April 15, 2025 Bankruptcy Court Hearing (The Dolphin Company/Leisure Investments Holdings LLC, et al.)

Please be seated.

Good morning, your honor. Sean Greacher from Young Conaway on behalf of the debtors. Your honor, thank you for setting this special hearing time. We don't have a lot on the agenda, and you may have noticed there's not a lot on the docket, but there is, I can assure you, a lot going on off the docket around the world. So I thought maybe it's a good time to give you just a quick update.

My World Wildlife Fund calendar in our kitchen said that yesterday was National Dolphin Day, so why don't I start with, animal welfare issues. So the the independent director and the Riveron team have spoken with, authorities in Florida. We've been speaking with the company's existing advisers. We've been speaking with the company's employees who are located in the Florida parks, particularly the veterinary staff. We've also been speaking with parties to serve as an independent advisor to the independent director and CRO regarding animal welfare efforts at the company's facilities.

We're hoping to have a party on board shortly to assist with that, so that that continues to be top of mind. Operationally and financially, the Riveron team has made good progress getting our arms around financial and operational details at The U. S. Parks. As Ms.

Milke will be discussing and presenting our emergency wage motion, we are engaged with the company's employees that are doing what's necessary to ensure appropriate stewardship of the business and the animals. And of course, a critical part of that is paying our employees. Governance wise, outside of The U. S, as we discussed at the first day hearing, the process of effecting governance changes that are necessary based on the corporate laws of various foreign jurisdictions remains ongoing. These are simply processes that in many cases require some time, always moving forward on that front.

Now onto Mexico. As we mentioned at the first day hearing, the Concourse Mercantile was filed by prior management with respect to one of the company's Mexican entities. Evidence has been provided in Mexico that this filing was done without the requisite corporate approval. The dismissal of that Concorso has been opposed by prior management's counsel, and the judge overseeing that proceeding has been reviewing the papers, and we expect, that dismissal will occur shortly. Additionally, the federal civil court in Mexico City issued orders and joining the former CEO, mister Albor, from acting as an authorized representative of the company, and voiding the board meeting that purported to authorize that filing.

We also obtained, an injunction that directed, all governance activities run through mister Straumann and mister Wagstaff. Those those those orders were obtained in Mexico City, the federal civil court. On Friday last week, the state court in the state where the company's headquarters is located, Quintana Row. I tried to say that properly. I'm sure I didn't.

But, the state court there entered a companion order recognizing the federal order. With that, the Riveron team was able to, for the first time, access the headquarters and begin to communicate with staff at the headquarters regarding records of the debtors that are needed to conduct these cases. Unfortunately, at some point, after midnight on Saturday morning at the direction of the former c CEO, the headquarters building was forcibly and, illegally retaken. The Riverrun team was barred from the premises and prohibited from any further communication with company staff or access to the debtors' books and records. So the debtors professionals in Mexico were taking appropriate steps, to enforce the valid court orders that have been obtained and and ensure that we go Riverrun can regain access.

Those efforts have been feverish. They've spread throughout numerous courts in Mexico. Council's been working around the clock, traveling around the country, personally appearing in court, and in person at the facilities in connection with these various steps that are being taken alongside the Mexican authorities. Given the ex CEO's conduct, we suspect this high level of effort will unfortunately be likely to continue, particularly if the circumstances continue to escalate as as we fear that they may. In the meantime, at a minimum, we view the former president former CEO's acts actions to exercise possession and control over the books and records related to the debtors, assets, liabilities, and operations, and to bar Riveron from access to such books and records as brazen violations of the automatic stay.

Additionally, your honor entered an order on the first day of the case compelling former officers, including the former CEO, to turn over books, documents, records, papers, ESI, and emails related to or connection with the debtor's property and finances. That order was sent to the former CEO's council on April 4 with a demand for turnover of such materials by last Friday, the eleventh. There has been no response to this demand from counsel to the the former CEO. Indeed, the former CEO's actions this past Saturday morning suggest, I think, an intent not to comply. All this said, assuming no change in circumstances, the debtors anticipate the need to file a motion as soon as possible to enforce the automatic stay and to enforce the court's, section five forty two e order.

Given the urgency of the request, we'd request a hearing on short notice. Happy to work with your honor or your honors chambers to find a suitable time for this hearing. Additionally, as we mentioned, the former CEO's conduct has required herculean efforts from Mexican counsel, firms that are not familiar with US bankruptcy and frankly for whom the expenditures of the time and cost here have been very significant, in order to ensure that we can see this process through. And I'll note, party should have no doubt that the debtors are resolute in their intention to see this process through. We will be requesting authority to provide some advanced retainers to Mexican counsel, subject to their retention as ordinary course professionals.

So we wanted to at least let your honor know all of that was coming, likely in short order. And, unfortunately, given the posture that we appear to be with respect to former CEO, like, you request to have a short notice. Okay.

Thank you.

If you don't have any questions about that, preamble, if not, I'll turn over your podium to miss Milke to address the motion that we did file. I do not, obviously reach out to Chambers as usual when you have papers that

are ready to be filed, and we'll figure out how to squeeze it in somewhere.

Thank you, your honor. Appreciate that accommodation

Milfield Young Conway, for the debtors. Seems like a hard act to follow after that update. As mister Greacher, previewed, the debtors have been working diligently, to stabilize operations, to gain the trust of their employees, and to mitigate any uncertainty that these seven eleven cases may have caused. We are before you today requesting some customary and limited relief to ensure that the debtor debtors can satisfy their payroll, which is due to be paid today. The debtors specifically are seeking authority to pay up to $514,000 in payroll obligations.

Those comprise compensation liabilities and wage deductions, and taxes. As indicated in the Wagstaff declaration, which is attached to the motion, the failure to make payroll, would severely disrupt the company's operations and cause substantial financial hardship to the company's employees, thereby causing irreparable and immediate harm. Mister Wagstaff is present on Zoom today. We thank you for that accommodation. He is available for questions if, of of the court and other parties in interest.

At this time, we'd like to move his declaration into evidence.

Is there any objection? I hear none. It's admitted.

Thank you. Your your honor, the the relief we've requested is very customary. I'm happy to answer any questions that you have, but otherwise, we'll rely on our papers. Thank you. I guess

the only question I had in reading this is that this request goes to US employees. Yes. And what's happening with employees worldwide?

It's an excellent question. For the, we don't have visibility into the payroll of those entities and and frankly, we don't have access and control to the books and records that would inform us of that information. We are working diligently as mister Greacher mentioned. We will be back before you, with additional relief, no doubt. In particular, we anticipate filing sort of traditional operational first days with respect to the Florida, entities and those operations because we do have visibility and control

And I know there are some locations that are not in The US and not in Mexico. I see Grand Cayman and Jamaica and Rome. And maybe I should have asked mister Breacher this, but what is happening with those locations?

Right. So to the extent they are debtor entities, your honor, the information that's necessary to operate those, is being held at the headquarters in Mexico. So to some extent, the criticality of of getting into Mexico and getting those books and records is really what, you know, what will open up for, control to all the other entities. With respect to Italy and some of the other, Caribbean entities that are not quite debtors, we are presently, undergoing sort of the governance processes in those jurisdictions to effectuate the transition of the board. So in some for example, in Barbados, if there's a notice requirement that requires, you know, various steps in certain, time periods, to pass.

So we are going through those processes and and, you know, applying complying with applicable law in those jurisdictions. There have been site visits? Not to, for example, Italy, or Jamaica, but we have been in contact with the operators of those entities, and we're in close contact and trying to obtain additional information. You could volunteer. I could.

I'm the first to have made that joke, your honor. I'll volunteer for, Italy. Maybe someone else would like to check out, Barbados.

Your Honor, just Sean Beecher. Mister Wagstaff has, personally, view visited most, perhaps not all, but most of the parks located in Mexico. He he he did look at them from the outside looking in, to some degree, but we had some communications with individuals at the parks. But given to the situation in Mexico, the that process is is complicated. Yeah.

Sounds like it is.

Okay. And I hope in Mexico, people are taking whatever security precautions need to be taken, including retaining security to the extent necessary.

Yes, sir. No. That has that has occurred. Okay. Okay.

Does anyone wish to be heard with respect to the employee wages motion? I hear no one. I did review it. As we just discussed, it addresses the, US employees, which, is which the debtor has visibility into, and and the relief is obviously appropriate. We need to ensure that employees who are working get paid.

I did have a couple of comments on the order. Paragraph four, nothing in the motion shall be deemed to violate or permit a violation of five zero three c. I assume that language, I think, is a little well, I assume what this language says is we're not giving anyone any insiders, any bonuses, etcetera.

Correct. We're not authorizing, Yeah. Payments made pursuant to section five zero three c.

So let's why don't we say it's not being authorized? There are no, rather than that. I think that's actually better. Nothing in this emergency order is authorizing or permitting any payments under five zero three six. We can make that.

And just to clarify, think you said paragraph four, but I think that's paragraph three. I've got it as paragraph four. So am I looking at the right order? Let's make sure I'm looking at the

right order. I'm sorry. I'm looking at the final order. I apologize. Yeah.

Okay. And then paragraph 11. I understand why this is in here, but I would prefer, to deal with future debtors Okay. In a separate motion or something else, but not preview that. Okay.

We'll preview that. I'll delete that. Okay. We did upload an order in advance of hearing. So just to confirm, we will re, revise the

order and upload a replacement. Yes.

Then there's no reason to do a COC on that. Just to upload it.

Thank you, Dawn. Appreciate it.

That's all we have for for today? It is. Okay. Very good. We're adjourned.