American court hearing recordings and interviews - Season 8. Episode 4. May 5, 2025 Bankruptcy Court Hearing (The Dolphin Company/Leisure Investments Holdings LLC, et al.)

Episode Date: May 24, 2025

This audio recording and other filings in the bankruptcy proceedings are available here: https://www.veritaglobal.net/dolphinco/document/list/6300

Good morning, Your Honor. Robert Brady on behalf of Leisure Investments Holdings, Inc. Light agenda today, Your Honor, but I thought I'd start as we have with just a brief status conference. Last night we did file Embassy of the Seas as a Chapter 11 debtor. That's the United Kingdom entity based in London. It's not a cruise ship. I got a lot of inquiries about whether we had a cruise ship. It's not a cruise ship, but it does sound like one.

Mm-hmm. Okay. But as we've indicated, we're continuing to complete the corporate governance changes and implement those throughout the organizational structure. So we'll be sending over a certificate of counsel for joint administration. Okay. And, Your Honor, an update on Mexico, one additional change since the last hearing we had, the April 10 order, Your Honor, and you may recall during the hearing and in the response filed by Mr. Albor, it was repeated. repeatedly cited to as the base for this confusion as to who might be the director of

Controllador Dolphin. We can advise the court that on April 30th that order was stayed by a federal court in Mexico. So as we stand here today, there is no order issued in Mexico that creates any dispute that Mr. Strom is the sole director of Control of Dorofan and as we indicated at the last hearing, Mr. Alward's own Mexican counsel conceded that the resolution putting Mr. Strom in place remains valid as of today. So again, no dispute right now that Mr. Strom is the sole director of Control of Dorof Dolphin. Obviously there is an automatic stay in place and a turnover order in place.

and Your Honor requested at the end of the last hearing that information starts to flow, at least be shared. So after the hearing, we sent a list of priority financial reporting items to counsel to Mr. Albor. This was stuff we thought would be readily available and easy to provide, and again, very much in line with the reporting requirements under the financing agreement, the note holder agreement. So to date, we have not received a single document from Mr. Albawer, control the door dolphin. So we don't have any of the receipts from operations. We don't know if payroll has been paid.

We don't know if the animals are being cared for. Again, the lenders have received no reporting for well over a year. So we did reach out to Mr. Moon and request a staff. report on getting this information he indicated that the request is being taken seriously but there was no commitment by when we would get any of this information and he did indicate I mean Mexican counsel to make sure they weren't violating any Mexican law or order by sending us this agreement we asked for a site to any Mexican law or any order that might prevent them from sharing information from

the conceded sole director of control of our daughter and we have not heard anything back. So I just want to know for the record, Your Honor knows we did agree to continue the emergency hearing briefly to allow for depositions. But to be clear, the debtor's position is each day is a continuing violation of the automatic stay, a continuing violation of the turnover order, and we reserve all rights to seek appropriate remedies against Mr. Albor and others for these violations. So that is our status report.

I did advise Mr. Moon that we would be providing a status report to the court at the start of today's hearing. And I do see... Your Honor, if I could be heard briefly. Thank you, Your Honor. So a couple of things. Number one, this is the first I've actually hearing about this April 30th order. So if counsel could please provide that to me, that would be great. I haven't heard anything from Mexico that that had been entered, and we would certainly like to say.

see it. Certainly I haven't heard that. With respect to the information exchange, Your Honor, we got our, we got the request for documents on Wednesday, and I simply asked for Debtors counsel to advise you since we don't have anything on today, and I don't typically show up for status conferences if I'm not involved, but they did say that they were going to mention that no documents have been provided. I will represent to the court that immediately upon receiving the request, we sent it down to the client as well as Mexican Council. We are taking it seriously. The issue that I also told them, though, is we were informed that, so that Thursday would have been the next day when we had that request. That was May Day. That's a holiday in Mexico.

And also, today is a holiday as well because of Cinco de Mayo. So I don't know who's down there to provide documents. All I can tell you is that we anticipate by midweek, we'll have documents available. Both Mexican Council and myself are pushing very hard to get this done. We certainly respect the court. We certainly are consistent with our request if you get us a list of

the documents you need, we will work on it, and we are pushing it hard, Your Honor. So I can't speak to what's actually occurring in Mexico right now. I can only tell you both between Mexican Council and myself, we were pushing it extremely hard. Thank you. I appreciate that.

But I would like to make sure you inform your client that, one, animals don't take holidays, so I don't think people get to take holidays when their welfare is at issue. And two, to the extent that there's going to be reference to law in Mexico that prohibits the sharing of information, I will need some citation to that. Because I'm not asking at the moment, or at the moment, all that's being asked, for is sharing and I can't even think of a equivalent law in Delaware that would prohibit a CEO from sharing information with a with anybody quite frankly

sharing information with anybody that's relevant to the safety with welfare of animals and the employees that work for a company which he purports to be in charge of. I can't think of a law that prohibits sharing of information. So if that's going to be cited to me, I would like case law, or whatever the equivalent Mexican law is, statute, case law, whatever, that would prohibit the same. simple sharing of information. So please pass that along to your client and your Mexican counsel. Thank you, Your Honor.

And I don't want to make too much of a point about this, but really this is simply an issue. With respect to saying that we want to make sure no Mexican court orders are law or violated, I am not a Mexican lawyer. The issue that's occurring at this point for production of documents is the same that any lawyer would do, which is get the documents compiled, and that's what we're pushing for. review those documents with Mexican counsel and make sure that there's no issue with turning it over. That's it. I'm not suggesting that there is some law, but I will tell you this. I make very clear that if there is a law, that they better be very clear about what that is.

Your Honor, I am an officer of this court as well. I will make sure that we provide any kind of law if such exists. But really at this point, it's simply a matter of typical production, which is lawyers, look at what's being produced, and then we produce it. That's it. Okay, I think in this instance it needs to be on an expedited, a hyper-expedited, super-expedited schedule. Thank you. Yes, Your Honor.

Thank you. Thank you, Your Honor. We appreciate that. I think Mr. Greacher is going to present the debt. Thank you. Mr. Gracher. Good morning, Your Honor. Sean Greacher from Young Conaway.

Your Honor, thank you very much for the review and sign off on various orders that were scheduled for today. The only matter that we did not submit for with a form of order was the final dip. We are obviously not here today asking your honor to approve a final dip. As you heard, we're still waiting to get full financial reporting data for the overall organization to complete a fully detailed 13-week budget. Through Riveron's efforts, working with the U.S.-based park management, we have managed to assemble a budget that relates to the U.S. park revenues and operations.

expenses and we have been working with the lenders on necessary amendments to the dip credit agreement and that shorter term budget to include the overall organization and in turn so your honor we have as I said reached agreements to fund operations within the interim cap that your honor previously approved we expect that we will have sign off on the shorter term budget based upon the presently available information I understand that the principals are speaking early this afternoon The lenders have, if we need it, prepared a form of a further interim order itself, assuming that we determine that that is necessary to implement the amendments in the short-term budget,

you will find that it will closely mirror, very closely mirror, the existing interim order to submit that under certification of counsel. Of course, Your Honor, making ourselves available. Your Honor, that's where we stand, fund this company and fund the operations for, Your Honor. that obviously is a key consideration. I will. Your Honor, may I be briefly here? Yes.

Yes. Good morning, Your Honor, Golden-Ellen Mackens for Keys Resort owner. My client is the owner of the Hawks Cave Resort where the debtor have as the Dolphin Connect facility down in the Florida Keys. My ProHawks-on file was filed Friday. That would as far as our local council.

I just want to be heard briefly on a comment. The debtor is not ready to move forward on a final. That is completely agreeable. We've been in contact with the debtor. We acknowledge that this case presents some unique challenges in corporate governance, and animal welfare has been paramount. But if I may quote a now retired partner of mine, we still have to block and tackle in terms of the day-to-day operations of the Chapter 11 case.

perhaps because of the corporate governance issues and the records issues that have predominated, we don't have a public budget in this case. The div financing is somewhat unique in that it provides the budget wasn't even to be prepared until after the interim debt. They had a 15-day milestone, which has passed. The U.S. budget has not been filed. It has not been shared with us, according to the U.S. budget. to the debtor. We are the largest unsecured creditor in this case, that's evidenced by the top 30 list filed a docket 77.

And to put a cherry on top, we didn't get rent for last month. The professionals in this case are too experienced and too talented to miss that stuff. You know, just because rent is revenue-based and payable in arrears doesn't change the application of the law in this district with respect to the performance state. We've been told it's been forthcoming for over a week. These are not good signs, Your Honor. And while we support, you know, this debtor does not need to be strangled. The inner musica cash lateral should be permitted.

There's work to do before we get to a final because the underpinnings of the operation of the business, at least from our client's perspective, and we are the largest unsecured. creditor of the case are not moving in the customary linear fashion we would expect this case is not that fresh anymore it's over 30 days old and these things should be going a little smoother than they are I just wanted to express since since we're doing the saddest thing I just wanted to express that concern to the court before we move forward we certainly understand a note Mr. Gold's comments and constructive criticism. We are, of course, working with him to make sure that we get the obligations paid.

We do understand, and as I mentioned, the intention is to submit a further interim order as necessary with a budget. So understand and appreciate that this is not proceeding in a linear fashion. We are doing what we can to put this on the straight and narrow. of course. Where do we stand on a committee? The debtors filed their top 30 list on April 22nd. We solicited a committee. We sent the questionnaire and information sheet to that top 30 list. The more fulsome list once was filed with some respondents and the U.S. trustee has committee appointment under advisement. I don't know if he will appoint. If he does, we could be in a position to do that as early as today.

but as soon as he makes that decision we'll file the notice of appointment anything else for today thank you and we're adjourned