American court hearing recordings and interviews - Season 7. Episode 4. October 17, 2023. In re Yellow Corporation et al., chapter 11 bankruptcy case no. 23-11069, audio of hearing held in the Yellow Corp. bankruptcy proceedings pending in Delaware, USA, #trucking

Episode Date: October 21, 2023

The hearing starts approximately 2 minutes and 20 seconds into the recording. Sorry about the sound... the audio recording is the official court audio and was posted this way to the court's docket.For other filings on the court's docket and more other information about the chapter 11 bankruptcy proceedings, see: https://dm.epiq11.com/case/yellowcorporation/info

This is good afternoon all. This is Judge Goldblatt. We are on the record in Ray Yellow Corporation, which is case number 23-11069. I appreciate, or proceeding this afternoon with the way of Zoom, I appreciate everyone hopping on this Zoom on such short notice. I thought it made sense to gather I've received the motion to shorten time seeking approval of what's described as the agency agreement and had I and let me say I very much appreciate the representation along with the motion indicating that it was opposed by the US trustee I rely heavily on the statements about whether motions are shortened or opposed and appreciate understanding that we had a dispute I In looking at the motion just by way of telegraphing my own questions,

I understand and tentatively persuaded by the arguments the debtor makes as to the business reasons why getting this done sooner is good for the estate and good for all other parties in interest. The two things that I don't know the answer to, that I make it interesting hearing from the parties on, and as well as whatever else anyone wants to raise that I should know that I haven't thought of, is first, because of the terrific job that the parties have done in not bringing anything to me to be decided, I feel like it's not, it just isn't obvious to me from my vantage point whether there's any party

who's likely to be opposed to this motion who's being jammed by this relief. Someone obviously I understand who would be opposed to the substantive motion, who for whom this would be prejudicial. And in that respect, the fact that we've got 100 parties on this call, perhaps gives me some comfort that if there is someone who is likely to object and needs more time, they'll tell me. And they ask the other set of questions I have that just on quickly looking at the substantive motion was a question of mine, was, is this a professional retention?

And if so, do we have or will we have by the time of the hearing? appropriate disclosures of disinterestedness necessary to enter an order of approving the retention of a professional. So those are the questions that occurred to me, but again happy to hear from from you know whatever else hasn't occurred to me. So Ms. Smith, that's enough words for me. Let me give you a chance to be heard. Your Honor, can hear me okay? I can. To record, Allison Stannock, and LF, counsel, to the debtors. First off, I just wanted to thank Your Honor for those statements,

that we do fully acknowledge that this is not the first time in these cases. We've asked to have heard on a pretty quick basis or less than full notice. And continue to be very appreciative of support to accommodations in doing so, and making these acts we've always prioritized in so far succeeded in achieving the consensus among our stakeholders that you don't need in your intro. So I'm happy to address more substantively, although it sounds like you do have a chance to read our pleadings despite then for a little bit into the later evening hours last night. But I'm happy to address the two questions you raise with respect to any potential prejudice or parties that may be to use your face getting jam. We're not aware of any.

We did endeavor to craft the relief that we're seeking to be sure that you know, if you can't take that anyone who's being. What's been had that concern or had rights, those are properly preserved. You know, we noted in the pleadings with respect to lien orders. Other than those precinctly secure parties, so parties that have to date assertive panic cleans or the like, those means will attach to the proceeds and will be dealt with that way. I did want to know, I see a lot of parties online. I'm not sure if this party is, but we did receive an informal outreach just before today's status conference. raising the issue of what happens to, you know,

store keys that were already improving. So we're happy to work with parties to ensure that, you know, to the extent there are concerns there, those will be properly addressed in advance of Monday's hearing. And with respect to your second question with disinterestedness, we did file a declaration. The agent did include a declaration of disinterestedness with our pleadings last night.

It was at docket 856. Oh. So we'd said that that does not address the concern. Of course, happy to supplement our work with the U.S. trustee and the court to achieve that. Okay. Apologies. I, in flipping through this, I hadn't seen that that had hit the docket.

So thank you for that. Okay. So that is very helpful. I guess unless Ms. Smith, there's anything else, I guess I propose to hear from Mr. Sheppercarder to hear the basis for the U.S. Trustee's concern with your motion. Mr. Sheppercardt. I can hear this evening.

I can. A little bit of a new setup here, so, but we'll see. Hopefully I can, your honor raised two questions and hopefully I can perhaps either dissuade you from what you may have wanted to go and hopefully I can use my act that could see still to get you to. As to the party who's getting jam, I can tell you the party who's getting in. I'll try to address the police toward that. court out as we go, this is a retention, and I'll get to that point in second, but as it goes,

it's a retention application that is usually the 14, 21 role. It's also an agency application, it's hard to sell the assets, but technically a piece of free sale, but it's an agency application. So there's the other part, so there's two parts with it. On top of that, they also follow the motions to seal, which on the local walls gets considered basically at the same time as the other substantive motion. So that was three weeks that our office has to consider within a week, which we easily get. Sometimes we get a week for those other motions, but they're on 14 days, so we have 714 hearings. So right now, we're kind of damned to the extent that.

they basically three things on. I don't see, like I said, I'll try to, and you're on it, feel free to interrupt me again. I'm sort of rambled one. No, I'm not shy, or terribly polite, so don't worry, Mr. Sheppercarder. Hopefully I am,

I'm not shy, but polite. But here's somebody famously would always say, here's the thing. The thing is that not only do we have three applications but the retention itself, this is not like that situation that was in the immediate reason to call why I think they had the same entity

and that had to be done a little bit more expedited because they were looking to have the option approved. Right. This is a six-month process. This is not an immediate where we're going to alter everything off. This is not the melting ice cream. This is the glacial. This is glacial.

This is going to go off for six months. So it's not necessary that the retention and the application and the short notice on the ceiling as well, because that's a whole other issue, need to be done on seven days notice. The retention itself, that declaration is. willfully deficient. We will be, I know, I already have a be a bevy of questions for the debtors and perhaps as to different aspects of that intention, what the affiliates, the connections are, to make sure that disclosure is fully made. If you look at it now, it looks like they've only served six parties in the case, and I know this case is chopped full of parties. They have at least 100 on the line here.

how many notices of appearance as I thought I sort of was keeping track of it, but then I kind of lost track because it became too long in the movie and I still have the bandwidth to be able to do that. So again, I don't see the exigency of why

this needs to be done. It doesn't need to be done on such a quick notice because of the fact that the intention is going to take, it may take more than we need to get all that resolved. And then we have to file an objection. We're jammed because we have to file an objection for that, to the agency part of it, and to the ceiling.

Again, you know, the ceiling's not on, but it's on for the short notice that's related to this, and honestly, they're reconciling, the fees, because nobody's going to know basically what fees are going to take place. If you read the agency period, somewhere buried in there is this idea of a private sale or a private tree, I think, can't have to look up what a private tree is. but maybe that's got something to do with the comedian aspect of this. I just don't know. But, again, this is kind of going to be done, I don't want to be high-quote stories,

but it's going to be kind of done in the shadows with respect to the sale, and then eventually information, I guess, will come out as to what's been sold. But I'm not sure if that's... Okay, and Mr. Shepakar, just to be really clear, all we're deciding today is probably... process for deciding. So the merits of whether the motion is a good or bad motion, you know, I think I'm going to reserve judgment on. Obviously, to the extent you're saying it's complicated, therefore we need more time, that point is fairly taken today. But I just, you know, there's no need for anyone to preview the merits positions. Right. And I'm not, I'm not going to be the merits. But the merits go to the short notice because it's going to take us time to get to the merits. Okay.

Yeah, the disclosure is important. I mean, we all know how important disclosure, how it can jam up a professional or anybody that the disclosure does not mean and come down later on to find out things that probably should have been disclosed that were. Okay. And Mr. Sheppercarter, on the timing issue, as I understood the debtor's position, you're right that it's a six-month process, but as I understand what they've explained,

that this won't start until the order is entered, and the process essentially is going to run past the rejection of the leases, so that essentially every incremental day that it takes, sure, they'll work harder if they get it done in less than six months, they will, but it looks like it won't get done before the, you know, debtor ends up having to sort of pay, you know, sort of incremental rent for the space. So what's your response

to that point? Other than that, that's life. If this was heard, like, that gave us 14 days to get at the 30th and they've been heard on the 30th? No, I'm happy to read fast. So. You know, that's what, it was

facilitating resolution. Like, if I'm jammed up on a 17. I understand. I think might just be the file I understand that. I understand that. Wait, on 14 days, I could reach out the council without a day. They know that I was there.

Okay, so you're saying if you had seven more days, you'd be better off? Oh, yeah. Okay, I'm not here primarily to mediate this timing dispute, but understanding the bid and ask is helpful. Okay, anything further, Mr. Shepherd Carter? Okay, okay. Okay, Ms. Smith, let me let you respond and I'll hear from Mr. Brown. I won't reiterate the timing issue. It sounds like your honor fully understands it.

Nation staff and her two brothers were the only agents that have the capacity to move and thing off of the debtor's properties on to their own in store, which is a key component of this agreement and the debtor's pivot from the private rolling stock sale process, being able to cut off those rent and all. and then clean out the terminals to ensure that nothing jeopardizes the closing of realistically fails on the timeline. I'm running to anticipate is obviously crucial. Regarding the disinterestedness and the declaration, of course, happy to work with to Shepard and supplement or address any of his concerns.

I, speaking just for the debtors, as you've seen, there's a lot of parties in the line. I think we'd be okay going forward on this 30th, I think that's where your honor wants to come out. And then again, we fully understand the position that we put the trustees off again, the court in with the US, and who wants to ensure that we get to the right outcome? Okay. I appreciate that. Mr. Brown, let me give you a chance to be heard. Thank you, Your Honor.

Mr. Brown, Biel and Piper for an agent. Your Honor, I had worked with Ms. Haley and Mr. Shepard many, many times to pass, would be very happy to do so in the circumstance to make sure that they are satisfied with the disclosures that we answer any questions. Putting the hearing so far out, Your Honor, does put the agent in a bit of a jam because while most of the time periods under the agreement are cut off of the entry of the retention letter, one of the more difficult tasks is keyed off of the effective date which was yesterday, and that is for the agent to come up. up with both the services expenses as well as the transportation expenses. And we would like to figure out if there's a way to sort of meet the baby in the middle,

if you will, on timing so that we're not jammed on having to put in a tremendous amount of time trying to come up with a expense budget before we get that far down the road after the effective day of history. Okay. Okay. So not to complicate things, but can I ask this question, and if the answer is, Judge, that's really interesting but in practical, don't worry about my feelings. But is there an alternative that involves interim approval and then final approval on more complete notice? Is that have any practical import, or is there no such thing as that in this context? that really puts the agent in a very difficult line. Because one of the key features of this agreement is to actually move holding off the drawners has seen the girth of the papers.

There are approximately 900 pages with 60 lines each. I did notice that. I can't tell you I read all, you know, 54,000 lines, but I did see them. It's closer to 62,000, Your Honor. Sorry. That's okay, appreciate your question map as well. But if you can understand that if there are 100 working days in six months to move 62,000 assets in that period of fine, that requires a burden of immediate there. But Mr. Brown, I'm sorry.

I want to understand where you are. It's not at all uncommon in bankruptcy on the filing of a motion for a party to begin work and appreciate that it's taking some risk. from the agent's perspective, is that work starting or is that not going to start until the entry of a final order approving the retention? It starts upon the only thing that starts now is the development of the two-expense budgets. The actual movement of the development of the plan to do so starts after the entry of the order. Got it. Okay. So, Ms. Smith, I take it, well, I don't mean to take it. Do you have a view, based on Mr. Brown's representation, it sounds like interim approval probably doesn't improve anything, but just wouldn't give you a chance to tell me if I've got something wrong here.

No, I appreciate that. I think representation is, right. I know our position is the same in the agent. If there was an alternative way to see here, we certainly would have attempted to pursue it. But given given what a agreement is draft, I think it was heavily negotiated, a lot of things see off of that. or entry date, including definitely all of the work in removing the assets. Okay, understood. So it was a great idea, except that doesn't work. Just to correct the record one quickly, Your Honor, it's not a fine order unless you meant fully fine.

I meant final as opposed to not interim, not final in the sense that it's become final and non-appealable. Yeah, no, I appreciate that. Mr. Sheperker, you turned on your cameras or anything? Yeah, you know, I would not be in favor of any kind of thing. Okay. All right. It sounds like everyone is unanimous that my idea doesn't work.

That's fine. That's not – this is not the first or last time. That will occur. And I'm persuaded that you're all right. in terms of dates Mr. Sheppercard not to jam you but just looking at my own calendar

is the afternoon of the Wednesday to 25th out of the question from your perspective yeah I'm happy again no no ceremony I'm happy to if you need you know any of your colleagues to chime in The question is, in addition to your availability, I also do want to be sensitive to the amount of work I'm asking your office to do as quickly as I'm asking you to do it. I hope it's clear. I very much appreciate all of the assistance your office provides and don't want to put you in a jam just for fun. Well, I understand.

From the debtor's perspective, how's the 27th? Okay. I will rearrange my calendar a bit. and what if we did this noon on the 27th? I have a confirmation hearing that I expect to be unopposed at 10, but I think that a noon hearing should work.

That's fine. 10 a.m. the 27th, and I'll read fast during an unopposed hearing. Actually, why don't we make objections do at 9 so that I actually look at them before I get on the bench? Let me, before we say that, is there any party in interest that would like to be heard with respect to that proposal? If so, you should turn on your camera. And Ms. Lehm, may I take it this, you and Mr. Sheppercard agree about this? No, that's fine.

Okay. Okay, Mr. Brown, is, did you like to be heard on this? I just have a request, your honor, and that is whether or my, the ability to appear. If, if, if, so let me say the following. If everything is resolved with every party you know about the night before, then if someone shows up and raises an objection and surprises you, and we have to do testimony remotely, we'll live with that. But if you know of an objection the day before, then the witnesses need to be here. So if we expect it to be unopposed the night before, it's fine

for the witnesses not to come, but if there's a known objection, then it's an in-person hearing. Okay. And Ms. Smith, from the debtor's perspective, this is all agreeable? Yes, this works right. Thank you. Okay. So just one last time, now that everyone knows what we're about to do unless you persuade me otherwise, is there any party interest that wants to be heard in opposition to this proposal?

Okay. If not, I guess what makes the most sense, so I don't make a mistake, is if counsel for the debtor could upload a revised form of order, reflecting what we just talked about. If you can run it by the U.S. trustee, I'm not sure I need a formal certification so long as you're uploading it is a representation that the U.S. trustee has signed off, and we'll then enter the order. Okay, while we're here, is there any other way in which the court can be helpful to the parties? If not, thank you.

Okay. Okay, thanks to everyone, and with that, we are adjourned. Thank you.