IN THE UNITED STATES BANKRUPTCY COURT IN RE: § CASE NO. …

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

IN RE: § CASE NO. 17-31146-H1-11§ HOUSTON, TEXAS

EMAS CHIYODA SUBSEA LIMITED, § TUESDAY,ET AL, § MARCH 28, 2017 DEBTORS. § 2:32 P.M. TO 4:12 P.M.

MOTION HEARING

BEFORE THE HONORABLE MARVIN ISGURUNITED STATES BANKRUPTCY JUDGE

APPEARANCES:

FOR THE DEBTOR: SEE NEXT PAGE

FOR THE TRUSTEE: SEE NEXT PAGE

COURT RECORDER: SHOSHANA ARNOW

TRANSCRIPTION SERVICE BY:

JUDICIAL TRANSCRIBERS OF TEXAS, LLC935 ELDRIDGE ROAD, #144SUGAR LAND, TEXAS 77478

(281) 277-5325 (office) " (281) 277-0946 (fax) www.judicialtranscribers.com

Proceedings recorded by electronic sound recording, transcript produced by transcription service.

JUDICIAL TRANSCRIBERS OF TEXAS, LLC

Case 17-31146 Document 216 Filed in TXSB on 04/03/17 Page 1 of 73

2

APPEARANCES:

FOR THE DEBTOR: GEORGE N. PANAGAKIS, ESQ.JUSTIN M. WINERMAN, ESQ.SKADDEN ARPS LATE MEAGHER FLOM LLP155 N. WACKER DR., STE. 2700CHICAGO, IL 60606312-407-0700

JOHN F. HIGGINS IV, ESQ.AARON J. POWER, ESQ.PORTER HEDGES LLP1000 MAIN STREET, STE. 3600HOUSTON, TX 77002-6336713-226-6648

FOR DNB BANK ASA, SINGAPOREBRANCH AS AGENT ANDSECURITY TRUSTEE: BRADLEY R. FOXMAN, ESQ.

VINSON ELKINS2001 ROSS AVE., STE. 3700DALLAS, TX 75201214-220-7784

(VIA TELEPHONE)TYSON LOMAZOW, ESQ.MILBANK TWEED HADLEY MCCLOY28 LIBERTY STREETNEW YORK, NY 10005-1413212-530-5367

FOR CHIYODA CORPORATION: CHARLES A. BECKHAM, JR., ESQ.KELLI NORFLEET, ESQ.HAYNES & BOONE1221 MCKINNEY ST., STE. 2100HOUSTON, TX 77010713-547-2000

ROBERTO KAMPFNER, ESQ.WHITE & CASE555 SOUTH FLOWER STREETSUITE 2700LOS ANGELES, CA 90071-2433213-620-7729



3

APPEARANCES (CONT’D):

FOR OFFICIAL COMMITTEE OFUNSECURED CREDITORS: CHARLES R. GIBBS, ESQ.

AKIN GUMP STRAUSS HAUER & FELD1700 PACIFIC AVE., STE. 4100DALLAS, TX 75201214-969-4710

FOR EMAS-AMC AS: ANNA ROTMAN, ESQ.KIRKLAND & ELLIS LLP600 TRAVIS STREET SUITE 3300HOUSTON, TX 77002713-835-3748

(VIA TELEPHONE)BRIAN SCHARTZ, ESQ.KIRKLAND & ELLIS LLP600 TRAVIS STREET SUITE 3300HOUSTON, TX 77002713-835-3748

FOR CROWLEY MARINE SERVICES,INC.: DUSTON K. MCFAUL, ESQ.

SIDLEY AUSTIN LLP1000 LOUISIANA, STE. 6000HOUSTON, TX 77002713-495-4516

FOR NOBLE ENERGY MEDITERRANEAN LTD: ANTHONY F. PIRRAGLIA, ESQ.

THOMPSON KNIGHT LLP333 CLAY, STE. 3300HOUSTON, TX 77002713-951-2886

FOR LARSEN & TOUBRO HYDROCARBON ENGINEERING,LIMITED: HUGH RAY III, ESQ.

PILLSBURY WINTHROP SHAWPITTMAN LLP909 FANNIN STREET, STE. 2000HOUSTON, TX 77010713-276-7600



4

APPEARANCES (CONT’D):

FOR CHEVRON USA, INC.: EDWARD L. RIPLEY, ESQ.JASON SHARP, ESQ.KING & SPALDING LLP1100 LOUISIANA, STE. 4000HOUSTON, TX 77002713-276-7351

FOR THE US TRUSTEE: CHRISTINE A. MARCH, ESQ.DEPARTMENT OF JUSTICE515 RUSK ST., STE. 3516HOUSTON, TX 77002713-718-4650

(VIA TELEPHONE)FOR SUBSEA 7 FINANCE (UK) SCOTT D. TALMADGE, ESQ.PLC, A PUBLIC LIMITED COMPANY ARNOLD PORTERINCORPORATED IN ENGLAND AND 250 WEST 55TH STREETWALES: NEW YORK CITY, NY 10019-9710

212-836-7036

FOR BIBBY OFFSHORE: (VIA TELEPHONE)MARK MINTZ, ESQ.JONES WALKER201 ST. CHARLES AVE.49TH FLOORNEW ORLEANS, LA 70116504-582-8368

FOR ICON AMBASSADOR, LLC: (VIA TELEPHONE)RICHARD A. MONTAGUE, JR.PHELPS DUNBAR4270 I-55 NORTHJACKSON, MI 39211-6391601-352-2300



5

1 HOUSTON, TEXAS; TUESDAY, MARCH 28, 2017; 2:32 P.M.

2 THE COURT: Good afternoon. We're here in the Emas

3 Chiyoda case. It is 17-31146.

4 We'll start with appearances in court, and then

5 we'll take those on the phone. Parties can make an appearance

6 up front, or you may reserve.

7 MR. PANAGAKIS: Good afternoon, Your Honor. George

8 Panagakis of Skadden Arps, on behalf of the Debtors.

9 MR. HIGGINS: Your Honor, John Higgins and Aaron

10 Powers on behalf of the Debtors.

11 MR. FOXMAN: Good afternoon, Your Honor. Brad

12 Foxman of Vinson & Elkins, on behalf of DNB Bank ASA,

13 Singapore Branch, as agent and security trustee. Also joined

14 on the telephone by Mr. Tyson Lomazow of the Milbank firm, our

15 co-counsel.

16 THE COURT: Thank you.

17 MR. BECKHAM: Good afternoon, Your Honor. Charles

18 Beckham and Kelli Norfleet from Haynes & Boone, on behalf of

19 Chiyoda Corporation. Also with us in the courtroom are Rob

20 Kampfner from White & Case, also on behalf of Chiyoda

21 Corporation. We're also joined in the courtroom today by

22 Hadeki Masu (phonetic), who's a general manager in the legal

23 department of Chiyoda Corporation, in Tokyo.

24 THE COURT: Thank you. Welcome.

25 MR. GIBBS: Good afternoon, Your Honor.



6

1 THE COURT: Good afternoon.

2 MR. GIBBS: Chuck Gibbs with the law firm of Akin,

3 Gump, Strauss, Hauer & Feld, proposed counsel for the Official

4 Unsecured Creditors Committee.


6 MS. ROTMAN: Good afternoon, Your Honor.


8 MS. ROTMAN: Anna Rotman of Kirkland & Ellis, on

9 behalf of the Norwegian Trustee of EMAS-AMC AS. I'm also

10 joined on the phone by my partner Brian Schartz.


12 MR. MCFAUL: And Your Honor, Duston McFaul for

13 Crowley Marine. Thank you.


15 MR. PIRRAGLIA: Good afternoon, Your Honor. Anthony

16 Pirraglia from Thomson & Knight, on behalf of Noble Energy

17 Mediterranean, Limited.


19 MR. RAY: Your Honor, Hugh Ray, III, on behalf of

20 Pillsbury Winthrop Shaw Pittman, and we represent Larsen &

21 Toubro Hydrocarbon Engineering, which we call "LTHE."


23 MR. SHARP: Judge, good afternoon. Ed Ripley and

24 Jason Sharp, with King & Spalding, on behalf of Chevron

25 U.S.A., Inc.



7

1 THE COURT: Thank you. Good afternoon.

2 MS. MARCH: Your Honor, Christine March, M-a-r-c-h,

3 with the Department of Justice, representing the United States

4 Trustee.


6 If anybody on the phone wishes to appear, you'll

7 need to press five star, although you may reserve.

8 Yes, from the 212 area code, who do we have from

9 New York?

10 MR. TALMADGE: (Via Telephone) Your Honor, you have

11 Scott Talmadge from Arnold & Porter LLP, on behalf of Subsea 7

12 Finance (UK) PLC, the Tranche A DIP lender.

13 THE COURT: Thank you, sir.

14 Also from New York, who do we have?

15 MR. LOMAZOW: (Via Telephone) Good afternoon, Your

16 Honor. This is Tyson Lomazow of Milbank, Tweed, Hadley &

17 McCloy, on behalf of DNB Bank, ASA, Singapore Branch, which is

18 the agent for the constellation lender facility.

19 THE COURT: Thank you, Mr. Lomazow.

20 All right. And one more appearance, also from New

21 York.

22 MR. SCHARTZ: (Via Telephone) Hi, Your Honor. It's

23 Brian Schartz from Kirkland & Ellis, on behalf of the

24 Norwegian Trustee, just making an appearance.

25 THE COURT: Thank you, Mr. Schartz.



8

1 I think that's about it.

2 Mr. Panagakis, how do you want to go today?

3 MR. PANAGAKIS: Your Honor, I just have a few

4 preliminary comments, and then we can dive right into the

5 agenda in the order that it was submitted, if that's okay with

6 you.

7 THE COURT: All right.

8 MR. PANAGAKIS: I just wanted to keep the Court

9 apprised of what's going on that might not be reflected in the

10 motions that are before your Court, because there are things

11 happening in other places of the world, as well as close here

12 to home.

13 I'll start with, as you probably guessed from Mr.

14 Gibbs' appearance, a creditors' committee has been formed. I

15 think I noticed that a formation of a committee was filed, as

16 well. And we -- I think they selected counsel on Friday.

17 We've been in conversations with Akin Gump every day since

18 Friday.

19 They've done a -- frankly, a terrific job, in terms

20 of getting up to speed, not wanting slow down some of the

21 momentum from this -- building in these cases, but by the same

22 token, wanting to do their jobs and reserve rights and make

23 changes to orders, where appropriate. So much of what you'll

24 see today, in terms of revisions to orders, are a reflection

25 of that cooperative effort over the last three, four days.



9

1 Second, Your Honor, at the last hearing, I mention

2 that there was another proceeding that was going on in

3 Singapore. That is still going on. That proceeding was an --

4 is an application to extend a Singapore stay, so as to prevent

5 creditor action from taking place in Singapore, arguably from

6 creditors that might be outside of the reach of the United

7 States. That hearing -- series of hearings, that matter, is

8 probably taking a little longer than folks originally

9 anticipated, and we're expecting some rulings within the next

10 day or two in that regard.

11 That's, frankly, supplementary to the stay relief

12 that we're primarily looking at, the U.S. automatic stay. But

13 I just wanted the Court to never be caught by surprise that

14 there is another proceeding that's pending in Singapore.

15 The next thing that's happening elsewhere, if you

16 may recall from the corporate org chart, one of our

17 subsidiaries is called the "Falcon," and that was a special

18 purpose vehicle that owns one asset, the vessel that's called

19 the "Falcon." The Falcon is not one of our go-forward assets.

20 We believe that the debt on the Falcon greatly exceeds the

21 value of the Falcon.

22 And that vessel has been placed under arrest in

23 Israel. We think that that proceeding is a blatant violation

24 of the automatic stay. We have sent letters to that effect to

25 the creditor and the receiver that has been appointed. I



10

1 think I could simply describe the responses that we've been

2 getting back as defiant; that they don't -- it's like, come

3 get us if you want to.

4 That vessel is scheduled to go up for auction on

5 April 6th. The lender on that vessel is a Singapore bank

6 called "OCBC," they're owed about $94 million. And we've been

7 in communication with OCBC; in fact, I was in Singapore two

8 weeks ago, met with them to describe this situation to them.

9 There is remedial action that can be taken to

10 prevent that vessel from being sold. It would require the

11 posting of a bond, probably order of magnitude of about a

12 million dollars. But because there's no economic interest

13 that we really have in that vessel, unless OCBC is willing to

14 put up those funds -- and we will certainly cooperate with

15 them to take whatever remedial action might be needed --

16 THE COURT: So the arrest was not the instigation of

17 OCBC.

18 MR. PANAGAKIS: No, no. In fact, they're -- you

19 know, they will be severely adversely affected if they don't

20 step in and facilitate stopping what's going on there.

21 THE COURT: What credit precipitated the arrest?

22 MR. PANAGAKIS: It's called the Corral Group or the

23 Coral Group. You know, we question the validity of the lien,

24 of the maritime lien that they are -- that they are asserting.

25 It's not clear to us that they have substantial



11

1 assets in the United States. It might be the case that they

2 have customers in the United States that owe them money. So

3 perhaps, at some point in time, we could take action against

4 those receivables, if necessary.

5 We've retained Israeli counsel that is maritime

6 counsel, who is prepared to step in once OCBC gives us

7 guidance as to what they want to do. I suspect that OCBC will

8 ask for our help, and will put up the funds, and we are having

9 a somewhat constructive dialogue, generally, with OCBC. And

10 it may be the case that, if they want us to protect the

11 vessel, that we might come to the Court and seek assistance in

12 enforcing the automatic stay.

13 Conversely, if, at some point, they want to take no

14 action whatsoever, we may also just come to the Court and ask

15 for approval to abandon our interest in the vessel, so that it

16 becomes clear that this is not something that we're going to

17 watch over, as we -- we are -- it's not a necessary vessel,

18 and there is no equity value in the vessel for us. So we're

19 willing to be cooperative with OCBC, but not to expend sums,

20 large sums of money, anyway, in seeking to protect a vessel

21 that we don't have an economic interest in.

22 THE COURT: So I mean, my only comment I'll make is

23 the Fifth Circuit has held that the automatic stay is not just

24 for the benefit of the Debtor. If OCBC needs relief from this

25 Court, they may also speak for themselves, if they're not



12

1 happy with you.

2 MR. PANAGAKIS: Yeah, I --

3 THE COURT: Yeah, so.

4 MR. PANAGAKIS: We'll relay that, as well. We want

5 -- you know, we want to help them, just like --

6 THE COURT: I know.

7 MR. PANAGAKIS: Yeah.

8 THE COURT: I'm hearing that.


10 THE COURT: I'm just -- I'm sending them a message

11 that I'm here, and that they're protected by the stay, too.

12 MR. PANAGAKIS: Understood.

13 THE COURT: As to whether a stay violation is going

14 on, I don't -- other than what you've told me --


16 THE COURT: -- I mean, I don't have any knowledge.

17 But the Fifth Circuit has made it really clear to the

18 Bankruptcy Judges in this circuit that we enforce the

19 automatic stay for the benefit of all parties, not just for

20 the benefit of the Debtor.

21 MR. PANAGAKIS: The last point, I think, just

22 generally, I wanted to make is, if recall also, on that color-

23 coded chart, the entities on the right, the blue ones, where

24 the Saudi Aramco contracts are at, those are amongst our most

25 valuable assets. You know, we -- that is the cluster of



13

1 contracts that we want to reorganize around, for sure.

2 And if you recall that the contractual relationship

3 is between Saudi Aramco on the one hand, and a consortium on

4 the other hand, made up of ourselves and L&T, who's

5 represented by Mr. Ray. There were a number of concerns that

6 L&T had, as to how performance under these contracts would

7 continue to function during the course of these proceedings,

8 all in an effort, frankly, to make sure that L&T is

9 comfortable, but perhaps even more importantly, that Saudi

10 Aramco is -- remains comfortable that their work will continue

11 to be performed.

12 So we met, for about a day and a half, with L&T in

13 Singapore, a very constructive meeting, in terms of paving a

14 way forward, that we could help one another to make sure that

15 the work on the projects is not impeded by anything that's

16 going on in the Chapter 11. And I think you can see much of

17 what that framework agreement, that we're calling the

18 "framework agreement," what it was. It's actually

19 incorporated at the tail end of L&T's general objection to the

20 first-day --

21 THE COURT: I was concerned about one statement in

22 there, that the agreement had already been redone.

23 MR. PANAGAKIS: No. No, not -- I think that there

24 are slight amendments to the prepetition agreements that I

25 think are incorporated by the framework agreement. There is



14

1 some court relief that we will need, in order for us to -- in

2 order for that framework agreement to be effective.

3 And frankly, because it's a pre -- a material

4 prepetition contract, we would also need the consent of the

5 DIP lenders, in order for that framework agreement to become

6 effective. So our intention --

7 THE COURT: I'm just looking, on Page 7, the heading

8 is called "Consortium Agreement, Modified to Preserve Core

9 Contracts," and then it describes the modifications in the

10 consortium agreement. And I was surprised that there could

11 have been a modification of such an important contract without

12 notice and an opportunities for parties to --

13 MR. PANAGAKIS: Absolutely --

14 THE COURT: -- object, yeah.

15 MR. PANAGAKIS: -- correct, Your Honor. And --

16 absolutely correct. And so we fully intend to file a motion

17 seeking approval of those relatively few enumerated

18 modifications. There are some --

19 THE COURT: Well, they may be relatively few, but

20 they're awfully major.


22 THE COURT: And if -- I'm just laying the

23 groundwork.


25 THE COURT: I don't think that you can modify those



15

1 contracts, based on the demand of the counterparty, without

2 coming in and getting court approval.

3 MR. PANAGAKIS: Right.

4 THE COURT: And the document filed by Mr. Ray

5 indicates a lot of demands that he says are satisfied, I

6 think, by the modification of the consortium agreement. And

7 it's one thing if you want to propose modifications; another

8 if you've already done one.

9 Mr. Ray.

10 MR. RAY: Your Honor, Hugh Ray, for the record, for

11 LTHE.

12 An agreement with the Debtor for a framework of

13 revisions to, additions to, and modifications to the various

14 consortium agreements, and perhaps even additional procedures,

15 was agreed to, subject to Bankruptcy Court approval. In the

16 very first sentence, "Subject to further documentation."

17 THE COURT: Yeah, I don't know --

18 MR. RAY: If I made an error --

19 THE COURT: That's --

20 MR. RAY: -- in my objection --

21 THE COURT: That's fine.

22 MR. RAY: -- insinuating it's --

23 THE COURT: Look, we're --

24 MR. RAY: -- past tense --

25 THE COURT: We're early in the case, and that's



16

1 fine. I'm not -- I'm just expressing concern over what got

2 filed, not over something that -- if I don't happen to like

3 the wording of something, that shouldn't bother anybody

4 because you can just fix it with the facts. So I'm not

5 worried about it; I'm just sort of laying down that -- he

6 brought it up. I don't know that I would have brought it up -

7 -

8 MR. RAY: Yes, Your Honor. Well --

9 THE COURT: -- but it raised concerned.

10 MR. RAY: I -- to allay any concerns you may have,

11 all parties involved have always understood that the Court

12 will have to reach the merits of the Debtor's business

13 judgment. My client's concern that it's been ten days, and we

14 haven't seen the motion filed, and we want court approval

15 quickly because third parties are relying on this framework,

16 and are acting in reliance upon the framework going forward.

17 That's our concern.

18 THE COURT: Okay. Thank you.

19 MR. PANAGAKIS: So we do have a motion teed up and

20 ready to go, as soon as we hear from the DIP lenders that they

21 would be supportive of the relief requested, and we actually

22 anticipate that they will be. We'll file that motion and put

23 it up for a hearing, and lay out all of the terms of the

24 framework agreement.




17

1 MR. PANAGAKIS: That's it, by way of preliminary

2 remarks, Your Honor.

3 And turn -- as we get into the agenda itself, at the

4 first-day hearing, certain affidavits were submitted into

5 evidence. We would continue to rely on those affidavits for

6 the relief that we're requesting today, as to the continued

7 first-day matters.

8 THE COURT: Is there any objection to carrying

9 forward the evidence from the first-day hearings to today?

10 (No verbal response.)

11 THE COURT: All right. We'll carry forward all

12 evidence from the first-day hearings to today, without

13 objection.

14 MR. PANAGAKIS: And then, to the extent necessary,

15 we have witnesses available in court to provide supplementary

16 testimony, or I may proffer their testimony.

17 But the first matter on the agenda is the second --

18 the final hearing with respect to the employee wage motion. I

19 don't recall that Your Honor had any specific concerns. The

20 interim relief was entered, no objections have been filed.

21 Obviously, a very important motion for the employees of the

22 company.

23 This is one of the motions where the committee

24 raised a very valid concern. As we described what type of

25 severance payments we would be seeking authority to pay, we



18

1 described it as "ordinary course" type severance payments.

2 So, if there's a layoff or two, that would be covered, but if

3 there was some type of mass layoff, that that would not be

4 covered.

5 And I don't think that the committee has a problem

6 with that, per se, but I think they just want more time to

7 think about severance, generally. So there is some language

8 that has been added to the order that, before we make any

9 severance payments of any type, that we provide the committee

10 with three business days' notice, and if they object, we'll

11 come before Your Honor, and if they don't, then it would be

12 approved. I think that that is the only change that was made

13 to that order.

14 THE COURT: Do I have these on a flash drive, or how

15 can we --

16 MR. PANAGAKIS: You do.

17 THE COURT: So I'll go ahead and invoke our Join.Me

18 website, so that parties on the phone can watch what we're

19 doing.

20 MR. GIBBS: Your Honor, while that's being upload,

21 just to respond to Debtor's counsel's comments. He is correct

22 that a change is made in the proposed order that's on the

23 drive that you're being handed, and that satisfied the

24 concerns of the committee on this motion. We support the

25 entry of it --



19


2 MR. GIBBS: -- as modified.

3 THE COURT: So anyone on the phone ought to be able

4 to now look and see, if they go on line, what we're doing.

5 Do you all want to be looking at the orders or the

6 red-lines; what's going to be the most helpful thing?

7 (Participants confer.)

8 MR. PANAGAKIS: Your Honor, I think the red-lines.

9 (Pause in the proceedings.)

10 THE COURT: And these are red-lined against the

11 entered interim; is that what we're doing?

12 MR. WINERMAN: Yeah, proposed final orders in most

13 cases. For example, we had filed a final order with the

14 motion when we first filed it.

15 THE COURT: So, if we make changes to the interims,

16 they're not reflected in the --

17 MR. WINERMAN: They would be reflected in this final

18 order.

19 THE COURT: Okay. Were there any interim changes

20 that did not get carried forward onto here?

21 MR. WINERMAN: Your Honor, Justin Winerman on behalf

22 of the Debtors.

23 What we did is this is the final order that we

24 attached to the motion. If you made any comments to the

25 interim order, we tried to put those into this final order, so



20

1 those should be reflected in this red-line.


3 MR. PANAGAKIS: So you have a cumulative mock-up.


5 THE COURT: All right. Is there any objection to

6 the employee order, or any request for additional evidence in

7 support of it?


9 THE COURT: Is this red-line in some proprietary

10 program?

11 MR. PANAGAKIS: I'm afraid that these are -- it's

12 kind of like a fixed red-line, so to actually make changes,

13 you would have to open the clean. I apologize.

14 THE COURT: Oh, that's okay. I just wanted to

15 accept them all, so.


17 THE COURT: All right. I've signed the wage order.

18 MR. PANAGAKIS: Thank you, Your Honor.


20 MR. PANAGAKIS: The next motion was a motion to

21 approve prepetition insurance payments.

22 Your Honor, no objections were received with respect

23 to this motion; indeed, quite to the contrary, if there has

24 been motion that's received heightened attention, it's been

25 this one, from almost all of our clients, from insurers, from



21

1 creditors, from other parties-in-interest, all of which are

2 extremely supportive of the relief that we are requesting.

3 Given the nature of these projects, nobody wants to take any

4 chance whatsoever that there is any argument that insurance

5 would not be available.

6 And if you recall, Your Honor, at the first-day

7 hearing, there were, I think, $3.4 million of payments that

8 actually came due prepetition. And if I understood it

9 correctly, Your Honor had a little reservation about approving

10 those amounts at the first-day hearing, but we'll see where,

11 you know, things played out, if anyone objected by today's

12 hearing. I think, if I were to cede the podium to a few

13 folks, there might be a small line of people that would be

14 supporting the relief that would be requested.

15 In addition to the arguments that we laid out in our

16 first-day paper, which was, you know, we don't want to have

17 any risk of coverage not being available, we want to make sure

18 that renewals take place smoothly, that our customers require

19 that insurance be in place, and that insurance premiums be

20 paid, in many of their contracts, that there could be

21 additional costs imposed on us if prepetition payments are not

22 made in connection with renewals.

23 Also, Your Honor, many of these policies are claims

24 occurred policies. So, if you take a 2016 policy, if it's not

25 eventually assumed, you're going to have a gap in coverage



22

1 down the road, which would be a problem.

2 And finally, Your Honor, many of the three point --

3 much of the $3.4 million is owed to a captive insurance

4 company that --

5 THE COURT: Let me just interrupt you for a minute.

6 I am not at all --

7 MR. PANAGAKIS: Okay.

8 THE COURT: -- certain, and I don't -- this has --

9 it may have something to do with whether we'll approve this

10 today. But as I said, I want to hear what parties have to

11 say. But I don't want my silence to subscribe to a theory

12 that a policy that was in force, for which one doesn't

13 subsequently pay premiums, has to be assumed, in order to have

14 it enforced. And I think that's, without doing any research

15 on it, probably a statement of law that I would not subscribe

16 to. So go ahead, but I don't -- this happens in lots of

17 cases, and I don't want my silence to somehow endorse that

18 view.

19 MR. PANAGAKIS: No, understood, Your Honor. And

20 given that, you know, again, the likelihood that these

21 policies will need to be assumed, and those payments made, in

22 order to avoid a gap in coverage, and then we have the issue

23 with a captive insurance company that has fronted many of the

24 dollars to reinsurers, and now the captive insurance company

25 may be facing some regulatory issues because it's the short



23

1 the premiums, for all those reasons, this is relief that we

2 would continue to request; that all prepetition payments --

3 that the Debtors be authorized to make all prepetition

4 payments. It adds up to about $3.4 million.

5 I'm happy to cede the podium to others that might

6 want to weigh some -- lend some support to the relief that

7 we're looking for. But it has -- and completely respectful of

8 -- I know what -- I think I know what Your Honor's intentions

9 were, and I know that those policy should remain in effect,

10 whether these prepetition payments are made or not.

11 But the risk is just so great that someone overseas

12 might not view it the same way, or an insurance company might

13 not view it the same way, and then we're caught in litigation,

14 as opposed to giving comfort to everyone that insurance is

15 actually in place.


17 MR. PANAGAKIS: So we would respectfully request

18 that the remainder of the relief be granted today.

19 THE COURT: Mr. Gibbs.

20 MR. GIBBS: Your Honor, thank you. Notwithstanding

21 the compliment paid to me by joking by Debtor's counsel at the

22 beginning of the hearing, about us working diligently and

23 pretty much nonstop since Friday morning, we'd reserve the

24 right to come back and beg for more times on various things

25 that may arise in this case, but we did focus specifically on



24

1 the insurance issues.

2 We realize and agree with the Debtor, it's

3 absolutely critical that there not be a gap in coverage, and

4 we are supportive of the motion being entered today. There

5 were some small changes to the earlier proposed order that

6 give the committee the same reporting rights that the DIP

7 lender has under the DIP order, the credit agreement, as well

8 as the prepetition secured lender that is the party to the

9 proposed adequate protection order.

10 So I wanted the Court to know that we're comfortable

11 with that additional level of go-forward reporting. The

12 diligence we did over the weekend, even without the benefit of

13 financial advisors, leads us to the belief that this order

14 really does need to be entered.

15 THE COURT: So, so that I have an order that is

16 unambiguous, where in the order -- if the premium came due

17 prepetition, is this authorizing the payment of something that

18 came due prepetition? I understand everybody wants it to say

19 that. I just want to be sure that, if that's what it's

20 supposed to say, it does say that.

21 MR. PANAGAKIS: I think it's within the definition

22 of "insurance obligations," which would include the

23 prepetition amounts, Your Honor, so it would probably be in

24 the very first line.

25 THE COURT: Does any party object to entry of the



25

1 order including the provision that would allow the payment of

2 premiums or insurance finance obligations that first came due

3 prepetition?


5 THE COURT: All right. I'll sign that order. Let

6 me print it.

7 MR. PANAGAKIS: All right. Thank you very much for

8 that.


10 THE COURT: Where do you want to go next?

11 MR. PANAGAKIS: The critical vendor motion.

12 And Your Honor, when I kind of use amounts, only

13 because I memorized it this way, I'm excluding those truing

14 payments that were transferred over from the employee motion

15 to the critical vendor motion.

16 THE COURT: Right.

17 MR. PANAGAKIS: So, excluding those amounts, if Your

18 Honor recalls, we were requesting interim approval of about

19 $5.7 million, and final approval of $8.75 million, to pay

20 critical vendors that satisfied one of three criteria -- one

21 or more of three criteria:

22 That a creditor can assert a lien or arrest a

23 vessel; that a creditor is a sole-source provider of a good or

24 service; and/or that it would be prohibitively expensive to

25 replace a vendor with someone else. And Your Honor granted



26

1 the interim relief that we were looking for and admonished the

2 company to use their best efforts to get executed trade

3 agreements from any critical vendor payment.

4 Your Honor, thus far, just to give you a little

5 update -- I won't give the exact amounts because creditors

6 could be listening. But thus far, less than half of the

7 interim relief that was provided for has been used. As to all

8 of them, trade agreements have been executed.

9 THE COURT: I thought it was required as to all.

10 MR. PANAGAKIS: It was a best efforts that we would

11 --

12 THE COURT: Was -- are you sure of that one?

13 MR. PANAGAKIS: Yes. And then -- we could double-

14 check it; I could be wrong. But then I -- you asked for a

15 client representative to swear to you that he would use his

16 best efforts, as well, to get those trade agreements entered -

17 -

18 THE COURT: Let me just --

19 MR. PANAGAKIS: -- executed.

20 THE COURT: -- take a look. Here's the order we

21 entered.


23 MR. PANAGAKIS: It's Paragraph 2.


25 THE COURT: Well, 2 requires them to do it; 3 says



27

1 irreparable injury, they can be relieved of the requirements,

2 so.

3 MR. PANAGAKIS: Correct. And --

4 THE COURT: But they've all signed them, so far.

5 MR. PANAGAKIS: So far, they've all signed them.

6 And frankly, we hope that, and we expect that to continue to

7 be the case.

8 The only thing I'll point out is part of the reason

9 why we're tracking under what we estimated is we've been

10 paying less than the full amounts than those creditors were

11 owed, so there's been some very favorable settlements that

12 have been reached in connection with the relief that we were

13 granted.

14 But as I indicated at the first-day hearing, there

15 could be more -- you know, we might come back to court and ask

16 for additional relief. We're not right now. But these broad

17 -- these categories that we've identified, there could be more

18 creditors that fit the criteria, and if we need additional

19 relief, we'll be before the Court. But I think, for now,

20 we're fine.

21 Your Honor, the committee paid close attention to

22 this motion, as well. And we've agreed to make certain

23 changes to the order. That effectively does two things:

24 One, we're going to meet with the committee within

25 the next several days and describe to them what's been paid,



28

1 how we're administering the program, what's contemplated to be

2 paid going forward, so they have transparency with respect to

3 this process.

4 And with respect to go-forward payments, we will

5 provide the committee with notice of proposed payments that

6 will be made in the future. They will have two days to

7 object; and, if they don't object, then we can proceed in

8 making those payments.

9 And we're probably going to administer that, not by

10 cutting a deal, and then saying, here's the deal that's been

11 cut, you know, Committee, you have two days. We're going to

12 inform them long in advance of that, wherever and whenever

13 possible. And so you'll see some red-line changes that are

14 intended to incorporate that protocol.

15 THE COURT: All right. So the Supreme Court came

16 down in your favor a little bit on this one, which helps --

17 MR. PANAGAKIS: Oh, Your Honor --

18 THE COURT: -- helps some --

19 MR. PANAGAKIS: -- I'm sorry.

20 THE COURT: -- in terms of --

21 MR. PANAGAKIS: I should add one other things that's

22 important; that the committee has not yet retained a financial

23 advisor. So this is the best protocol that Akin Gump has been

24 able to work out with us. And we have also promised that --




29

1 MR. PANAGAKIS: -- should a financial advisor want

2 to tweak this or change this, that we'll have an opportunity

3 to revisit it.

4 MR. GIBBS: That's what I was rising to just address

5 to the Court. We have presentations tomorrow morning to the

6 committee by candidates for financial advisor, so the April 5

7 time line that was in the proposed language for the order

8 works for us.

9 THE COURT: Does any party object to the critical

10 vendor motion?

11 MR. RAY: Your Honor, just to be clear, LTHE is

12 expecting, in the near future, to have a motion before the

13 Court by the Debtor to approve reporting requirements that

14 would give granularity to, and report on a very granular basis

15 the expenditures related to the Aramco projects, as set forth

16 in the objection.

17 Pending that, however, LTHE would like to know about

18 payments made on the Aramco project related -- that are

19 critical vendor payments because, obviously, as a consortium

20 member, that affects us financially, as well.

21 THE COURT: I don't think anything in this order or

22 in any order that we have entered today would restrict the

23 Debtor from voluntarily providing you with all of the

24 information about Saudi Aramco projects. If you're telling me

25 that you want an order to compel them to do that, I don't



30

1 think anything in this precludes you from requesting such

2 relief, either. So I don't know that we're getting in your

3 way, either way. Am I missing something in here?

4 MR. RAY: It was just my attempt to have that added

5 in as a sentence in the final order, that says the Debtor

6 shall provide the same information it provides to the

7 committee, relating to the Aramco projects, to LTHE.

8 MR. PANAGAKIS: Your Honor, I don't want to -- we

9 want to have the most constructive relation possible --

10 relationship possible with L&T, but I also don't want to take

11 bits and pieces of the framework agreement, get one part here,

12 one part there. It's an entire framework agreement that

13 provides benefits to us and benefits to L&T. That motion will

14 be filed. One of the requirements in that framework agreement

15 is that we give the visibility that L&T is looking for. So we

16 will file that motion; they will have that visibility, I'm

17 comfortable in that.

18 In the meantime, the parties are working closely

19 together to provide the very visibility that Mr. Ray is asking

20 for, so they will have the information that they're looking

21 for. If not, I agree with Your Honor, they can seek separate

22 relief.

23 MR. RAY: With counsel's representation, I'm fine

24 with that, Your Honor.




31

1 Any other party object to the relief)


3 THE COURT: All right. I'll sign the critical

4 vendor order.

5 And as I mentioned before, I'll supplement my

6 findings that we made at the earlier hearing, where -- simply

7 to refer to the Supreme Court's acknowledgment that orders of

8 this type are potentially reasonable, and should be entered

9 under correct circumstances.

10 The evidence in this case by the declarations, and

11 now the delay and absence of any objection after the

12 organization of the creditors' committee, and no other party

13 objecting, I think, given the Supreme Court's ruling, make

14 this -- confirm what we did before, for lack of a better

15 description, so.


17 The next motion, Your Honor, was the motion to

18 approve Debtor's cash management system and related functions.

19 I don't think that we've received any objections to

20 the motion, and I say "I don't think" because I'm not sure if

21 L&T's objection was an objection to the cash management

22 motion, but we'll get to that in a second.

23 The -- this was another one of the motions that was

24 discussed with the committee. I think that the committee is

25 comfortable with the relief that's being requested. They did



32

1 ask for additional language similar that that we just covered

2 with the insurance motion; that we will provide the committee

3 with any notice that the DIP lenders are required to receive

4 under the cash management motion.

5 The other thing I'll point out, and I think it's

6 reflected in some of the changes that you're scrolling

7 through, a concern was raised shortly after the first-day

8 hearing by Amagey. Amagey provides credit card services for

9 employee travel expenses in the ordinary course of business,

10 and prepetition, there was a three-hundred-thousand-dollar

11 cash collateral account that was used to secure any repayment

12 obligations under those credit cards.

13 A stipulation was entered -- your -- we submitted a

14 stipulation, I think, two, three weeks ago, that addressed

15 Amagey's concerns, that we could continue that ordinary course

16 practice. And the red-line changes that you see in this order

17 are intended to mirror that stipulation, that -- the language

18 in the stipulation, as it was contemplated in the stipulation.

19 THE COURT: But the stipulation has already been

20 approved, right?

21 MR. PANAGAKIS: Yes, Your Honor. But I believe, in

22 that stipulation, there was language that this language would

23 likewise be entered into this order.

24 THE COURT: Okay. So why are we doing a second

25 interim, instead of moving to final?



33

1 MR. PANAGAKIS: Your Honor, I think that the U.S.

2 Trustee wants to preserve the 345 waiver requirements, but

3 I'll defer to the U.S. Trustee.

4 MS. MARCH: No, Your Honor. Actually, we don't want

5 a waiver of 345.

6 MR. PANAGAKIS: Correct.

7 MS. MARCH: We also -- I notice in Paragraph, I

8 think 16, there is a waiver of the U.S. Trustee's guidelines.

9 We really don't want that, either.

10 THE COURT: So I'm going to go back. I'm not

11 understanding why we're doing a second interim, as opposed to

12 moving to a final. And if the U.S. Trustee has objections,

13 dealing with them today, unless you think they're going to go

14 away between now and the final -- and I don't know how we'll

15 rule on them, but ...

16 MR. PANAGAKIS: Your Honor, I guess our preference

17 would be to continue to see if we could address this with the

18 U.S. Trustee's Office, and not bring it to a head today. So

19 perhaps we could add some language to that paragraph that says

20 -- that changes what the -- Paragraph 16 says, and preserves

21 the U.S. Trustee's argument, to be addressed at a subsequent

22 hearing

23 THE COURT: In the past, she's lived with this

24 language, and let's see if she will today.

25 MS. MARCH: Yes, Your Honor, that would be fine.



34

1 MR. PANAGAKIS: That works for us, Your Honor.

2 THE COURT: Okay. Is there anything else we need to

3 do on this order to resolve the objections to it?

4 MR. GIBBS: Your Honor, it's not reflected in the

5 language of the proposed order, but over the weekend, we did

6 reach an agreement with the Debtors that they -- we would work

7 in good faith to establish a protocol to meet, on a very rapid

8 and regular basis, with Debtor's advisors to understand the

9 nature and scope of the intercompany transfers that may or may

10 not be impacted by the cash management system that the Debtor

11 employs because we don't have a financial advisor yet. We

12 want them to get hired, and then --

13 THE COURT: So you can get up to speed by final, you

14 think, as well, on that?

15 MR. GIBBS: Yes.

16 THE COURT: When do you all want to set a final on

17 this?

18 MR. PANAGAKIS: Your Honor, one -- as we get to some

19 of the other matters, we're -- if the date works for Your

20 Honor, we might need to come here before April 24th, which I

21 think is the next scheduled hearing date. And one date that

22 worked for counsel for the DIP order and for the adequate

23 protection stipulation to the DNB lenders, that they don't

24 want to wait until April 24th, was April 13th. So, if April

25 13th is a date that's available, then maybe we could continue



35

1 this until April 13th.


3 MR. PANAGAKIS: Your Honor, and if April 13th is

4 available, I believe the day before is Passover, and the day

5 after is Good Friday. If it's possible, if it works for Your

6 Honor, to have a hearing in the middle of the day, so folks --

7 THE COURT: Well, I know afternoon isn't available,

8 so that may not work.


10 THE COURT: We have that time set aside in another

11 case, but so far, what we expected to be filed hasn't been

12 filed yet. I know the afternoon is probably -- well, I could

13 double-calendar you in the afternoon, but let's let her come

14 back --


16 THE COURT: -- and we'll figure out what time --

17 we'll do it some time on the 13th, even if you're double-

18 calendared, but let's figure out the time, once we seen what's

19 going on.

20 MS. MARCH: Your Honor --

21 THE COURT: But I have signed the interim order.

22 MS. MARCH: -- I plan to be out --

23 THE COURT: I'm sorry. Go ahead.

24 MS. MARCH: I'm sorry. I plan to be out of the

25 office from the 11th through the 17th, so -- but I can always



36

1 have another attorney handle it, or I'm sure we can work

2 things out.

3 THE COURT: Are you okay if we schedule it on the

4 13th, though?

5 MS. MARCH: Yes. Yes.

6 THE COURT: Okay. Thank you. So we'll come back,

7 as to when we're going to do final on the cash management.

8 MR. PANAGAKIS: Yeah. And if it creates any issues

9 with the U.S. Trustee's Office, we're happy to move this

10 particular one to the 24th, if that's easier, so either way

11 works for us.

12 THE COURT: That's up to you.


14 THE COURT: You know what, given that we're going to

15 double-calendar stuff --

16 MR. PANAGAKIS: Let's do the 24th then, yeah.

17 THE COURT: Yeah, I was going to say, given that

18 we're going to have to double-calendar on the 13th, we'll go

19 ahead and move, until 9:15 in the morning, the final on cash

20 management.

21 Okay. What do you have next?

22 MR. PANAGAKIS: Next, Your Honor, is today was the

23 -- also the proposed final hearing date for our DIP financing.


25 MR. PANAGAKIS: As Your Honor recalls, we received



37

1 interim approval for the $20 million, and we've been

2 requesting final approval of $90 million of DIP financing.

3 Two things, Your Honor:

4 If you recall the summary chart -- and I know you

5 didn't ask for it, but the summary chart had categories -- the

6 summary budget, rather, had categories that weren't

7 necessarily intuitive. We have revised the summary reporting

8 and have attached it to a proposed form of interim order, so

9 you can see with a little more transparency into categories

10 that relate to projects, relate to vessels, relate to taxes,

11 as opposed to the more clumped-up categories that we used

12 before.

13 And it also breaks down the information of how much

14 of the borrowings would be attributable to each particular

15 Debtor, so there's visibility on that front, as well, which

16 was important to some folks that we heard from over the last

17 couple of weeks.

18 But in light of the magnitude of a DIP financing

19 motion, the creditors' committee clearly wanted more time to

20 consider this. So we have agreed to continue the final

21 hearing until April 13th. We're back to that date.

22 In the interim, we will need an incremental $20

23 million -- $21 million of additional funding. I don't think

24 anyone has taken issue with that, with the amount that's being

25 requested for the second interim draw. We have a proposed



38

1 form of second interim order, which is identical to the first

2 interim order, with just a few exceptions:

3 It updates some dates to reflect what we've just

4 been talking about.

5 It changes the interim funding request to provide

6 for an additional $21 million of funding.

7 And we've included some changes to notices --

8 noticing provisions, to provide notices to the creditors'

9 committee.

10 And then Your Honor may have seen that, yesterday,

11 there was an objection that was filed by the Norwegian Trustee

12 for one of the subsidiaries of our parent company. And we

13 have resolved that, at least for today, by the inclusion of

14 some specific reservation of rights language, where both the

15 DIP lenders and the Norwegian Trustee are comfortable with

16 their respective positions can be heard on April 13th.

17 THE COURT: I think you also drew an objection from

18 Mr. McFaul. Has that been resolved?

19 MR. PANAGAKIS: Oh, yes. We did --

20 THE COURT: He's right here.

21 MR. PANAGAKIS: I think that was this morning.

22 MR. MCFAUL: That was on the --

23 MR. PANAGAKIS: And the --

24 MR. MCFAUL: -- the financing stipulation, which was

25 presented separately, Your Honor.



39

1 THE COURT: That's not part of the DIP?

2 MR. MCFAUL: Yes, Your Honor.


4 MR. MCFAUL: Thank you.

5 THE COURT: So it should -- these bracketed amounts

6 now become final?


8 MR. KAMPFNER: We -- Your Honor, we filed the form

9 of order. I --

10 THE COURT: The one that you filed has the 21

11 million in brackets.

12 MR. KAMPFNER: It does have it in brackets?

13 MR. RAY: Yeah, we have one that has slightly

14 different language.


16 THE COURT: Can you email it to somebody here with a

17 laptop, and we'll put it on a new flash drive, and we'll come

18 back to that?

19 MR. KAMPFNER: Sure.

20 THE COURT: Thanks. We'll come back to the DIP.


22 THE COURT: So if this is what got filed, then I

23 don't have any questions on it. I don't know if anyone else

24 has any objections. And then we'll come back, and we'll see

25 what additional changes there's --



40

1 MR. PANAGAKIS: Yeah, and I don't think that there's

2 any substantive difference between the correct version and

3 what was just on the screen.


5 MR. PANAGAKIS: Your Honor, the next motion is the

6 motion to approve an adequate protection stipulation between

7 the Debtors and the DNB Bank syndicate. And if you recall,

8 Your Honor ...


10 THE COURT: So we can come any time in the morning

11 of the 13th, for the final DIP, but then you got to finish in

12 the morning.


14 THE COURT: So you tell me what time you want to

15 start, given -- I understand people have travel plans, and

16 I'll accommodate those, but you still got to finish in the

17 morning.

18 MR. PANAGAKIS: Understood, Your Honor. Probably

19 should have thought of this earlier, but I don't know if those

20 that observe Passover can or can't travel the night before. I

21 can be heard any time.

22 THE COURT: I'm embarrassed to say --

23 MR. PANAGAKIS: Does ten o'clock --

24 THE COURT: -- I don't, either, and I'm supposed to,

25 so.



41

1 (Laughter.)


3 MR. PANAGAKIS: Your Honor, whatever works for Your

4 Honor. But how about if I suggest 9:30?

5 THE COURT: 9:30 is fine.


7 THE COURT: Okay. So we'll continue the final DIP

8 until 9:30 on the 13th.


10 THE COURT: And we will put that in when we get the

11 final --


13 THE COURT: I approve the final interim. Okay? I'm

14 sorry to interrupt you, I just wanted to get -- figure out

15 that date. So you said that we have another ...

16 MR. PANAGAKIS: So next is the adequate protection

17 stipulation between the Debtors and the DNB --

18 THE COURT: Yes. On the phone with Mr. Schartz?

19 MR. SCHARTZ: Hi, it's -- yes, it's Brian Schartz

20 from Kirkland & Ellis. I just want to say something quickly,

21 I won't -- I'll be fast. As I mentioned, we represent the

22 Norwegian Trustee for EMAS-AMC AS. And like many people in

23 the room, we're working to get up to speed as fast as possible

24 in learning about the situation. Our client is in Norway, so

25 we're doing all of this over the phone; we haven't yet met



42

1 them face to face, and never will.

2 And what we want is that they may have significant

3 claims against some of the Debtors. It may also be the case

4 the Debtors have significant claims against the entity.

5 Everything is still somewhat in flux, and we just need to

6 diligence everything.

7 In any event, we reached out about our primary

8 concerns regarding the DIP going forward on a final basis.

9 We're really happy that we were able to reach the resolution,

10 as Mr. Panagakis described it. And we really are appreciative

11 of their efforts and the agent's efforts to get that done.

12 We do look forward to being part of the dialogue

13 about resolving our issues; in particular, how the cash

14 proceeds from the putative sale of the base will be divided

15 up, including with respect to the DIP and then any plan

16 discussions. But we do want to just make a statement on the

17 record that we are here, we are looking at the situation, and

18 we are working through things as much as possible. And we're

19 pleased on an interim basis, but we do have a little bit more

20 work to do to get this finished on a final basis.

21 THE COURT: All right. Thank you. So, Mr. Schartz,

22 in a few moments, I think we'll put up the final second

23 interim DIP. And if you have any objections to that, feel

24 free to voice them at that time.

25 MR. SCHARTZ: Okay. Will do. Thank you.



43

1 THE COURT: So I don't see -- do you want me to go

2 somewhere besides this redline section?

3 MR. PANAGAKIS: So, Your Honor, with respect to the

4 adequate protection stipulation, there should be ...


6 THE COURT: So ECF 35 is adequate protection

7 stipulation.

8 MR. PANAGAKIS: It's a draft supplemental order; the

9 last one, your order -- Your Honor, I believe, is the correct

10 document.


12 MR. PANAGAKIS: Yes. And we know we're going to

13 need to make one -- interlineate one small change that the DIP

14 lenders raised just before the hearing started.

15 But if you recall, Your Honor, we did not approve --

16 Your Honor did not approve the actual stipulation at the

17 first-day hearing, but you authorized us to act in accordance

18 with it. This order continues that until -- that construct

19 until April 13th.

20 There is reference to the interim DIP financing

21 order. I think what we need to interlineate is reference,

22 also, to the second interim DIP financing order.

23 MR. KAMPFNER: I think it's in there. I think we're

24 fine.

25 MR. PANAGAKIS: We're fine now?



44

1 MR. KAMPFNER: Yeah.

2 MR. PANAGAKIS: All right. What was raised to me

3 right before the hearing apparently is now in here, so the

4 order is fine the way it is.

5 THE COURT: All right. Does anyone object to -- all

6 I'm going to do is insert the time of the April 13th hearing.



9 MR. PANAGAKIS: And Your Honor, this is the -- that

10 was the order that Crowley, represented by Sidley Austin --


12 MR. PANAGAKIS: -- objected to, reservation of

13 rights --

14 THE COURT: Sorry, yeah. I had the wrong one. So

15 we're going to carry ECF 35 until April 13th.

16 MR. PANAGAKIS: Correct, Your Honor.


18 THE COURT: I signed that.

19 MR. PANAGAKIS: Thank you.

20 The next motion, Your Honor, is the Debtor's motion

21 to approve the retention of ordinary course professionals.

22 This one was not a carryover from the first-day hearing, and

23 we've identified about 30 professionals that the Debtors use

24 in the ordinary course of business for tax work, audit work,

25 accounting work, legal work unrelated to the restructuring,



45

1 and things of that vein.

2 There is a requirement that each professional sign a

3 declaration of disinterestedness, to be filed with the Court.

4 And there are also parameters, pursuant to which

5 ordinary course professions, if they fall within, would not

6 need to file fee applications. And specifically, those

7 parameters are if fees don't exceed an average of $20,000 per

8 month, over a three-month period, or if they are less than

9 $100,000 cumulative for a particular professional, that that

10 professional would not need to file a fee application.

11 And unless Your Honor has any questions for this

12 motion, we received no objection.

13 THE COURT: Well, if you're going to file the --

14 this is a procedural question --

15 MR. PANAGAKIS: Yes.

16 THE COURT: -- and a minor one. If you're going to

17 file the declarations, why do they need to be served on

18 anybody? Because they're all going to get it, and then you

19 can file it through CM/ECF.

20 MR. PANAGAKIS: We could --

21 THE COURT: Can I just --

22 MR. PANAGAKIS: I just want to --

23 THE COURT: -- take that out?

24 MR. PANAGAKIS: -- make sure the U.S. Trustee is

25 comfortable with that, and otherwise, I'm fine, if they're



46

1 simply filed.

2 THE COURT: So, if I just do this --

3 MR. PANAGAKIS: Your Honor, before you make these

4 changes, you're marking up a red-line. I just want to make

5 sure that we're not going to have that same issue, where --

6 THE COURT: Oh, good point. Let's see what else we

7 have.


9 THE COURT: What does this mean?


11 MR. PANAGAKIS: Your Honor, I don't believe that we

12 are expecting any contingency fees, so we can delete that

13 language.



16 THE COURT: Does this mean they need to meet the UST

17 fee guidelines, or their application needs to be -- you agreed

18 with the U.S. Trustee that the application will be consistent

19 with it, or that the fees that are sought will be consistent

20 with it?


22 MR. PANAGAKIS: This is if they -- if the cap is

23 exceeded.

24 THE COURT: All right. But I don't make people

25 comply with the U.S. Trustee -- the U.S. Trustee can't impose



47

1 how much fees we're going to award. If people want to have an

2 easy road, so that they comply with the form of the

3 application, where the U.S. Trustee, you know, wants all of

4 the subcodes and coding. I'm perfectly happy with people

5 doing that. But I'm not going to preordain allowance or

6 disallowance of fees based on what the Executive Branch might

7 want, when it's up to the courts and the parties to litigate

8 that. So, again, I don't care --

9 MR. PANAGAKIS: No issue for me if that language

10 were to be deleted, but --

11 THE COURT: But I don't know that I want to delete

12 it. If your deal is that you're going to file it in a form --

13 MS. MARCH: Your Honor, I don't believe the U.S.

14 Trustee takes issues with what you're saying; however, parties

15 generally refer to the guidelines as the "fee guidelines."

16 THE COURT: Right. So, if I just say "in a form

17 consistent with the fee guidelines," you're okay with that?

18 MS. MARCH: Yes, sure.

19 THE COURT: Okay. Yeah, I didn't think you did, but

20 I just ...


22 THE COURT: All right. Is there any objection to

23 the order for OCPs that's on the screen?


25 THE COURT: Okay. All right.



48

1 MR. PANAGAKIS: Your Honor, we went relatively

2 quickly through the adequate protection motion. I neglected

3 to just read a statement on the -- a short sentence on the

4 record that was part of the arrangement we had reached with

5 the DNB Bank syndicate. And we just wanted to confirm on the

6 record that the Debtors shall make the regularly scheduled

7 amortization and interest payment due on March 31st, and that

8 the committee has confirmed it has no objection to the making

9 of such payment, and that it's one of the payments that would

10 otherwise have been required under the stipulation.


12 MR. GIBBS: That's consistent with our

13 understanding, Your Honor.

14 THE COURT: Thank --

15 MR. GIBBS: The committee has no objection.

16 THE COURT: Thank you, Mr. Gibbs. All right.

17 MR. PANAGAKIS: Next, Your Honor, is a motion to

18 approve, I think in this case it's really more procedures,

19 with respect to the bar date, and to set certain supplementary

20 bar dates. Your Honor had set the bar date at the first-day

21 hearing for May 15th.


23 MR. PANAGAKIS: And by the motion, we are simply

24 seeking to approve the form of notice, the manner of notice,

25 some supplementary deadlines, such as for parties with



49

1 executory contracts that are rejected, governmental bar dates,

2 et cetera.

3 The committee is generally supportive of the relief

4 that we are looking for, and they have asked for a couple of

5 kind of clean-up changes, to receive notice of the bar date

6 notice itself, when it's sent. And I then I think there might

7 be a couple of technical corrections that they made, that are

8 reflected in the markup.


10 THE COURT: This looks largely like what I've

11 already read, right? So just those few changes?

12 MR. PANAGAKIS: That's it, Your Honor.

13 THE COURT: Yep. Any objection to the bar date

14 order?


16 THE COURT: I'll just tell you, so that you can put

17 it in your -- the back of your mind this week.

18 MR. PANAGAKIS: Sure.

19 THE COURT: I looked at this. I've had some

20 confusion, I think it's been mine, in the cases where it's

21 existed, when we get to claim objections, and when they're

22 filed a claims agent, instead of being filed with the Court,

23 I've been having difficulty finding the claims to which

24 objections are made. So, in any way, that, when you get to

25 the claim objection process, that you can accommodate



50

1 eliminating my confusion would be --

2 MR. PANAGAKIS: Your Honor, we'll --

3 THE COURT: -- appreciated.

4 MR. PANAGAKIS: -- figure out a mechanism --

5 THE COURT: Yeah.

6 MR. PANAGAKIS: -- where we'll have the objection

7 and the underlying claim at the same time.

8 THE COURT: Well, or a link or something like that.

9 I mean, I don't want to make too big of a deal. But I got to

10 be able to find them, and I've had cases where I just can't

11 find them and --

12 MR. PANAGAKIS: We get it in a formal like that, so

13 we can click right on both at the same time; we'll make sure

14 you have the same tool.


16 MR. PANAGAKIS: And then ...

17 THE COURT: I've signed the --


19 THE COURT: -- five-day order.

20 MR. PANAGAKIS: The last motion is the Debtor's

21 motion to reject certain executory contracts and principally

22 involves charter agreements or leases with respect to vessels

23 that are not part of the go-forward business plan; or, if they

24 are part of the go-forward business plan, we are looking to

25 procure a different arrangement, as to how we have access to



51

1 that vessel.

2 I could go through each of them, one at a time, if

3 Your Honor has questions. I will say that the committee wants

4 more time to look at the -- what it is that we're rejecting

5 and why. I'm very comfortable that the committee will be in

6 agreement with our business judgment, but they need their

7 financial advisors and time to review that.

8 What is most important to us, Your Honor, is that

9 the relief that is entered, eventually, if it's entered, be

10 nunc pro tunc to the dates that we were requesting. So we're

11 more than willing to accommodate the committee's concern to

12 have another -- have until April 5th, I believe we agreed to,

13 to see if they have any concerns with the contracts that we

14 are rejecting.

15 We had sought nunc pro tunc relief to the day of the

16 filing of the motion. One of the parties, whose contracts we

17 are rejecting, reached out to us and, for good reason, said

18 that we need to pick a different date. So the motion was

19 filed on March 7th, and we've agreed with that party -- and

20 that's the lessor with respect to bareboat charter for the

21 Ambassador vessel. We agreed with that party that the

22 effective date of the rejection would be March 12th, rather

23 than March 7th.

24 So we want to give the committee time to do its job,

25 but we do not want to incur any more administrative



52

1 obligations with respect to these contracts, if it turns out

2 that they agree with our business judgment and eventually

3 support the relief.

4 THE COURT: So, Mr. Gibbs, did you want us to come

5 back for another hearing? Did you want us to add a provision

6 that says that, if you file an objection by the 5th, we will

7 reconsider the order without prejudice to its prior entry?

8 What are you asking that we do?

9 MR. PANAGAKIS: Your Honor, we've worked out

10 language --

11 THE COURT: Oh, okay. So --

12 MR. PANAGAKIS: -- with Mr. Gibbs.

13 THE COURT: I didn't realize --

14 MR. PANAGAKIS: -- and I think --

15 THE COURT: -- that was in here.

16 MR. PANAGAKIS: -- that you'll see it reflected in

17 the order.

18 THE COURT: And what are you doing about the one

19 that we continued it until the 30th, but now they've withdrawn

20 their objection to the rejection? I don't even know if you

21 saw that.

22 MR. PANAGAKIS: I -- yeah, no, I did. I don't -- I

23 think we don't have to have the hearing on Thursday, and I

24 think that matter, as it relates to the --

25 THE COURT: Is that contained in this order, though,



53

1 or how are we -- how are you planning to address that

2 rejection?


4 MR. PANAGAKIS: Your Honor, if Your Honor just wants

5 to add language that that objection has been withdrawn, or

6 that all objections, you know, have been overruled -- I think

7 "withdrawn" is probably the right way to go.


9 MR. PANAGAKIS: Your Honor, while you're on this

10 page, I know you have to change the clean order, but at the

11 very top of the page, where the first sentence that -- the

12 first line that ends "or all objections having been

13 overruled," when we get to the clean order, maybe we would

14 insert right there "or withdrawn."



17 MR. PANAGAKIS: Your Honor, Paragraph 5, I probably

18 should have mentioned in the preliminary remarks. Some of

19 these contracts, we think we've actually terminated them under

20 the terms of the contract. We don't want rejection to

21 prejudice the effect of termination.

22 THE COURT: That's fine.

23 So Bibby is no longer in this schedule.

24 MR. PANAGAKIS: Right. They were never a contact

25 counterparty to begin with.



54

1 THE COURT: Okay.

2 MR. PANAGAKIS: They were a creditor who thought

3 that the rejection of a contract might affect --

4 THE COURT: You're right. Thank you.

5 MR. PANAGAKIS: -- the arrest of the vessel, which

6 could have violated the stay.

7 THE COURT: And that -- so.

8 (Laughter.)

9 THE COURT: So that was the Lewek Express --


11 THE COURT: -- which is --

12 MR. PANAGAKIS: Right --

13 THE COURT: -- here. Got it.


15 THE COURT: Does any party need any further

16 evidence, or have any objection to entry of this order?


18 THE COURT: All right. Yes, on the telephone from

19 New Orleans?

20 MR. PANAGAKIS: Right.

21 THE COURT: Mr. Mintz, is that you?

22 MR. MINTZ: (Via Telephone) Mark Mintz on behalf of

23 Bibby. I chimed in when -- just to concur with our

24 withdrawal, but I believe that's all been covered.

25 We have no objection to the proposed order with the



55

1 "withdrawn" language. Thank you.


3 And from the 601 area code, we have someone?

4 MR. MONTAGUE: (Via Telephone) This is Richard

5 Montague, I work in the Mississippi Office of Phelps Dunbar.

6 I represent the ICON Investor, LLC. And I don't have any

7 objection; however, that's a list of one that's going to be

8 rejected as of March 12th.

9 But I do have a practical question about control of

10 the vessel. And in the -- in this bit of time before the

11 committee files its objection, we were prepared to take over

12 control of the vessel, as soon as the order gets ordered

13 today. But I just want it clear that we need to wait -- or do

14 we need to wait until the committee decides, before we take

15 control of the vessel?

16 THE COURT: Well, it's my understanding that the

17 order is automatically stayed by the rules for 14 days,

18 anyway, so I don't think we're changing that fourteen-day

19 stay. But this order wouldn't entitle a counterparty to act

20 until the expiration of 14 days, I don't think. And somebody

21 can correct me on that, but ...

22 MR. MONTAGUE: But if the -- I'm wondering if the

23 rejection date being made retroactive to the 7th would change

24 that in any way, or the 12th --

25 THE COURT: Well --



56

1 MR. MONTAGUE: -- in our circumstance.

2 THE COURT: It is the order that is stayed by the

3 rules, not the contents of the order. So I don't see how that

4 would change it.

5 Now what I can ask, given the concern, is whether

6 anyone objects to shortening that to the 6th, unless an

7 objection is filed, and allowing control to change on the 6th,

8 if no objection is filed.

9 MR. PANAGAKIS: The Debtors --

10 THE COURT: So we can --

11 MR. PANAGAKIS: -- certainly --

12 THE COURT: shorten the rules.

13 MR. PANAGAKIS: -- do not have any objection to

14 that, Your Honor.

15 MR. GIBBS: The committee is fine with that, Your

16 Honor. We just want to avoid any additional costs to the

17 estate that might be incurred indirectly by them --


19 MR. GIBBS: -- not being able to take control --

20 THE COURT: Does that work for your client, if we

21 simply add that kind of a provision?

22 MR. MONTAGUE: Yes, sir. That's a very good

23 solution, Your Honor. Thank you.





57

1 THE COURT: Are you able to look on line at what

2 we're doing, or do you need me to read this to you?

3 MR. MONTAGUE: I can see it.

4 THE COURT: You can see it?

5 MR. MONTAGUE: I can see it, and it looks good.

6 THE COURT: All right. Let me ask --

7 MR. PANAGAKIS: Your Honor, if I can just ask one

8 question.


10 MR. PANAGAKIS: The order might become effective on

11 April 6th, or some other date. When it becomes effective, it

12 would still have nunc pro tunc effectiveness to the dates set

13 forth in the first paragraph? That is our principal concern.

14 MR. MONTAGUE: Agreed.



17 THE COURT: Did that solve that problem?


19 And then I don't recall. You were going to insert,

20 I believe, the word "withdrawn." I don't know if you did that

21 or not.

22 THE COURT: I think we did, yeah. Yep.


24 THE COURT: I just -- I had already saved the

25 document.



58

1 Does any party now object to this order, in any way?


3 THE COURT: All right. It is nice to be able to

4 look at that order on the screen, isn't it, and not have to

5 worry about what we've done here?


7 THE COURT: I've signed the executory contract

8 order.


10 And then I just have one last question. I know that

11 Mr. Ray's client is very eager for us to file the motion to

12 approve the framework agreement, and would like to have that

13 heard on April 13th. Should we be in a position to file a

14 motion to that effect, which I believe will be by this Friday.

15 I just wanted to ask the Court whether you'd be inclined to

16 have -- if we will submit a motion --


18 MR. PANAGAKIS: -- for shortened relief, so that it

19 can be heard on the 13th, perhaps we'd have an objection

20 deadline of the 11th of April.

21 THE COURT: So, under our complex rules, we're going

22 to go ahead and set the 13th as a complex date. That then

23 allows you to self-calendar whatever you want for that date.

24 You can include your request for emergency consideration,

25 either within the motion or in a separate motion. But we've



59

1 tried to make that a little bit easier. And then, the first

2 order of business when we get to that motion will be whether

3 parties object to consideration on an emergency basis.


5 THE COURT: So you're welcome to calendar it. As to

6 whether somebody has a legitimate objection to emergency

7 consideration, we need to wait and see what they say about it.

8 MR. PANAGAKIS: Okay. That's how we'll --

9 THE COURT: You, probably, given the shortness of

10 time, are going to have to tolerate oral objections at the

11 time to it, and not have them filed in writing in advance.

12 But if you want to seek something like that when you file it,

13 you can seek it.

14 MR. PANAGAKIS: I have no --

15 THE COURT: But I would rather give people more

16 time.

17 MR. PANAGAKIS: -- problem accommodating L&T. We'll

18 give it a shot, we'll see if it makes that more or less

19 complicated, and we'll proceed from there.

20 THE COURT: Yeah. But you won't need -- you don't

21 need approval to do that under our complex rules.


23 THE COURT: So April 13th is now one of your complex

24 days.

25 What else can we do today, either for the Debtor or



60

1 for any other party-in-interest, that would be helpful to the

2 furtherance of the case?


4 MR. PANAGAKIS: Yeah, that would be helpful if we

5 had that $21 million of funding available to us.

6 (Laughter.)


8 MR. PANAGAKIS: Yeah, thank you. Coming from our

9 lenders. Excellent.

10 THE COURT: Do we have the order?

11 MR. PANAGAKIS: It's been emailed to the case

12 manager.

13 THE COURT: Okay.


15 MR. PANAGAKIS: Yeah. And counsel for the DIP

16 lenders has confirmed that it is the correct version that

17 has --

18 THE COURT: Why don't we take this in and get it put

19 on here from Anita's computer?

20 MR. RAY: Your Honor, Hugh Ray for L&T. While we're

21 doing that, the, really, one nit that I had to the interim

22 order is that it says "all objections are overruled." To the

23 extent that the objection that we filed has anything to do

24 with the final DIP, we'd just like to carry that --

25 THE COURT: All of your objections are preserved to



61

1 the final DIP, and they're not overruled; however, the interim

2 DIP will be effective, according to its terms.

3 MR. RAY: Understood, Your Honor.



6 MR. RAY: Oh, and Your Honor, one other question.

7 My clients are in India, and should testimony be necessary, we

8 don't know if testimony is permitted by telephone or not, or

9 we should have a representative here, if necessary.

10 THE COURT: I mean, as you know, I don't normally

11 permit testimony by phone. Under the circumstances, where

12 even if your client has an objection, the Debtor is doing

13 their best to make nice to you, I suspect they're going to

14 consent to testimony by telephone.

15 MR. RAY: My concern is with -- actually, with the

16 hearing on the approval of the motion to approve the deal. If

17 my client needs to come in and testify, because Mr. Gibbs

18 objects to the deal, for instance, or the committee objects to

19 the deal, that that would be -- that was the --

20 THE COURT: Well, if the Debtor and the committee

21 consent to a telephone evidentiary presentation by your

22 client, I'm not going to raise an objection to it, and I'm

23 going to only let be the ones that can. So a third party

24 isn't going to be able to make your client come in from India.

25 MR. RAY: Thank you, Your Honor.



62

1 THE COURT: If the two of them -- if either of them

2 objects to them, my guess is they're going to have to come in

3 from India because I think they're entitled to cross-examine

4 them. I just think, given the nature of people trying to

5 preserve the relationship with your client, there may be some

6 objections here and there, but they probably aren't going to

7 be of a magnitude that somebody is going to want them to get

8 on a plane from India, but we'll see. We'll see.

9 MR. RAY: Thank you, Your Honor. You're making my

10 client feel better already.

11 THE COURT: Okay.

12 MR. RAY: Thank you.

13 THE COURT: Mr. Gibbs, am I speaking out of turn for

14 where you probably are going to be on this?

15 MR. GIBBS: When I earlier said I reserve the right

16 to tell the -- to beg the Court for more time, this is an area

17 that we really haven't gotten a chance to dig into.


19 MR. GIBBS: We accept, at face value, and have no

20 reason to disagree that the Saudi Aramco contracts are vital

21 to the reorganization prospects of this Debtor. Now Mr. Ray's

22 client is a consortium partner with the Debtor entities to

23 operate under those contracts, it's an important party.

24 I don't want to, however, mislead the Court that, to

25 the extent in the digging that we do, and the due diligence we



63

1 do in the next week, if we feel like we have to oppose the

2 motion that the Debtor is about to file, that's going to be

3 set for the 13th, we do want to reserve the right, at least,

4 to consider live cross-examination, but --

5 THE COURT: All right. But just so that you know,

6 the extent to which I will accommodate the committee, given

7 the situation that you would be in, in an emergency hearing,

8 if you need to make that decision too late for there to be

9 reasonable travel accommodations, I'll give you a lot of

10 leeway with respect to your telephonic cross-examination of

11 the witnesses.

12 And understand that there may be technological and

13 other problems getting it done, but we will find a way to try

14 and coordinate getting it done. To the extent that we have to

15 use Skype or something of that nature because you want to look

16 at people, that's fine. To the extent that you want to file

17 your exhibits of record, so that they can look at CM/ECF, at

18 the exhibits, while you're cross-examining them, I'll make

19 what accommodations we need to make. In the end, however,

20 your client has the right to live cross-examination. If they

21 want that right, they'll get that right.

22 MR. GIBBS: Thank you, Judge.


24 Is that fair to your clients, Mr. Ray?

25 MR. RAY: Absolutely, Your Honor.



64


2 We're just waiting to find that order. Let me hear

3 from -- while we're waiting on the DIP, does any other party

4 have any relief that they need from the Court today? Is there

5 any other matter we need to take up or schedule?

6 MR. PANAGAKIS: I apologize, Your Honor. I was --

7 can you repeat that question?

8 THE COURT: It wasn't to you.

9 MR. PANAGAKIS: Oh, okay.

10 THE COURT: It was to see if anybody, besides you,

11 needed anything, so.


13 (Laughter.)

14 THE COURT: Are the procedures -- while we're

15 waiting, are the procedures working out, our complex

16 procedures? Do you have any --

17 MR. PANAGAKIS: Fantastic, Your Honor.

18 THE COURT: Are they working okay?

19 MR. PANAGAKIS: Absolutely. Fantastic.

20 Speaking of procedures, Mr. Ray's question just

21 spawned a thought in my mind. On occasion, there is a

22 representative in Singapore who would be the best potential

23 declarant. Obviously, if it's something large, we'd have them

24 fly in, as well. But that has crossed our minds, as well, you

25 know: Can we have, if it's short, telephone participation of



65

1 a witness, as long as it's okay with opposing counsel; is that

2 something we'd be able to adopt?

3 THE COURT: Yeah, I'm going to do my best not to

4 raise objections for people flying in from around the world,

5 for something pretty straightforward. So, if you can reach

6 accommodations with others to get testimony by phone, we'll

7 try and accommodate it.

8 I've never done a Skype hearing. I've sort of

9 thought --

10 MR. PANAGAKIS: Could be a first.

11 THE COURT: -- about doing a Skype hearing -- what's

12 that?

13 MR. PANAGAKIS: We could do -- we could have it as a

14 first.

15 THE COURT: That's right. Have you done a Skype

16 hearing before?

17 MR. PANAGAKIS: I have not.

18 THE COURT: So we probably want to get that tested

19 because, for all I know, my system blocks Skype; I don't know.

20 So I wouldn't count in it working.

21 MR. PANAGAKIS: We'll call you from Singapore

22 THE COURT: That's right.

23 MR. PANAGAKIS: And we'll see --

24 MR. RAY: Your Honor, in a case I had before Judge

25 Hale, he was able to utilize the judicial resources to have a



66

1 person appear telephonically from eight time zones away, using

2 the -- either the consul or the United States Court System,

3 which allows a witness to appear on United States Government

4 grounds, in the United States, but provide video testimony,

5 and he took testimony in that case.

6 THE COURT: And I -- that's fine with me. I would

7 prefer, again, to avoid having people going to an embassy and

8 bothering an embassy officer, if we can find ways to do this

9 in a more straightforward way, so -- but, obviously, if that

10 is a better way for the parties to do it, and they can get --

11 I assume this is an embassy where they appeared -- some sort

12 of embassy cooperation, it's fine.

13 MR. RAY: Thank you, Your Honor.

14 THE COURT: I'm not sure what's happened to your

15 order. Does that work?




19 MR. PANAGAKIS: Your Honor, if we could do it on our

20 end, then tracked changes would be the preferred red-line

21 form, and then you could accept and reject, and not have to

22 swap back and forth between two orders, going forward.

23 THE COURT: That's fine. People on the phone will

24 not be able to see it --




67

1 THE COURT: -- if you do it on --

2 MR. PANAGAKIS: What would Your Honor's preference

3 be, that -- what we've been doing now or with tracked changes?

4 THE COURT: Why don't we just open it up and see

5 what we get. Is this going to be the right order here?

6 MR. WINERMAN: It is. Your Honor, Justin Winerman

7 on behalf of the Debtors. I believe the first one on your

8 screen is going to be similar to the orders you've been going

9 through. The second one should be tracked changes that you

10 could accept. And then the third one is the clean order.

11 THE COURT: So -- but this is the order that you're

12 asking us to approve.

13 MR. PANAGAKIS: They're all the same --

14 MR. WINERMAN: They're all --

15 MR. PANAGAKIS: -- in three --

16 MR. WINERMAN: -- the same --

17 MR. PANAGAKIS: -- different forms.

18 MR. WINERMAN: -- just two red-lines and a clean.

19 THE COURT: Oh, and this is one where I can accept

20 or reject the red-lines.


22 THE COURT: Oh, good. Well, that's -- that would be

23 the best of all the worlds.


25 THE COURT: So most of these look like changes, like



68

1 you said, that were carried over from what we saw earlier

2 today that got filed.

3 MR. PANAGAKIS: They are really minimal changes,

4 Your Honor, other than the dates, the amount of the DIP, and

5 noticing provisions.

6 THE COURT: Do we still have the wrong order?

7 MR. KAMPFNER: I think this is still not the right

8 order.

9 THE COURT: Okay.

10 MR. KAMPFNER: Oh, no. This is fine. Go ahead. I

11 apologize.



14 THE COURT: I'm sorry. What's 364(e)?

15 MR. KAMPFNER: Good faith and no reversal on appeal.

16 And the idea, Your Honor, is that, to the extent we extend

17 credit, it's there, and it's under the terms of this order,

18 they can make whatever objection they want at the final

19 hearing, but it doesn't affect the borrowing that is made

20 under this order.

21 MR. SCHARTZ: Your Honor, Brian Schartz. If I may?

22 THE COURT: Yes, sir. Go ahead.

23 MR. SCHARTZ: Brian Schartz, for the record, on

24 behalf of the Norwegian Trustee.

25 I apologize, my browser collapsed and I can't see --



69

1 I could see earlier, but I can't see now. But I did hear the

2 question about 364(e). Is that correct?

3 THE COURT: Yes.

4 MR. SCHARTZ: Yeah. So it -- we were okay with that

5 carveout in the provision of Paragraph 18(b) of the proposed

6 second interim order. We think it's a reasonable ask, and you

7 know, we talked to our client about it, and ultimately, we

8 were okay with that, if that was the question. I just wanted

9 to make sure that, you know, you know that we're okay with

10 that.


12 Are you able to look at the order at this point?

13 MR. SCHARTZ: I'm trying to. I'm actually on a Mac.

14 THE COURT: Oh.

15 MR. SCHARTZ: And it's not working with Safari,

16 unfortunately.

17 THE COURT: Yeah, you -- I think, on a Mac, you have

18 to download -- well, if it's on an iPad, you'd have to

19 download an app to look at it, so --

20 MR. SCHARTZ: Yeah.

21 THE COURT: -- you can't just go to the website.

22 MR. SCHARTZ: And I switched computers halfway

23 through this, so I'm not --

24 THE COURT: Okay.

25 MR. SCHARTZ: -- near my --



70

1 THE COURT: I think Ms. Rotman is here, and she can

2 see that we're not doing too much to you.

3 MS. ROTMAN: That's right.

4 MR. SCHARTZ: Yeah. Also, I've got -- we, you know

5 -- I've got faith in the folks that are there in the

6 courtroom, that they're not going to do anything untoward, so

7 --


9 MR. SCHARTZ: -- that's okay. Thank you, though.

10 MR. PANAGAKIS: Brian, we simply added "objection is

11 overruled," but ...

12 (Laughter.)

13 MR. SCHARTZ: And that's what I get for calling into

14 the hearing from New York.

15 (Laughter.)

16 THE COURT: Anybody object to an April 10th deadline

17 for objections? It leaves you all three days to deal with it.

18 MR. PANAGAKIS: That's fine, Your Honor.


20 THE COURT: Mr. Ray, I think that's what I promised

21 you.

22 MR. RAY: Yes, Your Honor. Thank you.

23 THE COURT: Okay. I'm not certain if I've properly

24 allowed anyone that wished to speak to speak. If anyone else

25 needs to address the Court, you would press five-star.



71

1 Okay. Are there any objections to this form of

2 order?


4 THE COURT: Are there any attachments to this?

5 MR. WINERMAN: We attached the budget, it's in the

6 exhibit flash drive.


8 THE COURT: So which flash drive do I want then?

9 MR. WINERMAN: It's -- there's a separate exhibits

10 flash drive, I believe.


12 MR. WINERMAN: It probably came in the ...



15 MR. PANAGAKIS: I do have a hard copy of the

16 exhibit.

17 THE COURT: Oh, is it double-sided?

18 MR. PANAGAKIS: It's only one page.

19 THE COURT: That's the only exhibit?


21 MR. WINERMAN: Yes.

22 THE COURT: That's great. I've somehow lost my --

23 is it Exhibit 1 or Exhibit A, does anybody know?

24 MR. WINERMAN: Exhibit A.

25 MR. PANAGAKIS: A.



72

1 THE COURT: A. Thank you.

2 All right. I've signed the cash collateral order --

3 MR. PANAGAKIS: So going forward --

4 THE COURT: -- excuse me -- the DIP order.

5 MR. PANAGAKIS: -- track changes will clean up the

6 extra page -- you know, the formatting, so that they're ready

7 to accept the changes, and you can enter the order. That

8 would be Your Honor's preference?

9 THE COURT: Yeah, I mean, I --

10 MR. PANAGAKIS: Just -- okay.

11 THE COURT: I don't want to be terribly picky about

12 all of this, but --

13 MR. PANAGAKIS: It doesn't matter to us. It -- you

14 --

15 THE COURT: It just -- it looks, to me, a whole lot

16 easier for everybody if we did it that way.

17 MR. PANAGAKIS: Okay. That's what we'll do.

18 THE COURT: There's a typo on the first page of

19 this, I'm going to fix it real quick.


21 THE COURT: Yeah. I think I'm really going to make

22 a mistake if I make my desire to have technology harder on

23 people, rather than easier --

24 MR. PANAGAKIS: I think I --

25 THE COURT: -- because the whole idea is to make



73

1 this easier, so.

2 MR. PANAGAKIS: -- speak for many of us. We're

3 pretty impressed with your ability to maneuver through these

4 documents.

5 (Laughter.)

6 THE COURT: Well, I'm mainly hoping it works, so it

7 makes everybody's life more efficient because, if I send you

8 back to go renegotiate this, it will take another eight hours,

9 so.

10 MR. PANAGAKIS: True.

11 (Laughter.)

12 THE COURT: Okay. We'll get that entered today.

13 What else can we do?

14 MR. PANAGAKIS: That's it, Your Honor. We'll see

15 you on April 13th.

16 THE COURT: See you then. Thank you.

17 COUNSEL: Thank you, Judge. Thank you, Your Honor.

18 Thank you, Your Honor. Thank you.

19 THE COURT OFFICER: All rise.

20 (Proceedings concluded at 4:11 p.m.)

21 * * * * *

I certify that the foregoing is a correct transcriptto the best of my ability produced from the electronic soundrecording of the proceedings in the above-entitled matter. /S./ MARY D. HENRY CERTIFIED BY THE AMERICAN ASSOCIATION OF ELECTRONIC REPORTERS AND TRANSCRIBERS, CET**D-337 JUDICIAL TRANSCRIBERS OF TEXAS, LLCJTT TRANSCRIPT #56632 DATE: APRIL 3, 2017



Date post:	14-Feb-2022
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

IN THE UNITED STATES BANKRUPTCY COURT IN RE: § CASE NO. …

Documents