Village Roadshow Entertainment Group USA Inc. - audio of May 14, 2025 hearing before the US Bankruptcy Court for the District of Delaware in case number 25-10475

Good afternoon, counsel. This is Judge Moran. We're on the record in Village Roadshow Entertainment Group. Mr. Bernbach?

Good afternoon.

Good afternoon, Bernard.

Good to see you.

Likewise. Justin Bernbrach of Shepherd, Mullen, Richter and Hampton, Counsel to the Debtors. Your Honor, we're here on a status conference in relation to joint status report that the debtors and Warner Brothers made on Friday of last week concerning the sale process and potential objections there too. Mr. Drake with the O'Melveny firm is on and for reasons that continue to perplex me, paper always beats rock and so Mr.

Drake is going to lead off.

Okay, very good. Mr. Drake, good to see you.

Good to see you. Thank you, Josh. For the record, Scott Drake, O'Melby and Myers on behalf of Warner Brothers. Judge, hopefully, this can be fairly quick, but we're reporting to you pursuant to the bid procedures order. We filed the joint report at docket 03:22 on Friday and as a result of the bid procedures order.

If the parties were not able to reach an agreement on the cure claims, we were under the order required to request a status conference. And so I think we can just update you where we are. And I think the debtors and Warner Brothers are in agreement as far as where things stand and what it means for the case and most specifically the auction. The good news is, Judge, I don't think it affects the sales process because of the dip order and the creation of the Warner reserve. So to give you a little more background, Judge, there is, I guess competing positions, if you will, between the debtors and Warner on whether some of the breaches of contract found in the matrix for arbitration constitute sure claims.

We take, I think a different position than the debtors, but Warner Brothers has acknowledged given the creation of the Warner Reserve under the final dip order that Warner Brothers does not contend that to the extent those are determined to be cure claims that they have to be satisfied before any sale can take place. Warner is comfortable with the Warner Reserve. The $110,000,000 from the sale proceeds will be put into the warrant reserve per the dip order and then the claims can be characterized whether it's by agreement or with your owner's help as either a cured claim or just an allowed claim. So, the treatment of that can be determined after the sale. We don't think it needs to be determined in advance of the sale.

And I think the debtors are in agreement on that. There is also the issue of just liquidating the amount of that claim, which I think your Honor has heard probably from the first days. Our position at least if nothing else has been consistent, Judge, from the first day we have said Warner Brothers' primary two concerns are getting paid what it is owed for the arbitration and preserving Warner Brothers rights under the contracts that the debtors seek to assign. That second category, it doesn't really pertain to the issue subject of the status conference. But just for your benefit, Judge, we're still talking with the debtors about ways to perhaps consensually set the Warner Brothers claim, the amount of it from the arbitration, whether that's through mediation or some other consensual process.

We're, as we have with everything else in the case, working with them. We're having productive discussions between the lawyers. There is some ground between the parties as you saw even in the status conference, the debtor's position on what the amount of that award maybe is different. We're trying to resolve that. If we cannot, Judge, you probably have seen, we filed Monday morning at docket three twenty four, a motion to lift the stay, which would allow us to go back to the panel.

I won't get into those arguments about why we think that's right. I'll just flag for Your Honor, it's set for May 28. The parties are discussing whether we hold that date or give the parties a little more time to try to see if we can reach a consensual resolution. So again, I think for the purposes of today, Judge, the status conference was required under the order. The happy news, I think, is that we do not believe the cure issue and whether our claim is a cure needs to be decided because of the reserve and we're comfortable with that.

So with that, I'll turn it over to Mr. Birnbrock and then obviously happy to answer your Honor's questions if you have any.

Okay. Thank you, Mr. Drake. I'll hear from Mr. Bernbach.

Thank you, Your Honor. Again, for the record, Justin Bernbach of Shepherd, Mullen, Richard and Hampton counsel to the debtors. I think that at the last hearing before Your Honor, which was the hearing on the bid procedures and the final dip order, Mr. Drake made a nice presentation of noting that Warner Brothers had objected prior to the first day hearing on account of the interim dip, which issues were resolved. Warner Brothers raised issues prior to the final dip hearing and the bid procedures.

All of those issues were consensually resolved. And so I think and I certainly agree with what Mr. Drake has said in respect of the party's discussions. I think we're just looking to continue our streak and going to be able to present to Your Honor a consensual sale order at the time that that is set for hearing, which I believe is June 10 as we sit here today. And we've got the bid deadline this Friday, '16, followed by an auction if necessary next Wednesday, the twenty first and then some time between then and the sale hearing within which we hope to resolve all opposition to the sale.

So that's where we stand, Rudder.

Your honor. Okay. I'm grateful for the update. It doesn't sound like at this point there's anything that you especially need me to do. So I guess I would only say that unless there is a request for any guidance on any issues, I'd leave you to it.

And should you decide because you mentioned it, Mr. Drake, should you decide that mediation is a path you'd like to go down, I'd be happy to enter an order approving your selection of mediator. And if there's anything else that comes up in the meantime where you think my systems may be of use to you, just let me know.

Thank you, Judge. We appreciate that.

Okay. Thank you, Eric.

Thank you. Okay. So anything else for today then?

I don't believe so, your Honor.

Okay. Again, I do appreciate the parties reaching out and the joint status report and having an opportunity to see where things stand. This is obviously a very important aspect of this case, the resolution of the Warner Brothers issues. So I have my eyes on it and I'm again grateful to you for reaching out. Okay.

So have a good afternoon and