23andme-june-3-2025

23andme-june-3-2025

I'm going to begin with our 130
matters, please.
23 in the holding co at all.
Francis in the courtroom.
Good afternoon, Your Honor.
Tom Riskin, Nathan Wallace,
the Army, and the panel as co counsel for the debtors.
Good afternoon, Your Honor.
Christopher Hawking.
Paul Weissriff, and Warden Garrison.
It's co counsel to the debtors.
I'm here with my colleague, Max Siegel, and Jeffrey Rucker.
There you go.
My name is Riff, and I look to you.
I propose co counsel to the committee.
Good afternoon, Your Honor.
Jason Adams, Kelly Dryan Warren,
proposed co counsel to the official committee of unsecured creditors.
With the important today is Megan McLaughlin.
And on the WebEx today is Eric Wilson.
We also have Andrew Scruton, and Matthew Diaz, from FTI Consulting,
proposed counsel for the official committee of unsecured creditors.
Also on the WebEx to be taken to honor.
Has any questions with respect to your attention?
Very good.
Thank you.
Your Kelvin Law下來.
Good afternoon, Your Honor.

David.
Unter Gebbaum,
icted on behalf of the police Lee.
We have to raise your permits based on the government Prosec′s annals.
We have to make arrangements for tonight.
We will soon conduct instructions and we can request questions
for the police.
Josh Lott's hour on behalf of the U.S. Trustee.
Good afternoon.
Good afternoon, Mr. Lott's hour.
Good afternoon, Your Honor.
Michael Castle,
walked out, left in resident cats for a general pharmaceuticals,
and cast this successful petr.
I'm here with Ben Struby of Lott's RPM.
I'm sorry.
I'm here with Ben Struby of Lott's RPM.
Castle, sorry.
My pins as they tend to do are all out of ink at the same time.
Yes, Mike Castle.
Yes, Mike Castle.
Thank you.
Thank you, Mr. Castle.
Good afternoon, Your Honor.
Joshua Jones, the United States of America.
Good afternoon.
Any other Pances in the courtroom?
All right, the Pances on the WebEx.
Good afternoon, Your Honor.
Sandra Jones, the chair of the petr.
Hello, Steve.
I'm with me on the WebEx today.
It is Mike Lott's.
Good afternoon.
My name is Sarah.
Do you have a memory of your long legs?
That's a long time.
Good afternoon, Your Honor.
Good afternoon, Your Honor.
A rabbit-hersch, a horned rose,
I am my son.
My dad is one of my camera.
I have a six-second aspect.
But yeah.
If you're enjoying the Capul with the flag.
Very good.
Good afternoon, Your Honor.
My name is Kevin Barnes.
I'm a class-a-chair holder.
My best friends.
Good afternoon, Your Honor.
Charles, the seat-o-class-a-chair holder.
Welcome back, Mr. Barnes.
Good afternoon.
Your Honor.
Charles, the seat-o-class-a-chair holder.
Good afternoon, Your Honor.
This is Abigail Ryan with the National Association of Attorney General,
representing the bank client states to which Oklahoma and South Dakota
are joining.
So a little larger now.
So those are your new clients, Oklahoma South Dakota?
Yes, Your Honor.
I'm going to update and add South Dakota this afternoon.
Okay.
Very good.
Thank you.
Good afternoon.
Thank you.
Good afternoon.
Good afternoon, Your Honor.
Good afternoon.
Thank you.
Good afternoon.
Good afternoon.
Good afternoon, Your Honor.
Good afternoon.

Good afternoon, Your Honor.

Good afternoon, Your Honor.

Good afternoon.
Good afternoon, Your Honor.
Good afternoon.
Good afternoon, Your Honor.
Good afternoon.

Good afternoon.
Good afternoon.
Good afternoon.

Good afternoon, Your Honor.
Good afternoon, Your Honor.
Good afternoon, Your Honor.
This is Dallila Jordan and with the state of Minnesota,
representing the people of Minnesota.
ался Jordan,
you're not going to review the data.
All right.

move your Honor.
Umbriski,
put the letters.
As you're on to wish,

I asked Mr Hopper.
Given updates,
giving up,
as the case stands and some of the coming attractions,
it's okay with the court.
As the court knows,
we agreed to push a number of matters tomorrow,
and I think as part of those accommodations,
we were green,
not really raise any of those issues today.
Is that satisfactory to the court?
That seems like a good idea.
We could get sidetracked if we all decide we need to argue today
about what we're going to argue about tomorrow.
So I think that's probably a good plan.
Thank you, Your Honor.
So as you're under those,
we filed a proposed agenda.
I noticed from the court's stockate,
Your Honor already took off the motion of reject,
as Your Honor knows.
It can take that matter up.
We filed a stipulation in his Jones,
and Mr. Gregoran,
it contemplates setting a rejection date,
contemplation of their administrative expense claim
and payment,
the offsetting of the security deposit,
and some additional language
in there just clarifying the removal issue,
the perspective of your ways.
But the long and short is that issue has been resolved,
the parties have negotiated in a good faith.
We believe the settlement is in the best interest of the estate.
So we've submitted that to your honor.
So I just want to touch on that.
I have the committee in the different end to review that as well.
The general terms of the settlement.
To be honest,
given the time constraints yesterday,
I know that's why we went ahead and filed it,
just so the parties could see it.
But I'm happy to talk to them after figuring today.
And talk to them about in comments before.
Sure.
If you give Mr. Spidal report about where that stands
with key parties,
and then we'll take a closer look.
And if there are any disputes,
we'll get them resolved, of course.
Perfect.
Thank you, Governor.
With that,
would the court be okay if we took up some of the retention matters
and then say the,
the stay matter is still the end.
I think that would make sense.
Sure.
Perfect, Governor.
Well, up next is the,
the debtor's application to retain Deloitte.
As your owners aware,
there was a separate OCP application for Deloitte
to protect some of their services.
But the services contemplated by this
are more in tune with actual retention and pre-30 review.
We haven't received any formal objections.
The U.S. trustee did have some informal questions
at right after we filed it.
We walked through those with them.
So I do not believe there are any informal
or formal objections to the application to do that
so that it would be granular.
Okay, a question for you, Mr. Risky.
The indemnification provisions seem a little broader than normal.
And the proposed or at least the last one I looked at
didn't have the usual three paragraphs that sort of bring that back
to Earth.
Is that one of the comments you received from the OCP?
It actually was not your honor,
but I'm happy to.
Now that you've highlighted that issue,
go back and see if that needs to be rained in.
No, no party has said that that's a.
Point that you need to die on the expected democation.
I think that might have been a pullover from another another one
before that guy was fine.
Sure.
I think the way we handled the mollus order of paragraph 12
is standard and ought to be acceptable to everyone.
So first let me find out if anybody else wishes to be heard
on the delayed retention.
Apparently not.
All right.
So I'll grant the application.
But subject to the usual language as in the mollus order,
for example,
and if that's an issue,
let's reset it and we'll sort it out.
But I suspect it won't be perfect.
And if you'd submit an order, please.
Thank you.
I believe that the next retention and applications are those
of the committee side that see the podium.
Very good.
Good afternoon, your honor.
Megan McLaughlin,
Dr. Kelly Dryan Warren,
counsel to the committee.
On May 5th,
Stinson, Kelly Dry and FTI,
all filed their retention applications at Dr.
numbers,
383,
384,
385, respectively.
On the same date,
we filed a notice of hearing advising all parties
the May 27th objection deadline end of today's hearing.
The applications were served on the master service list.
The certificate of service was filed at Dr.
number 397.
The committee professionals did not receive any formal
or informal objections or applications.
I understand that the orders have been submitted
to your chambers already.
We're happy to resubmit if needed,
but we request entry of those orders.
Okay, let's take them one at a time,
just in case someone wants to be heard.
The Stinson application,
anybody wish to be heard in the Stinson application?
Okay, not.
I've reviewed it.
Here's to be an order.
First, I'll grant that application,
and no need to resubmit if there's an issue
with the order that we have.
We will be in touch.
How about the Kelly Dry application?
Anyone wish to be heard on the Kelly Dry application?
All right, Ms. McLaughlin,
the only question I had there is the associate
who owns a couple of shares of stock.
If that were a partner,
I would say maybe the partnership donated to charity.
Since it's an associate,
how about we implement a formal wall
as you would with a lawyer
who comes over from another firm
or government service or something like that?
I think that will take care.
It's obviously a minimum issue.
And as you mentioned,
the associate is not going to work on the matter.
Correct.
So with that,
with that change,
I'll grant the application.
Okay.
And I'll ask you to resubmit orders,
so you can describe your formal walling procedure
using the correct terminology.
And we'll look at that.
Thank you, Your Honor.
All right.
How about the FTI application?
385.
Anyone wish to be heard?
All right.
I read that one as well.
The indemnification protocols there do seem to be standard to me.
So I think we need further tweaking there.
And I'll grant the FTI application.
And we'll run with the order that you submitted.
Thank you, Your Honor.
Thank you.
Next, do we have Wilmer Hale?
Yes.
Good afternoon, Your Honor.
And you called me again from Wilmer Hale.
And I'm joined in the virtual court room
by my partner, Kirk Nora,
in Washington, D.C.
We're on a refiled our application to serve those counsels
to Neil Richards,
their consumer privacy on budget and back on May 13th,
a cognizant of this situation in order
which appointed Mr. Richards.
We styled this as a 327 application,
and obviously went through the standard
that one would go through with respect to disclosure,
parties in interest,
conflicts check, and the like.
We received no objection
from anyone formerly or informally on the application.
My declaration is attached to the application,
explaining the procedures that the firm went through
in terms of clearing conflicts and confirming
for this court that we are disinterested
and hold no interest at birth.
We did file a short supplement just
to disclose that Ryan Dury,
who is going to work with Mr. Richards
and assistant in Mr. Richards' tasks,
at one point,
because he worked for Amazon,
held some Amazon shares,
and was also a consumer himself.
That supplemental declaration was filed on May 30th.
Again, your honor, we received no objections of having to walk
the court through the application.
If your honor has any questions or concerns,
but again, no objections for file.
Nobody is reached out to us,
asking us any questions with respect to our application.
All right.
Thank you, Mr. Goldman.
The certificate of service shows
that the application was served on May 29th.
So, aren't we a little,
a little tight on timing here?
I just want to ask you a little bit.
Yeah, well,
you're out on a tumble risky for the debtors.
I think there was some confusion
by the parties with respect to this.
We agreed to file it on behalf of them
to move this press forward,
but I think there was some miscommunication
with roll on serving that immediately.
I don't know if there's a workaround
to have it go on negative notice
that's longer to satisfy any notice concerns
the court may have,
but I think that's why it was served
last week formally.
The reason for the delay.
Negative notice is a creative solution.
I don't have in front of me the actual language
of what went out.
If it would tell someone to object
by a certain time,
I could probably get my head around negative notice.
If not,
if not, it may file it.
Send it, you want to send a supplemental notice?
Yes.
Okay, well,
the CPO should have counsel.
Why don't you do that?
Why don't you send negative notice
giving 14 days from whenever that is
for anyone to object to the one with hail application
and failing receipt or filing of the objection
to submit an order on that?
I do want to also talk at the same time
about Mr. Dury.
I don't understand from the application
who Mr. Dury is or whether he has any connection
with warmer hail.
I'm not saying Mr. Dury
shouldn't work for the CPO,
but I didn't get the sense that he's a lawyer
with warmer hail,
and so I wasn't sure.
Oh, no, no, no.
You honor it.
Yeah, first of all,
I apologize.
This is...
I would respect for the notice question, Your Honor.
This is the first that I am hearing
of any of this with respect to any delay
or close service.
We had thought that this was served
on May 13th when it was filed with the court
for any confusion.
I apologize.
I'm as surprised
by hearing this as anyone.
Beyond that, though,
your Honor, with respect to that question,
no, Mr. Dury is not a warmer hail lawyer.
He is somebody who Mr. Richards knows well.
He's the Director of AI Initiatives
at Washington University,
Taylor School of Law,
and I believe
although Mr. Richards is on,
if the court wants to ask him directly,
but I believe that
in Mr. Richards' preparation
of his reports to the court
and the work that he is going to do,
he is going to utilize Mr. Dury services
as necessary,
and it is for that reason,
and I wanted to make sure
that there was supplemental disclosure,
both of Mr. Dury,
which we did disclose,
and Mr. Dury's very,
if he will,
can he with parties
in interest contacts
with respect to Amazon,
and the former
and health lawyer
and small shareholder, et cetera?
I don't know if the answer
is the court's question
in full or not?
That's helpful.
I think Mr. Dury probably needs
his own application.
I assume he's a professional person.
And I think he ought to,
or the CPO ought to apply
on his behalf to retain him
as a professional person.
So, primarily Mr. Goldman,
because your declaration
about Mr. Dury is probably missing
a little foundation,
because he doesn't even work for you.
And so, why don't we,
subject to the negative notice issue
of Grant the Wilmer Hale application,
but let's carve Mr. Dury out
into his own application.
I'm not anticipating
there will be any problem
with that,
but I'll take up any objections
as they are,
and we'll deal with that,
and it won't impair the timing
of his attention
or his ability to charge
for his time,
beginning from the outset
of his engagement.
That's fine.
I know.
Well, one of the health keeping
better your honor,
and I'm happy to file a second
supplemental application
if your honor would like.
We obviously, Grant,
are exhaustive conflicts,
check-off the parties
in interest, which we were provided
at the time.
The parties in interest was
recirculated.
Mr. Richards obviously wasn't
on the list,
because he wasn't there
at the inception of people.
And so,
we did not disclose,
and we've just learned,
embarrassingly,
from me since I've been a partner
at the firm for about 24 and a half years,
but from 2002 to 2003,
Mr. Richards,
was affiliated with the firm,
I believe, and associate,
and one of our offices,
obviously,
did well in my world.
But don't really intersect
in any way until now.
But I did want to disclose
that to the court,
obviously,
that he left the firm
22 years ago.
But I did want to disclose
that to the firm.
If your honor wishes,
I'm happy to file
a second supplemental declaration
unless the record can stand
as such with respect
to this declaration.
And my comments on the record
can stand as such
with respect to this declaration,
and my comments on the record.
That is a life at a large law firm.
So,
without leaking into tomorrow's
subject matter,
there is a supplemental declaration
from Paul Weiss
about the bidders.
I don't believe we've seen
supplemental declarations
from the other professionals
who are interacting
with the bidders
about any connections
with the bidders.
And that,
so Wilmer Hale may be due
to file something
of that nature anyway,
Mr. Goldman.
And if so,
go ahead and put the one
liner in there about the
about Professor Richard
affiliation with the firm
in the past,
and that will take care of that.
But I,
I will take this up again tomorrow
as necessary.
But I do think the other
professionals who have been
involved in the sale process
ought to get supplemental
declarations on file
and sealed in this appropriate
based on the order of the
last week.
Okay, so we'll look for,
we'll look for an order following
a negative notice period
on Wilmer Hale
and the separate application
for Mr. Dirk.
Thank you.
Thank you,
Aaron.
I believe that brings us
to the state motion,
and Segal will be presenting
it for the debt.
Very good.
Mr. Segal,

to begin with?
Thank you, Aaron.
I believe that brings us
to the state motion,
and Segal will be presenting
it for the debt.
Very good.
Mr. Segal,
shall we start with the motion
to expedite?
Happy to, Your Honor.
We've sought to expedite this
motion because there is an
impending hearing in the Canadian
class actions that are the
subject of our substantive
stay motion,
that during a schedule to occur
on June 16th,
and despite the debtor's best
efforts in Canada,
responses have thus far
refused to agree to an
adjournment of that hearing,
and thus in order to avoid
all of the prejudice and harm
to the debtors that
would come from further
proceedings.
In the Canadian case,
we request that the court
expedite this matter.
All right.
Does anyone wish to be heard
in the motion to expedite?
In your honor,
I'm sitting with the lawyer on behalf
of the Canadian plaintiff.
I just,
with notes for your record that
I do not necessarily agree
with my friend's
characterization of the events,
but we have no
objection to the motion to expedite.
Thank you.
Okay.
Thank you.
Anyone else?
All right.
I'll grant the motion to
expedite.
Let's proceed to the mirror.
Thank you, Your Honor.
The present motion seeks an
order confirming that the
automatic stay applies to two
Canadian
cutative class actions,
including as to certain
non debtor dependence.
These class actions arise
from the October
2023 cyber security
incidents that this court has
heard much about in the
course of these chapter 11
cases.
In the alternative,
the motion asks that the court
extends the automatic stay.
And it also seeks an
injunction against continuation
of the Canadian cutative class
actions during these
chapter 11 cases.
A Canadian court has already
granted recognition of these
chapter 11 cases.
And thus is prepared to give
effect to any order that this
court issues with respect to a
stay of the class
actions.
First, I'd like to deal with
some housekeeping evidentiary
matters.
As an initial matter,
we'd like to admit the
declaration of married
pottery in support of the
motion at docket number 434.
Ms. Pottery is
counsel to the debtors and
the individual defendants in
the Canadian class actions.
And her declaration describes
the proceedings thus far in
those cases.
She's available on Zoom.
Should the court have any
questions for her?
But we understand the
respondents do not intend
to any cross examination.
Okay.
Any objection to recede
the battery declaration
in evidence?
No objection.
Thank you.
Okay.
I'll receive it 434 is
in evidence.
And just for clarification,
Your Honor, we'd also
move to admit the exhibits to
that declaration, which are
all public records of
Canadian court proceedings,
including the complaints in
the two punitive class actions
and anonymization order in
those cases and a proposed
amended complaint.
We would offer those into
evidence as well.
Any objection?
No objection, Your Honor.
Okay.
Thank you.
Third minute.
Next.
We'd move to admit exhibits
A, B, and C to the
Seagull declaration filed at
docket number 435.
Those documents consist of
certificates of
incorporation for the debtors
23 and me folding co
and 23 and me ink.
And their public records
that have been filed with
the Delaware Secretary of
State, we would request that
the court admit those as well.
You said A, B, and C, but not
D.
D is a red line comparison of
exhibits A and D to the
buttery declaration.
So we think it's better considered
as an illustrative aid rather
than an actual item to be
admitted into evidence.
Okay.
Fair point.
All right.
Any objection to the receipt of
exhibits A, B, and C to the
bill?
Okay.
Okay.
We have been admitted as well.
Thank you.
On the substance, your honor.
This motion concerns two Canadian
class actions arising out of
this cyber security incident of
October.
2023, which has been the
subject of many proceedings in
this court.
Respondents filed the first
class action in October.

On October, 2023, bringing
contractual, statutory, and
tort claims solely against the
debtors.
The claims focus on what
responds in
select were deficient data privacy
and security practices at 23
and me.
Then nearly one year later in
September, 2024,
respondents sought to add additional
defendants to the complaint
against the debtors.
Namely, these are certain
officers, directors,
and employees of 23 and me, as
well as KPMG, who was then the
debtors'
bugger.
Instead of obtaining leave to
amend, though, respondents filed
a duplicate class action.
They again sued the debtors on
largely identical claims to the
first class action, and based
their claims entirely on the same
contract as before.
The only difference is that they
now tacked on these additional
defendants, calling them at least
three times throughout the complaint,
co-principles, and or
co-conspirators.
That's in exhibit C to the
buttery declaration, paragraph
6, 9, and 47.
This second complaint does not bring
a single claim against the
non-debt or defendants that is not
also alleged against the debtors,
and doesn't differentiate between
the debtors and non-debtors in any
way in the non-debt or claims.
There are some claims in the
complaints that are just claims
against the debtors, but there
are no claims that are just
against the non-debt or defendants.
I'm glad to walk your honor through
the causes of the
causes of action in the complaint
helpful.
I've reviewed it.
Thank you.
I appreciate that.
The face of the complaints thus
in no way reveals any sort of
claim against the non-debt or
defendants.
That's not also a claim against
the debtors.
The proposed amended complaint,
which is a exhibit deed to the
buttery declaration, is even
worse in this regard.
It leads five causes of action,
and each one of those is against
quote each of the defendants.
Unlike the plaintiffs in the
many other class actions arising
from the cyber security
incident, respondents here have
refused to pursue their claims
in these chapter 11 cases,
or to utilize the procedures
that have been extensively
negotiated and discussed for
resolving claims arising out of
the cyber security incident.
And while it appears that
respondents agree that the
automatic stay applies to their
claims against the debtors,
they're continuing what amounts to
proxy litigation against the
debtors by bringing claims against
the debtors, former directors,
officers, and employees,
as well as KPMG.
And that's because the claims
asserted against the non-debtors
are the same as the claims asserted
against the debtors are based
entirely on the debtors alleged
wrongdoing in the cyber security
incident, and would result in
recovery from the debtors
because of indemnification
obligations that the debtors
have repeatedly have.
In fact, the cases are already
taxing estate resources
because the debtors are required
to indemnify the individual
defendants, not just for any
judgment, but also for their legal
fees.
So Mr. Siegel, the response
mentions that insurance is
defending the litigation.
And I didn't see a rebuttal
to that in your reply.
So is the estate coming out of
pocket for defense costs right
now, or is it a insurance
company?
At the moment, the
estate is out of pocket for
those.
There is insurance that is
applicable with a retention
that may be waived in the case
of bankruptcy, but ultimately,
the estate, the end of the day,
stands liable based on its
indemnification obligations.
So is there a denial of
coverage or dispute about
coverage, or is it just you
haven't reached the retention
level?
My understanding is the
ladder.
Okay.
Thank you.
Now, respondents have not
been able to identify a single
case where litigation has been
allowed to proceed under the
circumstances I just described.
In fact, they don't cite a single
U.S. case in their briefing.
They don't cite a single
case in their briefing.
They don't cite a single case
in their briefing.
By contrast, other similarly
situated plaintiffs who have
asserted claims against the
debtors and non debtors in
analogous circumstances have
reasonably consented to stay
their cases, including
against the non debtors.
Your honors familiar, for
example, with the pixel
litigation that is pending against.
Well, I know that it exists,
but that's in.
I don't even know why it's
called pixel.
It's a class action that's not
based on the cyber security
incident.
It's based on certain
tracking pixels as they're
termed on a website operated
by lemonade.
But as relevant today, one of
the defendants in that case is
a non debtor.
And shortly after a
suggestion of bankruptcy was
filed, the district court in the
northern district of California
asked whether the stay applied
to the non debtor defendant
and plaintiffs in that case came
to an agreement in a stipulation
with the debtors that applied
the automatic stay to the
non debtors.
That's available on the
docket at ECF number 216.
But respondents, the Canadian
plaintiffs have refused to agree
to any sort of stay or stipulation
with respect to the non debtor
defendants here, which
plainly is an effort to evade
this court's jurisdiction and
the orderly resolution of
data breach claims that the
parties and the court have sought
to establish in these cases.
The court should grant the
motion for three fundamental
reasons.
First, as noted, the claims
against the non debtor
additional defendants in the
Canadian proceedings are
applicable to the claims against
the debtors and arise from the
debtor's alleged misconduct in
the cyber security incident.
In essence, the complaint says
the debtors did something wrong
and certain additional defendants
are liable because of it.
This means that resolution of
those claims based on the
debtor's alleged wrongdoing
without the debtor's participation
would be highly prejudicial to
the debtors.
Second, the individual
of the non debtor defendants
have an undisputed right to
indemnification for claims
against them, which means that
at the end of the day, the
debtors are the ones on the
hook for any judgment in the
Canadian class actions as well
as illegal fees.
And courts routinely apply the
automatic stay to non debtors
in such circumstances.
Third, the continuation of the
Canadian class actions,
which means that additional
defendants would disturb
these chapter 11 cases where the
debtors are presently resolving
their other liabilities
stemming from the data breach
incident.
By contrast, applying the stay
threatens no prejudice to
respondents who would face at most
a slight delay while these chapter
11 cases are resolved.
The only arguments that
respondents have presented to
me is that there is some hidden
distinct liability theory
as to the non debtor defendants,
but that's simply contrary
to the face of the complaint.
As I've mentioned to your honor,
every cause of action against the
non debtors is also a
cause of action against the debtors.
The complaint states that it
quote arises out of two main
allegations, which are that,
quote, the 23-and-me
defendants did not
introduce implement and-or
maintain proper data retention
practices and, quote,
the 23-and-me defendants
did not introduce
implement and-or maintain proper
data protection measures and-or
practices.
That's a paragraph eight of
exhibit C to the
pottery declaration.
So simply, the suggestion that
there is some sort of distinct
liability theory is contrary
to the fact that this is a
case of the comment that
you just mentioned.
And the report says the debtors
did something wrong and the
non debtors are
liable for it.
At the end of the day, the
claims against the non debtors
are the same claims as those
against the debtors are based on
the same conduct as the debtors
and ultimately seek the same
source of recovery,
which is the debtors.
I do have a few questions for you.
Personal jurisdiction,
the Canadian plaintiffs,
at least in their declaration,
have made what I'm interpreting
as a special appearance.
They're not acknowledging that
this court has personal jurisdiction
open them.
Tell me your thoughts on that.
There are a couple of answers to that,
Your Honor. First, as you mentioned,
this is kind of a throwaway
statement in Mr.
Mark's declaration,
and there's no argument in the
motion whatsoever that there's a
lack of personal jurisdiction.
Typically, a party entering a special
appearance would be required to
contest personal jurisdiction
in their first filing,
which did not happen in these
motions, nor in the stipulation
that responds and
previously agreed to,
signed and filed before this court.
We also attempted to resolve
personal issues by agreement
to proceed by motion,
and therefore via an
in-ram proceeding in this court,
as to the scope of the automatic
stay, rather than
any sort of in-personam
adversary proceeding against
the respondents.
And I'm happy to speak to the
minimum contacts that
respondents have with the
United States,
if that would be helpful.
But as noted, the Canadian
court has recognized these
proceedings, and stands
ready to give effect to
this court's determination
as to the automatic stay.
In other words, this court could make
a finding about the scope of the stay
and a Canadian court can then tell
the trial court in Canada
the proceedings have been stayed.
So I see your point about that
aspect of the motion being
more or less in-ram.
I don't know if that's the right
way, but if I need to extend
the automatic stay to reach the
plaintiffs, aren't we in the world
of in-personam at that point?
Don't I need personal jurisdiction
over these two plaintiffs
and or their council to extend
the automatic stay to reach them?
First, our council has
appeared,
Proha Vichet in this court
at this stage,
and determining the
scope of the stay
would be
a matter within
this court's
jurisdiction
as to whether
any further relief
would require in-personam
jurisdiction, I think
it's helpful to take a look
at exactly what
respondents have done here.
Let's talk about minimum context.
So,
as an initial matter,
respondents
purportedly chose to do business
with a US company
by
purportedly entering contracts
with using the products
of 23 and me,
which is a US-based entity,
and thus they availed themselves
to the privilege of doing business
in the United States.
In connection with that,
saliva collection kits
from a US company
collected saliva
sent it back to the United States
for it to be processed
by a US company
at a laboratory
in the United States
and ultimately
a return to them
in Canada.
On top of that,
the
respondents have initiated a lawsuit
in the United States
in the United States
in the United States.
They have also
recently filed a proposed
amended complaint
in that lawsuit.
By doing so,
during this bankruptcy case,
I'm happy to
provide
a case law to this court
out of the eighth circuit
that says that
we are
during the existence
of a stay
constitutes minimum
context and brings
the respondents
within this court's personal
jurisdiction.
I haven't seen that.
I'm not familiar with that
specific case law.
I don't know if you have it handy
or if you have access
to it when it's applied
in the United States.
Yes, that's
I believe that is cited
in the adversary complaint
that we initially filed,
but I'm happy to
find that and present it
on or bought all.
That would be helpful.

I appreciate that.
Even short of that,
we'd submit that
doing business
in the United States
is taking about a very
specific kind of
specific jurisdiction
or a very specific
aspect of specific jurisdiction.
I have personal jurisdiction
over these plaintiffs
as to the scope of this lawsuit
and we don't need to think about
whether I would have personal
jurisdiction to
handle a breach of contract claim
against them or
something much further
in the United States.
I think that's
the case.
I think there are
sufficient minimum
contacts to
exercise specific personal
jurisdiction
regarding
respondent dealings
with 23 and me,
which they state
form the basis of the claims
in this action.
I think there are
no Canadian class actions
without
the exact business transactions.
I just described.
I don't think the court needs to go
farther than that in determining
the extent of jurisdiction.
Okay, that's helpful.
Yeah.
Okay, well, we'll give you a
chance, Mr. NewMitalotti,
after everyone through some
questions.

We'll give you a
couple of questions.
We'll give you a couple of
questions.
We'll give you a couple of
questions.
We'll give you a couple of
questions.
So, what
if I grant an
interpretation of the state
or preliminary injunction
that stays this litigation?
How long does that

be, it's not the case that
they can proceed
uninterrupted by what's
going on in Canada
and we think it would be
appropriate during that time
to attempt to work
with respondents
as we already have
to help them engage
in the exact claim
resolution process
that other class
actions against the
the state
or an injunction extending
the state through confirmation
of a plan

momentarily
with my colleagues
to points
to the state
and to
clarify
we seek the stay through the
effective date of the plan
and to note
one further point

we are asking
this court to issue
an order

as I noted
will ultimately be recognized
by a Canadian court
and enforced by a Canadian court
which unquestionably has
personal jurisdiction
over respondents
okay
if the stay
extends or is extended
through the effective date of the plan
what
is going to happen
in the litigation
that is irreparable
if I don't do that
first there
is hearing as I noted
scheduled for June 16
and I'm sorry to interrupt
but the plaintiff's declaration
says that hearing is only
on the motion to consolidate
two cases is that right
part of that motion
includes the amendment of the
complaint
the amendments you can see
in the

declaration and among those
is to enlarge the class
so that it is no longer just
individuals
in Canada whose data
was breached
and now expands to all 23
and me customers in Canada
that sort of
vast expansion
of the potential liability
of the
state
is a substantial irreparable
threat to the state
the debtors
can't see scope of their
liability expanding
as they're trying to
complete a reorganization
there are also changes
to the claims that
are sought
in the proposed consolidation
and there are the fees
that are sought
by the individual
defendants
for
as the June 16
hearing occurs
now past the June 16
hearing assuming that
the motion is granted
we expect there to be
proceedings regarding
motions that
according to
other words there is
the potential
for liability against
the debtors
to a crew
by those proceedings
not give the debtors
the breathing spell
to which they are entitled
and subsequently
there will be motions
for class certification
which do involve
factual affidavits
that sort of fact
gathering much like any
discovery that might
subsequently occur
in these actions
would squarely implicate
the debtors
so the plaintiffs lay out
a pretty extensive timeline
in their declaration
starting in paragraph 37
and you haven't really
addressed that with
the reply but


I have all the details
on my screen here
but class certification
we're talking about 2027
or 2028 if I remember correctly
I don't want to
stand here and speculate
as to what will happen
in terms of timeline
as you see
the timeline said
fourth and mister carp's
declaration makes
a vast number of assumptions
that the timeline
does speak to unquestionably
though is that
if respondents are correct
then there is effectively
no prejudice to them
from issuing a stay
through these
fast-moving chapter 11 cases
to result
to give the debtors a breathing spell
from what
respondents say
will take many years
to find the chapter 11 cases
okay
the plaintiffs refer to Ms.
Wajiski as a former director
I thought in earlier proceedings
there was a discussion that she was still on the board
but not on the special committee
I'm sure there's a straightforward answer to that
do you have a handy
for the record Christopher Hopkins
always for the debtors Your Honor
Miss Wajitski is
currently still a member of the board of directors
of the debtors
she is not a member of the special committee
that's been delegated
effectively the full authority of the board
with respect to all restructuring related
I thought that's what I remember
thank you for clarifying that
all right then how about
KPMG?
I haven't seen anything about
indemnification of KPMG
and I do see in the complaint
some daylight
between the claims
against KPMG
and the claims against everybody else
related to the fact that they're the auditor
and auditors do different things
then officers and directors do
and there's some discussion of that
but the more important issue is
indemnification of KPMG
are they indemnified
and where is that in the record
they're not indemnified
Your Honor
but nonetheless the
proceedings against KPMG
are about what occurred
in these cybersecurity incidents
and what little there is
in the complaints
that is specific to KPMG
are for example
statements that KPMG
puts in advertising materials
on its website
fundamentally
ancillary to what respondents
describe as the main allegations
in the complaint
which are deficiencies
of cyber security
practices and data retention practices
and KPMG
like the others is alleged
to be a co-principle
and or a co-conspirator
They covered by the same insurance
that covers the debtors
or they have their own insurance
or no insurance at all
I'm not aware
of their being covered
by the insurance policy
that covers the debtors
to look into that
to the extent
to the extent the court would like
All right
I have what's concerned
about all questions but I'll explain
Are the debtors offering any security
in support of a preliminary junction
to the extent this heads in the direction of preliminary junction
And the reason I ask that is
I think the bankruptcy lawyers know
that the court can waive security
for a debtor under rule 7065
but HR1
the one big beautiful bill act
moving through Congress
contains language that could be
read to make a preliminary
injunction unenforceable
unless security has been provided
and it appears to apply
to injunctions that are in existence
before the bill is enacted
into law
So that's a very long
explanation for why I asked what
I think is an odd question
I don't believe that
security would be appropriate
in these circumstances
given the financial distress
that the debtors find themselves
in
and the fact that
even as to the non debtors
as I've spent a lot of time on
those claims are fundamentally claims
against the debtors
with respect to
the big beautiful bill
I'm
candidly not certain of its
application
to this proceeding
It's not the sort of proceeding
that Congress has in mind
I'm pretty sure
but
the language is
vague
Let me go back
It's
understood
We're glad to
look into if it would be helpful
to the court
but
short of that
answer is that
security wouldn't be
appropriate given the distress
that the debtors find themselves in
and that the non debtor claims
are really debtor claims
Okay
Thank you
That's helpful
Thanks
Thank you
We'll have a few
questions
Mr.
I've been calling the plaintiffs
Mr.
Are you on the
question?
Please proceed
Thank you all
Just wanted to touch
quickly on the issues around
jurisdiction and I guess
I think

declaration was

not
clear as it could have been.
The land use that being
included was in response to the
adversary complaint, obviously
23 and me and that filed against the
clients.
We were
shocked to receive that.
We know all this
law, especially so, given the very first day of the
commencement of this proceeding, we were in direct
statement to them that we would comply with the
scope of this day.
We have an absolutely no reason to file an
adversary complaint
and
especially, you know, with no
notice to us.
And just to be clear, the
adversary complaint
includes
statements regarding the fact and the
connection with the United
States and whatnot.
So that language in the declaration really speaks to the
context of the coming from that
adversary complaint.
Adversive proceeding,
situation into this,
more proper
forum to address this scope of the state.
But besides that,
there is really no dispute
that your
order has the opportunity to
extend or determine the scope of the state.
And if you determine
that the state should be extended to any
up and on dinner, we
have a
report of course complied.
As my friend indicated, the Canadian court had now
recognized these proceedings in Canada that happened on our
consent.
So if your
order grants the further order,
which is kept to this day,
and that order will have to be recognized in Canada as well.
So we will consent to that very obviously as well.
That is also
say also, I don't think there is any
further order.

been
complied and we say we will continue to comply with the
state of the proceedings and it may be
in place.
And on that note, I think the issue of the
guardian is security of
forecast would also be moved.
Okay.
Thank you.
How about the merits?
I mean, you know, on our
we have a declaration of
misbuttions.
That is
talk at number 5-8-4.
That obviously is out of that if
regarding the events and proceedings in Canada.
The difference is that we
I did not object to the declaration of
misbuttions being
admitted to evidence.
But with respect, I do believe that it's
incomplete in some respect.
A very clear example would be what
misbuttions said.
Well, if the action proceed, we're going to get
it done.
And then there's going to be discovery.
Well, that is correct.
But let us clarify that that's not going to happen
on the 2020-29.
So, Mr.
Carf's declaration provides further
details from our perspective regarding the
procedure in Canada.
So we do not exceed to the
declaration of misbuttions and we rely on Mr. Carf's
and of course of in Canada.
So we respectfully ask
or move to
admit Mr. Carf's
activated, including the exhibits
A through S into the evidence
before the court.
All right. Is there any objection to
receive the Carf Declaration of Exhibits?
No objection, Your Honor.
Okay. It will be received.
Thank you.
Your Honor, my friends that
have been in the real misbuttions.
And again, honestly, that we do not
cite to a single U.S.
authority in our response.
And that is
not fair.
The law is understood as we do not
have any debate on the law.
Frankly, in Canada, I can tell you that the
costs are largely the same.
And we do rely on the same authorities
that my friends cite in their
in their motion.
And specifically, I wanted to take you for this
case from the
the Appalach court in the circuit,
which is called Reaching Capital Management.
It's a 2011
judgment of the court.
And it's cited
in my friends' motion at paragraph
39.
So, I wanted to take it to some
excerpts of that judgment.
And I'm not sure if you have a copy of it,
or if it would be possible for you to have a copy of it,
or I can just read out to you.
I don't think so.
I've looked at it within the last hour,
if that's helpful.
I think you already can allow me.
I would want to take you to some of the
language from the Appalach court,
because I think it's germane to what my friend
was even saying.
So, for this decision,
you know, a woman you will
want to, and under two,
we have a section A and section B.
And section B is the one that I'm relying on.
And I'm going to read.
I want to be complete and faithful to the decision.
But I'm going to skip over some of the words
and rewrite on my,
that the one that I want on the Appalach court,
and the special we give, and that your
order also read it just recently.
But if you want me to go and read their
bowels of their excerpts, just maybe let me know.
But the portions on their section B,
that I wanted to highlight,
would be as follows.
Whatever the precise scope of this category of action,
it is significant to broader,
and more of us than the group of actions
expecting the assets of the receivers.
A federal court,
supervising an equity receivership,
has inherent,
incredible authority to issue a variety
of answers or to relief,
to protect the receivership.
And, true enough, the scope of that relief
is not limited to parties before the court.
We accept that one hundred percent.
For a minimum answer,
relief includes issuance of orders,
imposing blanket states of litigation,
in order to give the receiver a chance
to do the important job
of marginal and untangling companies' assets,
without being forced into court
by every investor or claimant.
But the cost power,
to save off suits,
like third parties turn on these suits,
ability to deplete the rest of the receivership state.
The cost-equitable powers do not reach cases
that pose no threat to the assets of the receivership.
In this respect,
the critical powers of the receivership court
are similar to powers of the bankruptcy court,
to impose an automatic state,
to pull in both,
if you as far as receivership
and liquidation bankruptcy,
you don't have to call the third distribution
of the liquidated assets.
The bankruptcy court can stay action against any party
as an denominator,
whenever the objecting of the action
is to obtain possession
or exercise control over the debtors' property,
unless a case involved
unusual circumstances, however.
The bankruptcy court
cannot halt litigation by non- debtors.
Even, this is very important
to my philanthropist, Your Honor,
even if they are in a similar legal
or factual nexus with debtor.
And next paragraph says,
that unusual circumstances
in which the bankruptcy court can state cases
against non- debtors are rare.
So, I would pause here.
So, our pitch is simply your honor
that we already said,
from day one,
to our friends,
that we're going to comply with the sale proceedings
with respect to debtors.
We agree that debtors must preserve a state.
My friends said that we have refused
to bring the claim within the chapter,
unless I'm proceeding.
That is a not fair and not accurate.
We have been in significant discussion,
and we are looking into bringing into creating a channel
to bring the claim in this court.
And just so you know,
your honor has already granted
what I refer to as a claim process order
or claim bar order within this pursuit.
The debtors did not give us notice of that motion.
We had asked to be included on the service list.
We were not provided with notice.
And no one would hold one day
to say what the order had been granted.
Now, we are,
we think there is a way for us to,
to, in accordance with your orders,
order to bring that claim within the chapter,
11th proceeding,
and we have,
we are putting a lot of efforts to do that.
But, suffice it to say,
that debtors have already secured
what they wish to secure,
as they have proceeded against the debtors.
The preservation of the state of the debtors,
and channeling all the claims against the debtors,
within this chapter, 11th proceeding,
that that has all been achieved.
And now, there is no,
in the word of the affluent court,
there is no unusual circumstance,
which are already no,
all rare,
to warrant that the claims against the non-detter,
or KPMG,
be state at this time.
And,
my friend,
he's saying that,
the claim against the debtors,
and,
and,
sort of,
the former directors and officers
at KPMG
are basically,
and write out,
of the same conduct,
of,
of 23M8.
That is just simply false.
We plead,
specific misrepresentations,
and that is the evidence before the court.
And then,
my friend is actually,
now even acknowledging,
in their reply,
they acknowledge,
well, yeah,
their specific misrepresentation
has been pleaded against these entities.
However, my friend said that,
the misrepresentations do not form the basis
for any cause of action,
which is also false,
because we have a firm reply,
and that directs the court
to the provisions of the claim.
That,
we are not,
we rely,
specifically on the specific misrepresentations.
We are,
like,
doing non debtors
have made.
So,
we,
in our written submission,
we identify four,
four to four two issues,
and under issue number two,
basically,
the question is whether,
you know,
this case is one of those unusual circumstances
that,
it would be warranted
to extend the state of proceedings
to non debtors,
and the answer is absolutely no.
If we look at the facts,
the claims are distinguishable.
They're, you know,
they,
in the words of the affluent court,
they do arise
from the same legal
and factual exit.
But that is insufficient
to grant a state
with respect to non debtors.
The claims against them
is different.
They are not going to be liable
for the conduct of 23 and me.
They are going to be liable
for their own conduct.
If they are to be found liable,
sometimes,
found their own.
That's point number one.
The claims are not identical.
Secondly, there is no rational connection
between the state of proceedings
and the restructuring efforts of 23 and me.
KPMG is an entirely independent party,
third party.
They're doing their own thing.
They're going to have a separate representation.
They're not even involved
in any role the capacity to do here.
The forwarded directors of the company
relied on mass in September of last year
in an unprecedented situation.
We searched for one back in memory.
We cannot recall any situation.
We're all the independent directors
of the company.
Seven of them resigned on mass.
Just one time they said,
we don't want to have anything to do
with this company anymore.
That was their wish to not have anything to do
with this company or the restructuring events anymore.
There is no rational connection.
Thirdly, we say there is absolutely more
adverse impact on the state.
Absolute is zero.
The defense is being funded by insurance.
KPMG has their own resources.
They're not on the insurance policies that we have seen.
There are two sets of insurance policies
that we have learned to understand.
I have never seen any situation
where the idol would be on the same set of policies
and directors and officers or the company.
They're not on the same policy.
They don't have the old resources.
They don't even have indemnification rights, whatever.
As for DNO, my friend says,
they have an indemnification rights against the debtors.
Correct.
But as the state of the DNO claim
is not going to dispose or resolve that indemnification rights,
presumably they already have
or they will have to file the indemnification rights
within the chapter 11 for the CDM.
To stay the claim against the directors and officers
is not going to resolve that claim.
What would resolve the claim
would be to allow that their objections on pleadings
or jurisdictional objections be heard.
Maybe dev right.
Maybe the Canadian courts would agree with them
to strike the claim on screen and against them
or find that the court doesn't have to restriction over them.
That would be the end of their indemnification rights
if they have a sort of,
it will be a sort of against 23ME.
To stay the claim against them is not going to address
or resolve that claim.
So that is for that reason that, you know,
we say the universe of the claim,
my friend said that debt should,
or argue that should somehow work against us.
No.
To the contrary, I just explained your honor
as the damned indemnification claim already exists
because the directors and officers have already been sued.
So how are we going to deal with it?
Either it has to be addressed in the chapter 11 proceedings
or if the directors and officers are correct
that the claim should be struck against them
or the claim that should be struck,
that would be the end of the debate.
That's to all given a chunk,
a big chunk of the claim off
the shoulder of the state.
And I would pause here to say, you know,
this at least is as far as my experience goes.
This is a peculiar installancy proceeding
because as far as I know,
there are most secure lenders.
This is really an installancy proceeding
in business options and in large parts
to deal with this type of claims.
So anything that we can do to address this claim
and there is no cost for there for the state
is the plating motion, you know,
it's going to be funded by insurance.
Anything that we can do to one way or another
is all that any of the claims of the creators
that are that arise from the cyber claim.
I would submit to you your honor
that should be welcomed by the court
because it's going to be a streamline in the process
and it's going to determine
what claim is going to stay
and what claims are not going to stay.
I mean, we're not starting to say I'm starting to be slow.
Is there an open to remain?
What claims are going to remain
as against the state
or what claims are going to be struck
and that's going to be the end of the journey?
And lastly, we say,
my first and foremost, there is no prejudice.
It says, you know, it's flight delay.
I don't know.
My friend is really not committing to any time
like for chapter 11.
And you know, you ask him, you know,
for how long this in John's issue
should remain in effect.
My friend is really not committed to a timeline.
If it is a matter of, you know,
this fast evolving and unwrap
and proceeding in a matter of,
by fall, we're going to be done
before the Canadian court is going to,
you can hear these preliminary objections
on the planing of jurisprudence.
The chapter 11 is going to be done
or substantially done.
But on the other hand,
we have the interest of,
again, the debtors will not tell us,
well, about 700,000 Canadians
in this privacy class action,
and I have it before you,
that in Canada, these are serious rights.
And Canadian courts have very strong interest in them.
They treat these rights as,
of course, the constitutional rights of Canadians
that have very strong interest in educating them.
And we're offering, you know,
a real need to say, you know,
my friend is counsel,
I deal all the time with,
I'm not saying it in a discouraging way,
but the tenders would like to delay,
they want to take the time,
I deal with these,
they're already very often,
and there's a,
there's a saying that Justice denied,
Justice delayed,
it's Justice denied.
So it's really the same situation,
you know, we have the claim
in Canada,
we have no connection with the debtors,
we have no,
no,
cause for the debtor.
At least for, at least,
for the movie stages.
And my friend,
he's not coming into any time,
but I want to basically
get an order that, you know,
stays the claim,
sign the die until we know when,
who knows when,
but on the other hand,
we have a significant population of Canada
because the future of rights are at the stake.
So in summary,
it's subject to any question of your order.
The average course says,
we do not have to stay the claim against nonmeters,
even if we arise out of the same legal or factual nexus.
We've got to have
a rate,
exceptional circumstances,
and a minimum,
hard to the state,
developing from the proceeding.
And I might respect the submission of your order,
this does not the case of an exceptional circumstance.
The debtor have already got everything that they would have
wanted to accomplish.
We have the qualify for a distance,
then you may be the first day with them,
and then we have complied with the state,
and the preliminary issues that are now before the Canadian court
does not adversely at all,
at all not in this lightest,
affect the state in any way.
But,
if there is any likelihood,
as the DNO would say,
that the country would be struck on the freegan,
or for a lot of want of jurisdiction,
are we simply to your order,
then let's determine that,
sooner or later,
because that in fact benefits the state,
and that in fact will get,
they'll get some of these chapter 11 proceedings.
Subject to any questions
those would be my submissions.
Thank you.
So, do you agree with Mr. Siegel
on the scope of the June 16th hearing?
No, your order.
The evidence,
Mr. Siegel is not qualified
to provide any opinions on the Canadian law.
The evidence that is before the court,
if you have it,
it's a misbondering.
And,
misbondering has a brief description
after what this motion is seeking
through a confirmation.
They do say that we are seeking to add defendants,
that is not entirely accurate,
because we are not adding any defendants
who is not already named.
The defendants are already there.
We are just bringing the two claims
in the same umbrella.
And just so you know,
just because my friends
have mentioned something
and this body had made some comments
about the manner of the finance of the second claim.
We do note in our declaration
that misbondering remains the same objections
with Justice Douglas.
Justice Douglas was not very impressed really.
She said, you know,
those corrections were not correct,
but if he was already wanted to bring the motion,
she could do that,
which is yet to be brought out.
But in any case,
this is how the defense unfolded.
The discussion around the claims
with respect to the firm of defendants
have been ongoing for some time.
And again,
we're dealing with a delay issue
that we wanted to add
to the firm of directors
without, of course, any prejudice
that the defense may have
to bring, you know,
a motion to strike the claim
or state the claim.
You know, it could be entirely without prejudice.
The defense were,
we're dragging your feet,
not coming into any timeline.
We're looking for dates.
We were around September.
We were looking for dates in December
for that kind of simple motion
to add some parties
without prejudice.
And what happened
as we were having these conversations
that directors resigned on that?
So from our perspective,
to a perfect interest
of our Canadian class,
we had to take the steps
to file a claim
because we know,
in the situation of insolvency,
you know,
those claims could be entirely
perished.
Hold on a second.
Hold on a second.
Name a client.
I'm asking a much
more granular question.
What motions are being heard
on June 16th?
The consolidation motions
that there exist
in applications
to bring them together.
Exactly.
Enjoying their,
if you wish.
Enjoying their...
Okay.
And are you brought,
are you seeking to broaden the class
as Mr. Siegel mentioned
from those who are known
to be impacted by the data breach
to all Canadians?
That is an excellent,
that is an excellent question.
We are seeking to broaden the class.
I say a couple things.
That's an appropriate
proposed class.
That's not a certified class,
but it has no,
there ain't no nothing
with respect to 23 and me.
And especially so,
that 23 and me is already
subject to a claim process
order of the score.
So there's not going to be any claims
against 23 and me
at all in Canada.
So,
and on the other hand,
right now,
23 and me has sent
no notification
to all the customers.
I think someone mentioned
that some were 18 million customers.
That any customer
can submit a claim
within chapter 11 proceeding.
So 23 and we have already invited
any customer
who might have a claim
to submit a claim.
The extension
of the definition
of the proposed class
which is without prejudice
to emulsion to strike.
Emulsion to stay
for voluntary jurisdiction.
And eventually,
the certification
motion had absolutely
more bearing at this point in time.
Okay.
The city's
55 proposed definition on paper
that can happen
as a matter of,
you know,
the law in Canada,
you know,
someone can just
propose a new definition
at the time of the hearing
of certification application.
It's really had no bearing
other than the course
you'll consider
whether or not
a certification
or a certification
whether or not
that's going to be correct
or it should be certified.
It's kept through
pools.
It's a mad matter of
nearly definition.
Okay.
Let me see if I can
summarize part of your argument
accurately,
Mr. Neymatt, why?
I think you were saying
that
litigation in Canada
would benefit
the debtors
and their states
and the other parties
in interest because
your litigation
would clarify issues
maybe in the debtors' favor,
maybe in favor of
the Canadian claimants.
By determining whether
certain parties are liable,
whether the liabilities
co-extensive,
with other parties,
whether there's a valid claim
under Canadian law.
At all, I suppose.
Is that,
is that the point
you're making
that you're
helping the debtors
crystallize what's
going on in this case?
So we're on,
just to be clear,
we have like five different
arguments,
and this is one of them,
and almost,
but not entirely.
What I'm saying is that
the outcome of the Canadian case
would only benefit
the debtors
and the chapter 11 proceeding.
Because what?
Because the claim,
and that,
that corresponds
with the
indemnification claim
that the D&O has.
And the KPMD
doesn't have any
indemnification rights,
so we're not talking about
KPMD right now.
We're talking only
about D&O's.
So what I'm saying is that
the claim against D&O
is already there.
The state is not going
to make it
some legal way.
If the Canadian
proceeding proceeds,
and if the D&O succeeds
on striking the claim on
pleadings or for
one of the jurisdictions,
that can only benefit the state.
Even if,
even if the Canadian court
agrees with us,
that's still benefits the state,
validing in one,
but then out of the state
knows that there is
this valid indemnification claim
that would not be
strong indemnification claim
that would not be strong
for the benefit of the D&O.
So when time comes
to figure out how
any proceed should be
distributed and how
should all of the claims be
discharged, etc.
That is also going to benefit
the state.
However, I would go once
further to just say,
you know, how
what the non-issue
indemnification
went in.
Because we all know
that at the end of the day,
all these claims are going to be
bound together
and they're going to be largely
established.
So my friend,
on this new topic, you know,
at the end of the day,
if there's judgment
in favor of the D&O
for like five years
down the road in Canada,
this is
to a D&E
that has to provide
for indemnification.
So,
all the installments
that are going to have
are dealt with in one
there was a plan that
was successful,
a little bit stronger
to claim.
This is only an academy
debate that never comes into
reality, never
bears any
error of reality.
It's just, you know,
for people to say
that we have an
investigation right
but that is
realistically
intense and
disvolving company.
It will never be
realized.
So, it's all
I'm saying that,
if at all,
if anything,
this Canadian proceeding
would only benefit
the state
and these chapter
11 proceedings
if at all.
Not only that it
does not
harm the state
in any
conceivable way.
Not in the slightest.
If anything,
it would help
the debtors
and these proceedings
before you
honor.
Okay.
Mr.
Named Mattel,
what's
the prejudice
to your clients
if there's a stay
of their litigation
against all
the defendants
through the
effective date
of a plan
and let's say it's
six months
from now.
What's the prejudice
to your client
if you're looking at a
five or six-year
litigation settlement?
Well,
firstly,
that's a very good
question.
And that is
you know,
there's going to be

if my friend
that said that the state
is going to be involved
only for six months.
And now,
we have no issue
with it.
Bearing in mind
that realistically,
those applications
that the NT
and OVNK,
and G have indicated
that we've been
bringing it,
cannot be brought
until
probably December.
The timelines are
just like that.
So if
this proceeding,
if my friend was going
to commit
to a conclusion
or stay
only for six months,
I would have
more had issue
with any of that.
You reminded me
your honor that
I think my friend suggested
that we have not
been amenable
to any sort of
resolution.
And if my friend said
that that is absolutely
not correct,
we have
conducted many
of the values
scenarios
to come to a
conceptual
arrangement
and none of them
has worked
and we just
think for my friend
to suggest
that we have
basically
being
very difficult
and not
amenable to any
resolution that
would not be
accurate
or for.
In any case,
what I'm saying is that
the timeline that we are
looking at,
you know,
we're dealing with
this application
or we don't have to
be brought
into December.
So if there's
going to be a stay only
for six months,
again, I'm not aware
of any reason
for that.
But if your honor
would be inclined
to impose a stay
that would be
perfectly fine
with us.
But in the
term of the stay,
especially
in the other
considerations where we say
there is no
unity of
the claims, you know,
there is no
identity of interest.
There is no
adverse
impact.
And so on and so forth,
any
stay, especially
and in the
term of the stay,
is totally
unwarranted.
And again, a
direct
ahh, the
reach a
case that I took
you to.

treat a stay
to non-deaders
as a
minimum event
to be granted
only in
exceptional
circumstances.
No, we should
act this here.
And we do
have, we do feel
very strongly
about these claims
in Canada.
So, you have
the indirect
before, the privacy
commission of
Ukraine's
are
quasi-constitutional.
They're
important to us because they
define our
value for the democratic
society.
If we have a
very strong

educating
them to set the
standard that
at last
old
Kenya, this is not
yet.
This is not
yet.
It would not be the best
analogy.
But I just
just to get the
sense of
what my head is.
You know,
you want
it, you want
it, you want
it let
you
sense.
And to