American court hearing recordings and interviews - Season 6. Episode 13. May 25, 2023. In re BlockFi Inc. et al., chapter 11 bankruptcy case no. 2022-19361, audio of hearing held in the BlockFi bankruptcy proceedings pending in NJ, USA #crypto

Episode Date: May 26, 2023

A free publicly available bankruptcy court docket for the BlockFi chapter 11 bankruptcy proceedings is available at: https://restructuring.ra.kroll.com/blockfi/Home-DocketInfo

Okay, good afternoon, everyone. This is Judge Kaplan. Thank you for appearing remotely on shortened time. This is the BlockFi Inc. at Al matter, the application for TRO filed by the committee. and today's hearing is essentially, at least from my perspective, simply a status conference, so we can talk about scheduling and how best to address what I will refer to as interesting and novel issues. Maybe not unexpected, but certainly interesting and novel. So we have, I think about 20 participants remote. I'm not going to go through appearances. I'll just ask that for those who wish to speak, just introduce themselves.

So I get a sense of whose interest you're representing. I debated about having an informal conference. I thought it better we put this on the record just in case we want to fix some dates and deadlines. But let me turn to, I guess first, we'll start with committee council. Who wishes to be heard on how best to move this matter forward? Good afternoon, Your Honor. This is Kenneth Ollad of Brown-Rudnik for the committee. So from our perspective, there's two scheduling issues.

The first is when a hearing on the preliminary injunction should occur. There's a couple of timing issues there. First, it's my understanding that that date does not work for Mr. Shapiro from the Department of Justice. And June 5th and 6th are the dates in which the committee and the debtors are going to be mediating the plan process. The second timing issue is that the Department of Justice has filed a motion to compel in the Washington State District Court, which the date for an opposition would be May 30th if that is not postponed. And we have some concerns about the timing of that and have requested, though I don't believe that the Department of Justice has been able to get a response yet, that that be postponed

so that we can have an orderly litigation process rather than having to bounce between courts or seek further emergency relief. All right. So we have the pending, the DOJ's pending motion before the, just for court in Washington, state of Washington, and also obviously the return date on the preliminary injunction. The court's calendar is somewhat tight in June for a variety of reasons. I guess all good from attorney's perspectives, but difficult for the court. We have a lot of activity. Let me,

Mr. Shapiro, do you want to be heard or give me your thoughts? There we go. There you go. I do, Your Honor. There's actually a third scheduling issue. This may just be a correction on the docket, as Your Honor may know, under the federal rules of bankruptcy procedure, which incorporated the federal rules of civil procedure, the United States gets 35 days versus 30 days to respond to a summons and complaint once it's served. And although the committee council did send me a copy of the summons that appears to be correct, I did want to note to the court that there's a docket entry in the adversary proceeding that says that the return date for the United States is only 30 days.

I don't think that's a big deal, but I thought I should note it for the court. because it should be a different date than the date for the other defendants. I think that's helpful. I think that's more of a clerk's office process that we need to adjust. But I appreciate the heads up. Oh, no problem. And then as far as hearing back from the criminal division, I just heard a short time ago that there is a procedural problem,

apparently under the rules of criminal procedure out in Washington, where this matters have been assigned to a senior, district judge Robert Lasnik, where apparently they do things differently in the criminal world and we do here in the bankruptcy world. And in their world, they have what's called a noting date. It's not a hearing day. In other words, a motion is filed. The response has to be given or any objections have to be given by, I think, within about a week,

which I think on this calendar would be Memorial Day with the federal holiday. That probably bumps it to Tuesday. And then, of course, there's a reply date like, which I think is right on the day of the noting date or right before the day of noting date, which is Friday, June the 2nd. The noting date is not necessarily a hearing date, I understand, under the rules of criminal procedure. I have Mr. Kurt Bowling on the phone from the DOJ criminal division in Washington. He can address that if he'd like, but my understanding of the way it works is,

once all the papers are submitted, well, no ruling will be entered until all the papers are submitted. and those likely will not all be submitted until either June 1st or second, and no ruling will be entered before the noting day is what I've been told by the criminal revision. Now, on the noting date, it's possible the judge could schedule hearing or call for hearing, or he could rule on the papers, or he might just take it under advisement, and we might not hear anything for, you know, a week or two or longer. There's no way to know. Mr. Bowling, are you on the line?

Did you want to provide any clarification to Judge Kaplan? Yes, I am. Thank you, Seth. Your Honor, I believe Mr. Shapiro has accurately stated our understanding. This is actually a local rule in the Western District of Washington. It's not a universal to all districts. That is my understanding of the procedure in that district. And my understanding of the fact that there's no, it's not on a tight schedule in the same way that some civil proceedings aren't bankrupt. is it is very much up to the judge about how this will unfold there in terms of time. All right. I guess it lends itself to the bigger picture issue. How do we reconcile these two processes going forward where ostensibly, I mean, I certainly want the opportunity for all parties to brief the issues and so that the court can make an informed decision. But there's not a lot of ways to read 28 U.S.C. 1334E as far as which court has

exclusive jurisdiction over property of the estate. Well, the problem, Your Honor, if I might, is that we don't believe there is property of the state that's an issue here, and that the criminal laws actually give original and exclusive jurisdiction to the district court with respect to assets that were seized prior to the petition day. Well, and we're getting into the merits, but can you identify a particular asset that is sought subject to the warrant that is actually, I mean, I don't want to get too far afield. Right, right, of course. I mean, but there are policy consequences, and we have two statutes that certainly speak of

exclusive and original jurisdiction. That's correct. That's correct. Very interesting. I'm sure this is fodder for great law review articles and law school classes. I don't know if we need to or we want to start down that pathway. I'm open to suggestions on how to give everyone, both courts, frankly, the fairest opportunity to view the applicable law, of the positions of the parties without prejudicing any party's rights.

So does anyone have any suggestions? Timing-wise, I mean, I don't want it to be a race between two courthouses. I think that's offensive to everybody involved, including the courts. We went through that a bit with the Bahamian courts. It's good enough when we're dealing across the Atlantic. I hate to see us have to go through that exercise. 3,000 miles across our country. So I'm open to suggestions on how to accommodate,

including having a conference with both courts, you know, the judges of both courts. Your Honor, may I have you heard? Your Honor, may I have you heard, Richard Kanowitz, Keynes and Boone on behalf of the debtor? Yes. Yes, hi. Thank you for scheduling the conference.

I think it's appropriate for us to have this type of discussion And for months, we've been working on this issue with the DOJ, and one of the issues was, should we come before your honor? So this call plays out in a timely and appropriate fashion, or should we do something else? And clearly we went with the, we're going to go with the stipulation in front of the district court, and whoever has rights to appear there can appear there. But we are, you know, in sort of a procedural quagmire here. My reading of the motion sought by the DOJ is to abide by the deal.

that the debtors have worked out, which is that not all of the assets are collateral, however you want to phrase it, no prejudice, using any of the terms today, gets put over to the Washington State Court, right? We're talking about, and I know the criminal indictments under seal, but we're talking about a magnitude of potentially of $50 million leaving the estate, as opposed to $24 or $28 million leaving the estate. That's the difference between us being able to utilize the set off rights or not. And, you know, we could talk about what happened vis-a-vis the Robin Hood shares and the FTX disputes and the emergent disputes and why the debtors have taken the approach they have taken. But the bottom line is I read the motion that was filed in

Washington, and it is clear they're seeking the transfer of the assets. And we are obligated now to hire local counsel and put in papers by June 2nd, sorry, the 30th, what the position of the debtors will be, which will clearly be to comply with the law, and to also provide notice of Your Honor's TRO, which prohibits the transfer of the subject of assets. So while the district court may very well rule or not rule come June 2nd on directing the debtor to do that, transfer the assets, Your Honor has prohibited the transfer. So we are stuck here where you may have competing orders or you may have to undo certain orders entered. So I don't think it proves anybody to move forward on any of these motions until we could get a concrete plan

because all we're doing is spending estate assets to figure out the situation. You are right. There are a lot of novel, complex issues here. The debtors have been down this road for six months, and we look forward to working with the committee if we can and the DOJ, as we always have been, to try to see if we could bridge the gap. but if we can't, we'll present our position to your honor in the appropriate fashion. But I don't think we should rush this. I don't see an emergency here.

The assets are not leaving the estate one way or another. And I think the professionals should be able to work with the courts to try to get a comedy between both the bankruptcy court and district court. That's our view. And we stand willing, ready, and able to listen to your honor or the district court as appropriate. Thank you, Mr. Kahnowitz. And I appreciate the debtor's difficult position. They certainly want the debtor wants to reduce the prejudice,

diminish, mitigate the prejudice to the estate in any turnover of assets. But I have to appreciate the committee's concern that what's being requested is a release of non-criminal funds or assets of other assets that are attributable. to non-criminable to non-criminals, third parties, other victims in this bankruptcy. I agree with Mr. Kanoits that I don't see their urgency in having to have either of these motions resolved without proper briefing and an opportunity. There's no... Can I address that?

Yes, I was going to say there's no danger in the funds being lost. there could be and I would like to address it. Go ahead. Okay. Yeah, I mean, first of all, Your Honor, BlackFi is six months late in responding to a court order, four court orders requiring them to turn over this money. We've been negotiating, but, you know,

it quite honestly has just dragged on way too long. The assets are not property to the state, and we can't, you know, well, we're concerned that as you head towards confirmation of a plan, if you were to get an adverse, if we were to get some kind of ruling in the bankruptcy court, turning over the money that the committee or the debtors, the money could get distributed, and now you would have authorized a distribution of money in a bankruptcy case in violation of federal criminal law. And we just can't allow that. There are a lot of assumptions you just made respectfully. There's the EPSY Dixon

as to what is property of the estate. But that the process, I don't know what you've witnessed in this bankruptcy, unfortunately, that suggests anything is going so quickly. No, I understand. All I'm trying to say is, while Your Honor does have jurisdiction to determine, you know, whether the automatic stay applies, that jurisdiction is concurrent with the district court in Washington State.

And so the seizure is permitted by the criminal forfeiture laws in order to ensure that the property's available for forfeiture at the conclusion of the criminal case that it's given to victims. Here, none of the creditors in this bankruptcy case have been identified as victims of the crime. These are individuals. It's a case against individuals who committed wire fraud and conspiracy to commit money laundering. The creditors committee, knowing their papers, identifies a single creditor that was a victim of that crime. They are simply a creditor of this estate.

if they haven't allowed claim, but they are not a victim of the crime. And we cannot let the bankruptcy courts interfere with criminal cases and criminal forfeiture proceedings. That's the reason 362B4 was created in this situation. It's the reason why the criminal code and statutes give the district courts original and exclusive jurisdiction over criminal forfeiture proceedings. And, I mean, Mr. Bowling, you're on the line. there's anything you'd like to add, I think that's, that's, that's, that's, that's the position of the Justice Department. Well, that's understood. Well, Mr. Bowling, let me, let me hear from you if you want to know. I, I, I, Mr. Shapiro has eloquently stated that, of the position of the

United States here. I agree. Can I respond on behalf of the committee? That, that's fine. Let me hear from the committee. Let me reiterate, this is not the underlying here. hearing on the preliminary injunction. We can turn it into that, but then I'm not sure we're advancing the process. Mr. Allett? Yes. So I'll just avoid going into the merits besides saying that we disagree with much of what the debtors said except for the scheduling issue, and we disagree with the DOJ on their legal contentions. But I agree with the Department of Justice that that should be resolved prior to a plan being confirmed, if at all possible, but it is not something that needs to be resolved by, for example, June 2nd. And the Department of Justice

has asserted that the committee is essentially only a creditor. One of the issues that we've raised is that we believe that we should be representing the estate if there are any proceedings that should be occurring in the Washington District Court, which, of course, we dispute. But that said, what we're here for today is a scheduling issue, and I think that the appropriate thing to do would be to put off the May 30th deadline for the debtors and or the committee to file any response to the motion to compel, either by having that withdrawn without prejudice or by having the, I'm not sure what exactly the procedure would be under the local rule, but to move that June 2nd date that sets the response deadline,

while all the parties can confer on what an appropriate schedule is to brief these issues so that they're resolved on the merits rather than on, you know, who got to the courthouse first, and who has or does not have standing at any particular time so that we can get this resolved by, you know, mid-July or end of July so that if there's a plan that's confirmed, we know what's being distributed under that plan. Your Honor, the question of standing is also disputed because in a criminal proceeding, in a criminal proceeding, the committee neither Block FI nor the committee would have standing to be heard. They simply would be dismissed away by the district court judge because

because they would, they're not, they're not representing a victim of the crime and they're not asserting some kind of, you know, interest in the, in the property that gives them the right to be heard at the district court level. Unless, Mr. Boling, did you want to provide any clarification on that? I agree with that. That would be our position. It's, with it, the seizure warrant's already been entered by the, just by the court, by the magistrate judge in Washington.

And that makes it a court order? Right. Yeah, that really ends the matter. And certainly our position would be that it is primarily with the district court now to decide the motion to compel, which we believe should be done expeditious. All right. Well, then I'm at a loss to understand how you would expect any third party that takes an interest. in these assets that are being sought to be turned over to argue and to protect their rights if you're eliminating both the debt or in the committee from taking a position out in Washington?

Oh, they would have a right runner down the road after the criminal conviction. There would be a criminal forfeiture proceeding. and in that forfeiture proceeding, whether it be an ancillary proceeding or a remission proceeding, they could attempt to try to be hurt. But even in those proceedings, if they don't comply with criminal law and can establish that they have standing to be heard, you know, they might not get hurt. They possibly could get hurt if they're able to satisfy the criminal law statute. But that's a different standard than a creditor trying to be heard in a bankruptcy case to be fixed.

to be fair, to your honor, about, you know, it is a different legal standard under the criminal laws about whether you have standard. And, Your Honor, we respectfully disagree with that point. We believe that the estate, and if it's the debtors or the committee or both that have the right to represent the estate, have the authority to challenge the motion to quash on the grounds that the assets sought to be obtained by the seizure warrant were turned over, and it's our position that those are an unsecured right to payment, which is why it's an issue for this court, and to move to quash the warrant because it seeks property that is property of other people

and not what was described in the warrant. And that's the sort of thing that we would believe that if Your Honor believed that this should be in Washington, and we disagree with that and believe that 28 U.S.C. 1334, is clear that even if there's a dispute over if something's property to be a state or not, that is an issue for your honor to decide. Yeah. The committee, may, there's a, let me give you a site. There's a, there's a criminal statute that basically stands for the proposition that once

the United States has commenced the forfeiture of property in a criminal case, third parties cannot seek release of the property seized a restraint for criminal forfeiture until the conclusion of the criminal case. That's 21 U.S. Section 853K. There's actually a Third Circuit case on point. United States v. Nickel. 711 F. APP, apostrophe X, 108, 110, 111, Third Circuit, 2017, and United States v. Laban, 942, F. Second, 177, 182, Third Circuit 91. So I don't want to get too much into the merits, but there are really only two grounds, Your Honor,

for a party to be heard under Title 21, Section 853N. It's where the third party had an interest superior to the defendants, which in this case, we don't believe the committee could assert that, but if they have it, they'll have a right to be heard on that one day. And the other is where the third party was a bona fide. a purchaser for value who is reasonably without cause to believe the property was subject to forfeiture. And that's all laid out in 21 U.S.C. section 853N, 6A, and 6B.

So I just want the court to know, because I don't know how often the court has had criminal cases that kind of, you know, interfere with the bankruptcy court's notion of jurisdiction, but this is a completely different type of case, one where the criminal court has already exercised jurisdiction over the asset. And under the Princess Leader doctrine, the bankruptcy court should simply defer to the criminal court and let the criminal court make the decision. Well, I understand the DOJ's position,

and I'll ignore what I view is disrespectful as far as notions of jurisdiction. I tend to make decisions based on more than simply notions. In fact, what I think is appropriate is to afford this court the same respect that you would afford any court and the ability to make a decision based on a proper presentation. And I'm not denigrating what you're doing. I understand the position. But you cannot expect a court to make a decision based on citations discussed in a status conference. And what I'm trying to do is secure a fair and balanced opportunity for both the district court

and this court to make an educated and informed decision, knowing that there really is no prejudice and to have additional time taken. Notwithstanding your concerns, I can give you this court's commitment. There is never going to be a plan confirmed that distributes these assets before a proper resolution of this issue. It's not going to happen. That's not how I operate.

That's not how I think any court would treat it. I detest races to the courthouse in any fashion. We're not trying to be disrespectful in any way, Your Honor, but understand that what's happening here is itself a violation of federal criminal law. The committee had no authority to bring that lawsuit, and they violated criminal law by doing it. They are now interfering with a criminal forfeiture case, and there are consequences for that.

So, you know, we don't want to push too hard on that, but that's effectively what it is, And that's why we're saying, like, this can easily be dispensed with by, you know, at some point, just letting the district court make its decision and let the bankruptcy court abide by. So the position of the DOJ is they will not honor any order of this court. Is that where you're telling me? No, I did not say that, Your Honor. I just said we were asking if you would defer to the, under the, you know, under the Princess Leader Doctrine or otherwise, to the fact that the district court in a criminal forfeiture case, has exclusive jurisdiction over assets that have been seized before the bankruptcy.

I am happy to so defer once I've been convinced that it's proper to do so. And I'm trying to secure the opportunity to make an informed decision. And I don't want to take it, I say a lot of things tongue in cheek. I respect what DOJ is doing and its obligations. But I have an obligation as well. The obligation is to the bankruptcy estate and all the stakeholders. And it's not to make a rast decision as to what, especially when we're talking about a lot of zeros at issue in the dollars that are being transferred. Absolutely.

I respect your honor, and I respect this court. I respect this. But, you know, I'll defer to Mr. Bowling. Is there any flexibility on the criminal division's end here? Let me talk to my colleagues. I'm in the airport today as that knows on travel. I certainly, I think Mr. Shapiro has outlined the basics of our position, which is very strongly that we believe that this is the district court's decision that the district court has jurisdiction over these assets because of the issues of the seizure warrant. So, I mean, that is our position.

And obviously, I certainly respect the court and understand the competing interest here. But, you know, that certainly is our legal position. I think is Shapiro has stated quite well. Can we secure the time to have that issue, the proper jurisdiction of the court, briefed? Understanding that the funds are not going anywhere? I think one of the outgros of our position, Your Honor, is that the district court should be able to decide in the first instance the motion to compel. That is the essence of our position. Your Honor, may I have you heard on that?

Yes, please. I mean, clearly what's going to end up happening is we're going to have local council file papers where we alert the district court of Your Honor's order so that unless the district court changes its order, that order is going to be stayed by virtue of the terms and conditions, right, because you'll have two competing orders on one directing transfer and one prohibiting transfer. So then we'll have to either reach out to the district court after that motion to compel is granted and then have further hearings in Your Honor's Court to determine some of the key issues. These are issues that we've discussed with the DOJ all along in our relationship and come to certain conclusions.

and today is not the day to explain what we the debtor's view is the law and the process that plays out. But the expense to go through multiple, multiple hearings instead of just simply two, to get your honor's approval, direction for the estate, as well as then having the district court make the citizens, however it sees fit vis-a-vis the criminal process. What I'm hearing is, unfortunately, the debtor has to put in paper, higher counsel, abide by the district court, subject to whatever your honor rules, and at a future preliminary injunction hearing, which will be also putting in papers on. That's where we're at, which is exactly where we started a half an hour ago.

No, I agree, Mr. Caterwood. We haven't made much progress. And there's little to do today other than set a date for the preliminary injunction hearing. I have an order that's out there. The district court will do. I certainly can't dictate to the district court what it can and cannot do. I have an order that directs parties to refrain from certain actions. The parties will do what they deem appropriate. So at this juncture, other than fixing the time frame for a return date on the preliminary injunction,

I'm open to other issues, but I think that's paramount. Mr. Bowling, didn't you say that you needed to get talked to DOJ management to see whether or not you had anything else to add to help the judge figure out this procedural quagmire that we're in? I'm happy to do that. I don't think our legal position is going to change. Okay. And I certainly, I understand it's not necessarily popular, but I believe. it's correct, and I, I, that's the essence of our position is that this is, this is something that the district court should get to decide. And I think for many of the reasons that Mr. Shapiro

explained, this is overdue. Well, then let's discuss the date for the return date of the preliminary injunction. Mr. Olland? Your Honor. Sorry, I was going to say the parties met and conferred on that and subject your honor's availability. Does June 15th work for hearing? I mean, we see this and we spoke really as something that's going to be oral argument on a fact pattern that I think everyone has agreed to. I mean, most of these issues are legal. Maybe it's some mixed question of fact and law, but I don't think anybody's going to, you know, what witnesses are those things. I mean, we've discussed this, but I'll let the committee and the DOJ talk through those issues.

So I see this as, you know, a hearing that we could either do in person or by Zoom, 90-minute type of hearing. So that's, if Your Honor is prepared to do that, the 15th work for us, again, subject to your honor's approval. Mr. Shapiro, how does that work on your end? If we could get a stipulated fact record, Your Honor, with the indictment of four seizure warrants slash orders, and, um, a, there was one other document, a bill of particulars into the record without any kind of

objection or ask the court respectfully to take judicial notice of those. We may be able to do this without a witness, Your Honor. So we just question of getting those exhibits into the record. I would think you all could. It doesn't seem to be that at least anything that I've read or heard to date suggests that there's factual issues at play other than possibly the disposition of funds as deposited by these dependents and how they made their way through blockby's various accounts

and activity. But even that case, didn't. And can I touch on that, Judge? Yes, please. That's a key issue, right? You know, one of the issues we talked about earlier with the DOJ is you're looking to seize assets. What if they don't exist? What if we can't

identify them? And you know, the committee put it out there in their papers, and I don't know if anybody's going to have a witness to be able to give you that says these assets that were actually given by the defendants, you know, the criminal defendants still exist. It's going to be an unknown, and it's just going to have to be certain assumptions made that like assets exist as opposed to specific assets, and does that matter? Because that issue is not going to be able to determine at the preliminary adjunctive hearing. I could tell everybody that now. Well, I will certainly.

Well, what could be determined, Your Honor, and if I might, I mean, what could be determined is that the debtor was prepared to stipulate of what the amounts were in those accounts on the date that the seizure warrants were served and what they were already willing to turn over. So it's not quite with being some unknown amount. The debtors have agreed as to what the amounts actually are. We have the coin count exactly down. We have the values down, multiple different times. So the stipulation that we have is the exact coin count and the exact values as of November 16th, less the loan amounts do plus interest, and then the excess goes to the government. That's the way the stipulation reads. That's what we'd be able to put into the record as a stipulated fact.

And Your Honor, I don't think that the committee would object about what the notional account balance was on those accounts. we would object that to any attempted entry of the stipulation as a admission that these specific assets that the accused criminals deposited at BlockFi remain at BlockFi, I think we put in our papers that we can see some of them are not present anywhere at the debtors. But I think that like Mr. Kanoit says, we're not going to object or put the government on to prove up their indictment or anything like that. That is not facts that we're contesting. We're contesting what the legal effect was of the seizure warrant given the structure

of how Blockby set up its accounts. And if delivering the seizure warrant actually gave the government title to, you know, Bitcoins or if it gave the government title to a note that essentially read IOU on Bitcoin signed Zach Prince. And so assuming that the government is not looking to prove that the specific Bitcoins deposited

remain at BlockFi, I think that we're going to have undisputed facts. If the government wants to attempt to trace the Bitcoins, I think we're all going to need a little more time, but I suspect that we're going to find that those

went to Almeida research. And the only other thing I would note is, you know, the committee was appointed by the Department of Justice and was given fiduciary obligations by the bankruptcy code, and we don't appreciate the bailed threat that the committee is committing a crime here by seeking to discharge its fiduciary duties. Fair enough. On the other hand, Your Honor, in the Third Circuit, the committee doesn't have standing yet to pursue any claims, and it doesn't have standing to pursue anything in the, in the Washington District Court. So, I mean, we reserve our right to object to that in the motion papers as well. And we'd be glad to try to work out a stipulated record. And if we can, then I think if Mr. Canowitz is correct, it will be a relatively short hearing,

probably no longer than two hours. But if we can on particular fact that the criminal division feels has to be presented, then we may have to subpoena somebody from the debtor to take the stand. Or maybe even bring in someone, you know, who works for the government. Well, for planning purposes, I will accommodate. I am out traveling on the 14th, but I'll make sure I'm back for the 15th, but we'll schedule this for the afternoon on the 15th. Okay, thank you, Ron. Assuming it's legal argument, the rule I have is attorneys are always welcome to come into court.

In fact, I always favor appearances, but I understand traveling issues. I'm happy to undertake this by Zoom. we are having an evidentiary hearing. If we're going to have a witness, then I'm going to require that it be done live and in person. I don't foresee that as being required. I'm sure you can come up with stipulated facts and then argue off those facts. If we have to spill in, God forbid, fill it spill into the Friday, the following day. We can. But we'll set it for one, o'clock on the 15th as a return date. Oh, I'm getting a note from people who know better.

What do you think? Two o'clock. If we don't mind, let's try to do this at two o'clock. I've already moved things to one o'clock. Maybe we'll move them up a little bit. And so I'll give you enough time. I understand lawyers, two hours is usually at least three to four hours, but we'll get it done that afternoon.

If there can be further discussions, and I know the debtor has undertaken this with DOJ, and you've done well at it to date, if you can accommodate and get yourselves more time and get the court more time, the court will endeavor to accommodate as far as calendaring if you want to push this a little further on. And, Your Honor, the only other thing I'd note is that we'll continue discussions with the DOJ, but we may need to seek emergency relief if the hearing on the motion to compel continues to go forward on the current schedule. I just wanted to make sure that that was noted for your honor. I'm a phone call away. I think you've all discovered that.

Thank you, Your Honor. I also would like to just note that the government is not consenting to jurisdiction here, and we reserve our right to argue in our motion to dismiss or answer if it comes to that, that the court does not have jurisdiction over these particular assets. By all means, and I don't take offense. Well, bear with me one second. Just for what other issue, Judge? It may be the same that my clerk is raised.

We had a motion to seal on for today. I don't know. That was going to be adjourned. Do you know how much time you need for that? Your Honor, I believe that we, the debtors, and the U.S. trustee had agreed that the motion to seal, which is the motion to seal the committee's report, would be best heard sometime after the mediation. So a date after June 6th. All right.

I'm looking. Well, we have a block-five disclosure statement here, and for whatever that's worth at this junction. we will on for June 20th. Why don't we just put it on for that date and we can keep moving them, we can move it as needed. That works for the committee, Your Honor. All right, thank you. Mr. Kenowitz, you had another issue?

Well, Your Honor's order directed a opposition to the motion by June 2nd. So now that we're moving the you know, hearing date, I hate to be in contempt of yet another order on this issue. So I'd like to request that we have an extension of time to answer.

Obviously, and I'm sure the government was the same, if we're going to do a stipulated fact pattern, which would be beneficial to all, I think, it may take some time. You had us responding within three days of the hearing. I'm happy to respond within three days of the hearing. If the committee thinks they need a little bit more time to digest our papers, you know, I'm okay too.

but I think we should agree on a date so that we don't have another. I think that makes sense. I could put out there June 12th, which is a Monday, that way hopefully not ruining anybody's holiday weekend as well. Close a business by June 12th is fine for us. Mr. Allent. And it's fine for the government, Your Honor. Thank you.

Mr. Salad. Their paper is being filed by close of business on June 12th, works for the committee, Your Honor. That's fine. I'll expect something on the evening of June 14th in response. I have no doubt. All right. I do appreciate everybody's candor and professionalism.

I understand the competing positions. And as we started out, these are interesting and challenging issues, and we'll continue to be so. So I look forward to, let's call it, further education. Take care of us. Thank you, Adam.