American court hearing recordings and interviews - Season 7. Episode 7. December 12, 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: December 17, 2023

This is the official court audio, sorry about the sound quality.

So good morning. We're here in Inray Yellow Corporation, which is case number 23-11069. Hi, good morning, Your Honor. For the record, Allison Smith, Kirkland, Ellis, Counsel to the Debtors. I'm joined in the courtroom today by my colleagues Pat Nash, Mike Slade, and Aaron Metveiner, as well as our co-counsel, Lord Davis Jones. Also in the courtroom today is Cody Caldenberg from the Deucera team. And despite the lengthy agenda, we actually only have a few items up. today and if all right I'd like to start with the sale items and then my partner Mike Slate will take up the lift stay matter okay so with respect to the proposed sales I'm pleased to say that we are before you on a fully consensual basis starting with some of the

housekeeping items to get out of the way we do have two declarations to submit into evidence both from Ms. Caldenberg the first was filed at docket number 1303 and the second at 1330 and unless any objection we'd ask that these both be submitted okay is there any party that would like to be heard in opposition to the introduction to evidence of the Caldenberg declarations. Seeing none, they will be admitted. Is there any part in interest that wishes to cross-examine the declarant? Okay, seeing none, you can proceed. Thank you, Your Honor.

Next, we did file a declaration from Mr. Whitman of the Alvarez team. We do not intend to submit that into evidence, however. It was made known to us after the fact the model reference therein had an error, and the tax benefits are closer to 10 million. So while still material, it's obviously below the 36 million that was cited. So again, we're not seeking to submit that, but wanted to make clear and correct that on the record. Okay. Thank you. Then if Your Honor, recalls, at the first day hearing, Mr. Nash quoted the appraisal value of the own terminals as approximately $1.1.1 billion.

Then we were before you a couple weeks later getting approval of a stocking horse agreement for the own properties at $1.525 billion. And now we are before you today seeking approval of the sale of only a portion of those properties, 128 own terminals and two leased properties for an aggregate purchase price of $1.88 billion. So a great result for the estate and its stakeholders and was only possible due to the hard work and collaboration of our consultation parties who worked around the clock with us to design and ensure a fair and competitive process. That process clearly worked. We'd also like to thank the dozens of bidders who participated in continuing to participate for their efforts, as there's obviously pivotal parties as well.

It is described in more detail in Ms. Caldenberg's supplemental declaration, but the auction process proceeded on a fully virtual and anonymous basis. Bitter submitted each round of bid via email. At the start of each round, bidders received a personalized spreadsheet, examples of which were attached as exhibits to Ms. Caldenberg's supplemental declaration. The spreadsheet listed the specific properties the bidder was bidding on, as well as the current highest bid and the minimum overbid. In the cover email attaching the spreadsheet, bidders were reminded of instructions to submit their bid and provided a deadline to do so. It was generally about an hour after emails were distributed. Aside from the value obtained just for the assets themselves,

the process also proved to be incredibly efficient, both in terms of time and money. The auction generally ended around 6 or 7 p.m. each evening, and the virtual email nature saved dozens of attorneys the need to travel and hang out in Kirkland's Conference Center for hours on end. We do plan to proceed the same process for the lease properties, which are slated to reconvene Monday and Tuesday, the 18th and 19th next week. And to say this process was robust is an understatement. As set forth in Ms. Caudenberg's declaration, DeSera contacted over 650 parties, over 400 executed NDAs,

and ultimately we had approximately 70 qualified bidders. This has obviously also been a very public process. To the extent there was some stone left unturned, parties know who to contact. We did file a revised proposed order yesterday. We tried to save some trees and streamline things for your honor. So rather than attaching 21 plus APAs, we attached a schedule that references docket numbers and each APA was filed on a standard-wain basis. We do have a couple APA docket numbers to update based on new filing.

So assuming things go the way we're hoping to today, we'll submit a revised order for entry. In the Red Line filed yesterday, you will see some changes made to reflect resolution with various parties. One resolution that I do want to note on the record is the agreement we reached with 1313 Grand Street. In addition to certain language in the order, the debtors have agreed to pay $129,246.40 in pure amounts upon close, and will escrow approximately 171,000 for repair costs, which will be dispersed upon receipt and confirmation that such repairs were completed. So I know I just said a lot, so I'll pause here and happy to walk through any changes of the order or otherwise answer any questions that the court may have.

No, so I've seen the red-lined form of order. I guess I should see if there are objections, but preliminarily based on what. represented this is obviously a tremendous outcome and very you know it's often the case here that one sees only the tip of the iceberg in terms of the work that that goes into a case and perhaps never more so true than in a situation like this so I hugely appreciate that all of the parties tremendous work and think this is again subject to anyone's right to be heard seems like a tremendous outcome for the estate and you all have my congratulations

Thank you, Your Honor. Okay, anything further from the debtor with respect to the sale? Not with respect to this sale, but we will ask the court for additional dates in January for the least property sale. Okay, okay. And I take it the existing bid procedures order gives you what you need in terms of the ability to continue that part of the auction process then. Yes. Okay. And we filed their requisite notices and whatnot as well.

Okay. Well, happy to talk about dates. So let me ask this question on the first, which is, is there any party in interest that would like to be heard in opposition to the debtor's motion to approve the sale? Okay. Seeing none, again, this is a tremendous outcome for the estate. And in addition to being a good outcome, the work to get from a very tallest act of objections to consensual, I appreciate it doesn't happen automatically, and so everyone's on all sides, good and hard work in that regard is appreciated. And I guess we will wait for a revised order to be uploaded and we'll enter it.

And I saw the issue about the timing of the order and the like. We will get that order entered promptly upon it being uploaded. Okay. Thank you, Your Honor. Thank you. Nothing else on the sale matter then, so I will pass the podium to Mr. Slade. Great. Thank you.

Well, and I should have said at the outset, I have another hearing at 1130. So to the extent we are still going, then, that will be brief. So if we are still going on stay issues, which would surprise me, but without prejudice, anyone's rights, if we have to, we'll take a brief break to address that. But with that, Mr. Slate, happy to pass the baton to you. Thank you. Good morning, Your Honor, Mike Slate, for the debtors. We would definitely be done way before then because there will be no arguments today. Before we, this morning, all but one of the LISA objectors had agreed to continue their motions,

and for the stay to remain in place through the next hearing on January 22nd. We were going to argue this morning the deitering motion, which is docket number 1037. This morning, I got a call from their lawyer saying that they were ill, and we reached an interim resolution, which is the stay will continue to stay in place. The motion will be heard on January 22nd on the merits. we are going to try to stipulate the facts before then to minimize the amount of testimony or evidence that we would need to argue about. But that is with respect to the Deering motion 1037 and the others are just being continued.

As Your Honor may have seen from the docket, we did file our proposed ADR procedures for all of the couple of hundred claims that would be covered by them. These are all personal injury or property damage claims. We're hopeful to work with all parties to have an agreed structure, which will lead to as many settlements of those claims as possible in a very efficient way for the estate. Terrific. Okay. And is that going to be set to be heard on the 22nd? It is. Okay. Terrific. That makes good sense. Okay. Thank you. Thank you. Thank you. Sir, Your Honor. Terracactor, whom wars James on behalf of Mr. Dieter D. Deider Dane just wanted to say that's accurate. And we will be before an honor next month. Okay, very well. Thank you.

Thank you. Nothing else. want to work out the January dates now or would you like us to reach out to terms? So we can, let's, let's look and see. So you're talking about January dates now on presumably motions to approve the sales of the sort of leased assets. Is that what we're talking about? That's correct. And if there's any way to do January 10th or later, I know that there's some out-of-office conflicts for some folks on our side. Right. So, so I'm actually away through the tents. Okay, it's perfect.

So, Friday afternoons aren't the most popular times for hearings, but is in light of the circumstances, is the afternoon of the 12th available? Or we can look at the following week, whatever your preference. That works for the debtors, Your Honor. Ms. Barks, don't I'm missing anything?

Is two o'clock, any reason we can't do this at 2 o'clock on Friday, January 12th? Okay. Okay. And if any party have an issue with that? Okay. Seeing none, why don't we set it then? Okay. I think that's all for today, then, Your Honor. Okay. Well, you've all made this easy for me, which I do appreciate. While we're here, is there any other party that would like the chance to be heard or any other way in which the court can be helpful to the parties?

Okay. If not, I'm glad to see everybody. And with that, we will enter the order upon it being uploaded. And otherwise, we're adjourned. Thank you. Thank you.