EP 15 | Kawhi Leonard in Bankruptcy Court, Spirit on the Brink, and Disqualified Counsel Provisions

Welcome back to The Octas Download, the podcast where credit meets culture and where your discount airline, your NBA superstar, and your cannabis provider all need bankruptcy lawyers. I'm Jason Sinjana, and I'm Kevin Eckhart. If your weed business is in foreclosure, your airline filed chapter 11 during Group 7 boarding, or your bogus tree planting endorsement deals, surfaces and bankruptcy paperwork. You're in exactly the right place. In addition to all of that content, we'll be joined by our colleague and the man behind LME memes, Julian, to walk us through the rise of disqualified council provision, which is the newest trick in sponsor friendly credit documents. In today's culture close out, we talk the hunting wives and the perils of snorting Zanah perils. Come on. Oh wait, but wait, Kevin, are we still doing that disclaimer thing? Yeah, you know, Tanya, all about the legalities, stupid lawyers. These are our personal views. Not those of Octis, our co-workers at the NBA commissioner's office, which, hey, Silver, get an Octis subscription already. This podcast is for informational and entertainment purposes only. It is not investment advice unless you're investing in spirit airlines, new bag fee, securitization facility, in which case you are our hero, you yield chasing maniac, securitize it. We recorded the conversation everyone's about to hear right after the Kauai Leonard news broke, and we spoke a lot about the bankruptcy tie-ins to that story. And then, just as we were about to publish the podcast, a docket filing drop and the facts changed. Wait, wait, wait. Kauai Leonard said, "Jud, you told me we were doing a pickup because of Josh Sussberg getting his ears pierced at the clairs hearing yesterday." Breaking the news. I had no idea. Yeah, the real stuff. We had to talk about the facts at the Kauai Leonard changing a bit as far as baking. Wow. I mean, I guess that's the business wherein stuff moves fast. We check the court filings and boom, there it is in black and white, the endorsement agreement between aspiration partners and KL2 Aspire, Kauai's company is listed as an executory contract remaining in the bankruptcy estate as of the conversion of the case. For now, what you should know is that it changes the framing of when we were talking a little bit, because we had a discussion about the particular bankruptcy story here. And as you'll see, when we were talking, the big question was whether this contract was going to get assumed and assigned to the buyer. We didn't know when we were talking. All we knew was the contract was scheduled as potentially assumed and assigned in the sale closed. Now we do know it wasn't sold. It stayed behind in the estate, which is now in chapter 7. That means claims related to the contract weren't released and we may see a further investigation of what happened. That matters because if it's still in the estate, the trustee has to look at it. They can reject the contract. They can try to claw back the money that was paid to Kauai, the $21 million. They can treat it like a fraudulent transfer. What they can't do is ignore it. And that was what we were theorizing. Yeah. Not our discussion. All right, let's jump into the conversation now. All right, let's start with the biggest sports/bankruptcy story in forever. Kauai Leonard was allegedly gifted a no-show contract by a now bankrupt carbon credit tree planting company. And the resulting scandal, believe it or not, is completely rocking immediately. I mean, they've moved on. Really moved on from the '80s when the scandal was absolutely everyone on cocaine. All the time. Look, Roy Tarpoli never got busted for a no-show endorsement contract. Bankruptcy and sports is, you know, teams go bankrupt, players go bankrupt. Hey, man. I mean, I saw when I was in Jacksonville, Willie Jackson, Jr., wide receiver, filed for bankruptcy and the trustee had all of his stuff out on his front lawn. It was delightful. Oh my goodness. All right, well, this one's completely different because this is a massive sports story that was uncovered through the bankruptcy process, essentially. So the story, it's complicated, all credit to Pablo Torre and Pablo finds out, which is a podcast that broke this story. They are all over it. If you can imagine. Major love for Meadowlark. Pablo Torre had a giant exposé on Kauai Leonard and the result is the NBA's open investigation in what appears to be a $28 million no-show endorsement deal between Leonard and a bankrupt tree planting startup called Asperation. This is important for everybody here. The company renamed itself right before it filed for bankruptcy into CTN holdings. So on our site, LTL management was taken. All the paperwork says CTN holdings. There's some mention of aspiration in the footnotes. We'll get into it. But Torre talks about aspiration in bankruptcy court. It's CTN holdings. The back story from a sports point of view is that Leonard's contracts with the Clippers have been head scratchers for sports fans for years, really. When he moved there in 2019, what the people keep signing him, even though we never play. Arguably the... I'm not an NBA. I'm not a basketball guy, but I'm told he's arguing with us players in the league. He was. When he went in 2019 to the Clippers, people were surprised the Clippers got him. This is all in the backdrop of the NBA operating on a strict salary cap. Well, in the NBA salary cap has become the last CBA made it extremely punitive, made it a real salary cap. Basically before owners could pay players whatever they wanted go over the salary cap and they could pay a fine to the other owners. Now, those fines are so ridiculously punitive, not going to get into the whole, like, the different levels and skirts and all that, but it's now, it's a real, basically, a real salary cap. So as Pablo Torre explains it, Kawaii Leonard is also famously frugal and profit maximizing. When he went to the Clippers, even though he's from LA, there was people wondering why he went there when he could have probably gotten more money from them. Because they're the Clippers. Right? The story franchise. Then, even more confusing, I think was his contract extension in 2021 where he opted for like a middle-tier contract that's, you know, under the rules that you know better than me, Kevin, is much more team-friendly under this new structure. That all being said, there was an investigation in 2019 by the NBA about whether there was, you know, something untoward happening in the move to the Clippers and that investigation was closed, but what Torre found out and went through an extensive detail on the podcast was that Kawaii Leonard has an LLC called KL2 Aspire. And it was a major contract party of this company aspiration that filed for bankruptcy. So why don't you get into the details again? Yeah. So Kawaii's LLC, KL2 Aspire, because of course, too, is his jersey number for you, non-sports ball people. And a contract with Aspire for $28 million, and that's $7 million a year over four years. Cash-ish, cash-ish, cash-ish, to do nothing. The contract looks like a real endorsement deal, but there are huge holes in Kawaii's obligations that basically mean he was required to do nothing if he didn't want to. No commercials, no appearances, and no signatures. I mean, usually these, at this point, the athlete endorsement cycle, these contracts are very specific. Yeah. They require a certain number of personal appearances, certain number of signatures, certain amount. And the kicker on this, in fact, he didn't do very much. He did some social media posts, or his people did social media posts. You know what, it might have been that he never posted a thing about Aspire, but Aspire used him in one or two posts themselves, which is absolutely the bottom barrel stuff of these contracts. Right. We're talking $28 million. You don't want a laugh-out-loud high amount of money in this scenario. Yeah. You don't want an endorser to just have to post tweets with them endorsing that you wanted on their account. Yeah. You want them being like, "I can't believe how awesome it is to Austin." Right, right. Here I am planting trades. Aspire. Okay. So if Torrey and his guys have the right contract, this is all based on leaked documents. We have some bankruptcy documents. We'll get into that. Spoiler alert. We covered this case. We had no idea that Kauai Leonard was involved because partially they changed name, partially, you know, that's not our business. It's okay. So they have it all based on info, is that the contract was terminable by Aspire if Kauai no longer played for the Clippers. And that is extremely unusual. Again. It's very bizarre. It doesn't make any sense. If you sign someone to an endorsement, it's not for them at that team. Right. If you do an endorsement, they would never agree to that. Like they'd need, that's like basically that's tying the contract to their presence on the team. Right. And this should be something that makes it look like the compensation was tied to his employment with the Clippers and not to his personal celebrity. And they even rode in these scenarios that are, you know, common for sports. Like if the Clippers bought him out and traded him or if he retired, but still had the right to be paid by the Clippers, that those payments by the Clippers would not count as, he would Aspire would have an out in those scenarios. So they really fought through this, you know, a technical legal term not available to Pablo and his team because of their lack of fancy law school degrees in years and big law. This is extremely sus. Extremely sus. Now we're getting into again, on the Torrey side of things and where they definitely put the threads together to connect this to the Clippers. And I think that it's worth saying that you could have an extremely sus contract with an extremely sus company. And maybe that's the end of the story. What Torrey and his team did was then look at the relationship between Aspire and the Clippers, which is strong. Balmer was definitely an investor. You can go on the internet and find the press release Oak Tree and Balmer. An investor in Aspire. In Aspire. But Oak Tree led a $350 million equity round. Oak Tree Los Angeles based hedge fund. And it names prominently how Steve Balmer is joining in this and we're so excited to partner with, this is all equity side. We can get into it later, but Oak Tree apparently also had debt, but was not the stocking horse bidder that eventually bought the company out. They sent it right to Oak Tree for dip financing, but Oak Tree said no. I think they want to run away from this as fast as they possibly can. They don't need to. I guess suspect they're not very happy about the Pablo Torrey thing. But the connections between Steve Balmer and Aspire are, you know, he was a major investor. They were a major sponsor of the Clippers. He put in 50 million, right? He put in 50 million. Right. Right. The same year that the co-ideal cut. His LLC that he invested in was called Pulpit. Not Pulpat. Torrey made the same joke. It's Pulpit, P-O-L-P-A-T-L-L-C, and you can find it on the bankruptcy petition, the equity. The equity holder list is like 17 pages long, but he's there. Or that entity is there, I should say. As is Oak Tree, as is a UBS fund. So there's real banks, real people involved in this company. The point is, this was a major sponsor of the Clippers for just one year. The Clippers cut ties pretty quickly. Balmer was a significant investor, and there's this incredibly sus, as you say, seeming contract with Kawai Leonard. Those are the pieces that Torrey ties together. And the allegation is that some of that $50 million was put into the company to round trip to Kawai through this contract. That's their allegation, you know. We haven't seen any of these documents. You don't have to be a forensic accountant to trace that one. Well, we will see, because the NBA is saying, I think, already, that they're reopening the investigation. That all brings us, Kevin, to, I think, where we can add some value here and some interesting stuff, because we're the bankruptcy, guys. We're the bankruptcy, yeah. Play the theme song, Tonya. So obviously, a bunch of us, we all looked back at the CTN holdings bankruptcy docket and our coverage of it, because we were on these hearings and stuff. And the truth is, the bankruptcy court docket is incredibly thin for a company with all of the hair and weirdness that Torrey outlines in his podcast. And I should say that's one more underlying fact that we need to mention. Beyond the weird contract, beyond the relationship with the Clippers and Balmer, beyond the allegation of round tripping of money, and entirely in addition to an additive to that, the founder of this company, Joseph Sandberg, was basically the reason why the company filed for bankruptcy is that he was under investigation for misleading investors. And if you read the press releases from the DOJ and he pled guilty, I think pretty recently, it's not totally separate from aspire. When you read the bankruptcy court documents, I think, I mean, it's a 21 page first aid declaration Kevin, which is shockingly short for us. I don't know. I mean, I like when they're short, but that one's, let me find it. And in order to save trees, I printed it up four pages a day. Who was the declarant? It's their rental CRO from CRO. All three partners, CRO three partners, CRO three. Is that Cristiano Ronaldo three? I'm just looking. I just love how sports guys name their company. CRO Ronaldo became a mid market of CRO provider. Okay. So I'll read this one. In February, 20, 2025, the Department of Justice filed a criminal complaint against the investor, that's Joseph Sandberg, related to his personal conduct alleged to have occurred between April, 2020 and February, 2023. Based on my understanding, allegations do not impute that implicate the debtors in any criminal activity. And the debtors' current leadership and employees were unaware of, and the debtors are themselves victims of the investor's alleged conduct. For the avoidance of doubt, the investor no longer holds any position or roles with the debtors and is no longer involved in any capacity with the debtors' operations. But I mean, that's all typical. Of course, the company is a victim in a security fraud situation when people sue over security for other effectively suing on behalf of the company. After listening to Torrey's hour and 20-minute-long podcast about what was going on and what these allegations were about and what was happening in the company, we got to talk about that. And allegedly, the allegation that the company claimed to have had Dubai as an investor, but never did. And the company may not have planted the trees that they say they planted. Now, those are not our, it's surprising that you get that one paragraph in the first state declaration to me, to be honest with you. Because the company clearly had to file for bankruptcy, it seemed, or not clearly. That seems because of these charges and investigation and then to just pretend like it's totally underpriced. Well, but why? A company whose CEO is committed securities fraud by lying to investors doesn't have to file for bankruptcy. That happens all the time. They found for bankruptcy for a different reason, and you're going to paper this. But I've seen, I know what you're going to say, so I'll do the opening statement. They did it to bury the Kawaii contract situation to hide it from the NBA. Okay. That's an allegation by Kevin. Evidence? Over there. Allegation? Give me the evidence, Jason. Maybe I'll change my mind. On Kevin's side of the ledger here is a few things. One, when you listen to the Torrey podcast, it's certainly worded like Torrey stumbled upon this petition and this kale to LLC on the third line of the bankruptcy petition. I mean, look, that's a good setup, but we all know we've done this. Two million times. It sure seems like somebody felt like something was getting buried and tipped off Torrey to look into it. Now, also on Kevin's side of the ledger that the bankruptcy might be deeply replaced. We're going to keep going. There can be a lot on one side of the ledger here. If you look at references to kale to LLC on the bankruptcy docket and on octas, you can full search the, you know, the, the docs, which is great kale too. Most people can't do that. Probably we're happy to help you with the dog. If you look, there's not a lot of references. If you get the typical, it's on all the conflicts, disclosure sheets for the professionals and their attention. And then it appears in the schedule of in their sale motion, the potentially assumed and assigned contracts. And that's a real headscatcher from a bankruptcy law point of view because if Torrey is right about this contract and it's so incredibly one sided, it's not an asset that you pass to a buyer. It's something that you go and you start calling that money from the fraudulent thing. It's crazy. Yeah. And you have a contract with a, an endorser, basically imagine he's an employee and you've agreed to pay him $28 million over four years. Now even if it's not for nothing, right? Even if you have a deal with an external party, a contractor, you are going to try to reject that contract to renegotiate it, even if you want them. Most of them. Unless you really needed that person. You have a retail case. Yeah. You have a lease. You have a favorite store in America. You're most profitable forever 21, right? But you are not going to just assume it out of hand and the buyer certainly not going to assume it out of hand. You threaten rejection and you start the renegotiation. Well, Kauai, you're owed $7 million by us. We have this contract. We're going to reject it. You'll be left with an unsecured claim. If you want us to assume it and pay us your $7 million, you're going to have to add four more years on the contract or you're going to have to get rid of these loopholes. This is, that just assumes it's legit. If it's not legit, it's incredibly stupid to assume it. Yeah. And this would be like assuming a contract for someone to rob a bank for you. Okay. Right. Because first principles, this should be a avoidable preference and/or fraudulistic. Yeah. And that's the other thing. That can bring money back into the estate. There's some unquiled $1 million paid to him for nothing. Yeah. A contract that requires nothing, a chapter seven trustee or a liquidating trustee would be all over the issue. There's no consideration. There's no reasonably equivalent value. The company was almost certainly insolvent. It's open and shut. On the other hand. But when you assume the contract, you can't do that. So let's just go to the facts right now. What we actually know, obviously Kevin is making a strong case. I'm sympathetic to him. We should expand to my side of the measure. We should stick to what we actually know, which is that they scheduled it for assumption and assignment, which is odd. And we don't, the sale closed. Now, this company was sold very quickly to its lenders, certain lenders, I guess, in a credit bid, $20 million credit bid sale, which means they bid their debt. No cash. No cash change. I don't know offhand how much cash they actually put in. Usually, there's enough to fund the case or get out. But this case had to convert to chapter seven afterwards, so they obviously didn't put in much money. The sale closed. And what we don't know is whether in the ultimately signed sale contract, this was an assumed and assigned contract, because why that's actually important is, is one, because what sort of diligence happened in that decision? And two, in the sale order, the counter parties to assume an assigned contracts are, are released. So you would be giving up that fraudulent conveyance. Right. So for people who are not familiar, when you sell assets in a bankruptcy case, what we call section 363, right? That's the, the provision in the bankruptcy code that you sell assets. If you get the court to approve it, there are two issues. First, that approval is irrevocable. The sale happens. Even if the bankruptcy court completely fucked up in a line, there's provisions to protect the sales, yeah. Right. And there's an appeal and the, the Supreme Court of the United States says they should not have been able to sell these assets in this contract and give these releases, it's, it doesn't matter. It's the sale sticks. So it's forever. Right. Second of all, those sale orders, like you said, always include releases and the assets are transferred free and clear of leans, claims and incumbrances. And there is no better way to launder a shady situation than to have a contract transferred via section 363 of the bankruptcy code. Companies filed chapter 11 just to transfer their assets under section 363. And that's what happened here. They filed a chapter 11, did an unattackable, it's done, it's done, can't appeal, can't do anything. Assignment of this contract with third party and releases. And now the chapter seven, and then they converted it in a chapter seven trustee can do nothing about this. I'm sure the sale order also says it binds the chapter seven trustee. Okay. It is a, it is laundering, laundering. Okay. On the other hand, the problem in this theory that you would file just to do this is that if the publisher's revelations come out and people uncover what actually happened, sure, your sale is locked in. And I should add a third thing that would have paid $7 million just for the right to take this contract out of the bankruptcy, which is crazy if it happened. But I guess crazy if you're trying to hide it and prevent there forever being a lawsuit against Kauai Leonard to recover $21 million. I know on this podcast, I'm the, I'm the, I'm the stooge for like the corporate, uh, the way things always work. But I think your brilliant strategy of bearing this contract through the bankruptcy might miss is that if any part of it comes out ever, there's a whole new set of people that are now going to be on, on, on the shopping block for this course of action. Yeah, but Kauai is not. And that's what this was engineered by Balmer to protect Kauai Leonard. For the law firms and the, and the, the advisors and both sides, the law firms and advisors for both sides who, you know, I think at some point, they're not going to be in any trouble. Look, let's be clear. Let me step back. I'm trying to keep it subtle, but it sounds like I'm accusing them of doing something unethical or wrong. This happens in bankruptcy all the time, right? Companies will file chapter 11, having done terrible stuff, selling opioids, get children for ankle sprains, okay? Getting earplugs that don't actually protect soldiers and they all end up deaf. They file for bankruptcy to lose these liabilities and to move on with the fresh start and not have to deal with it ever again. 100% agree. This isn't really very different. These ding bats filed a bankruptcy to hide a shady transaction that was not already known. Okay. That's stupid. But what for bankruptcy when you're trying to bury stuff that everybody already knows about? Okay. Not to hide something. Okay. This is where I think there is a difference and I think it's important. I would say the best case scenario for the people involved here is that they filed this case to quickly get this thing through the taint of the scandal in order to continue performing under these contracts. They signed with tons of people to do this tree planting and to just not get all those contract parties in their face about where the trees and all that stuff and this is a real tree planting business. These guys were right on the work. We got a warehouse full of trees. Look at the pine cones, a pile of pine cones ready to be buried in the ground where I think it doesn't you don't file bankruptcy to treat a liability like an asset and wash it that way. That's what's so strange. Well, apparently you do. Well, because that's what you're saying this is like all the other cases where they bury the opioid stuff. So first of all, one other distinction in a lot of these small cases with a bad actor allegedly doing stuff. They will throw one person in the bus to preserve all their causes of action against that one person. And I think that they would do that with the Sandberg here. So that's, it's not quite true that in all these cases with shady behavior, they wash all the time. Yeah, you're right. They do the seriana at the end when they throw the oil executive under the bus, great movie, by the way. There's somebody who you can pay and here it's Sandberg, okay, but why Leonard was to be protected? Well, that was, that was their way of protecting him and again, protect assets. It happens. If I'm a 30 million dollars by a company, they file bankruptcy and then they want to assign to a third party a contract and scrub a fraudulent transfer suit against another person for 30 million. I'm going to object to that, you of course, because that's money I could receive. If I'm a 30 million and they are trying to cancel out a fraudulent transfer claim of five million against me, that's a point of negotiation, but they're not going to do it, but this makes no sense. And you know what I always say? I said this on Twitter last week, when people do something that makes no sense, I generally assume it's taxes, because I don't understand tax. Right. That's my assumption when someone's doing something, I can't figure out what they're doing. Why are they doing this? It doesn't make any sense. It's taxes. It doesn't make any sense. It's here. The reason is the NBA protecting Kauai Leonard's compensation for playing like 10 games a year for the Clippers. I think the answer to why most brilliant fund conspiracies aren't true is that the amount of people required to cover it up is so high that it's almost impractical. Give me that, Occam's razor, both. There are too many people here to treat this glaring fraudulent transfer and/or preference as an asset and let it go through and get protected here. Well, a lot of people are getting zeroed out. And I think it's just-- So you are pulling the very New York Times tote bag NPR listener assumption that people wouldn't do something so obviously crooked because they're not that stupid. Yeah. If we've learned anything since 2016, since we entered this tangent universe when the Cubs won the World Series, if we have learned anything, it's that there is no limit to stupidity. And that is not a valid defense of an action. Kevin, I guess I'm insane. There's no way this could be a cover-up because to do a cover-up like this is stupid, that's not good enough. You just got lawyers and financial advisors and they're all bound by privilege. They're not going to leak it. Who's going to call and say, hey, somebody's got to object to the assumption of this contract because there's no business justification for it? What is this credit bid buyer getting out of the maintaining the NBA relationship? They're getting paid under the table. Okay. See, this is complete conjecture now. That's why you-- look, look. I've been doing this a long time. Yeah, this is great. This is great conjecture. But what Jason doesn't have the benefit of is practicing law in South Florida for most of his career. I have seen that man. And there is no business justification for this. The only logical reason to do this transaction, the sale, with the assumption of this contract, the only logical reason is to prevent Kawaii Leonard from getting sued for $21 million. You know, there's a lot in the bankruptcy docket, a lot of bankruptcy stuff to talk. I think I can sum it up pretty simply, which is that both Kevin and I are scratching our heads as to how this could possibly make any sense for a business judgment point if you-- I ain't scratching my head. Kevin's wearing-- No, exactly what happened. Kevin's in conspiracy corner and something has to be explained more, not just on the salary capside, but on the bankruptcy side, too. And I really hope it is. Now we're back. Let me stand by what I was saying in our convo. I do think that the contract was supposed to go to the buyer. I think their plan was to have it assumed in a sign so the trustee couldn't sue Kawaii. This notice, which says no, the contract goes to the trustee, so the trustee controls that decision over whether to sue Kawaii, I think that they changed their minds and listed this as a contract after the whole thing went public and they knew they couldn't pull that off anymore. You've heard our discussion. Let's update it based on what we were talking about earlier than you guys we know. So now we know that the contract is not going to be taken by the buyer of the company's assets. And there is the potential that a chapter 7 trustee who has no interest in anything but recovering money is going to bring a investigate, bring a claim, try to settle a claim against Kawaii for the return of $21 million, which just means that this whole thing, it's delightful, gets to stay in bankruptcy court. And if we had been right, it would not have. Our theory was that everything was going to get released and quietly brushed to the table and we were going to, we were point to get out too late. So we will see. It's worth mentioning Kevin that there's other facts have come out since we spoke and they make everything seem even more dubious. Again, these are all on my side of the ledge. These are all things that are coming out in public areas of investigation. We haven't independently verified them. Other outlets found or reported that the total compensation under this contractual agreement could have been $20 million extra. Be quiet Leonard or they reported he received $20 million out of the founder's personal equity stash and inequity. So $20 million inequity in a failing company is worth what it is. Potentially, there was even more money at stake. And then a couple other weird facts that came out was that Clippers Minority owner Dennis Wong invested $1.99 million in aspiration, reportedly just before Kauai's LLC was paid $1.75 million and after Uncle, Uncle, Uncle, what's his name, demanded payment and they were missing some, and that was the same time that 20% of staff at the company were laid off. Most of the finest department had the right to check to Kauai Leonard, well, half of their co-workers were being fired and purportedly for doing nothing under this contract. Well, unfortunately, the money was paid just after Wong put $1.99 million in. Yeah. So more than that. I mean, again, this is like what we were talking about was tracing that when $50 million goes into a company and then $50 million comes out, it's a pretty good assumption that the latter came from the former. So when you get $2 million from another Clippers Minority owner and you send $1.75 million out, common sense tells you that probably had something to do with it, especially because the company was clearly in trouble and laying people off. Yeah. A couple of other facts. Of course, the Clippers continued to deny any involvement and Steve Balmer has gone on the offensive saying he was the one deceived by aspiration and even has Mark Cuban kind of acting as a pseudo surrogate on-public ratio and publicly defend Balmer. Get him. These owners are going to defend each other because who knows whether Cuban's done this before himself. One final fact, Kevin, and this one's great friend of Octis Waktel Lipton is the firm retained by the NBA on this matter, which is no joke, you know, that is a big deal. Let me guess. Lead lawyer is going to be some former US attorney. Well, yeah. I mean, they're a major joke. Because that's how these work. These internal investigations. Good work if you get it. Well, they find some. They always find something they can peg it on. And I don't doubt the NBA is going to hit them with some kind of punishment here. I just doubt it's going to be the kind of punishment that Steve Balmer can't buy his way out of. What we should talk about is what's next in the bankruptcy case and the trustee. And I guess. Most important. Well, how was it? How is it not a slam dunk fraudulent? I mean, okay, the company was at least insolvent. They did get the big $350 million equity infusion at one point. We're jumping ahead a little bit here. But the hard part in this is only statutes of limitations, look back periods, and insolvency. Because clearly, there's no questioning there's no plausible way that Kauai did the work. And once you do that, all you've got to prove is that they were insolvent when they paid them the money for doing nothing and that it was within a fraudulent transfer look back period. I think that's a safe assumption because the work here was social media and promotional stuff and people have really dug into it and he did zero social media promotion out there. Yeah. No, I mean, if someone has a no-show job in the company files for bankruptcy, you're going to be able to get their compensation back. Usually you're probably with these no-show job workers is you don't, it's, you can't probably be known and they don't have the money to prove or, or they're, you know, they work for Tony Soprano as well on the construction site. It's a very sketchy situation, but yeah, they obviously he's good for it. So there's no reason for the trustee not to go after it. And of course, then the question becomes if the trustee does get $10 million from Kauai Leonard, is Balmer going to pay that 10 bucks and then get in trouble again? The intricacies of clawbacks, the transfer needs to have been made at a time when or have rendered the debtor in solvents, unless it's an actual way, well, don't get it. The point is keep in mind that when a company or a person files for bankruptcy, everything they did in the four years before they filed for bankruptcy can be looked at and anything they did that was hinky in that period can be undone. And so if you're dealing with the company that's going to file for bankruptcy, you got to worry about that. And so Kauai's got to worry about that. The point is we're watching it, where we are kind of unhappy that they blew up our conspiracy theory, although I still think it was a conspiracy theory. They just changed the facts out from underneath it because they knew they were in deep trouble. I'm extremely thrilled because this will continue to be a bankruptcy problem. Yes. And we're going to have all kinds of fun with it. We'll be watching. I'm sure a lot of other people will be too. It's a live bankruptcy issue and we're on the case, folks. I mean, look, I know that Pablo's guys are really good at like, digging stuff up and looking at stuff, but to go watch a hearing in United States bankruptcy court, I don't know if they have this stomach for that. I don't know. Sometimes I don't. And this is what I do for a living. I mean, if they had a time machine and they could go back and watch this bankruptcy hearings after all they know about this company, I think they would be horrified because it doesn't feel like any of this stuff came out. Let's move on. Let's move on from the hardwood to the runway. Spirit Airlines is back in bankruptcy court for the second time in a year. They're fraud, spirit. No. No. No, just a bad company. Spirit Airlines is back in chapter 11. Your ridiculous bag fee didn't help them, didn't work. They filed on August 29th, less than six months after reemerging from their last case in March. The trigger this time was a supposedly unforeseeable move by international Megalessor Aircap, which terminated 36 future airbus deliveries and issued default notices on leases for 37 current fleet aircraft. We painted that hideous yellow color. Spirit drew 275 million under its revolver to fund the filing, very 2021. But once those aircap notices landed, they say they had no choice but to seek court protection again. Can't lose 37 planes needed to service all those shitty routes, Jason. The Atlantic City to Myrtle Beach, that is can dire. That is the, I looked at their route map and that's the one that stood out. There are a dozen, but Atlantic City to Myrtle Beach. Yes. The most incredible thing for us old bankruptcy heads is that they filed on a Friday before a Labor Day weekend. And they're in airline. This is absolutely bananas because nobody filed on Friday. Like that's a bankruptcy. You never filed on Friday because you can't control the narrative. You can't get into court until the next day. This is a three day weekend. And this is an airline. And when you're like unfrozen caveman lawyer, bankruptcy lawyer from the 90s, like airlines were the most sensitive. To be fair, I'm a bankruptcy lawyer from the early aughts. Early aughts. You were scared to file an airline because the fear was that people would not get on the effing plane because the company's bankrupt. And we have somehow got those people including the pilots. Yeah. You have to, you're highly paid pilots are like, am I going to get paid next week? And if they don't show up, your whole route fails. Very bold. I admire it. Balsy maneuver. I'm just saying from that early aughts point of view, it's inconceivable to file any big company on a Friday. And it's inconceivable to file an airline on a Friday before a three day weekend. You don't get into court until the next Tuesday. You have to make payroll for the period before you file. All right. So when you file bankruptcy, you can't make any payments. You're basically forbidden from paying amounts due for the pre-petition period. This bankruptcy 101, right? So if your employees have been working for a week before the bankruptcy is filed, and you haven't already paid them for that, then you can't pay them without court approval. This is one of the big reasons why companies have the first day hearing so that they can file, and they ask for permission to pay the employees and make payroll. But if they do that on a Friday and you can't get a hearing, they filed it 4 p.m. too. You can't get a hearing till Monday. Nobody's getting paid. And it's Tuesday here. And also in the air. Yes. Tuesday. And then entirely separate from that legal point of view, because I think some of the local rules on on first-day relief, I think some of it's almost like, anyways. You can do it. You're just taking a chance. There's a whole nother thing, which is the public perception issue of being able to filing for bankruptcy, having the narrative be that you're in bankruptcy, and not having that court hearing where you explain yourself, and you get the court to tell you everything's going great. And you get to say that everything-- Get your financing approved. Yeah. You say, we got enough. We're paying all these vendors. Yeah. You don't have that. You just got a weekend of silence. And yeah. I admire the hoodspot. It's really, to me, it's more a sign of how far this practice has changed since when we started. And I think a lot of it's rooted to the 2008 financial crisis. And the taint of bankruptcy is just not what it was. And I guess people kept flying. People are just so accustomed. Yeah. Yeah. It's just part of the news cycle now. Moving on to the substance of this. The company has the same operational problems as before. The first bankruptcy. Right. Because the first bankruptcy was this half-assed effort to redo the balance sheet without terminating any roots, canceling any union contracts, collect bargaining agreements, without stiff farming, fuel suppliers, all the stuff that airlines generally do in bankruptcy. The first bankruptcy feature none of that. Yeah. I think you shouldn't call it half-ass Kevin, because we're the bankrupt. Well, I mean, yeah. It was well done. It was well done. The LME thing in court. Right. And we should like that. We should like that. We should like that. It was basically an LME. They liability management exercise for you, civilians. And we'll get into that. We'll get into that. Julian's coming up. Julian. But the point is the first bankruptcy was purely a balance sheet. Let's deal with our debt thing and they didn't deal with any of these operational problems. The first bankruptcy was about to be, many people worried the trigger for it would be the payment processor for the credit cards. You know, when you use your credit card, a company pays the company that. And that was supposed to be the trigger for the first bankruptcy. That's an issue in this bankruptcy. The credit card processor demanded more collateral and that would require a lot more cash. You need a credit card payment processor, I mean, if the spirit had a plan to accept doge coin or whatever. Side point. In Europe, you know, very few people have credit cards at all, even super wealthy people. It's all debit cards. So this one, you mean issue? Well, you're the European expert from South Florida, where nobody has a debit card because no one has any money in the bank. So it airlines, you got there's one more issue, one more operational issue, 38 of their planes are grounded because there are issues with the Pratt and Whitney engines. Nearly 80 engines could be sidelined over the next two years. They are not saying they didn't know about that prior than prior, before the prior bankruptcy. It's been something that's going around in the aviation guys, John Austro and all those guys have been covering these issues with, with new ultra-efficient airplane engines. But there's, so there's a lot of operational issues. They didn't do it. Do anything in the first bankruptcy in now. Right. Yeah. The first bankruptcy was essentially a yo-bet to see if they could get to a hockey puck upward. My theory. And I've been out there with this. They wanted to clean up the balance sheet and the debt holders going into the first bankruptcy wanted equity because they thought that the new Trump administration would be more friendly to airline mergers. Remember, their merger with JetBlue was scuppered by the courts. They were playing footsie with Frontier. I thought that when they did the first bankruptcy, what they were doing was trying to clean out the capital structure, get rid of existing equity so that they could then sell the company to another airline, Trump administration, okay, so when the Biden administration wouldn't. Or they do an IPO and get it out there. It was just a by-time play and obviously that didn't work because no one's traveling. Yeah, revenue per passenger dropped, almost 9% year-of-a-year, operating cash burn nearly tripled and the losses last year hit $1.3 billion. So that is a tough environment to be doing your yo-bet for the future. One thing we should sort of explain to the civilians on these airlines and how they operate air cap, we mentioned briefly, but none of these airlines own the planes they fly. They lease them from companies. What to do on some. They lease them. There are entire companies that buy and lease out airplanes to airlines as their business, that's what they do. And then those airline less sores, there's companies like air cap and then there's also a financed aircraft through e-triple-seat notes, basically, that are sort of- Don't get into the airline. What's important to know is this is an illustration of what I was talking about before. That yellow ugly-ass dirty bargain basement 737 you're flying on when you're on spirit. That's owned by some Rando Irish LLC and there's no good reason for that. So you know what the reason is. It's tax. Taxes. This is all a tax dodge. Aviation leases are a huge tax structure thing. So that's why air cap is this. The secret here is that air cap, these less sores, are savage, savage creditors because airplanes are worth money. They don't mind getting their collateral back. That is every bankrupt company's worst nightmare, a creditor that instead of renegotiating and getting paid at a higher interest rate over more years, we'll just take the airplane back and sell it to Delta or lease it to Delta. This is a plane where the tail fell off. It is, you know the metaphors, crash into earth, full speed, pilots black and out, everybody in the eyes. I don't think that's quite fair, Kevin. Again, I'm going to stooge for the man again. That would have been the case if everybody stopped flying spirit because it filed for bankruptcy. But in reality, they kind of, I don't know, they just, it was a baller-move to file and just be like, you'll still keep flying with this because if you have life, I'm a little rich to wherever, where the option, what you're going to do, you know, I mean, they're losing money with every sale. Their plan is to make it up in volume and shrink. So lose that volume. Frontier is actively on their tail. Right. They want to right size the fleet, shed billions in debt and lease obligations and focus on key markets. Good news. Chattanooga. You'll probably get a direct flight, the Guayaquil, but, you know, they're also trying to juice revenue with new branded, fair options, go big, go comfy, go savvy. Management says it could lift revenue by 15% with this program, but it's going to take at least a year for this stuff to hit. Maybe they should have done it in their first bankruptcy. They'd been six months deep by now. But, you know, this is, it's, it's a testament, we talk a lot about how bankruptcy has changed. We are so accustomed to companies doing, focusing on the balance sheet side of reorganizations and bankruptcy and restructuring that it's just weird for us to now see a company that's like, no, we're going to, we're going to like get rid of some costs and we're going to try to juice the business and actually make more money as an operating business. That's astonishingly fresh and innovative nowadays. From an investor point of view, these, these airline ones are tricky because the main catalyst for whether that they succeed or fail is going to be the terms of their renegotiated leases and that is blacked out from all the disclosures. Well, and of course, the question you have to ask yourself, if you want to invest in this company's distressed situation is, will Americans start flying again because they're calling big chairs go big? Do people really want to go to Waikil? I would say people have become incredibly loyal to their particular airline, something I've, uh, when you try to plan a ski trip with your buddies and everyone has a different air. No, I'm saying I have friends who won't fly anything other than Southwest and I can't figure out why because it's the same price as a regular airline. I love Southwest. Okay. So you're one of those people. There's all these sort of geographic and personal legions to airline. I don't think there's anybody who feels any allegiance to spirit, other than maybe people who are looking for Instagram mobile moments on the flight. No, nobody wants to fly a spirit. It's a, it's a, a true budget airline. People fly spirit because they have the cheapest ticket and if they don't have, and nobody's flying spirit. But that cheap ticket is not $17 anymore. It's not like the way that Ryan and I are used to be. I checked. I checked. I checked. Myrtle Beach. Oh, you did look. The Myrtle Beach Atlantic City Route posting for $80, but of course. That's before all the features. That's one way, before fees, before buying a seat that you can actually sit in. They go around before the flight and they put a live 40-pine in all of the cheap seats. That's 250 or 300 by the end. I'm flying to tell you right? Yes. 450 bucks. Yes. So get on American. Get on a real airline. Doesn't have engines that are like busting and falling apart. No, there are problems with their engines or more, the less source just want them to more lucrative leases, I think. Oh, that's another thing. The engines are completely separately leased in the planes. So you're flying on an aircraft where the engines are leased to somebody and the frame is leased to somebody and both of them have commercial relationships with the airline. I know Jason. We'll wrap it up. Spirit calls this a restructuring, but to me, Jason, it looks like an acknowledgement. Nobody wants to merge with them or buy them out right now. Even though Trump's FTC is much friendlier than Biden's, shrinking the fleet, cutting roots and selling go big seats doesn't sound like the kind of reinvention this turkey needs. It sounds like buying time and for what? I don't know. Hope springs eternal, Kevin. We'll see. But I do know, Spirit is the only airline where your boarding group is chapter 11. Filing on a Friday might have hidden the headlines for a day, but not the reality. They are running out of runway. You give cois some stock people, which brings us to our unofficial sponsor. Because when the filings pile up and you've got 700 pages worth of credit agreement to review, sometimes all you really need is a tree. Kevin, this episode is unofficially sponsored by the emotional support tree. Because sometimes a flight cancellation, a second bankruptcy in a year, or just checking your email on a Monday is too much. That's when you need tree. Not a metaphorical tree, a literal tree, lociarbolis with roots and leaves. Your emotional support tree doesn't judge you. It doesn't ask you to download an app. It doesn't send you calendar invite. It just stands there, tall, patient, photosynthesizing your trauma. The emotional support tree comes in multiple species, oak, if you need strength, willow, if you need to cry, pine, if you want year round shade. The supportive kind, not the kind of shade you get from your mom for being single and still sharing an apartment in Kipps Bay with three other junior analysts. Each emotional support tree arrives with a starter kit, soil, a watering can, and a laminated certificate that says, this tree believes in you, it's like using chat GBT. Upgrade to emotional support tree plus and we'll add a Bluetooth speaker inside the trunk. They got corporate packages. For corporate packages, we offer the forest of coping, perfect for HR retreats, earnings calls or anytime your CEO announces, they're, quote, taking the company in a bold new direction, end quote. I mean, this might be the wrong time to mention this, but I am an endorser of the forest of coping, it's $28 million over four years, seven million a year. You didn't get to do for that, you didn't get that, you didn't get that, what do you have to do with that? Oh, no, I just assume Jason had that too. The emotional support tree, because sometimes therapy is expensive, your friends are busy, and all you need is alder. Order now, it will throw in a free tote bag made of recycled guilt. And unlike certain fragile NBA stars, your tree will actually show up to work. Too soon, Kevin, too soon, but yes, this tree won't miss games, skip endorsements or end up in bankruptcy paperwork, sorry, go I, sorry, not sorry, all right, from emotional support trees to emotional support lawyers, borrowers are now slipping disqualified council provisions into credit agreements, even big time finance lawyers get the blues. To explain how this works and why it matters, we're joined by one of our colleagues, Julian Belon, head of liability management at octas, Julian Belon is here to break it all down with us. Welcome, Julian. Thanks Jason, nice to be here. So what's is actually going on in this disqualified council provisions, where are they showing up? How often have you seen it? This surprised me, honestly, it's kind of shocking from when you first hear about it. So why don't you explain a little bit and then how often you're seeing it? Well, we're not, to be clear, we're not seeing it super often. It was several weeks ago where it popped up in a couple of private credit agreements. And what was so shocking about it was that it allowed disqualified council to be named by the borrower after the closing date, which is really extraordinary. We actually haven't disqualified council is not a totally unprecedented concept. We've seen it in some older, broadly syndicated loan agreements, but it's been limited to a specified list as of the closing date. You don't get to update it after the fact. So everybody's going in with eyes wide open, knowing, you know, okay, fine, I can hire these law firms. But the more recent iteration that we've seen in private credit allows the borrower a one time veto right after the closing date to say, no, you guys can't hire that council, which it doesn't name any specific council. But if you just take a look at the league tables at the types of law firms and which law firms are leading lender groups and liability management exercises in the law firms that are also representing holdouts and liability management exercises, you get a good sense of who this is going to get pointed at. Is it like super detailed mechanics where you have to sort of send your proposed council or is it all that laid out in the documents or is it more an concept that hasn't really been? No, it's not particularly well fleshed out and the piece that we published, we only included an excerpt, which is really the only portion that I'm really going to be able to talk about today. But generally speaking, the idea is that you're going to need to ask the borrower for consent before you decide to hire that law firm. And it could be anybody. You cannot know ahead of time when you're shopping for lawyers and you're doing a bake-off. You can't know whether the people you choose will be approved by the debtors because they're the sponsors or whoever because you don't have a list. Yeah, I mean, we should explain for people just stepping back a second that this is inherently borrowers and creditors are inherently on opposite sides of the table and inherently opposed when it comes to this sort of stuff in a way like the creditors agreeing to lend money to the company, but it's an adversarial process in a way of negotiating the terms of that agreement. And then in the future, if something were to go wrong, it becomes even more adversarial and that's where this provision could really have some impact, because I guess the idea is that the enforcement here would be not paying for counsel, but we don't really know because these are relatively new. But nobody's tried to say, well, we'll just pay out of pocket for the super-aggressive counsel. Yeah. Let's say you want to hire, I don't know. I'm going to take it. I'm just taking a random firm name, not a firm that, you know, is typically known for aggressively representing lenders. Let's just say Gibson Dunn. Okay. You may or them, you send an email to the debtor saying we're going to hire these guys for our upcoming, the ad hoc group of, you know, these ten holders. We want to hire Gibson Dunn and the company says no. What happens then? Yeah. Well, it's a breach of that provision, then. And it's probably going to-- Well, it's a, but it's only a breach if you proceed with hiring. Correct. Correct. Right. Presumably, if you are in the position where you're hiring someone like Gibson Dunn, you're probably willing to continue with them, even if you get shot. I don't know anything about Gibson Dunn, just randomly pick two names. Just I have a phone book in front of me there on the back. Yeah. I just want to be clear about that. Yeah, wow. What a quinky thing. The, the, it would be a breach of that provision if you proceeded with the hiring. And there'd be, at the very least, the agreements make it very clear that the company, unlike it normally would, would not pay the fees of Gibson Dunn. Yeah. So usually, in the old deals that we sum were off, the company would agree to pay counsel to the agent under the lending agreement, which is a more ministerial role. And then they'd also agree one counsel for the lenders, maybe not quite defined. Has that been ported into private credit, or I guess there's one count, is there an agent council and then a lender council, or is it all sort of one bucket in private credit? Oh, I can't really speak to how it's done in private credit. The bulk of, you know, what I, what I do over here is looking at BS documents. Well, Jason, that's private. But it, but it's going to be more relevant and broadly syndicated situations anyway, because the agent is actually going to be dealing with a group of lenders that are coming in and out of the structure, which is less common in private credit. You've got a lot more people holding, holding to maturity in that asset class. But typically, the agent will have its counsel, and there won't be other lender side counsel named in the debt documents. And it's often the case that the agent's counsel is going to be the designated counsel where the sponsor is more or less blessed their involvement from the beginning. And I think the idea here and what's so interesting about disqualified counsel provisions is that you, you sort of now have sponsors vying for end to end control of who can represent the lender group, starting from syndication all the way through now to the downside scenario where you might see groups forming. This is part of a broader back and forth, right, between sponsors and creditors. LME has been a radical shift for, for practice, right? There's just much more opening up the debt documents and doing as much as you can under the arguably most aggressive reading of the document. How does this fit into the push and pull with the stuff you guys reported on earlier this year about, say, like, LME blockers and stuff? Is this a push back? Is it all part of the same dynamic? Is there an ebb and flow or is it just that stuff gets floated and we see what sticks in the market? I think it is a response to the dynamic that we're seeing where LMEs are increasingly being done on a consensual basis. I should put consensual in scare quotes because some lenders are agreeing, but majorities usually of each tranche are participating. What that means, once you get that threshold, that majority threshold, you can generally amend documents in any way that you'd like as long as it's not listed in that, yeah, unless it's not a sacred right, exactly. So the idea is, you know, when you're doing old school covenant analysis, you're kind of, you're very focused on tabulating things like basket capacity. How much debt can the company incur, how much can they invest in unrestricted subsidiaries? None of that stuff matters, really, once you get a majority because you can just delete it all, unless it's a sacred right, of course. So the idea here is that there's a lot that you can do with a majority easier, I think, in some ways. If you have the poll, the social poll and the relationships to get together a required lender group, then it is to engineer a clever transaction within the parameters of the existing document. Well, just to be clear, on the baskets and stuff, you can't tighten the company's baskets with majority control without the company agreeing, like, it's a contract between the lenders and the company, but you can speak for all the lenders if you have a majority on them on issues like that. Yeah, that's exactly right. I think some people forget that the borrower actually has to consent to these required lender votes because there is technically a limit to what the required lenders can do and they need to have the borrower on board. I see the disqualified council provision as an extension of several other mechanics and moves that sponsors are using to expand their control over potential, the formation of the potential majority lender groups for the purpose of controlling the outcome of an LME. All right. Well, let me, here's the big question on my mind. Can this go the other way? Can there be retaliation? Can lenders and agents ask for a provision disqualifying restructuring council for the buyer? Let's say there's a, don't do it. I won't name the firm, but it'll, it's basically like that Simpson's sketch where the Germans have, here's the list of everyone that's laid off at the Springfield power plant, Simpson Homer. That is all. I mean, there's one name that would be on that list. Is there a, is that feasible? Is that the kind of thing that lenders would do? I mean, I think it's, I think asking the question illuminates how sort of ridiculous the provision is generally, which is, I mean, yeah, it's a reasonable thing to ask why shouldn't lenders reciprocate, right? Why shouldn't it go both ways? If you can disqualify my council, why can't I disqualify yours? I think a, if you're already in a position where you're agreeing to the veto right and you don't get a reciprocal one, I think that says everything about your leverage in the negotiation. And if it does extend to permit lenders to disqualify council, I don't know, it seems like all bets are off. I, I don't see it happening anytime soon though, usually the aggressive, surprising terms happen on the sponsor side before they do on the lenders side. I think most of the ill will between LME and bankruptcy is actually internal firm dynamics if I had to guess. I think that, I think, well, I think, oh, there's this boring ship. We're moving on. Thanks again, Julian. We will have you back when borrowers invent an even dumber clause for credit documents. Thanks for having me, guys. Can't wait to be back on soon. All right. From bankruptcy lawyers to cultural bankruptcies, the hunting lives, on Netflix, suburban chaos awaits. Let's get into it. We got suburban Texas. We got affairs. We got politics and enough guns to make the NRA blush. It's messy. It's implausible. And somehow it's still watchable. At least the first-- Yeah. Agreed to disagree. Kevin, I really wanted you to watch this one because I thought your wife, Mandy, would watch it with you. And she's a Texan and I needed some Texas takes. Well, that's the problem. Mandy hates Texas, like many ex-texans. Yeah. She has one of the things we have in common. She hates Texas as much as I hate Florida. Amazing. She flat out refused to watch. So I was left by myself trying to make sense of Lake House bore hunting parties. Yeah. Suddenly deciding to run for governor and bisexual milves getting knocked up by their kids' friends. It's a real slow show. You know, you got to-- There's a lot of good. You know? Yeah. But we have a lot of listeners who don't watch all these shows too. It's on Netflix. It's suburban drama. Ball. I think about-- I think-- I think the narrative force you get into the first few episodes is a very northeastern couple from Boston. Actually, they specify Cambridge moves down to this East Texas town. Where are the blues? Yeah. You have a certain age. Yeah. This is Skinimax. Yeah. It's-- It's a shame. High production level. High production level. Yes. Extremely high production value. It's the Red shoe diaries. It's the stuff that came on that you switched the TV from the input from A to B on that little slider so you could watch it after APM. It's really-- And I-- You're right. I started off with high hopes. Because it had an obvious milieu. It has this-- It has this East Texas thing. See, that's what's interesting. It doesn't go with like the Cowboy West Texas. No, this is like the Elder Burbs of Houston or Dallas. Yeah. Actually, they say Dallas. It's like Lake Life. Right? It's an hour from Dallas. Yeah. But it's not-- It has an honest milieu. It has some interesting characters. And for a while, I thought they were going to surprise me because that's why I always went from the show. Right? What I want from TV shows is for them to subvert the trope. And I thought, OK, this Boston sort of uptight Boston woman with apparently a flaming drinking problem and a total disregard for her child's well-being. I just need-- I thought she would like blend in and like, there'd be some interesting give and take. And maybe the-- No, it's just the totally bonkers. Well-- Psycho. If you watch the show, they definitely set up at least the first episodes with a-- it's called The Hunting Lives. And it-- very first scene is a unknown character crawling through the woods and getting shot in the back of the head. So there's this overlay of violence. You're doing the in-medius race. Yeah, that's a-- How do we get to the murder? That's a flash forward. There's two big problems for me in an interesting way. More than two? Yeah. But one would be that the whole reason they uprooted their family is to live in this town with-- if you're saying it's German, Mulroney, that's German, Mulroney. But he's the head honcho guy, the richest guy in town, and he is a bank head. And-- Is it a bank? Yeah. I didn't catch where it was ever. And so he's building a new headquarters. Our main character's husband, who's a pathetic cuck in his own right, moves the family down to-- He deserved it. Yeah. If anybody-- I mean, I don't want spoilers, but, you know, the one person who really deserved to die didn't-- Yeah. Kill the husband. Yeah. He moves the whole family down to this town in the middle of nowhere, including-- They're young son. Mapleville? Yeah. To be there for the building of this, he's the architect for the bank, which is all very implausible. Maybe they just needed a break and a move because of her backstory, sure. But then also, I would say something that truly irritated me was the idea that this, uh, philandering threesome, getting with anything that moves, guy, and just decided that he's running for governor of Texas one night, and that that becomes like a plot device for the whole show. You don't just run for governor of Texas. It's an economy the size of Spain, I think, and they're in their need. The Texas government is like in Austin and working like 20 days every two years. Sure. Like, this is not a-- I hate that. Like, we're not talking about the governor of New York, or California, who actually does anything. These are pretty-- I don't think you go from being the richest, most liked guy in some random, important suburb of Dallas to running for governor, sorry, but I guess this is a very minor-- Well, I mean, but the running for governor thing was essential. First of all, it's a plot device for sure. Well, yeah. It's a plot device because all of the nefarious deeds that happen, all of the lesbian affairs, the sleeping with high school boys, the swinger parties, I mean, there's a lot of-- There's a lot-- There's a lot going on in the whole idea behind it is that this all has to be hidden and sort of wrapped up in a way so he can run for governor without-- Yeah, and just so everybody understands the plot, the-- I don't-- Yeah, it's the back-- I'm going to sit back and listen. Our main character point of view person moving from Cambridge, who has a very troubled past in her own right, and was a party girl, and then became sort of square, lands in the middle of this couple as they're trying to clean up their act so he can run for governor. But at the same time, I guess the future governor's wife is just has an unsatiable sexual interest in the mom from Cambridge and vice versa, and they really like each other. And the husband, the governor, is fine with-- No, no, he-- Yes, they-- They sort of find women. He's fine with his wife sleeping with other women, but not sleeping with other men, including, but not limited to the high school basketball star. And what was really unbelievable and what really struck me as interesting is at the very beginning. So the show sets up the surroundings by having a party at the rich guys, you know, ranch, and it's like an NRA fund rate. It's also his coming out of sorts to running for something. Right, he's sort of playing with running for office, and he says something that is the most honest thing about this show, which is nobody can-- About that. Nowadays. In politics, yeah. Right, nowadays-- They want a strong guy. They want a strong man. They don't care if-- And brilliant. Yeah. That's like an amazing point. If this guy's charismatic enough nowadays, nobody would care if he came out. He's running for care, and he'd be like, yeah, I'm sleeping with these two waitresses from Hooters, a spirit flight attendant, a girl who works the front desk at the weed dispenser. I'm just trying to wrap it all up together here. Kauai Leonard? Slip with him? Kauai Leonard came over. And people wouldn't care. And he's absolutely correct. So the whole rest of the show is her trying to cover this stuff up, and more people getting killed, and more people getting drunk murderers, and it's all ostensibly to clean up these various loosh misdeeds that she's done. So he can run for cover. But in the end, it doesn't-- he was right in the beginning. It doesn't matter. But this is like, if Hollywood's like, we want to do the Taylor Sheridan and Milu, but we don't want to actually fully embrace the politics, that sort of thing. If you're trying to find something interesting, is all of the men are shallow morons and idiots with very little substance, and all of the women are interesting and have interior lives and make a good and bad choices and drive plot. Does this hurt you as a man? Are you swinging around a man's rights here? Are you getting rent though? No, no, that's the thing. I think it would have been really interesting if it was a better show to just completely invert all that stuff. But the plot is so convoluted through the last episodes. It's hard to think of anything smart to say about it. The other thing that really struck me about. Yeah. What I was thinking about. The idea that there's some kind of cancel culture on all of this. There is an evil minister. There is a flannel wearing, beanie wearing, evil youth pastor. I mean, and yeah, there's dong swinging around in the air. Yeah. Governor's wife's estranged brother. This show was bonkers and there's no way, like, Dallas or Dynasty or any of this. We've got to even near this stuff. It's crazy. But, you know, it's ridiculous, but then again, so is Texas. That's how they do it in Texas, this is extreme. All right, Jason. Yeah. One more item. One more item. One more item. Cannabis foreclosures, Kevin. So the story is that what got a lot of traction is that cannabis companies are not filing. They can't file for bankruptcy. We know that. They know that. And they're using Article 9 foreclosure under the uniform commercial code instead. Basically, that's the examples that people are talking about, which was Z and air wellness. And I guess, you know, what we thought was interesting, Kevin, is to tell me what we thought was interesting. Tell me what we thought was interesting. Tell me what we thought was interesting. Tell me what we thought was interesting. Tell me what we thought was interesting. Tell me what we thought was interesting. 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