Village Roadshow Entertainment Group USA Inc. - audio of April 22, 2025 hearing before the US Bankruptcy Court for the District of Delaware in case number 25-10475

All right.

Good Good

afternoon, Your Honor. Justin Bernbach of Shepherd Mullen, Richard Hampton, Council Debtors and Debtors in Possession. Thank you, Your Honor, for permitting us a one hour delay. I assure you that we used it quite widely. And I'm most pleased to say that we have resolved all open issues in respect to the matters that are set for today's hearing, as we believe that we resolved all open issues for the matter set for hearing.

And so what I propose to do is just walk through a few of the items on the agenda, take care of some housekeeping items.

Okay.

I do note, item 10, which is the first item was from the agenda going forward is the debtors cash management order. We filed COC just prior to the hearing. And so if there are no questions in the court, I think we would simply ask that that order be entered.

Okay. If it's just filed, I haven't seen it. Let me pull it up. Okay. I'll tell you what, to make it more entertaining for the crowd, why don't you walk me through the changes?

Yes. I would like to. Do we have a copy of them? They're on their way over. They're on their way over.

Okay. So the changes in the initial paragraph, I think just pertain to ops United States trustee, counsel to Warner Brothers, counsel to Sony, counsel to Magnum. Anyone else?

And the committee.

Our friends from the Petrosky firm on behalf of the committee, I should have mentioned, I should have acknowledged them in the afternoon. I apologize.

Oh, their presence speaks for itself.

Thank you, Your Honor.

So the first change about notice of the final hearing being sufficient.

Okay. Mr. Birnbrock, I'm going to ask you a favor. The microphone to your left, could you pull it up closer? There we go.

How's this? Yeah. And maybe the other one too if you bring it in.

How's this? Yeah.

I just wanna make sure we get a good record. We're, not picking you up too well.

How about that? Is that better?

Is that good? Yeah.

Okay.

Yeah. Much better. Thanks so much.

I'll try to project. Yeah.

I'm

I've I this case given its proximity to show business, I've been listening to the Smartless podcast so that I could feel like I'm actually in show business. So I'm trying all these things, which are new for me.

This is all a performance system. Indeed.

So the next change in the cash management order is that the debtors are required to maintain accurate books and records. And we will provide those to the committee.

Do we need an order to make sure that you maintain accurate books and records? I'm certain. I'm kidding. I'm all for the changes. So that's fine.

Very good. There's another provision in the same paragraph that does require disclosure to Warner Brothers in the event that there are any intercompany transactions that are greater than $250,000 where one of the library debtors is a transferor. And then we're providing on a confidential basis, information to the advisors of the committee, counsel of Warner Brothers, a journal entry we're providing journal entries of all intercompany activity, month end post petition intercompany balances and month end cash bank balances and any reporting the debtors otherwise provide to the debt lenders. So committee and Warner Brothers are getting the same reporting. The next change is in new paragraph six.

States that the debtors shall not make payments on account of intercompany transactions involving debtors and non debtors absent further of the court. There's an additional proviso that says the debtors shall maintain accurate and timely documentation of any post petition intercompany transactions, which we shall adequately record in and readily be in a readily ascertainable form in our books and records. Paragraph seven provides that all ordinary course intercompany claims arising after the petition date shall be accorded administrative expense priority to the extent that they provided an actual and necessary benefit to the respective debtors' estates. New paragraph eight, we've got additional language, regarding, I believe this is protection for the ABS lenders. And and what it does is it it lists a whole host of debtor entities, that are subject to, the pre petition ABS notes documents.

And simply, I think it just makes clear that these are all still enforced. Okay. And

I've been reading ahead of you. I think I understand the remaining changes and I don't have any questions. I'll grant the motion.

Great. Thank you, your honor.

So that was cash management. The additional two items that we have on the calendar today are the debtors dip motion, as well as the debtors motion for entry the bid procedures order and associated bidding procedures. But before getting to those, as your honor may have seen, we did file a supplement to our bidding procedures motion, wherein we announced for the first time a new stocking horse bidder. We did tender a declaration by Mr. Reid Snellenbarger who is in the courtroom today.

Where is Reid? And he's available in case if there are any questions concerning his declaration. It's certainly something that we as debtor professionals had not seen much of, but we did have something of a mini auction leading up to this hearing on April 7 and what I'm going to say now is all set forth in Mr. Snellenberger's declaration. On April 7, we received a binding bid from Alcon Media Group for a purchase of the library assets on substantially the same terms as the original Stocking Horse bid from Content Partners.

We then notified Content Partners of that increased bid. And on April 11, Content Partners subsequently raised its bid in reaction to the Alcon bid. Wanting to try to get to both parties highest and best bid and in an efficient manner, the Board of Directors, the debtors instructed the advisors to go back to each of Alcon and Content Partners, notifying them on a date certain that they had to provide their best and final bid by 5PM Eastern. The debtors Board of Directors would then compare those bids and determine which was the highest and best solely for purposes of the bidding procedures hearing and the stocking horse on the library assets. By that process, it was determined that the highest and best bid was from Alcon Media Group in the amount of $417,500,000 which represents a $50,500,000 increase since the original Stalking Horse bid.

And so Stalking Horse that we are seeking approval of at this hearing is that higher revised Alcon bid. They are seeking a $2,000,000 expense reimbursement as a component of their bid, but they are not seeking any break fee in connection there with. So again, that was, Mr. Snellenbarger's declaration at docket 198, which I would move into evidence at this time.

Okay. Does anybody object to the admission of Mr. Snellenbarger's declaration in support of the bidding procedure, Joshua? Okay. I hear no response.

It is admitted. Is there anybody who would like to cross examine Mr. Snellenbarger? Okay. Again, I hear no response.

So with that, your honor, perhaps it does make sense to go to item 12 on the agenda, which is the debtors original stocking or excuse me, the original bidding procedures motion, there has been significant and substantial revisions to that document. We did file approximately an hour or so before the hearing, a red line, of that. I'm not sure if we have any hard copies of it or they might still be in transit. I'll, this is the red line is at docket two three six.

I'll bring it up on the screen. K.

The changes, set forth in the bidding procedures, order and corresponding bidding procedures and the related attachments and notices in many respects are to address objections raised by Warner Brothers. They also address issues raised by the Office of United States Trustee, by the committee, and I think a handful of other folks who supplied comments on an informal basis.

Okay. I have the red lined up. Would you like to walk through the changes made to the order that was filed a little early?

I'm happy to. I don't have a red line, unfortunately. I think Mr. Mulvihill is going to be there.

Okay.

So your honor, I'm told that yesterday's red line, which looks like docket two two four might be a better place, to go through, because today's today's red line only reflects comments from the office of United States trustee. Again, that's, DACA two two four.

Mhmm. Okay. I'm there.

I am scrolling to the to the red line.

Okay.

Okay. So, your Honor, are you at DACA two twenty four Redline?

Yes, I am.

Okay. So we made reference to the supplement supplemental motion, made conforming changes throughout the document to swap out CTE Ventura with Alcon Media Group. Let's see. We removed, at the request of, I think several parties, the good faith finding, which had appeared in paragraph C as in Charlie.

Right.

So in paragraph G as in golf, there begins, you start to see for the first time that we've got a parallel set of procedures. And in the debtors business judgment, this was appropriate given the scope, size and scale of Warner Brothers related agreements and essentially the interdependence of the two entities, it made sense to create a separate process that would apply to the Warner Brothers agreements. And so what you see starting to emerge in the red line is this parallel track.

I'm

going now to, so paragraph six of the order does grant authority or the right in the debtors reasonable business judgment and in a manner consistent with their fiduciary duties and applicable law in consultation with consultation parties to do a number of things in connection with the bid procedures. But most notably is appoint additional stocking horse bidders for the derivative rights or the studio business. That would be subject to filing with the court an incremental notice of that action to which parties would have an opportunity to object. Some reservations regarding distribution of sale proceeds and this order are making clear that nothing under this order permits distribution of sale proceeds. Warner Brothers has reserved rights in many places.

That also shows up in the red line. There's also reservations in favor of a few of the other parties that I mentioned at the outset paragraph 13 for example preserves certain rights of Magnum. And again these were all all of these additions were negotiated at arm's length with representatives for the various parties. So So the paragraph 14 is this additional stocking horse concept for the derivative rights and the studio business. This sets out the parameters under which the debtors are seeking authority to do that.

The dates and deadlines that originally were set out in connection with the sale process, They moved a little bit, one on account of our having moved this hearing multiple times, which we are grateful for the court's patience. There were a few dates keyed to that, particularly with respect to publishing the sale notice, deadline to file and serve cure notices that just had to track along with those modifications of the hearing date. But the actual substantive dates for the sale process save for the last date have all remained constant. So the bid deadline remains May 16. The auction if necessary will be held on May 21.

The deadline for the debtors to file for sale order which is a new addition is May 27. And then there was an extension of time on the back end for the hearing date and that was done to permit parties to object to the extent that they had objections to the sale And time for us to work out any of those objections and try and present on a consensual basis. And then you see the box on, PDF page 15, which actually sets out the separate Warner Brothers track for their objections to any sale is called out separately. And then a few of these paragraphs seventeen-eighteen, I believe, yes, seventeen-eighteen set out really a robust reservation of rights in favor of Warner Brothers in respect of what they may object to in connection with the sale. Some changes regarding I'm looking now at this new Power of 21 And this is just service on counterparties of any adequate assurance information in the event that the successful bidder is not the stocking horse bidder.

Let's see. Just more language on when objections may be raised and on whom they must be served. There were some additional limitations put on credit pitting rights. And this was raised by a number of parties. And so the language that's included essentially provides that any better who seeks to present a credit bid on the library assets, They've got for example include a cash component that's adequate to pay off the ABS in full.

They've got to pay the stocking horse bid protections with cash. They've got to identify any business segment or portions of the assets on which the secured party is bidding because as you recall from our discussion at the first day hearing, some of the pre petition secured parties did not have liens across the entire enterprise. So that's essentially what's going on there. And there are other enumerated limitations on credit biding rights, set forth in the in the order. I think a number of the I'm I'm all the way down, your honor, on let's see.

Paragraph 30. There's a lot of these are just sort of conforming and cleanup changes non substantive ones.

Then we

get into on paragraph 32, these are the Warner Brothers assumption and assignment procedures, which in many respects mirror the procedures for non Warner Brothers contracts, but are unique to, to Warner Brothers and that was the debtors believe justified just on the basis of the scope and scale of agreements that are in place. And I think your honor that, let's double check there's nothing additional that's substantive after that. There are not. There are no additional substantive changes to the order. The changes set forth in the bidding procedures, the notices and other items simply conform to what's set forth in the order.

And then docket two thirty six, that's the further revised order which picks up provisions and language offered from the United States Trustee's Office earlier today. So I think that is the sum of the changes to the bidding procedures order. Happy to answer any questions about it.

No, I have no questions. I'd like to see if there's anybody else who'd like to be heard regarding This is Sandler, welcome.

Thank you, Your Honor. Pleasure to be here. For the record, Brad Sandler, Priscilla, Stange, Dylan Jones on behalf of the committee. Your Honor, the committee supports the bidding procedures. When we've been involved in the case for a few weeks at this point, we've been working cooperatively with the parties.

As you know, there's the kind of the elephant in the room is our friends from Warner Brothers. Hopefully, the committee will be a positive force and help to resolve the issues among the parties. But focusing on the bid procedures several weeks ago when I received a call from Mr. Rubinstein and his team that Alcon was interested in being the stalking horse better. Of course, it was music to our ears.

We worked with them extensively. We worked and when I say we, it's really the estates. It was the committee as well as Mr. Bernbach and his team working extensively with Alcon to get them to the table. We ended up with a significant increase in value in these estates and it's really it's a fantastic result.

So these are as your Honor, I think, knows from the first day, these are wonderful assets. We expect that there will be active bidding. We're looking forward to a spirited and robust bidding process here. And your Honor, we support the bidding procedures. Thank you.

Thank you, Mr. Sandler. Mr. Merchant?

Good afternoon, Your Honor.

Michael Merchant of Richard Clayton and Finger on behalf of the content partners on the Delaware Council. I rise simply to introduce Your Honor to my co counsel, David Hammerman from Latham and Watkins. I'd like to see the podium to him. I think it's Prohok presented earlier today.

Excellent. Thanks. Okay. Mr. Hammerman, welcome.

Good to

see you. Good afternoon,

your honor. For the record, David Hammerman of Latham and Watkins, counsel to Content Partners. As counsel for the debtors noted, Content Partners was the designated stalking horse bidder when the debtors filed these cases on March 17. For all practical purposes, my client served as a stalking horse bidder throughout the bidding process that occurred prior to today's hearing, which resulted in the current bid by Alcon Media Group for $417,500,000 While my client does not object to the debtor's request to designate Alcon as a stalking horse bidder, we did want to appear and reserve our rights on the record, including with respect to our right to recover our bid protections, which are set forth in our stalking horse APA, which is located on the docket at Docket No. 11, I believe.

While we intend to assert those claims in due course and recognize that's not a today issue, we wanted to briefly provide some background on our stalking horse bid and the events leading up to today's hearing. The marketing process for the library assets began well before these cases were filed. The debtors first approached content partners back in on or around January 2024 regarding their interest in the film library. Early in those discussions, it became clear that any sale of the library would require significant investment from a buyer to diligence the underlying contracts and negotiate an APA that accounted for the various rights and liabilities related to those assets. My client also understood at the time that the debtors were engaged in an active dispute with Warner Brothers regarding certain derivative rights, which although not included in the library assets include introduced additional complexity and risks to the process.

After a period of extensive discussions, we began an extensive diligence process that started in earnest in October 2024 and continued through the execution of our Stocking Horse APA in March 2025. That process involved reviewing thousands of contracts related to the film library to identify the relevant rights that would need to be assigned from a buyer to take ownership of the assets. This was a significant and costly undertaking that was necessary to fairly value these assets and negotiate the APA. We understand that the debtors marketed their assets broadly all throughout 2024, but failed to attract an acceptable offer from the buyer with the financing and experience necessary to close the deal. Content Partners obtained exclusivity with the debtors in December 2024 when the debtors, facing further uncertainty and financial distress, asked if Content Partners would commit to supporting them through a potential in court sales process.

While that was not something my client had contemplated or desired, my client ultimately agreed to support the debtors by negotiating in parallel two forms of an APA, one in court, one out of court. On February 16, Content Partners signed an agreement with the debtors to provide a binding commitment to acquire the library assets along this parallel path. While the parallel approach was a costly and uncertain path for my client, it was one made in support of assisting the debtors in finding a path forward to the benefit of all parties and a reliance on the bid protection set forth in our stocking horse APA. Prior to the commencement of these cases, the debtors informed my client that they elected to proceed with the in court path. My client honored its commitments and promptly signed the Stalking Horse APA to support the debtors Chapter 11 process.

After the first day hearing on April 7, my client was informed by the debtors that they had received an offer from Alcon to acquire the library assets. To our knowledge, Alcon had been involved in the debtors pre petition marketing process, but had never submitted a binding offer for the assets. We were informed that Alcon had signed our form stocking horse APA with limited modifications and offered a purchase price that included incremental monetary value to our client's bid after taking into account our bid protection. While my client did not expect to have an auction before the actual auction contemplated by the bid procedures, They understood that Alcon conditioned its bid conditioned its bid, sorry, on serving as the stalking horse. On Friday, April 11, my client then negotiated and submitted a renewed stalking horse APA with an increased purchase price in excess of Alcon's bid.

The following Monday on April 13, we were informed that Alcon had submitted a further revised bid, which accounted for the value of our bid protections and an initial minimum overbid of $500,000 Later that same day, as Mr. Berenbrach noted, the debtors asked for final bids by the close of business. We understand Alcon ultimately submitted a bid in the amount of $417,500,000 and that is where we are today. As I mentioned, my client does not object to Alcon serving as the stalking horse bidder. It's a good result for all constituents involved.

That said, we felt it was important to explain the background leading up to this point since Content Partners has been heavily invested in this process for more than a year. The currently proposed purchase price of $417,500,000 is a reflection of significant amount of value that Content Partners has contributed to the debtor sale process, all of which has been borne out for the unusual post petition bidding process. Until our bid was publicly filed, the debtors marketing process had failed to result in an actionable offer. As a reputable participant in the industry, Content Partners bid established the floor for the library assets and provided the form of APA that facilitated the bidding process leading up to today's hearing. As reflected in the red line filed at docket number 197, our APA clearly served as the form for outcomes bid.

The current purchase price represents $52,500,000 in incremental value to the debtors' estates. As noted, this price reflects multiple rounds of bidding and increments above our bid protections and exceeds our bid protections by approximately $40,500,000 We believe the record supports the value we provided to the debtors' estates and all parties in interests. And therefore notwithstanding the relief being granted today, we reserve all of our rights regarding any claims my client may have administrative or otherwise. Thank you for your time.

Thank you very much.

Very briefly, Your Honor, for the record, Brad Salatin, Patilson Stange, Salatin Jones. Just before any memories get so cold, I think we just heard a draft motion for substantial contribution by content partners Committee reserves

all rights.

Thank you, Judge. Scott Drake on behalf of Warner Brothers. Didn't necessarily plan to make any remarks, but in light of Detter's comments just about the robustness of the Warner Brothers changes and then the committees referenced us, just wanted to provide a little more context from the first day. By the way, again, thank you for letting us appear virtually on the first day. Glad to be here in person today.

Judge, our role Warner Brothers role in this case is a little different because not only are we the largest general unsecured creditor, we also obviously have this contractual relationship, the robust sale everybody has described, the library assets, 91 of those 108 films in the library were created by Warner Brothers. And with the derivative rights, those are Warner Brothers films as well. And so on the bid procedures, largely non economic, but it is one to protect the arbitration award, but also really because you've heard in the evidence in the first day declaration, right, about the village Warner relationship over the years. When it was good, it was good for everybody. And then once it wasn't, it's obviously led to protracted litigation.

And in fact, according to their first day, one of the reasons they had to file. So Warner Brothers is very focused on making sure whatever relationship there is go forward with a potential winning better is one that is healthy and for Warner Brothers. And so that was the reason we appreciate the debtors work and also the help of the committee to reach resolution on the procedures. Some of the issues were resolved largely we were able to preserve all of Porter Brothers rights for the sale hearing. So I just wanted to provide a little context in light of comments from counsel.

Thank you, Judge. Mr. O'Donnell. Good to see you.

Good afternoon, Judge Wren. Dennis O'Donnell, DLA Piper, for Magnum Filums SPC. And just very briefly, your honor, we support approval of the bidding procedures in their current form as well. I advise simply because we did file a limited objection to reserve our rights with respect to one issue. Magnum II is in sort of a unique position here.

It owns, has a 50% undivided interest in the library and the various components of the library that result in it getting paid certain amounts on a quarterly basis. Everyone acknowledges that we own that interest, that we've been carved out of the purchased assets, we've been carved out of the dip collateral, we've been carved out of the cash collateral, which is all good. The problem is that there are a few contracts that are relevant to our continuing ownership interests that have yet to be assumed or assigned, which we hope will be. But we filed the limited objection simply to preserve our rights that to the extent those are not assumed and assigned, we may be back here at the time of the sale here. Thank you, Your Honor.

Thank you very much, Mr. O'Connor. O'Connor. Mr. Rubinstein, welcome.

Thank you, Your Honor. Good afternoon. Vadim Rubinstein of Lobe and Lobe, counsel for Alcon Media Group. I just rise to echo what Mr. Bernbrack has said and Mr.

Sandler has said. We did we told you on the first day of the case that you're probably going to be hearing from Alcon. And we did reach out fairly early to make our interest known. And through that process, we were able to work cooperatively with the debtors and with the committee who as you saw from the red line version beat us up a decent amount on various provisions of the stocking horse APA. And we've made substantial concessions, not only on the purchase price, but on other provisions, including not purchasing avoidance actions, not purchasing insider claims, things of that nature.

And so, just want to commend the both parties for their efforts and thank your honor for the accommodations you've made with the scheduling. We are signed off on the bidding procedures and we'll be heard really briefly in the dip order. Okay.

Thank you, Mr. Robinson. Ms. Kaufman? Good afternoon.

Good afternoon, Your Honor. It's Susan Kaufman for the Guilds. They are affiliated funds in the Motion Picture Industry Pension and Health Plans. The Guilds, as Your Honor, may have seen also filed a reservation of rights with respect to what the dip in the bid procedures motion. On the Zoom, my is my colleague David Adut.

And with the court's permission, he has been admitted to ProHawk BHA, and I would ask that he'd be permitted to simply put a reservation of rights on the record.

Oh, certainly.

Thank you, Your Honor. Okay.

Mr. Ridic, good to see you. Welcome.

Good to see you, Your Honor. Thank you again for allowing me to purchase the State by June. It's very, very much appreciated. David, on behalf of the Entertainment Guild, we rise merely to provide a little bit of context of our role in this case, which is really to try and avoid any unintended consequences. The motion pictures in this film library are subject to a variety of complicated different agreements, of which the guilds are parties, some with the debtor but often with third parties.

And it's our goal here through cooperation with debtors to ensure that those structures remain unprejudiced by these procedures and so far so good. No issues, however, Ron Armstrong would stand up and just say that we reserve all those grounds.

Very good. Thank you, Mr. Adityan. Thank you, Ms. Cockney.

Is there anybody else who'd like to be heard? Okay. Mr. Birnbrock.

Thank you, your honor. And many thanks to the other parties as well. I think that at this point we simply seek entry of the bidding procedures order as well as approval of the supplemental motion regarding the new stocking horse bidder in the form of Alcon Media Group.

Okay. Yes, based upon the record before me, I do approve the bidding procedures and the supplemental motion to appoint Alcon as the stalking horse. And I'll look after those in my inbox and we'll enter the orders.

We do file or we have to file? We'll submit.

Good afternoon, Your Honor.

For the record, Joseph Mulvhill, Young Conaway on behalf of the debtors. We did file the most recent order on at docket number 236. We filed that under a notice

of filing because objections were technically due at

the hearing. If you'll be okay with your honor, we can just upload that same order. Is that if

that would work?

Yes, please.

Thank you, your honor.

Thank you, Mr. Moldenhut.

And your honor that takes us then to I think the main event today, which is the debtors motion for approval of its post petition financing. And this is number 11 on the agenda. Before we get into the meat of the dip order, there was as you'll call your honor, the discussion of first aid hearing regarding the evidentiary support of the, I think we're calling it the transaction support agreement, which is a document that we negotiated with the ABS trustee prior to the petition date and then attached a agreed form of, which wasn't yet fully agreed because the note holders themselves had not yet been contacted and the issues hadn't been discussed with them. They are here now and counsel is I think in the courtroom and they are represented by the Wachtell firm. I believe represent an ad hoc group of greater than 50.1% of the note holders.

They did provide and I think that they filed a 2019 statement to that effect. They did provide substantial input on the transaction support agreement. In support thereof, we did file an additional declaration from the debtor's chief restructuring officer. This is Mr. Keith Nave who is in the courtroom and is available to testify as needed.

That declaration appears at docket two eleven and it provides a bit more substance as to the necessity and import of having that transaction support agreement in place. Unless your honor has questions, I'd move that declaration in evidence at this time.

Okay. Is there any objection to the, to the admission of Mr. Mabbe's declaration, in support of the DIP? Okay. I hear no response.

It is admitted. Is there anyone who would like to cross examine Mr. Mabbe?

Okay. I have no response.

Thank you, your honor. And attached to Mr. Mabbe's declaration is the revised transaction support agreement, as well as a red line indicating the input from counsel to the ABS note holders. It was heavily negotiated at arm's length. And our understanding is that upon approval of the dip, which also approves the debtors entry into the transaction support agreement, that the direction has been given to the ABS trustee to countersign the transaction support agreement, which is a critical component of the case insofar as the, ABS and the securitization entities are the primary owners of the library assets that we're seeking to sell in the case.

And so having this support agreement in place does benefit the debtors significantly as always more fully set out in Mr. Mabbs' declaration. On the DIP itself,

we

minutes before the hearing did come to final resolution of all the outstanding objections largely from counsel to Warner Brothers who had raised a number of objections as your honor will recall from the objection that they filed. I think that I'm certainly going to want counsel of the TIF lenders to speak on certain of these issues as well as counsel to, to Warner Brothers. But what I'd like to do at least in broad strokes is identify the concepts and we're going to need some time following the hearing to ensure that there aren't multiple periods at the end of a sentence or duplications of words because we were working pretty, pretty fast in the lead up to the hearing. So at sort of broad levels, what was being agreed here is that the facility, the dip is being agreed by Warner Brothers. That's a new money component of $7,000,000 along with a roll up component of WB arbitration debtors.

These are the entities at which the parties to the arbitration with Warner Brothers and so the roll up will not encumber those states. It will however encumber other library debtors because there's a distinction between the full suite of library debtors and the smaller subset of Warner Brothers arbitration debtors. There's also been an agreement and I should have mentioned this at the outset that we did agree with the committee on a number of provisions in the debt order issues that the committee had raised concerning the propriety of encumbrances on adequate or on avoidance actions and the proceeds thereof. There was an agreement regarding an enhancement of the professional budget for the committee and a number of other points that we went back and forth with the committee on for a period of time. The other I think very significant component, and I don't know if we've got the red line well, can we is this the red line we can put on the screen, put on the A screen?

The other component which I will I'll just briefly describe is the concept of a reserve established and really two reserves established at the library debtors and most specifically the WB arbitration debtors, whereby upon payment of the ABS obligations and upon payment of the new money component of the dip, after those amounts have been paid, we shall then establish a reserve in the amount in a segregated debtor account in the amount of $110,000,000 and that amount will sit there until there is a further determination from the court about the distribution of that money to Warner Brothers or to the debtors. However, that dispute shakes out concerning those amounts. There is language in the order that, Warner Brothers has preserved the right to seek a cure claim in connection with the assignment of its contracts. That amount also serves as a form of adequate assurance that the debtors will have sufficient funds assuming sale closing. And if the court determines that the debtors owe that amount in cure costs, we have that reserved for to pay to Warner Brothers.

Now there are other claims or at least we're aware of at least one other claim at these entities. And so what is also created and you can scroll down, I believe it's paragraph 34. Nope. Yes, 34. So this paragraph 34 creates a secondary reserve.

And again, what what what really is happening here is just an acknowledgment of the structural seniority of claims at the library debtor boxes before money is upstream out of those boxes into other entities throughout the structure. And so what this provision does is it says that the Debtors and Creditors Committee will meet and confer regarding an appropriate amount to reserve, to address other claims aside from Warner Brothers that are at those library debtor entities. Again, before any money goes anywhere, we've got reserves established and then if we want money to go anywhere, you have to seek further order of the court. So the red line that we have here is probably not or is it the red line run against the last filed version? Last filed.

Okay. So this red line was to the last filed version. So this sets out the primary agreement with Warner Brothers. This order also picks up agreement with Sony, with Magnum, with the Entertainment Guilds. I understand from Mr.

Rubinstein that we've got to make one change to a schedule just to reflect Alcon's commensurate interest in the Wonka. You'll tell me exactly what it is, but okay. I'm sure we've seen a couple of clarify. But there is an additional change we need to make. There's liens that are, same priority.

And what the schedule you can scroll down to schedule C, I believe it is. Yeah, what this schedule does just on in graphical representation your honor is sort of show the relative priorities, of both the or of the dip liens, the specified Warner Brothers liens. There's the Wonka lien in row one last column. And we need to add Alcon to that reservation as well. So this chart essentially shows what has been agreed as far as the priority of the various liens at various entities, and on certain the collateral listed in the columns.

So that I mean from the debtors perspective, we're very grateful to, to DIP lenders, DIP lenders Council, to Warner Brothers and their Council, committee and its Council, Alcon and all the other parties that spend a lot of time working on what is a very complicated dip order so that we could come to your honor on a fully consensual basis today. I don't have anything further to say, but I'm sure others are going to want to explain their portions of things. Maybe, Mr. Newton.

Mr. Newton, great to have you here.

Thank you.

Great to see you,

Your Honor. James Newton of Morrison and Forrester on behalf of the DIP lenders. Echo Mr. Birnbrock's comments that we appreciate working with UCC and with Warner Brothers over the past couple of weeks. As Mr.

Birnbrock suggested, this is a bit of a thicket and I think you've seen that from magnums and the Alcon's and the other parties that have showed up. So we've spent a lot of time over the last several weeks working with each of those parties to make sure that this chart in the dip order reflects the respective rights and priorities of party liens in the various silos within the organization. And I'm happy that we've reached an agreement on that front. As Mr. Birnrock mentioned, we did reach a couple of agreements with the UCC or fair number of agreements with UCC, in particular relating to the avoidance actions and proceeds of the avoidance actions, but also relating to some concessions on adequate protection liens and super priority claims in favor of the pre petition note holders who are being primed.

They're in fact I think their liens are the exception to the general rule that liens here are not being primed. So we appreciate the UCC working with us to get that done. And as Mr. Berberich mentioned, the revised order reflects a number of additional changes that were agreed to with the Warner Brothers with Warner Brothers Council and with Warner Brothers to address their concerns and really to try to silo the value attributable to those arbitration entities within the arbitration entities for now, but to allow the DIP lenders to make sure that they're funding this case in a way that's going to allow them to have the DIP loans repaid from the proceeds

of the sale as well.

Okay. Thank you, Mr. Newell. Mr. Sandler?

Good afternoon, your Honor.

For the record, Brad Sandler, Petroski, Stange, Zelen Jones, on behalf of the committee. Your Honor, fortunately value and a lot of value can help solve a lot of problems in a case. Here, there's a lot of value. I want to thank Mr. Newton and his team.

When we got involved, there were allegations of some pre petition transfers of value including the derivative rights assets and whatnot. It was critical to the committee to preserve and protect the unencumbered assets. We believe we've done that. In this case also the dip is not that large here, Your Honor. So we appreciate all of the parties working cooperatively to get the committee on board and we support the dip,

Your Honor. Thank you. Thank you, Mr.

Simpson. Thank you,

Your Honor.

Again, Scott Draper, Melvody and Myers on behalf of Warner Brothers. Echo everybody's comments, spent a lot of time over the last couple of weeks working with everybody, Did not look like yesterday we were going to get there. So we appreciate the court. I know you've moved the hearing multiple times, including giving us more time today. So thank you for that.

I do want to, to again, I think this was a creative solution that either solves or at least preserves some of the issues we raised in our objection. And yesterday, if you saw the debtors reply, again, it was filed on the eve of what looked like or the morning before what looked like it's going to be a very contested hearing. But there was a characterization that everybody else in the case stood behind the dip except for this aggrieved general unsecured creditor. And I think again, Judge, given the position we have in this case, our concerns were justified. Again, we're grateful that everybody got to a result.

But as we filed our objection, if you look at the very first paragraph, Line one, we cited to Mr. Birnrock's comment to the court at the first day hearing about the $130,000,000 to $140,000,000 cushion that was on the original stocking horse bid. And then in paragraph two, we talked about these transfers of the derivative rights, which the committee just referenced. And so we had other concerns as Mr. Newton and Mr.

Birnbrock discussed. But our primary focus again was preserving rights relative to these transactions, but more importantly, protecting that structural seniority that we have. There is this issue that is kind of hanging over this case with the Warner Brothers arbitration not yet the liability being finalized, but not the amount. I won't get into it, Judge, but I would just point the first day declaration, the sealed declaration at paragraph 14 or excuse me, docket 14, paragraph 28, Mr. Maybes' declaration.

It is sealed. It sort of characterizes the arbitration from Village's perspective. We, at Mr. Wayne Smith's declaration, who was going to be offered on our evidence if we had a contested hearing today. We filed his sealed declaration at one hundred and forty seven on the docket.

Paragraphs 20 to 28 are either redacted or partially redacted, but that is sort of a response to that. I say all that again just to provide context that, that is a major issue, one of the major issues from the Warner Brothers perspective. It's already came out from Mr. Warren at the first day. That's in the neighborhood of a little over $100,000,000 so a significant issue.

So this solution that everybody creatively worked on very hard over the last few days, especially, I think at least preserves that until the arbitration is dealt with. And as mister Birmrock, mentioned, I think the solution provides flexibility as to whether it is a cure claim or whether it is something else like just an allowed claim. And so I think the order allows all of those issues to be dealt with. And we I think as evidenced from Mr. Warren's comments on the first day, we had issues with the interim, but we're able to solve them.

We had issues with these orders and at least we're able to solve or preserve and we'll continue to do that. We're committed to that. We prefer reaching resolution. And if not, obviously, we'll be back and we think we've preserved our rights. And as a result, again, thank everybody in the court and would ask you to approve this order.

Thank you, Mr. Drake. Is there anybody else? Mr. Rubinstein.

Hello again, your honor. Bidde Rubenstein, Logan Loeb, counsel for Alcon Media Group. Just rise for a couple of issues. Alcon sort of wears two hats in this case. Pre petition, as I believe mister Birbrat, noted in his presentation the first day.

Alcon purchased Village Roadshow's fifty percent interest in the Wonka film. And so there are provisions in the dip order that recognize that those rights that that were purchased by Alcon do not constitute dip collateral or cash collateral. We are including a provision that recognizes liens that Alcon received in connection with that purchase. And that's what mister Bernbach was discussing on exhibit c. Also, Alcon is the stocking horse bidder, and we received bid, bid protections.

In that regard, we've agreed in the bid protections that to the extent we're entitled to our, PIP protections and our expense reimbursement, those will only come out from the sale proceeds. However, in the unlikely event for some reason the sale proceeds are received and we do not get payment, we did reserve for ourselves an a super priority administrative claim. That does not reflect it in the dip order. The parties agree as I understand it to recognize that we do have our super priority administrative claim in our by virtue of our bid procedures order. And the fact that it is not referenced in the DIP order would not impact our rights to the extent we're entitled to assert that administrative super priority administrative claim.

Understood.

Good afternoon, your Honor. Aaron Gavant from Barnes and Thornburg on behalf of the ABS Trustee. And just briefly, I just wanted to confirm what Mr. Bermer said about TSA. We do understand that we will have a direction to enter into it.

Again, in terms of that TSA provide that the ABS Trustee will not object to the dip and to the bid procedures. In terms of the dip order sounds great. We haven't actually seen the language. So just preserve price to actually see that language, but does seem like a creative solution and echo everyone else's appreciation that the parties work so hard and generally we are supportive.

Okay. Thank you very much.

Sorry, Judge. Just real quick. I forgot to mention the Wonka Lean. This is not a criticism at all. We, mister Rubenstein approached us right before the hearing saying he had just seen the the Warner Brothers wonkaline on exhibit c to the dip order.

Again, that is not a criticism. I'm just saying we just talked to him about it. I don't think there's going to be an issue resolving it, kind of at a high level. So Warner Brothers also has a lien related to Wonka. And I think we basically reserved our rights under the proposed DIP order.

And we would propose something that Alcon reserves its rights and the relative positions to the extent there are of the Alcon lien versus the Warner lien would just carry over from whatever they were before the pre petition.

Understood. Thank you. Okay. Thank you. Okay.

Is there anybody else that would like to be heard?

I

think Mr. Blank is trying to come on screen. So let's give him a moment.

No, he's going all right.

Go ahead. Yes, I can hear you fine.

Thanks, Your Honor. It's Steven Blank from Austin and Bert on behalf of Sony. I want to thank the debtors and the parties. My understanding is the language that my client negotiated should be in the final form of dip order as long as it's still in there and hasn't been impacted, we're still good.

Thank you, Mr. Blank.

Thank you, judge. Thank you, Your Honor. Justin Bernbach, Shepherd Bowen, Victor and Hampton, counsel of the debtors. With respect to

the

second reserve, while the language in the order provides that the debtors and creditors committee will work in good faith to set an amount, the debtors commit that amount shall not be less than $11,400,000 Okay. And with that your honor, we will ask that the court approve the motion and once we can get the order, agreed among all the parties, I will tender it under certification of counsel.

Okay. I think there's one issue that was raised in your library that's not addressed through the comments I've heard today. And that's, were I too and it's the issues rendered moot at this point. But if I were to have sustained, Warner Brothers objection, would I have taken the blue pill or the red pill? Because I really wasn't too clear on that.

We will find out at the sale hearing,

your honor.

Well, you probably don't want to try to red pill your judge. You hope a little bit more stability from the court. Very good. Okay. Now I have certainly had an opportunity to review, the documents that have been before me.

I'll note I have not yet seen the final form of the order. But based upon the record before me and the representations of the parties, I will grant the motion subject to my final review of the form of order, which I understand the parties just need to proofread, double check and submit under certification of counsel. So I look forward to receiving that and having the opportunity to enter the order.

Thank you, your honor. Okay. I don't think we have anything further on the agenda. Thank you for entering the retention orders. Certainly.

Much appreciated. Is there anything else? I think we're done, Your Honor. Okay. Very

good. Well, safe travels all. And