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00:00:00 - [JUDGE] Thank you. Let's call Vera Holdings and Investments Inc. Case number 26763. Miss SawStop asking. 00:00:11 - [US_TRUSTEE] Good morning, honor. Audrey on behalf of the United States Trustee. 00:00:25 - [JUDGE] Hi. Is it Dave? 00:00:26 - [FAIRWINDS_CREDIT_UNION] Brian Davis on behalf of Fairwinds Credit Union. In the courtroom with me is Carlos Ramos, VP of credit. 00:00:32 - [VERA_HOLDINGS] Michael Wolff, attorney for the debtor. In the courtroom is Matt King and Ross Johnston. Good 00:00:40 - [LIBERTAS_FUNDING] morning, your honor. Michael Probenzel for Libertas Funding joined by Jeffrey Sanggioli. 00:00:45 - [JUDGE] Morning. Morning, 00:00:47 - [LIBERTAS_FUNDING] your honor. John Anthony on behalf of Four Daughters Industrial LLC. 00:00:52 - [JUDGE] Hey, miss Miranda. 00:00:53 - [US_TRUSTEE] Good morning, your honor. Jennifer Miranda on behalf of Signature Enterprises Inc, which is the general contractor for the Dutters construction project. 00:01:01 - [FAIRWINDS_CREDIT_UNION] Good morning, your honor. Steven Fox, Riemer and Braunstein LLP on behalf of Tiger Finance LLC. Your honor, with me in court today is my partner, Anthony Stumbo, who I think you've seen on video previously. Also, we have principals from Tiger in the courtroom today as well. We have mister Babcock, who's principal at Tiger Finance. We have mister Kennedy, and we have mister Shanahan as well appearing for the first time. They've been monitoring the hearings by video previously. Thank you, Ron. Pleasure to be back. 00:01:33 - [JUDGE] Okay, mister Stumbo. Good morning. 00:01:34 - [TIGER_FINANCE] Good morning, Ron. Anthony Stumbo, Rember and Braunstein, LLP on behalf of the senior secured creditor, Tiger Finance LLC. Pleasure to meet you in person. 00:01:42 - [JUDGE] Nice to meet you. Alright, mister Parish. 00:01:43 - [TIGER_FINANCE] Good morning. Are Jimmy Parish of Baker Hosteller on behalf of Tiger Finance LLC. Thank you. 00:01:49 - [JUDGE] Sounds good. 00:01:49 - [TIGER_FINANCE] Morning, your honor. Greg Steinman of McDermott Will and Schulte on behalf of the committee. 00:01:53 - [JUDGE] Okay. Okay. And then I guess on Zoom, mister Ricupiro? 00:02:01 - [LIBERTAS_FUNDING] Hi. Good morning, your honor. Fredericupiro, Remick Braunstein on behalf of Tiger Finance. 00:02:05 - [JUDGE] Okay. Alright. Anyone else that wanted to make an appearance that hasn't done so already? Okay, mister Wolfe. We're back on continued use of cash collateral, officer affiliate salary, the now mister Anthony, I had filed a motion regarding administrative rents and then the post petition financing. So sorry. It's a little bit late now, but why don't you tell me where we are? 00:02:34 - [VERA_HOLDINGS] Your honor, we have agreements in principle with regard to cash collateral. I we the use of cash collateral will be conditioned upon the reporting in the form that the debtor filed yesterday with the following changes. That reporting call for chain call for the reporting to be monthly on some instances. All of the reporting will be weekly in the form that is discussed. We will the debtor will also report give a report retroactive to the to the petition date of February 4. Also, the use of cash collateral is conditioned upon the appointment of a CRO. The debtor agrees to that in principle. We'll need to look at the fee structure, etcetera, but they're talking about a a firm that is known to me and that we're comfortable with. So we agreed to the appointment of the CRO in principle. And so I believe we have an agreement for the use of cash collateral. And if I can just go through these, Shawn, I think we can save time. The affiliate salary between Tiger and the committee and the debtor, we've agreed to the following. Mister King will receive a payment annualized at 360,000 a year. That is effective today with today's hearing. The there will be an agreement not to seek disgorgement of the difference in salary that was approved by and paid by court order up to this date. Of course, that doesn't affect anything pre petition. The well and let me just stay with that as far as the cash collateral is concerned, and we can let the parties give their comments before we move on to the loan and mister Anthony's lease. 00:04:55 - [JUDGE] Okay. Alright. So any comments or concerns or clarifications, based upon mister Wolf's representations, counsel? 00:05:03 - [TIGER_FINANCE] Morning again. 00:05:04 - [JUDGE] Welcome to the case. Committee. Thank you. 00:05:06 - [TIGER_FINANCE] It's good to be here. All of that is correct. The one caveat is that it does is subject to committee approval. We were not able to meet before the the after these deals were cut and before the meeting. So I'm gonna speak to the committee immediately following this hearing and, get their vote, assuming that they're approved and everything that mister Wolf said is accurate. Okay. With respect to cash collateral reporting, you know, when the committee was appointed, there was a bit of pretty obvious. There was a pretty big battle here. It's a lot of serious allegations. So putting that aside, we were just trying to get up to speed. And so we made some requests for documents. They were a bit slow, but we've started to get things this week. The debtor has agreed to to provide the same reporting to us, provided that we execute a confidentiality agreement, which we will work through. So we're hopeful that we can be more constructive going forward. It's just been a little bit of a slog since we got here. 00:05:58 - [JUDGE] Gotcha. Okay. Very good. Thank you. Alright. Mister Fox? 00:06:07 - [FAIRWINDS_CREDIT_UNION] Good morning again. Your honor Steven Fox on behalf of Tiger Finance. First, I'll confirm that what mister Wolfe has described is consistent with our understanding of the agreements reached in advance of this morning's hearing. Your honor, I'm sure sensed from reviewing our most recently filed pleadings that there's kind of a central theme, and that is we there's apparently a mutual distrust between the debtor and our client. We don't necessarily think there's a reason for there being distrust of us, but the debtor has its view. Our distrust is based on the financial reporting that we've been receiving in the period preceding the bankruptcy as reflected in the differential between the historical financial statements and then the restatements, which were the underlying predicate for making this loan in the first place approximately a year ago. The difference in that reporting and the results in that reporting breeds distrust on our part. Thus, the critical importance from our standpoint of having this independent financial party of CRO invested in this to give us the level of comfort that this credibility in the reporting that we've been receiving to date, which is limited just to the budget weekly budget to actual reports, and now get more granular, these types of reporting that we described to your honor at the last hearing three weeks ago that we needed both insofar as our collateral is concerned to have comfort that the collateral is one there and two not diminishing in value. And separately, as it relates to the operational aspects of the company, understanding what's actually happening on the ground on a day to day basis, week to week basis, is this company operating as it was pre petitioned as a substantial loss, or is it with the benefit of the bankruptcy operating on a more stable footing now? We need to understand how that's happening. So the types of reporting that we were getting prepetition will give us some insights, some additional sales reporting that we've agreed to with mister Wolf and with the benefit of the insight independence of the CRO will give us that level of comfort. And assuming we get the level of both we and the CRO once in involved gets the level of cooperation that we're expecting and that has been promised, it gave us the comfort that we can agree to the revised compensation structure for mister King on a go forward basis and also waive any of the disgorgement prospects from your prior orders. Well, this is taken on faith that, in fact, both we, the committee, and the CRO will get the level of cooperation that has been committed and expected. And you should rest assured that if we sense that's not happening, we will be back here with a very different attitude. But for purposes of today, our suggestion, and I think it's endorsed by the committee, would be an additional three weeks on an interim basis for cash collateral, consist pursuant to the budget that has been presented to the court by the debtor. And it's sort of operating on the show me principle that'll give us time to get the CRO invested in the process, start the new reporting paradigm on the cadence that we've agreed to, the weekly as opposed to the the monthly. The difference in the cadence is critical to us, judge, so you understand so that as it relates to operations and and collateral style reporting that we don't find out a month hence reporting a month in arrears that Rome is burning. So the weekly reporting will give us more current insight and the ability to react and have dialogue with the debtor if the things that give us concern, give the committee concern, and then we can have either a consensual path forward or go our separate ways. But at least this will hopefully set us on a path towards something other than fighting every two weeks. Okay. So as I said, show me principle, take it on faith. Okay. And, hopefully, everybody, you know, behaves in accordance with the reasons we've reached today. 00:10:31 - [JUDGE] Okay. And then Alright. Well, that's encouraging. I'm I'm happy that We're hopeful. Yeah. 00:10:36 - [FAIRWINDS_CREDIT_UNION] We're hopeful, your honor. 00:10:36 - [JUDGE] Happy to respond to 00:10:37 - [FAIRWINDS_CREDIT_UNION] any questions you may have. 00:10:39 - [JUDGE] No. Not at the moment. I guess we'll get to it shortly, I'm sure. 00:10:42 - [FAIRWINDS_CREDIT_UNION] Yes. And, judge, this is, of course, all subject to us coming to an agreement on the form of orders that will be submitted consistent with the outline that has been presented to you today, and we'll get to work with mister Wolf and missus Simon on those ASAP. 00:10:55 - [JUDGE] Okay. Great. 00:10:56 - [FAIRWINDS_CREDIT_UNION] Thank you, 00:10:56 - [JUDGE] Your Honor. Thank you. Alright. Anyone else wanted to hear you you heard in connection with the cash collateral or the officer salary? No? Okay. Alright. So then those will be granted as agreed upon by the parties, and I'll look to mister Wolf for those orders, and I know he's gonna circulate them amongst the parties before submitting them. Right? So Absolutely. Okay. Alright. So then let's talk about the which one do you wanna talk about next? The four daughters or the 00:11:27 - [VERA_HOLDINGS] We can talk about four daughters, your honor, and my apologies that I did not get the motion to reject the lease file that is on my desk. No. This was a lease that was entered into this permit. This piece of property was where the gutter was operating before they have the the idea of the additional warehouse. So they sold the building and leased it back. The lease terminates in July. So and we will be filing a motion to reject the lease effective March 31. And, of course, we acknowledge that there'll be an administrative claim for February and March, and then the balance of the claim will be unsecured, which but that's only April through July. So the accrued rent, whatever costs and expenses mister Anthony's client has, he can file a proof of claim for them, but we acknowledge the administrative claim for those two months. 00:12:31 - [JUDGE] Okay. Alright. So then, mister Anthony, does that resolve where is he? Okay. Does that resolve your motion? Or 00:12:41 - [LIBERTAS_FUNDING] It does, your honor. And because my role is so surgical and it has been very satisfactorily summed up by counsel, I would ask that I'd be excused so I can make my flight. 00:12:51 - [JUDGE] Okay. Any objection to letting mister Anthony leave? Or okay. 00:12:56 - [LIBERTAS_FUNDING] Work on an agreed order. 00:12:57 - [JUDGE] Okay. It 00:12:57 - [LIBERTAS_FUNDING] should be very easy. 00:12:58 - [JUDGE] Okay. Great. Alright. So I'll look to mister Anthony for the form of the agreed order then. Okay? Okay. Very good. Okay. So then alright. So then tell me about the post petition financing. Is that you intend to go forward with that? Or 00:13:12 - [VERA_HOLDINGS] Your honor, the committee has asked for additional time Mhmm. To evaluate it. I'll let them speak to how much time it'll take. I think it is we got two different requests here. One is for additional use of cash collateral, which mister Fox said three weeks. We would like to have four weeks just to be able to get the every our ducks in a row, but then we've got the issue of the period of time that the committee wants to evaluate the dip motion. I will say with regard to the condition of the location, there has been some erosion out there in the rains, and we will be intending to put 1,800 in the budget to fix up that well, to protect the the the the construction site, which is lying fallow, and that's where we're asking for that to be rolled as well. 00:14:22 - [JUDGE] Okay. For how long? 00:14:24 - [VERA_HOLDINGS] I'll let the committee speak to that. 00:14:26 - [JUDGE] Okay. Okay. Understandable. 00:14:32 - [TIGER_FINANCE] Your honor, I think our you know, we have a lot of initial concerns with the the dip motion putting aside the the granular aspect of it. The the from a macro level, our issue is is we don't understand yet, how beneficial it is to a go forward business. We've asked for information on that, and we're hopeful that we're gonna get it. And that will help us evaluate whether we think the dip is necessary at all. I we've asked for two weeks. I'm fine with it staying at two weeks. I think I'd be fine with it being four weeks, but I'm assuming that people behind me will object to that. So I'm comfortable with two weeks with a reservation that we might seek an additional continuance if we're not getting the information we need to evaluate it in lieu of having to file an objection. 00:15:11 - [JUDGE] Okay. So alright. So then let's find a date. So let's first find a date for cash collateral, and then we can find a date whether it's the same date for the financing, which maybe it makes sense since it should probably be altogether. 00:15:25 - [FAIRWINDS_CREDIT_UNION] You are. Steven Fox. I was going to suggest that we split the difference between two weeks and four weeks at the three weeks that I had proposed for cash collateral so we can all do this at once. And if we need more time on the DIP loan, we can address that at the appropriate time. I don't think that's necessarily gonna be the linchpin of this case right now. I would propose either April 1 or April 2 if you're 00:15:50 - [JUDGE] Well, if wanna come on to chapter 13 day, you're more than welcome. 00:15:53 - [FAIRWINDS_CREDIT_UNION] Well, which one of those two days do I wanna avoid, judge? 00:15:56 - [JUDGE] You wanna wanna avoid the first, so we can do it on the second. 00:16:00 - [FAIRWINDS_CREDIT_UNION] April Fool's Day is just so appropriate. But, yeah, if if if April 2 works for you, your honor, I don't know if everybody else does 00:16:09 - [JUDGE] We're okay with that date? Does it oh, okay. Hold on. Let me see. Do I have something? 00:16:15 - [FAIRWINDS_CREDIT_UNION] '3. 00:16:17 - [VERA_HOLDINGS] I cannot do the April 2 year. 00:16:19 - [JUDGE] Oh, you cannot. Okay. 00:16:21 - [FAIRWINDS_CREDIT_UNION] Perfect then. Oh, okay. 00:16:22 - [US_TRUSTEE] We have we could do March 31 00:16:24 - [JUDGE] or April 2. I could do March 31 if that works for you, mister Wolfe. I don't know if you're unavailable that entire week or just a couple of days. 00:16:34 - [TIGER_FINANCE] Or 00:16:34 - [VERA_HOLDINGS] I would be available in the morning of the thirty first. 00:16:43 - [JUDGE] Okay. So do you wanna do the thirty first? 00:16:46 - [TIGER_FINANCE] That also works for the community. 00:16:48 - [JUDGE] Alright. So why don't we continue the financing motion to March 31 in the morning, mister Wolfe. You said that that's when you're available? 00:16:57 - [VERA_HOLDINGS] That's correct. I have a medical procedure that begins at eleven. 00:17:03 - [JUDGE] Oh, okay. Well, what if you needed more time for I don't know if that's gonna work, is it? 00:17:10 - [VERA_HOLDINGS] I'm hoping this will be all in agreement at at that point. 00:17:14 - [JUDGE] Okay. Alright. Well, I guess if it's not, then we're just gonna have to you know, for now. Okay. So 032031 at 0930 for the dip and the continued use of cash collateral. 00:17:24 - [FAIRWINDS_CREDIT_UNION] That works for Tiger. Thank you, your honor. You, honor. Okay. 00:17:28 - [JUDGE] Anything else we need to take care of this morning? Okay. Miss SawStop, everything okay on the US trustee side? 00:17:36 - [US_TRUSTEE] Yes, your honor. We have a continued 0341 meeting in two weeks, so we're still working through the preliminary document review. 00:17:42 - [JUDGE] Okay. Alright. So then by March 31, hopefully, we'll have an answer to whether everything's been provided and where we are there. Okay. Any okay. I think I've covered everything. Is there anything else anyone wanted to bring up? Okay. Alright. Well, I'm glad the parties were able to work through a lot of issues. Keep working at it, and we'll see you back here in a couple of weeks. 00:18:07 - [TIGER_FINANCE] Thank you. 00:18:07 - [JUDGE] Alright. Thank you. Alright. 00:18:10 - [FAIRWINDS_CREDIT_UNION] Thank you, your honor. 00:18:11 - [JUDGE] Thank you. Bye.
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