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00:00:01 - [DAVID_MCHUGH] I didn't get it yet. Hold on. 00:00:03 - [SCOTT_WARNER] Yeah. I I I think I hit send as I hit join. So yeah. Probably. Yeah. 00:00:10 - [DAVID_MCHUGH] Give me a second. See. 00:00:17 - [DAVID_MCHUGH] Not yet. I know Mary sent you something earlier too. 00:00:23 - [SCOTT_WARNER] Yeah. We kinda I haven't I got on my email about 7AM and haven't been back since and so until just now. Let's see. Mary. Mary. Mary. Yeah. Okay. I just need to review those real quick. 00:00:43 - [DAVID_MCHUGH] Sure. 00:00:46 - [SCOTT_WARNER] So I I did finally get her. I don't know if you saw the, entity spreadsheet updates that kinda we've been talking about for a long time now. So 00:00:57 - [DAVID_MCHUGH] Yeah. 00:00:59 - [SCOTT_WARNER] I think we 00:01:00 - [DAVID_MCHUGH] It's still good to get that out? 00:01:01 - [SCOTT_WARNER] Well, I I finally just started calling people and being like, guys, like, this isn't that hard. Give me the data. So Right. No. That felt good. I hope that helps kinda just get some stuff kind of aligned. Now that Jennifer, our former tax person's gone, I I'd like you know, I had I had asked for Mary's help making sure she kinda handles the filing pieces and all that. So but I have to followup on some of these. I don't I don't know enough about it. So 00:01:39 - [DAVID_MCHUGH] I I'm looking at your email at the back. Yeah. Okay. 00:01:44 - [SCOTT_WARNER] So Amity said quite possibly after they do this interview, like, just to kinda help guide or something, but she said that, I guess, one of the guys had an attorney join and it ruffled the feathers of someone else. So they they said for this one, no or something like that. 00:02:00 - [DAVID_MCHUGH] I don't know. 00:02:04 - [DAVID_MCHUGH] Yeah. So we'll see what Beth says. I don't know if she'll be able to join in. 00:02:14 - [SCOTT_WARNER] But An email is fine. I just was letting her know that we're gonna be chatting anyway. 00:02:19 - [DAVID_MCHUGH] So No. Understood. I'm looking at my notes just from our call with Tamara from Tuesday. Yeah. 00:02:31 - [DAVID_MCHUGH] Where did we leave? I know we're 00:02:33 - [DAVID_MCHUGH] gonna say we talked to her in two weeks. I guess she was gonna followup with Frieder, or were you gonna followup with Frieder? 00:02:43 - [SCOTT_WARNER] Let me find it real quick here. 00:02:45 - [DAVID_MCHUGH] The warranty stuff. I'm just looking at my notes. And you got from Olga the followup that she needed. I don't know how easy or hard that's gonna be on all that data. 00:02:56 - [SCOTT_WARNER] I looked at it this morning for a little bit, but that's I I just glanced at it because it was she she was working late last night, it seems. Looked like Yeah. Minute in my time. 00:03:06 - [DAVID_MCHUGH] She had sent me an earlier email, and I gave her some feedback. And then I said, please go ahead and fire it. I said, send that along along with yada yada yada. And I literally said that in my email because she knew where I'm at. Like, she so then I saw the email later. I think I didn't actually see the email till I woke up in the morning. 00:03:24 - [SCOTT_WARNER] Yeah. I I I didn't either. So 00:03:27 - [DAVID_MCHUGH] Yeah. She does that. I mean, she's got young like, a lot know, she's got young kids and stuff, and she actually works from home most of the time. Okay. And so I think she has, like, those ebbs and flows during the day, but she does work late. 00:03:38 - [SCOTT_WARNER] Gotcha. Alright. So my notes say that. That's different. I'm sorry. I've got all these to dos here. 00:03:52 - [DAVID_MCHUGH] Oh, by the way, I also go ahead. I'm sorry. I don't wanna jump around. Got 00:03:56 - [SCOTT_WARNER] So it just says send no. That's legal. Okay. Review so it says for tomorrow, review Scott's warranty proposal en route to Frieder. Provide HQ guidance on scope and process for work and guarantee adjustments. So I think I was going to send her the approach that Matt Mills and Robert and you had had talked about. 00:04:15 - [DAVID_MCHUGH] I had forgotten I had forgotten about where that even was or what that was. 00:04:20 - [SCOTT_WARNER] I had I have notes. I just need to pull them out, and I 00:04:24 - [DAVID_MCHUGH] That yeah. So I remember Matt did send to you specific Yeah. Revisions to the current warranty. Correct. Yeah. 00:04:31 - [DAVID_MCHUGH] Okay. 00:04:32 - [SCOTT_WARNER] So I think the the the check is is where from Tamara's viewpoint, where's the boundaries? And and because if my my hope is is that she says Dave and his team can address whatever they need to, but you never know. Right? 00:04:47 - [DAVID_MCHUGH] Well, I mean, like, as we deal with a lot of stuff with Germany, a, it's just getting the the amendable. Then two would be, okay. But, guys, you do realize that this would they they you know, we would this would come from headquarters. This would be your new warranty. Right. 00:05:01 - [DAVID_MCHUGH] You know? Right. 00:05:02 - [DAVID_MCHUGH] The other thing that we talked about briefly, though, was having that separate agreement. 00:05:07 - [SCOTT_WARNER] Yeah. I was gonna ask you, what are next steps on that? Because I actually didn't write You know what? 00:05:11 - [DAVID_MCHUGH] Annually, I gotta talk to Jonathan Judge. 00:05:15 - [SCOTT_WARNER] Okay. Yeah. He wrote the article you sent me. So yeah. 00:05:18 - [DAVID_MCHUGH] Yeah. I need to talk to actually, I I proofed that article. He sent it to me for comment and stuff. It's, like, I don't know, maybe a month ago or so. But I need to actually talk to him to get into the weeds on, you know, what the best what the best practice will be, some you know, that kind of thing. So I'll that is on my list. Let me Okay. Let me even add 00:05:42 - [SCOTT_WARNER] But I think it'd be beneficial if we could have something for our meeting with Tamara just to get it. Otherwise, I'm afraid it's gonna get pushed. 00:05:50 - [DAVID_MCHUGH] Yeah. I'm gonna put that in my notes with Tamara and then go back and repeat it in our notes for this call. A proposed draft intercompany agreement to protect to help protect 00:06:09 - [DAVID_MCHUGH] German Arent from 00:06:15 - [DAVID_MCHUGH] product 00:06:16 - [DAVID_MCHUGH] liability suits in The US. Let me say between 00:06:29 - [DAVID_MCHUGH] which and I know it's gonna be Festool USA LLC, but which 00:06:33 - [SCOTT_WARNER] Well, it should probably cover because GmbH sells the tools to TTS and ALP, and then NALP sends sells it to Festool USA LLC. So I I don't really know how that's gonna work exactly. 00:06:45 - [DAVID_MCHUGH] Wait. Sorry. I know I'm familiar with the g what was the I know the GmbH. What was the other entity? 00:06:50 - [SCOTT_WARNER] TTS North America LP. 00:06:54 - [DAVID_MCHUGH] Oh, right. Yeah. Right. Oh, yeah. So Festool USA and, yeah, TTS North. So North America something LP. North America, isn't it? 00:07:07 - [SCOTT_WARNER] TTS Tool Technique Systems North America LP. 00:07:10 - [DAVID_MCHUGH] That's it. Okay. LP. 00:07:13 - [SCOTT_WARNER] I have some I was trying oh, here. Maybe this 00:07:18 - [DAVID_MCHUGH] oops. One one of these days, I'll figure out what how a tool Technic is. 00:07:24 - [SCOTT_WARNER] Well, they're actually renaming it globally, I think, where they're getting rid of the tool technique finally. 00:07:29 - [DAVID_MCHUGH] Everyone asks the same question. What the hell is tool technique? 00:07:31 - [SCOTT_WARNER] I know. Right? I wanna know where that came from. 00:07:34 - [DAVID_MCHUGH] Yeah. That's exactly it. 00:07:36 - [SCOTT_WARNER] So I just shared something with you real quick. So just to kinda show so here's the product flow. 00:07:44 - [DAVID_MCHUGH] But it's it would be Festool GmbH on the mothership side. Right? 00:07:48 - [SCOTT_WARNER] Correct. So they internal invoice to North America LP, and then we sell 00:07:53 - [DAVID_MCHUGH] Okay. 00:07:54 - [SCOTT_WARNER] To Canada Inc and LLC, and then they go to the dealer from there. 00:07:57 - [DAVID_MCHUGH] Yep. Okay. Alright. Copy. But when it goes to the dealer, it comes through from Festools. Like, I don't think I don't think North America LP has ever been named. 00:08:09 - [SCOTT_WARNER] No. So Festool USA is is they never actually see the product, but they do invoice it. 00:08:14 - [DAVID_MCHUGH] But I get it. No. And I get it. For completeness, that's actually a 00:08:16 - [DAVID_MCHUGH] good point. I'm glad you raised it. Alright. Hold on now. Let me go back into my notes. 00:08:20 - [SCOTT_WARNER] Do want me to send that to you? Would that help? No. Okay. 00:08:24 - [DAVID_MCHUGH] No. No. I I go now to my Scott alignment calls and realignment calls. Yeah. Pre pre pre alignment, post alignment. No. I don't here we go. Add page. Can you go hold on one second? 00:08:41 - [SCOTT_WARNER] Yeah. I'm go here. 00:09:14 - [DAVID_MCHUGH] I'm done. There we go. Finally. Got a wire going through that 00:09:17 - [DAVID_MCHUGH] just wouldn't go through 00:09:18 - [SCOTT_WARNER] Yeah. That's always fun. 00:09:19 - [DAVID_MCHUGH] On a payoff, and it all came down to likely a dash. It kept on it kept on getting rejected, and they're like, no. We always have the dash in there. I'm like, try it without the dash or, know, humor me. 00:09:34 - [SCOTT_WARNER] Yeah. 00:09:37 - [DAVID_MCHUGH] And I just literally, the person was like, 00:09:39 - [DAVID_MCHUGH] it worked. Oh my god. Alright. Let me see here. Paste. 00:09:54 - [DAVID_MCHUGH] Alright. We're good. Got that. I will do that. That's on my list. Cool. Let me make a temporary note to make sure I don't I get to start it. Jonathan Gage, inner company, agreement festival. K. Got it. K. 00:10:23 - [SCOTT_WARNER] Yeah. So I will draft and send summary of warranty changes to Tamara. She'll get back to us on that. You'll take care of that one. I'm still working on that insurance council thing that you're not really involved in, but I did talk to Amity a little bit about utilizing AFS a little bit more officially on some of those cases just to 00:12:19 - [DAVID_MCHUGH] That's all. 00:12:19 - [SCOTT_WARNER] I told Amity that she had good things to say about that McDermott, but Amity said that she agrees. She just thinks they might be expensive. 00:12:27 - [DAVID_MCHUGH] But Oh, yeah. They're expensive. 00:12:29 - [DAVID_MCHUGH] Yeah. 00:12:30 - [DAVID_MCHUGH] Are you kidding me? That's the other thing, by the way, about that while how do we know what law how do we know what law other law firms' billing rates are? They have to publish them as part of bankruptcy proceedings. 00:12:41 - [SCOTT_WARNER] Oh, okay. 00:12:42 - [DAVID_MCHUGH] Well, what they end up doing, though, is those are inflated, but not as much as you would think. But they are the high end of the rates. Meaning, they they will quote high ends because they know the bankruptcy courts are gonna chop them down a little bit. Yeah. So they bolster them up. 00:12:58 - [SCOTT_WARNER] It's brutal. Yeah. The whole bankruptcy process feels corrupt. Like, just going through it, it feels like a mess. Like, talking to the trustee's office 00:13:06 - [DAVID_MCHUGH] I'm sure why you say it feels corrupt, Scott, because I think it absolutely is. 00:13:10 - [SCOTT_WARNER] It yeah. The the ten minutes I've spent in there, jeez, Louise. It seems like a a mess. So 00:13:19 - [DAVID_MCHUGH] Yeah. The yeah. The you gotta remember who it'll go through a little game with you. Who invented the entire bankruptcy scheme? 00:13:32 - [SCOTT_WARNER] I actually don't have any. I've never worked with it. 00:13:34 - [DAVID_MCHUGH] I can't the easy answer, actually. It's a trick question. Lawyers. 00:13:38 - [SCOTT_WARNER] Uhuh. Fail. Fair. 00:13:40 - [DAVID_MCHUGH] So what do you think the first thing is about who gets paid? 00:13:43 - [SCOTT_WARNER] The lawyers. 00:13:44 - [DAVID_MCHUGH] Yeah. Hell yeah. 00:13:47 - [SCOTT_WARNER] I was listening to a podcast today, a diary of a video if you've ever heard of it. But it it was a he was interviewing an attorney, and the attorney was talking about, I am paid to manipulate people and and, you know, I get paid more if I increase the conflict. I mean, was he's like, I'm just being transparent about it. He goes, now I'm a good attorney, so I don't do that. But that's he goes 00:14:06 - [DAVID_MCHUGH] I know. 100. I that's why my joke is always like, let's see how complicated we can make this because someone's gotta eat. 00:14:12 - [SCOTT_WARNER] Yeah. Yeah. I feel like Germany must have been must be run by lawyers because they make everything complicated. So 00:14:19 - [DAVID_MCHUGH] The whole bankruptcy thing is is a mess of everything. You got creditors, committees. It's the second thing would be month doing, like, monitorships, if you know what that is. That's the we have a we always have a number a handful of those being done. Those are the someone did something bad, and now we have to have a lawyer and a team of lawyers monitor their activity going forward and then report back to a court on what how they're addressing the issues that need to be fixed. 00:14:53 - [SCOTT_WARNER] Yikes. That sounds like a good one, though. 00:14:55 - [DAVID_MCHUGH] The one here in Chicago is the Chicago Police Department. That's a monitorship. 00:15:00 - [SCOTT_WARNER] Yeah. 00:15:00 - [DAVID_MCHUGH] You know? There's there was there's has been other monitor I mean, the the biggest one still going on is not we're not doing it. That would be great, though, if we were. Was the whole made off. 00:15:12 - [SCOTT_WARNER] Oh, yeah. 00:15:13 - [DAVID_MCHUGH] So you think of that as also bankruptcy related. It's but it's also sometimes white collar criminal aspects of it. Yeah. Yeah. So there's always these monitorships that are going on, and that's mostly in the white collar realm. But, typically, it would it would involve maybe it would have a bankruptcy element, maybe. Now, like, obviously, City of Chicago, a lot of these don't, but there could be that aspect to it. But that is another huge suck if you think about it. Anytime there's so in Washington, when they do a we wanna appoint a special prosecutor. That special prosecutor is always a lawyer, of course. It's but it's a law firm behind that lawyer. 00:15:53 - [SCOTT_WARNER] Yeah. I I don't think I've ever really thought about it that deep, but that makes sense. Yeah. 00:15:58 - [DAVID_MCHUGH] So, you know, those are those are the things that can it's amazing how many people can you put on those teams. 00:16:08 - [SCOTT_WARNER] Hey, man. People need to eat. Come on. 00:16:11 - [DAVID_MCHUGH] So yeah. Now the bankruptcy thing, I think it's, you know, it's it will be interesting. I'm glad that Amity is gonna get directly involved. 00:16:17 - [SCOTT_WARNER] Yeah. 00:16:17 - [DAVID_MCHUGH] But in terms of she'll see what it's what it is gonna entail and get into the weeds a little bit. But in this case, from what I recall, though, the the statement of assets and liabilities is not so far off. Like, sometimes you'd say, like, you know, liabilities, a 100,000,000. Assets, 5,000,000. You know, then you're like, okay. 00:16:44 - [SCOTT_WARNER] Well, did you I don't know if you looked at it at all. Somewhere on one of the sites, he has his assets listed as, like, close to a billion dollars or something. I'm not kidding. And we're like, what world 00:16:54 - [DAVID_MCHUGH] And I regret paying that because they're gonna but the lawyers are gonna make money chasing down where everything is. Yeah. 00:17:03 - [SCOTT_WARNER] Well, is it 00:17:04 - [DAVID_MCHUGH] I mean, like, you guys will get something that looks like based on what we're seeing, but you never know. You may not get anything, but you might get something. 00:17:12 - [SCOTT_WARNER] Matt King is an attorney. Right? Is that isn't that his thing? 00:17:16 - [DAVID_MCHUGH] I thought I thought that was the case. I mean, he I don't know if he was ever licensed to practice or what. 00:17:22 - [SCOTT_WARNER] Passed the bar or whatever. But yeah. 00:17:25 - [DAVID_MCHUGH] I do remember because I was actually I can't remember what airport I was in when I had one of 00:17:29 - [DAVID_MCHUGH] those calls with him. 00:17:29 - [DAVID_MCHUGH] I was in an airport, I remember. Thinking candidly what a what a kinda douchebag this guy is. He's like yeah. 00:17:37 - [SCOTT_WARNER] Yeah. He didn't impress me at all, but I don't know. I mean 00:17:40 - [DAVID_MCHUGH] Never do. 00:17:42 - [SCOTT_WARNER] This guy this guy's a particular I mean, I don't know. It seems like he I don't know if he just sucked at business or whatever, but he just never 00:17:51 - [DAVID_MCHUGH] You know, also though, it used to be quite a shame, like a scarlet letter to declare bankruptcy. The problem has been in the last in my last twenty five, thirty years. It's almost like a, yeah, whatever. 00:18:04 - [SCOTT_WARNER] Yeah. It's kinda like divorce. Right? It used to be in the old days, divorce was, you know, kind of a failure, but now it's, like, something people do on a Tuesday. It's like, okay. 00:18:11 - [DAVID_MCHUGH] I know. It it drives me crazy because that should be kinda, like, the end of him from a you know what I mean? But, like, with all these guys, they're like, yeah. Whatever, dude. Like you know? 00:18:23 - [SCOTT_WARNER] When you hear stories about, like, they'll declare bankruptcy, roll their assets into another end I don't know how it works, but and then they start a bankruptcy. 00:18:29 - [DAVID_MCHUGH] That's where they yeah. They they can. I mean, that's why the bankruptcy and the bankruptcy code is, you know, that's why you get into the preference payment. So that was one of the issues that Beth immediately asked was, well, when's the last time Festool got paid on this? Yeah. Was it within ninety days? That could be a preference payment. Yeah. I could have that might need to go back into the bankrupt estate. You know? The the so for all creditors. You know? And the and the secured get paid first, then the unsecured. So 00:18:55 - [SCOTT_WARNER] real quick from a legal standpoint, what is the diff what is secured? That means you something's owned that 00:19:01 - [DAVID_MCHUGH] Oh, yeah. So, like, we wanted to try to do that. Right? We said we wanna put a lien on an asset that you own so that if you go bankrupt, we get the first dibs in that specific asset. 00:19:13 - [SCOTT_WARNER] Okay. 00:19:15 - [DAVID_MCHUGH] So if someone lien like, when you get a mortgage, right, the bank has a lien Right. As a secured loan. Okay. Their security interest is the real estate itself. 00:19:24 - [SCOTT_WARNER] So if okay. So it it's people who have a loan with him that he guaranteed with with an with property or something. 00:19:31 - [DAVID_MCHUGH] You're not really officially changing title to somebody, but you are effectively giving them all benefits of title in the event that they need to collect on that loan. 00:19:41 - [SCOTT_WARNER] So how does he come out of this in in in any semblance of wholeness? Like, if he has to liquidate all his assets, or how does that 00:19:48 - [DAVID_MCHUGH] So when you say his assets, so, you know, one thing is, like, what assets he had in Vera Holdings, whether he did transfer in and out, that would be that would get him in trouble, and he would attach other assets if he intended or not. Right? Right. That's the whole made off. Think about made off. Right? He had nothing. It was totally well, he didn't have nothing. He had Ponzi scheme. So money was coming in, then he'd send it out. Money's coming in. And then it was like, we're and he had all these accounts everywhere. That's why it's such a mess. But because he was intermingling and everything else, the creditors committee yeah. The secured creditors, unsecured, will all go after and say, we've clawed these we're clawing back all these things, these payments. Oh, that account oh, no. That account was in, you know, made up junior. Well, no. You know what? We see a connection here. We're pulling it back. You know? For him, it's gonna be Vera Holdings, I guess. Right? It's the name of the entity. 00:20:36 - [SCOTT_WARNER] Yeah. 00:20:36 - [DAVID_MCHUGH] And the question is gonna be what assets does Vera Holdings have? Did he do any kind of fishy stuff between Vera Holdings and another LLC or his personal accounts? Or they're gonna do forensic on what was going on there to figure out whether there's more assets to be clawed back. But the bankruptcy is there to protect also to protect debtors. So it shields them. So often you'll have you know, especially private equity. Right? They'll say, yeah. We're gonna buy this company. Well, when we say we are gonna buy this company, we mean this new LLC that we've set up. 00:21:08 - [SCOTT_WARNER] Yeah. 00:21:09 - [DAVID_MCHUGH] So that that's gonna be a get loans. It's gonna buy some get some equipment on loan. It's gonna have some loans with banks and everything else. And all of a sudden, let's say they can't pay off those loans. If it's nonrecourse, meaning personal guarantee, no. Private equity's not gonna do that. Just like this guy wasn't gonna guarantee anything. You only can go after that legal entity in the and and the assets that that legal entity has. So it's the nuance of he hasn't gone bankrupt. His entity went bankrupt. You could have a 100 entities, and those you know, theoretically, if he did it correctly, would be protected. 00:21:46 - [SCOTT_WARNER] Who knows if he did anything correctly, but, yeah, has he? 00:21:50 - [DAVID_MCHUGH] But that's the way you you sort of that's what you'll say. Bank make it bankruptcy remote, meaning you've shielded yourself with this legal entity so that it when when you always think, when it goes bankrupt, you are protecting your personal assets. 00:22:07 - [SCOTT_WARNER] So say he bought tools from us and thus was in debt to us and then goes bankrupt. Is do our tools that we owned at the time, those don't come back to us? 00:22:18 - [DAVID_MCHUGH] No. I'm gonna do a purchase money security interest, which is another security interest. That's a secured loan aspect of it, which that can trump another secured party. So when he let's say he goes to the bank and he says, want a 10,000,000 loan. The bank's gonna be like, okay. We'll give you that loan, but it's gotta be secured by all assets, inventory, everything, cash, receivables. All of these assets, would secure it. Then you'd say, well, then there's no money left for me. Like, I can I'll be second place, and then you get a subordination agreement. So you basically it's a pecking order of, like, Scott, you are getting it paid first, and I'm gonna get paid or you whatever agreement we reach, if you do at the same time with separate separate banks, separate bar separate loan, you know, separate loans. So so let's say he comes to us and says, I need to borrow 10,000,000. And I'd say, wait. Is that in addition to the 2,000,000 you asked me to borrow? No. It's that's a separate 10. Scott's gonna pay loan me the 10. He's gonna be the lender. I'm gonna be another lender. Well, I'm like, well, what's in it for me? Like, I'm gonna get screwed, I I think, you know, because Scott's gonna get paid first. And so I'd say, well, I I'll I'll be subordinate, but I wanna have my own deal. So you and I would have to come to that deal. And it and you would be either say yes or no. You can be like, no. Screw up. Not gonna loan you money then. But let's say you say, okay. I'm game for that, which a lot of banks will say, okay. You could have a okay. For the first 8,000,000, Scott, you'll get paid. For the next two, we're equal footing. You know what I mean? Like, kind of in so you could do all of that. Or it could just be as simple as, Scott, after you get your pay to ten, then I come in second and take the rest of these secured assets. And, Ken, to get the liquidity, you have to sell the assets. You could do all the stuff. So that's the normal. Then you have this sort of what's called the purchase money security interest scheme. That can trump that security interest, but you have to jump through a bunch of hoops, including giving notice to the world, including all known and unknown lenders to this guy that that specific inventory that you're selling, you're selling with a security interest attached. 00:24:24 - [SCOTT_WARNER] Okay. How's how do you notify someone? 00:24:29 - [DAVID_MCHUGH] You you know there's no you give notice. You first of all, you do a search for all hit, which we did. 00:24:33 - [SCOTT_WARNER] Okay. 00:24:33 - [DAVID_MCHUGH] You know, when we were thinking about we offer this to you guys. We said, okay. Well, you do a search. So those those liens are recorded in the state in which the borrower is incorporated. So he was in Florida. 00:24:45 - [SCOTT_WARNER] Yeah. 00:24:46 - [DAVID_MCHUGH] So we went to the Florida secretary of state's office and said, give us a we we asked for a lien search. We actually asked the agent to do a lien search. 00:24:55 - [SCOTT_WARNER] Right. 00:24:55 - [DAVID_MCHUGH] And that lien and then they gave us a document that had all of these security interest liens, UCC ones, that were filed in the you know, against the debtor, against the borrower. And we looked at that and said, oh god. This guy's levered up big time. Like, we can tell. Like, it, you know, it references the loan agreements. It refer and then it's gonna be secured by all assets. You know? So it was like, okay. Well, the only thing that we could possibly do then is do a purchase money security interest. If we were gonna do that, essentially, what you would do is you send a notice to all known creditors. So you get that from the UCC lien search that we got from the secretary of state's office. You get those you send a notice to them so that they're on notice that, hey. I know you have a security interest in this guy's all his assets, including inventory, da da da, we aren't gonna sell him inventory unless we get paid, and they don't have to agree to it. They don't they you just they just gotta be notified of it. 00:25:50 - [SCOTT_WARNER] Okay. 00:25:51 - [DAVID_MCHUGH] Now the issue would be then so let's say he goes bankrupt. We would, you know, go to the warehouse and say, this inventory is ours, and it's subject to this purchase money security interest. Of course, when you file for bankruptcy, that all is done in a coordinated way, and everything's supposed to stop. You know? So it's, I think when a bank fails, you know what they you know, the the FDIC, others get in there, the regulators get in there, and they're like, stop. No more money leaves us until we go through everything and figure out, you know, what 00:26:19 - [SCOTT_WARNER] Right. 00:26:19 - [DAVID_MCHUGH] What's so that's kind of the process that you go through. I mean, it's a little more than that, obviously, but that's kind of what it is. Now people don't like doing it because it is you gotta do the searches. You gotta send notices out. You gotta be disciplined. And everyone's like, I don't wanna deal with this shit. It's not worth it. But, I mean 00:26:40 - [SCOTT_WARNER] is a lot, but I'm trying to figure out how do we stop this from being such a huge issue in the future. 00:26:44 - [DAVID_MCHUGH] Well, that's where you sort of monitor the, you know, cash. Yeah. You know, you never let somebody get too far ahead. Well, you guys yeah. 00:26:52 - [SCOTT_WARNER] I'd like to and I I don't know this, but I'm curious how he got so far behind on us. Like, we normally don't extend credit terms quite that far, so it's like what happened here. I don't know. It sounds like Robert fell for his charm or something. I don't know. 00:27:08 - [DAVID_MCHUGH] I don't know. I mean, I'm sure he'll blame us. 00:27:14 - [SCOTT_WARNER] He hasn't yeah. I I'd be curious to see because finance is usually pretty strict about that, but I don't know. 00:27:28 - [DAVID_MCHUGH] Let me give you a second. Let me see. 00:28:55 - [DAVID_MCHUGH] Let me see if I can excuse me. 00:29:01 - [SCOTT_WARNER] Hold on. Let me see 00:29:02 - [DAVID_MCHUGH] if I can 00:29:03 - [DAVID_MCHUGH] I have this light on so you can see me better? Otherwise, this is 00:29:05 - [DAVID_MCHUGH] what I look like, and I guess it's not too bad. 00:29:07 - [SCOTT_WARNER] No. It's not that 00:29:08 - [DAVID_MCHUGH] bad. Okay. I guess it's because it's it's nice day, actually. Hold on one second. Let me 00:29:15 - [SCOTT_WARNER] I got to wear my sunglasses on the drive home. That was nice. 00:29:20 - [DAVID_MCHUGH] Alright. Yeah. Let's see. 00:29:22 - [DAVID_MCHUGH] While you're looking, I'll be right back. One sec. 00:29:24 - [DAVID_MCHUGH] Okay. 00:30:30 - [SCOTT_WARNER] Sorry about that. 00:30:31 - [DAVID_MCHUGH] Yeah. Well, I'm just looking at my notes on this. And if it's helpful for you and Amity to talk about this at some point, I can I I I thought at one point maybe I did get into this with you 00:30:41 - [DAVID_MCHUGH] guys, but I'm not sure? 00:30:43 - [SCOTT_WARNER] That's secured. 00:30:44 - [DAVID_MCHUGH] But I can I can kinda line you know, summarize it for you? Probably, it's, like, two a two page memo on this I can probably dust off and do. 00:30:53 - [SCOTT_WARNER] Okay. Yeah. It probably wouldn't hurt just because I don't have enough view into our invoice aging and things like that. But to me, if someone's getting into a risk slot, this might be something worth pursuing. 00:31:05 - [DAVID_MCHUGH] Yeah. The issue is to really have it, it it is there is a there's mechanics to it that you have to do each and every time, which is every time you sell to the person, you have to give this notification to the existing secured parties. 00:31:18 - [SCOTT_WARNER] Okay. 00:31:19 - [DAVID_MCHUGH] And a lot of times, people kind of, like, don't do that in a disciplined way, and that's the critical, you know, issue. Yeah. You gotta do it before they receive the goods. And then the question is always then, well, is he gonna just turn around and sell them right away and, therefore, like, then it's then it's done then once he resells them. But it could be useful in terms of if he has, like, stuff that's gonna be sitting there for six months. You know what I mean? 00:31:46 - [SCOTT_WARNER] Right. I don't know. My camera died. Sorry. I don't know what's going on. 00:31:51 - [DAVID_MCHUGH] But, anyway, that's kind of the why I think a lot of times people are like, yeah. 00:31:57 - [DAVID_MCHUGH] Doesn't make any sense. Let's not do that. 00:32:01 - [SCOTT_WARNER] Yeah. It's the balance of all the work and everything versus getting behind like this. So 00:32:05 - [DAVID_MCHUGH] Yeah. I mean, if it's a high turnover, then you're not it's not really you know what I mean? Yeah. Then it's kinda out the door anyway. 00:32:30 - [SCOTT_WARNER] I guess. 00:32:46 - [DAVID_MCHUGH] I think that's really kinda where it buttons down to is if it's a but I think it might extend the proceeds too, so I'm wondering. Yeah. No. I guess it does it for the proceeds. 00:33:04 - [SCOTT_WARNER] So if if they sold our stuff and got money 00:33:06 - [DAVID_MCHUGH] No. Know. I was thinking actually, no. I think it applies to proceeds too. So I'm trying to think of what the Yeah. I mean, let me give you an ask you this. And then does he still have a lot of our inventory? 00:33:29 - [SCOTT_WARNER] I I don't know. 00:33:31 - [DAVID_MCHUGH] I don't think so. I think he kind of, like yeah. I mean, maybe, maybe not. And and I think and I think when we're going back to my memory, Robert might have said, like, only the stuff that's not selling, and we bought some of that back and, you know, that kind of thing. 00:33:43 - [SCOTT_WARNER] Yeah. Because I imagine Robert would have offered him to return it if if he had a ton, and I don't recall that being a thing. So 00:33:50 - [DAVID_MCHUGH] I think the way people like I said, I can send you this and some practical guidance. But I think, ultimately, people look at this and say, I think it's more of a managing the how much credit we're giving him and make and not letting it extend too much. And and, you know, if you're dealing with somebody, it's like dealing with a tenant. If you're dealing with a tenant that says, I can't pay it till I get paid this week and I'm late, you that's bad risk. 00:34:16 - [SCOTT_WARNER] Yeah. You you you're you're not heading in the right direction on that. Okay. Well, I think, yeah. If if you have something you wanna you have and you put it together 00:34:27 - [DAVID_MCHUGH] won't spend I won't spend more than an hour looking at it. 00:34:30 - [SCOTT_WARNER] Okay. That works for me. 00:34:32 - [DAVID_MCHUGH] Alright. Good. Alright. What else? Alright. Hold on. I'll make a note of that. Send Scott a PMSI 00:34:45 - [DAVID_MCHUGH] memo. 00:34:49 - [DAVID_MCHUGH] Limit to one hour. K? 00:34:53 - [SCOTT_WARNER] I don't really have much else. I 00:34:56 - [DAVID_MCHUGH] Let me see here. Going back. 00:35:01 - [SCOTT_WARNER] Christine 00:35:01 - [DAVID_MCHUGH] Oh, I I got something. Hold on. 00:35:03 - [SCOTT_WARNER] K. I don't know if we can Christine Feller did get back to us today on the 00:35:07 - [DAVID_MCHUGH] Yeah. I saw that. Yeah. Good news. About time. That 00:35:11 - [SCOTT_WARNER] was a long process. 00:35:15 - [DAVID_MCHUGH] Yeah. No kidding. I know. It's Shaper reached out to me. Were you on this? No. I I saw it in the way. I had an early morning. Yeah. Let me let me just forward it to you. I already scheduled the call. I don't think you wanna be on the call. But if you do, I'll just add you to it. But Scott, just FYI. Speaking of insolvency go ahead. Actually, take a look at that. You'll get it in, you know, like, a minute. Let me 00:36:06 - [SCOTT_WARNER] Just got it. Okay. Leah. 00:36:16 - [DAVID_MCHUGH] I actually had not taken a lot of time to look at that yet. It was just like I said when I was coming in commuting this morning. I saw it, and then I corresponded with Beth, and then I hooked hooked her in and got the 00:36:41 - [SCOTT_WARNER] Yeah. I don't I don't know that I need to be there unless you want backup or something. But 00:36:46 - [DAVID_MCHUGH] so 00:36:49 - [SCOTT_WARNER] MTC is a key supplier to GmbH, the manufacturer of shape or tape. Do you know I I don't deal with this enough. What does opt out mean in in regards to insolvency? 00:37:06 - [DAVID_MCHUGH] I think it means I don't know, actually. I I That's why 00:37:10 - [SCOTT_WARNER] I've never 00:37:11 - [DAVID_MCHUGH] heard of 00:37:11 - [SCOTT_WARNER] before. So 00:37:12 - [DAVID_MCHUGH] No. I mean, here's what my initial reaction when I was saying opt out is, like, class action. Oh, I'm opting out. I'm gonna go after them myself. I don't know if that meant I'm not gonna let the committee represent me. I'm gonna opt out and have my own case. I don't know what this means, candidly. But Beth is Beth will very calmly say, here's what the I mean, she's the clerk for, you know, Baker Gage in New York City. So she's always like, oh, it's this and that and then then. I'm always like, oh god. What a racket. 00:37:43 - [SCOTT_WARNER] Yeah. Seriously. So this is interesting. So the company that makes the shaper tape, we only have one evidently, and they're going 00:37:53 - [DAVID_MCHUGH] bankrupt. Yeah. Yeah. I and like I said, actually, I'm glad you this we had their call today because I would have likely not gotten back to you till next week on this because after I had my call on Monday, because I would have been like I because I haven't really looked at it. But let me take a 00:38:10 - [DAVID_MCHUGH] I got too many windows open here. Hold on. No. 00:38:22 - [DAVID_MCHUGH] I have a buddy in Brazil. You know, he was an exchange student. You know? 00:38:27 - [SCOTT_WARNER] Yeah. 00:38:28 - [DAVID_MCHUGH] And I my wife and I were talking about maybe possibly going to Brazil, you know, to visit. 00:38:35 - [SCOTT_WARNER] Okay. 00:38:36 - [DAVID_MCHUGH] And my wife used to live in Brazil 00:38:38 - [DAVID_MCHUGH] Okay. 00:38:38 - [DAVID_MCHUGH] For, like, seven years or so. And so she's like, do you wanna get back? I don't know. She's like, yeah. I wanna go here. And I know you wanna spend a few days with Daniel and, his wife, you know, and their kids and stuff. And, and she's met them. We've visited them before. So she's like, did you did you did you email or text Daniel? I'm like, Daniel doesn't use email. I have and as I come on the phone with you, I'm giving you, like, 50 emails going on. I mean, I just have to say, like, this as I'm like, I text his wife. I email her. I use WhatsApp, and I not fair. Like, she is the, you know 00:39:22 - [SCOTT_WARNER] Arbiter of communication for this guy? Yeah. 00:39:25 - [DAVID_MCHUGH] Plus, I mean, she's her English is 10 times better. She went to school, like, at Emory, you know, and got her masters at Emory. You know mean? She's super smart. You know? And but, anyway, it just cracked me up because I'm like, I was saying to myself this morning, 00:39:38 - [DAVID_MCHUGH] goddamn it. You fucker. He doesn't answer he doesn't even much time do 00:39:43 - [DAVID_MCHUGH] we spend on emails? And he's just like, nope. I do not email. You wanna I will talk. I will go and meet with you, but I will not email. 00:39:50 - [SCOTT_WARNER] I'm kinda jealous. I wish I had that sting. 00:39:52 - [DAVID_MCHUGH] I know. Sorry. I know I I I but, like, what the hell? Right? Alright. I'm looking at this again. Oh, and I let me see if I can find Leah's she's in the legal department. Right? Or what who is she? No? 00:40:05 - [SCOTT_WARNER] Yeah. She's legal. She works for Tamara. 00:40:09 - [DAVID_MCHUGH] Yeah. Here it is. Yeah. 00:40:11 - [DAVID_MCHUGH] I don't think again, why I like to go to Germany and visit people. 00:40:13 - [DAVID_MCHUGH] So I actually know what the hell sing sending this shit. 00:40:16 - [SCOTT_WARNER] Yeah. I was working on that whole proposal this morning, then I got way late on something else. 00:40:22 - [DAVID_MCHUGH] I'm sending you, by the way, the original with the attachments. 00:40:26 - [SCOTT_WARNER] Okay. Cool. 00:40:27 - [DAVID_MCHUGH] But, again, I have not looked at this now, but now I will with you to see if there's anything I I can put together on this. So, yeah, they had they want they want to establish oh, is there a need to establish a second supplier? Sort of a business issue, I guess, but I like those questions. Let's see. 00:40:48 - [SCOTT_WARNER] Yeah. I thought it was funny that they asked that. It's like, well, I mean, you decide. 00:40:53 - [DAVID_MCHUGH] I take it as a badge of honor that they want my business advice. 00:40:56 - [SCOTT_WARNER] Right? 00:40:56 - [DAVID_MCHUGH] I I did that. I had I've had, like, three board calls today, you know, for companies I I attend their board meetings 00:41:03 - [SCOTT_WARNER] Yeah. 00:41:03 - [DAVID_MCHUGH] As their legal counsel. And I had one today where I did a postmortem because I said, I could just tell. Like, sometimes these directors say such stupid shit. And, normally, I'm just there to advise on legal matters, and I asserted myself in this one going like, I just didn't have any patience for it. 00:41:20 - [SCOTT_WARNER] Yeah. And I 00:41:21 - [DAVID_MCHUGH] asked another board member. I'm like, I I hope this guy's name was Robert. Said, I hope Rob's not, like, saying, like, what in fucking make you such an asshole. You know? Like, you know? That's it. Oh, they're like, you don't understand, Dave. No. You saved the company about forty five minutes of of of at least that thing dragging on. You went you cut to the chase. It was, like, basically, no. That's not what we should do. Here's why we should do the 00:41:40 - [SCOTT_WARNER] That's I mean, sometimes it just takes someone to say what's on their mind because it's like, ugh. 00:41:46 - [DAVID_MCHUGH] I don't 00:41:46 - [SCOTT_WARNER] know. Board meetings, I used to have to go through my old job, and it just sucked. 00:41:54 - [DAVID_MCHUGH] So here's Kirkland and Ellis, the largest law firm in the world, is dealing with this bankruptcy. And it's in the district of New Jersey. 00:42:04 - [SCOTT_WARNER] So is that a US company, you mean? I guess it would have to be because it probably was papers originally 00:42:11 - [DAVID_MCHUGH] Name of that. Case is called In Ray Multicolor Corporation at all debtors, and then there's a footnote and a complete list of the debtors can maybe obtained on the website of the debtors claims and noticing agent. But another great gig, Scott. You wanna you're gonna be you and Amity are gonna be, like, woah woken up to this entire world, this underworld of bankruptcy and all the players and the trustees and the banks and the agents and the 00:42:42 - [SCOTT_WARNER] Good lord. So Kirkland Ellis is you said that the biggest one? 00:42:48 - [DAVID_MCHUGH] Kirkland Ellis is the largest law firm in 00:42:50 - [DAVID_MCHUGH] the world. 00:42:50 - [SCOTT_WARNER] I did not know that. Holy moly. 00:42:53 - [DAVID_MCHUGH] By by revenue. 00:42:56 - [SCOTT_WARNER] Gotcha. 00:43:00 - [DAVID_MCHUGH] Their average partner profits per partner are, like, I don't know, 15,000,000. Jeez. Yeah. That's another world too. That's a totally different ballgame. We just hired somebody from there, actually. I mean, everyone says, why the fuck would he come right to us? Yeah. It's a it's a long story, but we're glad he's here. 00:43:23 - [SCOTT_WARNER] I mean, that's funny because you guys aren't small in any way, shape, or form. 00:43:26 - [DAVID_MCHUGH] But No. 00:43:27 - [DAVID_MCHUGH] But when you're Scott, we have about 650,000,000 in revenue. These guys have about, I'd say, I don't know, 6,000,000,000 in billions. Yeah. Yeah. Crazy. 00:43:41 - [SCOTT_WARNER] Yeah. Fort Beth, you probably never heard of us before, now getting slammed with Festool. 00:43:46 - [DAVID_MCHUGH] You guys. 00:43:49 - [SCOTT_WARNER] But this is brutal. 00:43:53 - [DAVID_MCHUGH] Yeah. 00:43:55 - [SCOTT_WARNER] Okay. Here's the opt out form. 00:43:58 - [DAVID_MCHUGH] Yeah. I'm looking for 00:43:59 - [DAVID_MCHUGH] yeah. Hold on. 00:44:00 - [SCOTT_WARNER] Page seven of the nonvoting. Right? 00:44:02 - [DAVID_MCHUGH] Get the the debtors here. Hold on. I don't see Festool tape. Which one is it? 00:44:12 - [SCOTT_WARNER] Should be Shaper GmbH, I thought. 00:44:15 - [DAVID_MCHUGH] Yeah. But they're not. 00:44:17 - [DAVID_MCHUGH] No. I think they're saying their supplier's going bankrupt. 00:44:20 - [SCOTT_WARNER] Oh, okay. 00:44:23 - [DAVID_MCHUGH] I think that's the issue. One. That's the plan notification. Yeah. I just this is 00:44:33 - [DAVID_MCHUGH] why like I said, then I, like, candidly, before I start, what was I was in backed up traffic. Before he caused an accident, I said, okay. I'll look at this later. I can't look at this now. But I but I did I did correspond relatively hands free with Beth on, hey. Can you join a call on Monday? I need to get this set up. 00:44:50 - [DAVID_MCHUGH] And then I got to the office. I finished it. What is this shit? 00:44:57 - [SCOTT_WARNER] There's It's 00:44:57 - [DAVID_MCHUGH] a prepackaged chapter 11 bankruptcy case. Okay. So it's chapter 11, which means they're gonna continue. It's not a liquidation. Means all of 00:45:05 - [DAVID_MCHUGH] the borrowers get screwed, and they 00:45:07 - [DAVID_MCHUGH] get and then they venture out of bankruptcy debt free. Essentially, unimpaired, impaired. God. 00:45:21 - [SCOTT_WARNER] They have Why do they have so many debtors. 00:45:25 - [DAVID_MCHUGH] Man, it's amazing. Mean, like, your question is, how do they get so many people who don't owe them money? Have you ever seen banks going poor? 00:45:33 - [SCOTT_WARNER] Yeah. Right. Exactly. Good point. I should've started a bank or a law firm, one or two. 00:45:41 - [DAVID_MCHUGH] I'm voting Dennis to hold. There's a potential or unentered claims. Yeah. This is where I think they're gonna wanna accept it. They don't wanna opt out. I think that comes down to you have this preplanned kinda all worked out kinda thing, or do you wanna go your own and try to get I don't know. I think that's kinda what it is. 00:46:02 - [SCOTT_WARNER] I would always hesitate to go on your alone when something like this. So 00:46:08 - [DAVID_MCHUGH] Yeah. It's my instinct, but, candidly, I don't I don't have that many clients that deal with this shit. 00:46:13 - [SCOTT_WARNER] Yeah. 00:46:17 - [DAVID_MCHUGH] But give me one second. I'm gonna 00:46:23 - [DAVID_MCHUGH] let's just look at this for another. 00:46:31 - [SCOTT_WARNER] Ordered that this motion is granted. Any objections to the entry to not extent not withdrawn already settled are overruled. Like, damn. Judge said, done. 00:47:26 - [DAVID_MCHUGH] See if I can 00:47:29 - [DAVID_MCHUGH] you're like my workout buddy, Scott. 00:47:31 - [SCOTT_WARNER] I know. Right? I 00:47:32 - [DAVID_MCHUGH] through this stuff. Otherwise, I would get distracted and not get to it later. So proposed co counsel. 00:48:00 - [SCOTT_WARNER] Yeah. Bankruptcy. Maybe I would just maybe I'm glad I never had to deal with it before because this stuff's brutal. 00:48:18 - [DAVID_MCHUGH] I don't know how I answered this question about the second supplier. Like, I mean, like, I could look into it, but I like are there is there a need to establish a second supplier? I think what they I think what she okay. I think the translation 00:48:32 - [SCOTT_WARNER] not gonna exist anymore. 00:48:34 - [DAVID_MCHUGH] No. I think is it gonna be is it gonna continue existing? I think the answer is yes. I think that's the issue. 00:48:40 - [SCOTT_WARNER] Yeah. I think you could say that's their intent by filing chapter 11. 00:48:43 - [DAVID_MCHUGH] Yeah. Yeah. Okay. 00:49:07 - [SCOTT_WARNER] Yeah. My guess is Leah is, like, reading through this going, what the hell? What's a prepackaged what does that mean? 00:49:23 - [DAVID_MCHUGH] It it basically is they have somebody that's coming in that's gonna take this business over, and here's the deal. 00:49:32 - [SCOTT_WARNER] Oh, okay. 00:49:35 - [DAVID_MCHUGH] Think of it as, like, a white knight. They basically have somebody coming in. That's how it reemerges. So you'd say, well, who how do they get to reemerge? Well, likely, what's happening is one of the largest lend one of the lenders or somebody's coming in and saying, I will convert my debt into equity, and I will take care of these lenders. I'll take care of the I'll negotiate all this stuff so that folks say, alright. This is better than chapter seven. 00:49:59 - [SCOTT_WARNER] Gotcha. 3,900,000,000 reduction of net debt. Holy moly. 00:50:10 - [DAVID_MCHUGH] What was it? 00:50:11 - [SCOTT_WARNER] 3,900,000,000.0. 00:50:14 - [DAVID_MCHUGH] Yeah. 00:50:15 - [SCOTT_WARNER] Injecting of approximately 889,000,000 into new equity capital. Yeah. Provided in cash by the plan sponsor. So, yeah, somebody Yeah. They're gonna take over 64 of the company. I mean, for us, at least they'll still be doing business, but my gut would tell you we should find a second supplier just in case. But 00:50:49 - [DAVID_MCHUGH] Always. Right? That's just a standard, you know, answer. 00:50:52 - [SCOTT_WARNER] Especially since we can't operate that tool without this tape. Like, it's it's nonfunctional without this tape. 00:50:58 - [DAVID_MCHUGH] Yeah. I know. I and I think they're looking at the practical, like, is this does this mean that they're not gonna be able to supply? 00:51:04 - [SCOTT_WARNER] Right. Right. 00:51:04 - [DAVID_MCHUGH] Yeah. I don't know what agreements we have in place with them right now. That would be one. They usually will be the question is, are they gonna reject those or assume those? 00:51:14 - [SCOTT_WARNER] That's a good question. And I don't, yeah, I don't know. So GmbH would have the agreement. Right? 00:51:19 - [DAVID_MCHUGH] Yeah. I could reply. I will reply. 00:51:23 - [SCOTT_WARNER] You might ask her for a copy of that. 00:51:25 - [DAVID_MCHUGH] I'm going to do that, actually. Right? 00:51:33 - [DAVID_MCHUGH] Now 00:51:37 - [SCOTT_WARNER] Yeah. I don't I can't imagine why we'd wanna opt out of this. Like, that'd be silly, I think. 00:51:43 - [DAVID_MCHUGH] And Philip. Do we have a contract with MCC? If so, can you send it to me? Alright. I copied you on that. See if I can get you looped in. 00:52:18 - [SCOTT_WARNER] That works. 00:52:23 - [DAVID_MCHUGH] Alright. I'm gonna delete the close these. Close alt. 00:52:39 - [DAVID_MCHUGH] I don't even know how much we're due. 00:52:41 - [SCOTT_WARNER] I don't either. 00:52:42 - [DAVID_MCHUGH] Think about that. Yeah. 00:52:50 - [SCOTT_WARNER] Yeah. The entity is given the opportunity to opt out of the releases contained in article eight. 00:52:54 - [DAVID_MCHUGH] Yeah. I don't know if we owe are they owe if we're owed any money. She didn't get into that, did she? 00:52:58 - [SCOTT_WARNER] Didn't say. 00:52:59 - [DAVID_MCHUGH] Or owed anything, like tape. 00:53:11 - [DAVID_MCHUGH] Yeah. 00:53:12 - [SCOTT_WARNER] So, yeah, I I think with an need to see an agreement if there is one. If there's not, I'd wanna know what's the status of our 00:53:18 - [DAVID_MCHUGH] Yeah. I think this is a quick call, is my guess, on Monday. 00:53:21 - [SCOTT_WARNER] Yeah. 00:53:22 - [DAVID_MCHUGH] I think they just don't understand it. I think I'm going back to her email. In Germany, future claims are automatically included in insolvency. Yeah. I'll let that's why I got Beth involved. It's just confirming for me. 00:53:36 - [SCOTT_WARNER] Yeah. I agree. 00:53:38 - [DAVID_MCHUGH] It's a nuance, and she's dealt with it. And I think it's just more of a loss in translate. I mean, Germany is very different in a lot of ways. Right? So 00:53:47 - [SCOTT_WARNER] Oh, in so many ways. As we know. 00:54:01 - [DAVID_MCHUGH] I think the answer is, though, that the difference is all future like they said, Germany, all future claims automatically are included in insolvency proceedings. In chapter 11, I think generally speaking, it's claims are generally defined as those that arise prior to the petition date, so prior to January 29. 00:54:26 - [SCOTT_WARNER] Yeah. 00:54:29 - [DAVID_MCHUGH] And what that plan does, it basically just wipes the slate clean of everything prior to January 29. So, basically, I think the idea is we would be if we wanted to fight about not going after, not challenging the bankruptcy and or going after the creditors. 00:54:57 - [SCOTT_WARNER] Gotcha. Okay. 00:54:59 - [DAVID_MCHUGH] So as I opting out, it's not likely. 00:55:01 - [SCOTT_WARNER] I mean, my guess is it's pretty quick cause, you said. I don't I think Leah's probably got a good idea of that. So 00:55:09 - [DAVID_MCHUGH] Yeah. But, essentially, if we have claims going forward, we still have those. If we had claims relating pre January 29, those are bye bye. So they intend to continue to operate. But the bank the other thing about bankruptcy, Scott, is that that the bankruptcy gives them the right, not the obligation, but the right to terminate any existing agreements. Okay. That's okay. The prepackaged things are intended to kinda get the, debtor up on their feet real quick to continue business because everyone loses if they don't. 00:56:01 - [SCOTT_WARNER] I see. Because that's how they get paid then too. Yeah. Yeah. 00:56:04 - [DAVID_MCHUGH] Well, that's how they get more money. 00:56:07 - [SCOTT_WARNER] Okay. 00:56:08 - [DAVID_MCHUGH] But that's separate and apart from the, you know, should they, you know, purchase more tape? Now if they're worried that they're gonna make a claim for it and then the money's gonna be gone and they don't get their tape, that's a that's 00:56:24 - [DAVID_MCHUGH] a separate issue. Maybe Beth can get into that. 00:56:30 - [DAVID_MCHUGH] But yeah. It's always the problem you have with sole source arrangements. So is there anything else on the list? 00:56:45 - [SCOTT_WARNER] I don't think I had much today just because we had just talked, and so it's more just about yeah. If you could look at the things on your side, I'll look at things on my side, we'll meet in the middle. I did get Mary all that stuff today, so let me know if she has any questions for you. We will be pushing for written consents pretty soon, and I'll just I'll remind you at the time, but we need to change the headquarters to SE instead of AG on those written consents. So 00:57:10 - [DAVID_MCHUGH] Yeah. I thanks for doing that. I need it. Be nice to get one day in my dreams, it's gonna be a very simple org chart, very simple things, and everything's gonna be done so automatically. It's gonna feel like going to a very smooth orchestra playing classical music, and everyone's just relaxed, and everything's just moving appropriately. One of these days. One year. 00:57:34 - [SCOTT_WARNER] It's funny because I back in the day when Fabian was here, he was like, this is just a simple process. You know, we'll do the same thing, copy paste every year. Yeah. Listen. I don't think it's worked out once yet. So I mean, it's not painful. I feel like we have a pretty good workflow between us, but it's just a matter of, yeah, getting done with the 00:57:56 - [DAVID_MCHUGH] I hadn't kept up with Mary on this, but she has not, updated the AG to an SE? 00:58:05 - [SCOTT_WARNER] I I don't think we've talked about it yet because it just happened, what the day 0301. So 00:58:11 - [DAVID_MCHUGH] Are you so you said you're gonna do that? 00:58:12 - [SCOTT_WARNER] Yeah. I'll I'll confirm with her. So 00:58:15 - [DAVID_MCHUGH] Okay. Alright. Well, let me know if there's anything else. Let me just take one quick look, make sure when's our next call? 00:58:21 - [SCOTT_WARNER] I think you and I are in two weeks. 00:58:24 - [DAVID_MCHUGH] Let me just hope I get some could we discuss the shaper and bankruptcy questions. 00:58:38 - [DAVID_MCHUGH] And so or a shaper tape pad. 00:58:44 - [DAVID_MCHUGH] Sorry. What and we discussed the annual reports and annual cents. Scott to followup with Mary regarding new name of parent company from AG to SE. Yep. Alright. Hold on. 00:59:13 - [DAVID_MCHUGH] I gotta learn how to spell the word discussed. There we go. Let me just double check. 00:59:20 - [DAVID_MCHUGH] Are we planning on anything just thinking real quick ahead on training, visits, that kind of thing outside of Germany? 00:59:31 - [SCOTT_WARNER] It's a good question. Probably would would wanna check with Robert, but we have an entirely hold on one second. Who's calling me from Lebanon? Decline that, see if they got back. We have a lot of new sales team members, so we should probably consider it. Do you have the training list you and I discussed a while back? I would have to go find it. I don't know 00:59:59 - [DAVID_MCHUGH] Let me see if I can find it. Training. Like, the things we're considering doing? 01:00:04 - [SCOTT_WARNER] Yeah. We had, at one point, said these topics would be I just I'd have to go find it. I know I have it somewhere. But 01:00:11 - [DAVID_MCHUGH] Hold on. Let me see if I can find it. 01:00:23 - [DAVID_MCHUGH] Privacy update? I had it's it's what I love about OneNote, Scott. 01:00:25 - [SCOTT_WARNER] Yeah. 01:00:27 - [DAVID_MCHUGH] Back in December, you and I and Tamara discussed this topic. We said privacy updates, and we discussed that in general. Hold on, Tanya. Hold 01:00:41 - [DAVID_MCHUGH] on. 01:00:41 - [DAVID_MCHUGH] Let me see. There's other ones here. Hold on. That was so we did discuss it, but I don't have the list. It's gotta 01:00:47 - [DAVID_MCHUGH] be somewhere here. Hold on. Festool training. 01:00:56 - [DAVID_MCHUGH] We talked about oh, this is 01:01:05 - [DAVID_MCHUGH] Can I try to hold on? Hold on. No. 01:01:12 - [DAVID_MCHUGH] For some reason, this came up into the social media stuff. I'm not sure why here. Hold on. 01:01:19 - [SCOTT_WARNER] I'm gonna look for my way you look. 01:01:20 - [DAVID_MCHUGH] I know, like, was it advertising? Or 01:01:24 - [SCOTT_WARNER] We had done stuff with marketing, but I can't remember what we had I can't I know I had a few ideas. I just hold on. 01:01:33 - [DAVID_MCHUGH] Hold on. I'm looking too. 01:01:38 - [DAVID_MCHUGH] I think he did that, though. Right? Matt did the whole marketing training. Right? We talked about immigration transfer, but that's not training. We talked about I sit here, and this is from this is from a year and a half ago. It was Matt Mills' marketing training. Scott will go back. We did it in early November, so I think that was separate. We did that separately. K. Hold on. 01:02:09 - [DAVID_MCHUGH] Here we go. Hold on. In September, we talked about a lot less stuff. Let's see here. Hold on. 01:02:24 - [DAVID_MCHUGH] The marketing training again, like sweepstakes, giveaways, and stuff, that might have been covered, I don't know. Privacy policy. I'm just looking at a lot 01:02:33 - [DAVID_MCHUGH] of stuff here. Subscribe and display. Don't know. K. And then do wanna train that? No. Let me see here. 01:02:56 - [SCOTT_WARNER] Gotta remember how to do all this. 01:02:58 - [DAVID_MCHUGH] Let's see. Let's see here. Here we go. Alright. 01:03:13 - [DAVID_MCHUGH] Hold on. I got better. I I I pulled it all open. Let me 01:03:16 - [DAVID_MCHUGH] see if I can I can see the ones that are just for Festool? See if I can just open those. Oh, okay. So hold on. That's that. Update. No. Getting closer, though. 01:03:41 - [DAVID_MCHUGH] Just call. We talked about marketing training. 01:03:49 - [DAVID_MCHUGH] Hold on. Training. Festool. Here it is. 01:03:55 - [DAVID_MCHUGH] We talked about antitrust training. 01:04:04 - [DAVID_MCHUGH] Oh, that was not bad. 01:04:09 - [DAVID_MCHUGH] Yeah. I don't think we had I don't have it in my notes. It might have been but, obviously, it was antitrust training and marketing training were the top ones. Yeah. Marketing training, we did it. That's from 2024. We did it in November. But let me just make a note of this. Training topics for 2026. Antitrust, marketing. What else? 01:04:52 - [SCOTT_WARNER] Trying to 01:04:52 - [DAVID_MCHUGH] Basic contract training, but I don't know. You are the only ones that really sign contracts, so I don't that's not a greater group. 01:05:00 - [SCOTT_WARNER] Let me I have the note. I just need to find it, and I can send it to you because then we can maybe plan out what that looks like. 01:05:07 - [DAVID_MCHUGH] Okay, Scott. 01:05:08 - [SCOTT_WARNER] The training I have has Training. 01:05:35 - [DAVID_MCHUGH] Privacy? Is that another one? No? Just a. Hold on. 01:05:43 - [SCOTT_WARNER] Everyone's saying understands what's going on doing not in training operation. Sometimes I take good notes, but I don't put what we're talking about. Okay. I believe that's not it. Man, how far back do I have to go to find this? You said September's when you were seeing stuff? 01:06:15 - [DAVID_MCHUGH] Yeah. Oh, yeah. Was it no. It was December we talked about it. Our December call on December 16 was tomorrow. We we it was a topic. 01:06:24 - [SCOTT_WARNER] Okay. And 01:06:25 - [DAVID_MCHUGH] I don't I don't I don't know if we got into any details, to be fair. 01:06:45 - [SCOTT_WARNER] Yeah. So I said we talked about training. So I think I'd still like to talk about training opportunities that might be needed next year, but then we switched, it looks like, to going to Germany. And then we talked about we talked about Reed, which was terms of privacy. Yeah. 01:07:07 - [DAVID_MCHUGH] Privacy. Yep. 01:07:14 - [SCOTT_WARNER] Structure impact. So I think it was before this when we had the real check because I thought it was just you and I on the call. Let me go to I have an old notebook in OneNote. Let me go to that notebook. Maybe maybe it's older than I thought. Legal. Where's AFS? So say it has a mysterious company wide training. Alright. That's not it. Okay. Here we go. We talked about January 30 of doesn't say what year 2025. So education training beyond advertising. So IP, t trademarks and copy 01:08:44 - [DAVID_MCHUGH] Yeah. Hold on. Beyond advertising go ahead. 01:08:52 - [SCOTT_WARNER] I I love that we gave it a name. 01:08:54 - [DAVID_MCHUGH] So Yeah. What what is though? IP. IP. Yep. Marks. 01:08:59 - [SCOTT_WARNER] Yeah. Copyright. 01:09:02 - [DAVID_MCHUGH] Yep. 01:09:03 - [SCOTT_WARNER] And then the next one was a deep dive into influencers, sweepstakes, contests, and more. 01:09:10 - [DAVID_MCHUGH] Yep. 01:09:12 - [SCOTT_WARNER] And that's all I had in this list. 01:09:13 - [DAVID_MCHUGH] Yeah. But that might have been what we did. No. I guess it wasn't. I'm not what did Matt do? The just more app more general on the marketing side? 01:09:20 - [SCOTT_WARNER] Yeah. He just did it with just the marketing side, but I think 01:09:24 - [DAVID_MCHUGH] This is really a Matt Mills thing. So Dave to follow Matt Mills. Yep. Okay. I mean, except for the privacy. But on that, the that one, we can. Yep. 01:09:33 - [SCOTT_WARNER] Yeah. And then I'm just going through other notes just to see. Yeah. Yeah. We did marketing compliance training with on 11182024. 01:09:45 - [DAVID_MCHUGH] Yeah. Right. That was a followup to that. Exactly. Okay. Makes sense. 01:09:53 - [SCOTT_WARNER] Cool. Yeah. That's all I have in my notes. So I did have I had to go back a bit to find that one. 01:10:03 - [DAVID_MCHUGH] Yeah. That's fun. What year was that? That was 2025? 01:10:06 - [SCOTT_WARNER] 2025. Yeah. 01:10:07 - [DAVID_MCHUGH] Wait. Hold on. Why didn't I have that? Let me look. 01:10:12 - [SCOTT_WARNER] Was it before you used OneNote maybe? 01:10:14 - [DAVID_MCHUGH] Or Oh. No. No. No. January I have January 30. But that was this with Tamara, or was this with Just you and me. January 16? 01:10:23 - [SCOTT_WARNER] I think so. Yeah. I already closed it. But 01:10:26 - [DAVID_MCHUGH] No. No. I got it. Okay. Yeah. I have it. I said legal topics that we can educate. I never put the word training. 01:10:33 - [SCOTT_WARNER] Oh, there you go. 01:10:36 - [DAVID_MCHUGH] Training. Yep. Okay. Best tool. And yeah. Okay. You're right. IP, deeper dive into influential sweepstakes and contest, Angela, executive leadership team, c level, and all VPs. 01:10:49 - [SCOTT_WARNER] So we We can start thinking about that too. And we we had joked, but somewhat serious, we could do it in Germany. 01:10:59 - [DAVID_MCHUGH] Oh, I know. 01:10:59 - [DAVID_MCHUGH] I think that's kinda where it came up. 01:11:01 - [SCOTT_WARNER] Yeah. 01:11:01 - [DAVID_MCHUGH] Like or we just repeat it, but then maybe do it from a compare Germany versus US. Let's help with the translation kinda thing. 01:11:08 - [SCOTT_WARNER] Exactly. 01:11:10 - [DAVID_MCHUGH] Alright. So that's all good. Okay. Then I think I know we say this, but, you know, we talk whenever. I think that covers everything we need. Okay. And you're good on the litigation. Oh, I know we have, like, an audit letter coming up. I know you just sent those out. I assume 01:11:30 - [SCOTT_WARNER] I didn't. You just signed my name for me, but yeah. 01:11:33 - [DAVID_MCHUGH] Well, I know. I was gonna say, because they gave us, like, basically, three days. You know? Usually, they give us, like, three months notice, and they gave us, you guys said, can we get it by tomorrow? And I'm thinking, this is, like, two days ago. I'm like, oh, shit. Because it you know? And so the process internally when that happens is we have a whole process for that, and it goes to a process that includes person gets people get emailed. Everybody that's touched the file, so to speak, billed anytime to Festool will get pinged and say, do you have any claims? Unasserted or threatened? And everyone's like, oh, let me think. Oh god. What was that? You know? So, like, Adam Bauser. And, like, I'm like, oh, fuck. Yeah. Is that you know? It's a it's 01:12:13 - [SCOTT_WARNER] a Yeah. It's more than just a one day affair. So 01:12:16 - [DAVID_MCHUGH] It's a pain in the ass because you it it it's candidly, the auditors are trying to shift liability if we forget to say something or if you you know, to the law firm. We're another we're another potential defendant. Never So they actually have a thing called the ABA, the American Bar Association Accord, which was like a d'etat of sorts that that we put in all those letters that helps try to protect us on unreasonably unreasonable questions from the auditor. Please provide us the likelihood of success. We're we're not gonna do that in accordance with the ABA Accord. We will not be doing that. We will give you facts. 01:12:52 - [SCOTT_WARNER] Yeah. Exactly. 01:12:53 - [DAVID_MCHUGH] Fax only. We're not gonna say don't worry about it. 01:13:00 - [SCOTT_WARNER] Our auditing team, I I know they I I think they're pretty easy on people, but I have never actually read all their what they're asking. 01:13:06 - [DAVID_MCHUGH] I know. If we don't get it to them by tomorrow, I can tell you they're like, woah. We wanted this. And I'm like, oh, don't worry. We're we we try to meet the deadline, but when you give us three days 01:13:15 - [SCOTT_WARNER] Yeah. I was kinda surprised that because Mike sent it out, and he's our, whatever, senior controller, whatever. But, yeah, he's a I felt like the timeline was pretty damn tight. So 01:13:29 - [DAVID_MCHUGH] Yeah. 01:13:30 - [DAVID_MCHUGH] Okay. So I know. Like I said, it's in process. I immediately put it into process. I just didn't get there. All good, mate. Alright. We'll talk anyway. Hey. How's everything okay with your daughter? You mentioned it before. Is it seeing impact? Yeah. There was a note I had here about, like, oh, Clint might do this, might do that, if not this. I just do do you have the sure thing my request really ultimately is, if it's easy, is do you guys have an updated org chart for people? 01:13:58 - [SCOTT_WARNER] Yes. We do. I can give that to you. 01:14:01 - [DAVID_MCHUGH] Okay. That just helped me get my bearings on who's doing what and where. 01:14:05 - [SCOTT_WARNER] Yeah. I'll ask HR for it, but I it does exist because we've had to put it together for even, like, our auditing team and stuff like that. So 01:14:14 - [DAVID_MCHUGH] To get Dave on updated personnel org chart update. Perfect. Alright. We're good. 01:14:26 - [SCOTT_WARNER] Have a good night, Dave. Take care, bud.
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