I guess, this provision applies to everything. And if you look at the next page, 5E and 5F make that clear. The limitations set forth in sections, this is an E, Your Honor.

The limitations set forth in sections 5C and 5D, the ones we just looked at, apply to all claims and causes of action, regardless of whether in contract, tort, strict liability, or other theory. There are Delaware cases they cited about intentional torts. I suggest in those cases there weren't these broad provisions. You should take a look if there's any issue. Those cases did not have provisions like this that say explicitly, whether in contract, towards strict liability even, or other theory. And then just to let everybody know how important these provisions are,

in F it says each party recognizes and agrees that the warrant disclaimers, limitations of liability and remedy limitations in this agreement are materially bargained for by the parties. It couldn't be more clear. I think you can flip to the end. We went over some of the other points. So when you look at what are the damages they're alleging. They're all contract-based. Claim for hosting deposits. Claim for alternative hosting costs. claim for storage fees. Losses and damages arising from Corps failure to satisfy its obligations,

including but not limited consequential expectation and reliance damages. The exact damages that the contract says you're not allowed to get. Right. So let me ask you this. So you start off by saying they're not a party. So if they're not a party to the contract,

not the limitations, right? Right, if they're not a part of the contract, then, We would say they have no rights they're out. Hold on a second. I'm with you. All right. Okay.

So, and again, I don't have. We have it from Griffin. Sphere may have sent it to Griffin. Again, we would say, it'd be like if Judge Isker paid for one of your bills. If I have a contract with you, I don't care who else is paying for it. I feel the guy, but I just want to walk through this. Sure. Yeah, we're having a conversation.

So if they're not a party to the contract doesn't fall on, you took money, you took money, it's a deposit that you longfully converted, all of those things, if it's, that's not a claim under the contract. I would say it's not a claim under the contract, and it's not a claim against us, because I got paid under the contract by some guy who I had the contract with. If you have a beef with somebody, maybe it's that of the guy. Does it matter who sends you the money? I don't think so. I have a contract with you, I don't want to make a personal,

I have a contract with some third party. But how did you know what the money was for? Well, Griffin sends us money. Well, Griffin sent us money, okay? Even if it came from sphere. I mean, we have the money coming to us, you know, let's say Griffin wire transfer. So it came from Griffin?

Yeah, but they're saying they gave it to them and if we look at the letter and give credence. No, no, and we give credence. Yeah, yeah. If it came from sphere. Okay. Then it's a slightly different issue, right? How did you know whose money it was?

I would say, the fact that you paid for somebody else's obligation, that's between you and him. That's my question. How did you know that if the money came from spirit, and I don't know where it came from, let's assume for our discussion here it came from them, but to pay for this contract. How did you know it was to pay for this contract? Well, there's an invoice, I mean, we can get into that. There's an invoice that would show that we got these prepayments. There was one attached to their papers that shows Griffin,

that they say they gave them money to Griffin to pay us. You didn't see that, though, did you? We would know it came from Griffin. How did you know that if it came from Spirit? Well, it wouldn't be obvious that it came from Spirit. Are you saying how would we know, like, in the abstract? I've got a wire transfer for a million dollars in my base account. Well, Griffin did tell, I mean, there's a letter from Griffin saying that the money came from Sphere.

At the time? Certainly in July. But again, I would say that's between the two of them. Like even if Sphere's paying for this contract, if they didn't get, if they didn't do what they needed to do to get the rights, who pays doesn't matter? And if they're out money because Griffin didn't pay them back, we're still using whatever these prepayments were. they're still being applied to the Griffin, to the Griffin miners. Do we know it in the petition date?

Yeah, it's about $34 million. Well, that's what they say, the claim. I mean, that's close. I couldn't give you to the penny, but it's up there. Okay. And our view is, okay, if you, it can't be aware, I think you're asking me, that you have no rights under the contract, you give me money anyway for the contract for the other guy,

but somehow I have to give it back to you, even though I have the contract with the other guy, he's not asking me for the money back. He's using the money as a credit for the miners that I'm hosting for him. So let's break that down if you could. Sure. Because you start off by saying they're not a party under the contract. That's right.

And I think we put that issue with that, is that if they're not a party for the contract, they have no benefits under the contract, if they're not a party. So it means that to the extent that they have a claim, it has to arise legal the claim against us? If one legal theory exists? Okay, I'm just, you know, I'm being a lawyer here. But if it can't arise under the contract.

If they have no rights under the contract, then their right to that payment cannot come from the contract. Right. It has to come from someplace else. If at all. If at all. Or they have a claim against Griffin. I don't know about that, but you're a good lawyer. Yeah, well.

So what I'm trying to figure out is on a summary judgment is if, and see, I've gone down both branches of a tree. That's what you should, you're a good judge. Yeah. If, as you say, they're not a party to the contract, then to the extent they have a claim has to arise from somewhere else. If they are a party group of the country, they're subject to all of the limitations,

all of the contractual. I would agree with that, yeah. And so is there anything in your mind in the proof of point suggest an alternative theory other than that I'm aware of? Their theory is that they have the right to the contract that they were assigned to them. That's it, Ron.

I got it. Okay. Thank you for indulging me. Appreciate it. Your Honor, bear with me. No, of course. As I understand, if you wanted to put some things up, but only in the court. Yeah, so we'll give you a copy of the same as they did it up a demonstrative,

and we'll also give our adversary. Okay, so you don't want to publish it or you do? We're fine either way. So why don't we publish it and we'll give a TPA? Harper, are you plugged in? Your Honor, my name. My name is, oh, if you're ready. I was, I want to make sure that it's hard.

Fantastic, Your Honor, my name is Greg Wolf. I represent Sveer, alongside by friends Pat Davidson, Ashley Carper, and Brandon Bean. Also in attendance is, excuse me, Brandon Beth. And also in attendance is Speer CEO, Patricia Chompher. Just as a housekeeping matter, I'd like to move all exhibits on our exhibit list into evidence for purpose. to evidence for purposes of this MSJ hearing and record only. And Spears exhibits are filed under seal. The docket numbers 10981 through 1098.

And I was remiss. I apologize, Your Honor. Prior to the hearing we did discuss with counsel that we would agree to that and also reciprocally for us, which would be at the 1099 numbers. So no objection to both for purposes just of the hearing today. Certainly. So my agreement, I would.

will admit spheres exhibits 1 through 9 identified as 1098-1 to 1098-9 and core exhibits 8 identified as 1099-1 to 1099-8 dash 8. Did I get them all? Okay, thank you. Okay, thank you. So I'd like to begin actually where your honor left off on whether we have any claims outside the contract and I direct you to page four of our proof of claim paragraph 13 I'll find it I just thought I did no no I don't think it's one of your

Mark exhibits I believe it's attached to our summary judgment papers please please that would be great if you know we file just so the records clear we filed two proofs of claims the material to identical and I direct you to paragraph 13 on page 4. And as you'll see, we asserted that there were, in fact, claims outside the contract, including unjust enrichment, conversion, and a stop. And the estoppel claim, for example, would arise when Ms. Trompeter and Mr. Sussopoulos go to meet with core CEO, and he says, you have a contract keep making deposit payments.

That will give rise to an estoppel. Conversion, you get a conversion claim when someone holds onto your property wrongfully. Those are claims outside the contract. And that more within our briefing fit within the rubric of, look, we would need discovery on this. I think we can beat the motion for summary judgment as to whether we have contractual rights on the merits,

and I'd like to get into that. But I just do want to make clear we do. have claimed outside the contract so so do you have a copy of the addendum available to my colleagues will forget so I now understand sorry what was this at this that's the same claim your honor oh no that was for you oh for me oh sure yes I know okay I now understands okay so what you did in paragraph 13 is you said I follow the demand for arbitration, I asserted all of these theories, and that you, by reference, incorporating, incorporated those claims within the addendum. I messed that one sentence, because then I went on

and said, this is a little bear. No, no, no, no, 15 and 16, and quite frankly, the rest of it, it's all contractual based? Yes. But I got it. Okay. Yes. And do you think you can have both? I think it depends. I think for the conversion. claim their position is they've canceled the contract a long time ago and as a result they're still holding onto our property so convert right you can't just keep you can't have a contract and then just keep holding onto property right so she's you've been it's you believe well it's funny you should say that so we it's it's sort of not clear um the i think the the the position they took with us in 2022 was at some point this has been canceled.

I then read their papers, and they sure seem to indicate it's been canceled, and yet I just heard my adversary saying that they're still billing things in accordance with order number two, which is sort of the opposite, right? That contract's still effective. It seems to me the contract has been canceled, but without discovery, I'm not sure. Let me ask you, have we thought about pushing that issue? Doesn't that change your view of the world? I want to be very clear.

I want to tell you exactly where I'm headed. Sure. On this track that we're currently on, you're going to have to choose, because I don't think that the claims can exist together. Either you're a party to the contract and you're going to be subject to all the limitations and everything else,

or you're going to take the position that's no I have tort claims that are based on whatever theories you have because I don't think I mean I got the conversion claim if in fact maybe I don't know I have to read the entire contract to find out what the rights and enemies are the parties on determination but I don't think that you can maintain this at least based on what I've read as both I'm just going to a tort claim and a contractual claim. I think it's one or the other. Yeah, so I mean, part of the issue is my adversary is going to move on that. But what I would say is for unjust enrichment,

you're probably right. Right, classically, there has to be a contract otherwise just enrichment. For estoppel, not so, which is more quality contract. It's not really a claim. Well, it can be right, so a promise, so an estoppel claim, for example, if he says, if he's, right, there's no contract, but he says. Oh, but it's a contract.

Yes, it's basically substituting consideration. Some, some jurisdictions consider that a tort, some contract. As far as the, as far as the conversion claim, I will agree with you that there may be some element elements of it that we can't maintain, but I do believe that the law would say, for example, with respect to the machines. Right. If that's our property, the machines are our property, and they cancel the contract, and then they just won't give them back, that's a conversion claim.

Right, they've converted them. Assuming they have, right, I mean, assuming they have no right to hold it, right? Assuming they have no right. Right, I got it. So, are you starting to? Yes, please. Could I struggle with that. Given what I've said, I'm also trying to figure out if you really want to.

Well, I think we will, and hopefully I can sway your honor. away from struggling to a decisive feeling that it should just be denied at the very least of this structure. So let me begin where I think I would have began, which is just to level set what's at stake here. Over the course of a little over half a year, we paid core $35.1 million deposit funds. And can I ask you the same question that Mr. Scarey couldn't answer? Who paid? So if sphere would give it to Griffin, who would they have?

give it to court and up and i will from from the debtor's point of view if we were only looking at the wire transfer they would have no idea that you paid if you were only looking at the wire transfer but i will get to why it makes sense of the delegation agreement right i got to start it the easy first so i will wire transfer you you wire transferred the money our exclusive manager of our department you transfer your manager your man and you've been transferred. Yes. Yes, and if you put blinders on and you were only looking at the wire transfers.

Okay. So, as they began, 35.1 million to them, we get a few hundred thousand dollars for the services. And then they say, we're not going to host any more of your minors. We're not going to uphold our end of the market. So are there minors being hosted today? There are approximately 600 minors being hosted. And are they your minors or are there somebody else? There are minors.

Okay. And so is it your belief that you have to pay for those or you don't have to pay for those? They've been using telling leave are prepayments down. Yes. Yeah, absolutely. We would absolutely have to pay for that. Okay. And is it that you believe you have to pay for it pursuant to order two?

order two or some other agreement? Well, they've canceled order number two according to them. So I think that's what I'm struggling. Right, I know. So I think what if you were, you can cancel a contract and continue to charge a fair rate without a contract in place. Well, that's actually different. It seems like that's what's going on here, right?

They won't give it back, but they're still following order number two's rate. How can that be when sophisticated parties and so I were here before you okay is the whether any agreements that the 35 million dollars had to be segregated or it was just a deposit that could go into the general coffers and be spent my my understanding is if you look at the fee schedule within order number two is that this would be credits for so that would be right that would suggest to me that general right you would have it as a separate statement allocated towards serious value.

Well, that just says an accounting entry, I'm going to take your money in, but on the ledger of life, you just have a plus that it gets a paper deduction every month, right? Yeah, I mean, so if, I don't know if it's that simple, because if you are running out, right, so let's say you were to put it into the general ledger on your hypothetical, And then all of a sudden, right, you're, you have below $30 million in the general ledger. You can't do what you were supposed to do under the contract force to be right now. Why not?

Well, because you don't have enough money, right? It was, you got $35 million in the sphere. Well, at that point, it's not money. It's a credit. I may not be following your question. I asked you an accounting question, which was not fair. Because once I take your cash in, you swapped your cash for a credit. Mm-hmm.

So you have an account there that reflects for subject to future deductions. I took your cash, it's in the general coffers, and you now have a credit there against, which will satisfy future bills. So I will be candid. My mom is an accountant, and there was only one profession. She said I could go into, that was accounting. Okay, fair enough. So the question before the contested matter, and we look forward to presenting our case to you,

hopefully on a full discovery record and at trial, on whether Corps should enjoy a windfall. You just heard from my adversary. They still have $34 million of our money, right? The question will be, should they enjoy the windfall? So let me ask, Mr. Seger-Eadieson, yes, sir. Is there a contract in force or not? There's a contract with Griffin that we're performing under, even though we believe that Griffin is in breach.

Griffin's, minors, I mean, my adversary keeps saying they're his, and not his, they're Griffins. The miners that are there are griffins. They're never spheres. I mean, that's the whole argument, right? Our view is the miners that came over, their argument is they belong to spear. Our argument is no, they're griffins,

and I got the invoice to prove it, right? It says, Griffin, May, 2023. Yeah, so let me ask, I'm going to ask, your bankruptcy question. Oh boy. So you, you, this, I'm assuming this contract has neither been rejected nor assume. That is correct. And so if they're your manager, why haven't they moved to compel rejection of the agreement? Because you're going to allege that they can never care. The answer to that question is I'm not sure you're wrong. I think our impression was that the up until, right, they said that I'll take a step back.

There are two conflicting things here, right? One is the contract is enforced. You know, as I was listening to my friend speak, I was thinking, gee, there sort of do sound like a lot of fact issues here. But I think the problem is they indicate, right, I think they indicate in their claim objection. The contract is no longer in effect. And they say they won't host any more minors. But then they say they're also continuing to host minors, which suggests that the contract is in effect. I think it's just unclear at the end of the day.

So what is your relationship with your manager today? Do you have the ability to direct them or not? I think we would have the opinion that we do have the ability to direct them. I think they may have a different view of that. So is this really a $35 million dispute between you and the manager? No, definitely not. So you're telling me that the money got paid to your manager for the money back? Can I ask my client whether we have any?

I'm just trying to make. This doesn't make sense to me. Well, can I go to, can we get to the delegation agreement and I can explain why it would make sense? Okay. Okay. So, let me walk through the relevant agreements with you. Right. For agreements, let's start with.

Let's start with slides soon. So here we have the agreement between Speer and Griffin, which provides that we use the terms provider and customer, but you can just report. those with Griffin Shelby, Spears-exclusive provider of any and all management services are watching. Is it your belief that Core knew about this agreement had it signed onto it for the asset agreement? Given that they, I don't know if they passed away to it, did they know about it? Given that the order number two is so explicit in providing that rights would be assigned to sphere

and that they then they then signed off on a press release from Griffin or excuse me from us describing the delegation it sure seems that they knew about it but if sphere was taking over why would they mean why don't I just get to the delegation agreement and explain how I think it functions and I'll be quiet I think that will I'm glad you're interested so again The next is we have order number two, and the third is the MSA, and then the final agreement, and I think this is sort of the key here, is the delegation agreement between Speer and Griffith. And what, you know, I think what may be the cause of the struggle is not everything is being assigned, right? What's being assigned is the right to access and use the company

facility pursuant to order number two, and then it's delegating the obligation to make payments to court pursuant to order number two. What hasn't been delegated are all the obligations to actually interact with court. And there's a reason for that. They're the exclusive manager. They're the ones who are getting paid

to ultimately deal with poor. But in terms of whose money it is, it's our money that's coming to it. And so why didn't your manager? I'm not sure that they would consider that they had, it's a good question. I'm not sure that they would consider that they have rights to the money given that it's our money. Well no, they don't have any rights to the money. I mean, according to you, but managers take action all the time that have financial

benefits to the folks that they're managing for. The answer, I can't speak for them. Okay. Are they represented by anybody? Can't hold it. Okay. Can I take it, there's, they haven't followed for a client in this case, that's correct. All right, so if we can put up slide six, we've been discussing adenosia. Right, you have slide six, which specifically refers to sphere. As your honor just put it, they knew something was going on.

Right, it doesn't say any party, it says sphere. Right. It's specifically a reference of it. And, you know, we then go to the proxas just, what are the requirements prior to? They submitted this affidavit from Mr. Cannes. And I think we're all in agreement now, my adversaries included, that there's no way you can read the phrase requirements prior to

and think that's what those requirements are. And so the question for you then becomes, what are the requirements? And the requirements, given that there's no written consent required, seem perfunctory to us. And it could be as simple as, as, CORE signing off on a press release, right? It could be core doing a search and just verifying that

Speer is a Canadian company. There's no mechanism in the contract that actually says, oh, Sphere has to submit something to CORE, right? It could be Griffin that submitting it. And there's no mechanism that actually says Corps has to announce your requirements have been met. And there's no mechanism because there's no written consent required. And so So there are many things that could have been done to satisfy the requirements. We don't know what the requirements are, and given that Griffin and Court were the ones interacting,

they would be the one the parties that ultimately know if the requirements were satisfied. I think we have a lot of evidence and certainly sufficient evidence on this record to go past a motion for summary judgment. And I'd begin with order number two, which contains the assignment language that specifically references sphere. We then have the delegation agreement, and it's undisputed that, whether effective or not, it was certainly the intent of Griffin, right? It was the intent of the parties to accomplish a delegation. And then third, and we have the declarations of Ms. Trompeter and Mr. Sassopolis, excuse the mispronunciation. There are unrebutted missions that poor CEO said, yeah, we have a contractual relationship.

right and that's dispositive and I heard a lot about for my adversary whether the requirements had been met but what I hadn't heard is anything about whether there was a waiver of a condition precedent and when the CEO of a company says we have a contract relationship you are our customer that sure suggests that either the whatever happened between Griffin and Corps that the requirements were met or we don't really carefully. requirements are made. Keep paying us millions of dollars. We like it when you pay us money. We don't really care if it comes from your Griffin. We just want to keep receiving the money. And Your Honor, we think that that's dispositive and there's really no need to go to the other evidence, but we did offer other evidence, right? We have the, and if we could, let's slide 9, right, we have core approving a press release disclosing the delegation agreement. Surely, if Core thinks this delegation isn't effective, it's going to say, wait, hold on. You can't, you can't disclose this delegation.

So we have the approval of the delegation agreement. And finally, we also have the statements from Griffin that this is actually our money. And unless you have more questions on that branch of the motion, I'll move on for the limitations of liability. Okay. If it's okay with your honor, I know that TAD began with contract construction, I'd like to begin with public policy. Sure. So, court contends that Section 5C eliminates certain categories of damages such as lost profits, and that Section 5B limits its liability to just over $84,000. And its argument fails for several reasons.

The parties agree that Delaware public policy controls. and bill or public policy will not permit a party to exploit itself for intentional torts or contract claims that include allegations of bad faith and we've included both claims here now there was actually um we've put up on the deck for you um the paragraph's discussing why intentional torts can't be disclaimed and while my adversary said today um oh look at the underlying opinion see you at the limitations of liability and their scope that was nowhere within their reply papers and I'm unfamiliar with any jurisdiction that permits conversion claims be just to be disclaimed and the porpoise of Delaware law

indicates they can't be and I've never seen a decision that says that intentional court tort can be disclaimed right but the conversion claim isn't under the contract, right? Correct. I think your point is, either way, it probably wouldn't be subject to what if you're just about. I don't need your theory on the post-contract termination. They're wrongfully keeping my money and have no right to do so.

I think it might be, wind up being a little bit more nuance than that. Okay. But either way, I think we're in agreement that the limitations of liability can't limit the conversion price. I wouldn't make that assumption. Okay. Either way, that's our position. And then, so to our mind, what this really boils down to is whether contractual badge bait can be disclaimed. And our adversaries say that there is no Delaware precedent

for striking a limitation on contractual liability because of a party's batheap breach of contract. And what we submit is that this is a misstatement of Delaware law. And we cited Delaware precedent indicating that Delaware, like most jurisdictions, in fact, does not allow a party to limit its liability for a bad faith breach. My adversary cited the same case law. And we'd refer you to the Petroleum, the Magellan Terminal Holdings case. The question was whether the limitation of liability was enforceable against bad faith breach. As you can see, the limitation of liability was very at issue in Magellia.

was very similar to the limitation of liability here as reflected in Section 5C. And what the court holds is that whether a bad faith breach can be limited is an issue of fact that cannot be decided before trial. And I quote, the case law from the Superior Court carves out an exception for bad faith breaches of contract in specific instances. It is undisputed that parties cannot resolve themselves for their own conduct amounted to fraud. However, as the claims that fall somewhere short of fraud, such as claims for bad faith, the court must undergo a factual analysis that is premature on summary judgment.

Now, on reply, my adversary say that the Magellan case only reached this conclusion because there were also fraudulent inducement allegations in the case. And if you read the case, the presence of fraud allegations ultimately had nothing to do with the court's ruling on bad faith breach of contract. You can see it right there. It's undisputed that fraud can't. be exulpated. The only question is whether bad faith breach of contract can't be. And the court says that that raises fact issue that I need to address a trial. And we'd also submit that petroleum is consistent with the majority position in Delaware that

bad faith breaches cannot be limited. And for example, if we could go to the next slide, in the context of interpreting a contract construction provision that did not specifically carve out exception for bad faith, the court in J.A. Jones construction, v. City of Dover observed that even if a contract reports to give a general exoneration from damages will not protect a party from a claim involving its own fraud or bad faith. And my adversaries in their brief say that J.A. Jones only dealt with tort liability. That's not correct.

The court in Petroleum, as the court in Petroleum noted, J.A. Jones also dealt with contract liability. And if we could go to the next slide. The rule, and it may be the rule in every jurisdiction, but certainly the rule in the majority of jurisdictions, is consistent with the law we've just given you, which is that bad faith breach cannot be limited. And my adversaries didn't dispute that. And I'd like to read you what the Texas Supreme Court has said to say on that issue in Zachary Construction Court. Generally, a construction provision exempting a party from tort liability for harm caused intentionally or recklessly,

is unenforceable on grounds of public policy. We think the same may be said of contract liability. To include otherwise with incentivized wrongful conduct and damaged contract relations, this conclusion is supported by lower court decisions in Texas and court decisions in at least 28 American jurisdictions. We joined this overwhelming consensus. And so the question then is,

I think we've addressed the public policy aspect of my adversary's motion. Right. And let me ask, yes, of course. So I'm looking at your proof of claim. So I'm looking at paragraph 13. It says, sphere of fault command for arbitration against core asserting claims for

repudiation of a contract, breach of contract, B, breach of the implied covenant of faith for your appealing, and just enrichment, conversion, promise sorry to stop. No assertion of it goes on down in 16, in addition to the other amount stated herein, the truth of claims in amendment, for the right nonetheless of the data now.

For any of the losses and damages arising from court's failure or satisfies obligations to the claimant, included by not limited to consequential expectation of reliance damages and any fees. So, I think our underlying, obviously don't have our

undelying arbitration demand, but it would be clear that we're asserting bad faith, but I'd also note that a breach of implied covenant of good faith and fair dealing under Delaware law necessarily requires a proof of that of bad faith breach. And so that's where we would rely on. And so again, so we, I guess we're going to where I was going, which was in their motion, my adversaries promised you very narrow legal

issues of contract interpretation. And in their reply, they're giving you very fact-heavy questions on whether bad faith has been, whether we're going to be able to prove bad faith, on this record. And that's a fact, that's a bad faith is a classic fact question. And that is, would be inappropriate to be resolved now before there's been, um, discovery. But on top of it, we've given you evidence that there was in fact bad faith conduct. Um, as reflected in Ms. Trompeter's declaration, core hooked up Sears miners and used them to mine Bitcoin for its own benefit, it's dated to have compensated sphere but never did so. The contract may not say explicitly, oh, gee, you can't hook up your customers, minors,

and use it for your own benefit, but it's surely bad faith conduct to do so. And we'd also submit that accepting $35 million in deposits and then maybe keeping part of the contract in place, maybe not, and then just refusing to take on more minors is also bad faith conduct. And I'd like to make one last point here. And this was another argument raised in reply, not in the opening. Cors citing to the anti-bootschrapping rule, which includes a party from alleging a fraud claim in the guise of a breach of contract. And I think I heard my friend on the other side also mentioned fraud.

We haven't asserted any fraud claims. So the anti-bootschopping rule really has no application here. Unless you have any more questions on public policy, I'll move to contract interpretation. No. Okay, so Section 5D provides and there's language in the middle, but the gist is course total liability will not exceed an amount equal to one month fee payable to core pursuant to order number two. And Corps' contention is that Section 5D unambiguously limits its liability to the amount

charged on the last invoice before it files for summary judgment, namely the $84,685 in 94 cents. I'll help you that. I don't buy that argument at all. I also don't buy the one that it's the most expensive, which was yours. Okay. Well, fortunately, we didn't move for summary judgment on that, so I don't need it. All I'm just telling is I didn't believe is.

Well, I'll reserve on that for later. So I'm going to move now just to a final word on discovery, which is, look, we submitted a Rule 5060 motion or affidavit excuse me I don't think you need to reach it but I do want to say just a word on discovery the norm the norm in the run-of-the-mill case 99.9% of cases is that you get to you get to have your claims heard on a full discovery record and this is not the case that deserves to be cut off at the knees before we have that record and I'm a baseball fan And I thought, Charlie. So let me ask.

What's the end result in this? So you learn today that somebody still has a contract. Nobody's moved to do anything with that contract. I mean, you told me that you had minors that were there. You dispute who they belong to. You told me that you agree that you should pay for them. And there's debtors are standing up saying there's, contract between them and your manager.

So what's the end result in this? Well, I'm going to dispute whether there is a contract. They told us there was... All right, so... There's some sort of contract. Because you still got people there, right? You mean minors there? Yeah. Sure. So you're asking what's the end result?

We sue on our claims. We prove that there was a breach or we'd prove a non-contract claim when we get our money back and potentially limited by a limitation library. But you get a claim that's potential it may not get your money back at all. Sure. Fair enough. We have money. Okay. But the miners will let. Hopefully we'll get them back.

I don't know how that works. Okay. It's part of our proof of plan. At the end of the day, I'm sorry. The miners are part of our proof of plan. I mean, at the end of the day, what you get is a generalized complaint. Sure. I mean, maybe you've got some basis for that.

You haven't heard yet, but maybe you end up getting the general institution, right? Mm-hmm. And your relationship with four is terminated to the extent that you had. Okay. Here? Here. And of course, there's always the potential for a negotiation of something. I'm just trying to understand what the end is.

We're trying to get our money back and that's the end game. And if it's through a general unsecured claim, we're in a better position than we are. What I'm really trying to understand is you're not asserting that there's some sort of trust fund. You believe you gave these folks a deposit in return for services. There's a dispute about who services were provided to and who's entitled to act with respect or whatever agreement is. parties think is. But at the end of the day, I mean, I've been pointed to nothing, I've read nothing, which would suggest that there's a fund there or there's some sort of trust fund theory. This is, you have a claim. Like, like, the person who sold a box of pencils and who paid their receiving.

If you don't mind it, like, you could consult with my, the Steve-Dill counsel. That would be great, because it helps me understand what question to ask. Thank you. Your Honor. Ted Davidson for a sphere. I think in the proof of claim we reserve rights to assert election of remedies and other sort of arguments, we reserve for an admin claim. I'm pressing.

Yeah. We understand the court's pressing and concern and questions about that trust fund issue. We're not waiting those rights, but we haven't asserted them yet. Is it now run? Is it passed, yeah. So I'm going to guess a trust fund claim is probably gone. Whatever the effect of the Bardet would be, Your Honor. I got it. Okay. Okay. Thank you. Then,

Secretes, have we, do we, I'm trying to fear what we're really fighting about. And have we figured out what likely distribution to Gux is going to be? I think the last version of the plan is stock, right? Your Honor, it's a hundred percent case that gets Gets. In terms of cash to unscureds? Equity. It's equity. Equity. Okay. And was that contemplated? I mean, in terms of getting your money back, that is an entirely different world, right? Like I said, Your Honor, I think... Can I excuse you? So parties are listening, just so everyone can hear.

As I said, something is better than nothing. I think it's different, Your Honor. If this were a hot plan with a million dollars in it, we may not be here fighting so hard. They've got a proposed plan that at least has an economic recovery that says that claims are going to be paid in full. Yes, it's an equity, but it's still, you know, $35 million of equity based upon the value of their reorganized company. Got it. Wouldn't argue with you just trying to understand. All right. Just a couple points.

No, no, no, no. No, no. No, no. I've interrupted you a million. I've enjoyed it, Your Honor. It's much lonely or not happening. I just want to say one final word. So we put up the slide and I just want to say just a couple more words on when it's appropriate to eliminate discovery.

Or excuse me, to eliminate a case before discovery is complete. As you pointed out in our papers, courts applying Delaware law never rule on the application of partial limitations of liability like those at issue here without the benefit of discovery. And my adversaries did not cite a single case to you that did so. And my adversaries did not cite a remotely similar case to this one that would have cut off the needs of the case before discovery has commenced. Sure. And when a party files for bankruptcy protection, they increase certain obligations. One of those is to meet contested matters. This is immensely important case to my client.

And we deserve our day in court and to present to you with a full record at trial, we know, look forward to that thank you what is it that you think you're gonna be discovering isn't most of this I got it that you want to take the depot yeah he either said or didn't say certain things sure what else do you really need for your case I would think it would be coming back the other way I think we'll look so I guess if there's a disputed issue of material fact on whether the record on whether the requirements were made today, there's gonna be a dispute tomorrow to,

regardless of what discovery deals in most of the time. If there's a dispute today, regard of, right, I assume that their motion for summary judgment was their best shot at this. If there's a dispute today about whether the requirements were met, then there's gonna be dispute tomorrow too. And that will ultimately be resolved in a credibility determination.

We'll need depositions. Isn't that the same depot you're infected guys? Yes, fair enough. So look, we'll need discovery into whether the recommendations were, what the requirements were, whether they were met, whether they were waived. Is this something you could try in 60 days? In 60 days. I don't know that that's realistic in part because my, our star witness is unfortunately undergoing

cancer treatments and is expecting a major treatment a major procedure. I apologize. I apologize. Yeah, not to meet her. Yeah. So, but barring working for, this doesn't sound like it's that complicated. The big number of the disputes is relatively fine. We ought to be able to do this relatively quickly.

It's not something to need six months of discovery, three months to get ready, and we try this sometime next year. I think we, I'm not sure about that. Let me, can I think about it? So let me ask you that. Yes, sure. If, subject to all of the legal arguments that you want to make with respect to the effect

of certain provisions, do you agree with the basic premise that if you have rights under the contract, they come full burdened with all of the obligations. I think that it's a little complicated because there's a partial assignment. So I think, but in terms of the limitations of liability, which is really what we're talking about. Yeah. Okay. So you agree that if you are, if you have rights on the contract, you are subject to all the limitations that are set for it under the contract.

for the ones we've just discussed today absolutely okay other others that I've missed I'm sure my adversaries will bring them up to you if they all right all right I think I got thank you thank you just briefly I'll pick up on that last point because I think there were some schedules submitted and we had a very different view we agree with your honor we think this could be done by the end of the year so we you know we can turn to that when we need to but their schedule had us going to April which to us as a non-starter. Just a few points I wanted to make. There was some accusation that whatever happened at that April Miami lunch that somehow that's the basis for this

estoppel point that council was trying to find in his proof of claim. All the money that was paid was paid before then. If you look at the order number two, that adds up to about $35 million. It's not correct. Okay. Well if you look at the order, when it's they keep paying millions. When you add up, and if I'm wrong, I'm wrong. But if when I add up order number two and what the payments were, they come up to about $35 million. So it's not like we were sitting around saying keep sending us money.

But in any event, we did cite. Oh, sorry, go ahead. No, no, no. So let me ask you this. So let's assume that somebody filed a motion to compel or rejection of the agreement. Somebody was standing. Like Griffin. Like Griffin.

whoever has standing files a motion to compel rejection because and they allege that you can't cure can't assume then what happens to the balance does that just go into it? I mean it's a good question Ron I haven't been a rejection damage claim but we in connection with this if the party that may I'll just you know be candid if Griffin were to have done that We think that they breached the contract because they didn't supply these minors. Like Griffin breached the contract. We're still performing. We have 600 miners and we're using order number two. And I... What would the effect of that day if, in fact, Griffin breached the agreement?

We would say we get to keep the money. Theory. Under the contract. We built out facilities. The provision I read to you about the limitations of liability has a carve-out that runs in our favor. You would have to file a lawsuit when? Well, yeah, I mean, yeah, I mean, we don't have a test in that or an adversary proceeding probably.

Right, you just don't get to keep it. Yeah, yeah. Okay, of course. So if we went down that path, there would then be a piece of litigation summary. Yeah, I mean. And so you're objecting to the proof of claim, and so if you win, you're not pursuing anything else. You're just done with it. Is that right?

Yeah, well, the only. The only entity that's asked for money is Spier, right Griffin didn't. We, in our objection to the proof of claim, we pointed all out how they didn't have the wear of a fault, provide the miners or part of the country, all that stuff we would get into to show that there's no basis, even if they are a party,

that they can't recover this money. We would get into some of that in discovery. And so if we won at the end of the day, all of that, that would be a lot. That would be it. We wouldn't be pursuing anybody else for money because we'd be resolving that issue here in this context. And my guess is there will be some subpoenaing

of the Griffin people in this context. What was just trying to figure out, should they be, since I didn't really understand, is it, do we need? I mean, what I don't want to do this twice. I mean, I know we got a bar day, but I don't want somebody to come, I don't want them to run in and go,

Well, no, it was my mind. And I have a plan. Which we'd say, well, bar dates. I got all of that. But, you know, we're in a Chapter 11. You got excusable neglect. And, you know, well, I thought they were going to do it right, and they didn't. And I, you know, I'm just trying to be efficient about this.

I only want to do this one. Well, I mean, at the risk of thinking how loud here on the podium, you know, we want to be done with this as quickly as possible. We also, everyone's talking about chapter 11. Yeah, that's right. we have a plan we want to get done, right? And we don't want things hanging out. So, I mean, I'd have some concern inviting more people to the party, but I take your point.

I mean, we're going to be saying things about Griffin. We will be deposing Griffin. I mean, I'm going to subpoena them, no doubt. You know, but at the end of the day, you know, I still get back to it's a problem between those guys on some level. Like, right now, right now there are minors over at Corps that we say are Griffin's minors. They say they're their minors.

Well, Griffin thinks they're Griffin's minors too. So that's why the issue of do they have a contract, do they have any rights is so critical to us. And we did propose, one of the things I'll just segue a bit, we did propose taking discovery just on that limited issue, targeted up front 30 days, 45 days, whatever, on that issue as an alternative possibility so we don't have to go down the other path. I mean, our point, I think I heard some comments,

that we agree with them that we can't prove bad faith or not saying that we're not able to agree that's got nothing to do with this our whole the whole point about the bad faith is that's not a basis to get around the limitations provision so we would say there should be no whatever that discovery even looks like into bad faith because bad faith and we cited cases e-commerce and a couple others where the courts said you can't just say bad faith and get around a limitations provision so that's kind of a thing threshold point for you today, otherwise we're going to need to take discovery on that too. So if we're going down that path, then I'm thinking more four months.

If we're going down just the path on the, are they a party, then I'm thinking six to eight weeks. So would you have any objection to including a provision that said to intervene, you do it by this date or you waived? I mean, my own view now is they've already waived it. So I'm not sure that I'd want to open that up to them. How would they wait for? They had an opportunity to file the claim, and they didn't. Well, did that what Pioneer says? I mean, you know, it's excusable, neglect.

What's the excuse here? You know, they know about it, where... All I'm trying to do is, I only want to do this once. I appreciate that point, and I take that to heart. This makes absolutely zero sense to me. I'd have to confr- I'm not prepared to say that. Okay, right. I mean, I had everything.

I don't think there's anything else to really get into you. You understand what's going on here, so. All right. I've got to perform me the debtor's motion for summary judgment. I do find that I have jurisdiction over the matter pursuant between U.S. Section 1334. I do find that the resolution

of claims against the state constitutes a court proceeding under 28 U.S.C. Section 157. Further find that I have the right of the Constitution authority to enter a final order to be in applicable with respect to the motion Let me start with what I think we have learned today, and I think we now have, and I think we now have an admission and agreement, which I find to be binding, that if, in fact, Sphere has rights to the contract, they come burdened with the obligations and the contract as well.

That is about as far as I was going to be willing to go today. As I said, I don't buy the theory about that it's the last invoice. I don't buy the theory that is based on what I've heard, that it's the most expensive invoice. I don't know how I would figure that out if, in fact, that limitation applies. I also find the language that's in there about having the, about having necessary permissions, if you will. I don't have, that's one of the poorest written provisions that I've ever read.

If it was intended to be substantive, someone just didn't do a very good job. And so I don't know what that means. I am going to have testimony on both what it meant at the time, because I do find their testimony about whether or not. those conditions were met to the extent that we're going to go down the staff of living under the contract I do think that the attachment to the claim asserts claims that are outside of the agreement they don't do it with specificity it's hard to figure out exactly exactly what is being sorted but that is That is the basis for some limited discovery. So I am with the admission that was made on the record, again, which I accept, and I don't think

it was much of the idea at all about to status the contract. I'm going to deny the motion for some scheduling, but I want to tell everybody this is not a six-month thing. This is not that part. I don't, again, pretend to be a doctor or to understand anyone's, for the fact. medical condition I want to be as sensitive to that as I can be but I also have to recognize that this is a company that if it's going to survive it has to get out and it has to get out relatively quickly and this is going to be one of the

reason I don't know why we can't try this or in fact I'm going to give you a schedule you all can agree to it but it's going to be a schedule that has a trial-baked issue I'm perfectly happy to let you all work through that I'm perfectly happy to pick dates that work for me. Have your choice. Well do you want to give us some ideas of what dates you that work for you and we can work backwards from that? Sure. So let me ask if you had to guess worst case what do you think takes to try a day, two days? My guess would be two days. We'd have one, two, three, well let's see how things go. Maybe three. have a couple of witnesses from Griffin, a couple at least from four,

sphere, probably six fact witnesses, maybe seven. You have to imagine, but I'll start talking. You know, I'm just, I'm thinking out loud here, Your Honor. So you think two days? Yeah, I mean, we had put, just, we had filed our proposal that had us having, I mean, we had a trial in January, but I'm certainly not opposed to before the end of the year. just being mindful of the holidays but what holidays I don't know you want it in January so this is you're the debtor and the debtor I'm my view this is this needs to

with my friend here sure honor I would also just add a minute um miss Trompter who is at the day the typical witness she has procedures it's going to come tomorrow actually and then um end of October so that's the okay. So January would work better for you as well.

I saw I nod yes. Sagridis. Mr. Cross would just telling me December would be better but if we can do it maybe split the baby and have it in the beginning part of January. Sure. You want the second and third? How about the third? I'll have to take a break on the fourth

But I can absolutely give you the third and the fourth and what I'll do is we'll do a late lunch You guys can go grab a bite and I'll put them that are scheduled and that's That's Wednesday the third Thursday the fourth and then should we just confer on working back from there? Works for me that all right if you guys can talk and work through those it's all fine by me The concern you have about the third and fourth of January is just we're talking about six witnesses, trying to make six witnesses available right after the new year, which I think might have been some of the holidays you might have been referring to. So we think later in January probably works better from availability for witnesses. We don't even know who they are yet.

I'm okay with the third and the fourth. I mean, I know who might have been. You know what? There's a lot to learn in all of this because again, this still makes no sense. sense to me as to why you guys are standing here. So I'm going to give you the third and the fourth and Brianna just reserved a fifth as well. If it turns out to be a problem, you know how to talk jointly to Mr. Alonzo. He's got full ability to move the calendar. But this really needs to be honed down. I don't know. Let me ask this. Do you want, I trust you all so I don't. I don't. I

I don't do, I don't require those folks that I know and trust. You want a final pretrial, you don't care, don't need it, when I ask for one, if you get a logjam in December. We work at an order with those dates and work back and then have the ability to talk to Mr. Alonzo as well to be accepted in the pretrial. No, absolutely. That's only if you need it.

And if things come up, you're usually. Yeah, it's going to be discovery issues or whatever. Well, discovery, again, because we got such a short time. Frank, do not engage in the letter write and campaign come see me immediately. I tend to save paper and email traffic. All right. I'm going to, what I would ask Mr. Davidson, he did draft a short order that says for the reasons,

stated on the record for saying to bank for 20 to 70 to see and not without prejudice. Things may change. I have so many questions and I just trying to put these quiet. the private as quiet as I could do. But with that, sign office to form only, by signing office to form only, waiving any right of appeal or review,

you may have, you're simply confirming that the paper reflects the oral lawyer. All right? And if you would shoot Mr. Alonzo, a text or email, once you've uploaded the discussion order, but we've reserved the time. That's going to change, you know, let me know ASAP, because other people will take it.

All right. Thank you. All right. keeping you late started. I'm going to sit right here because I've got to be judged a good order. So everybody, have a good day. Thank you.

Thank you, all.