Q Talk

[They CallMe MRWILKES]

Summary as of today:

While the Bankruptcy Court has approved QVC's plan, the Preferred Shareholders immediately appealed to a US District Court.  In addition,  they filed a motion with the Bankruptcy Court to stop the confirmation until the appeal is heard.

Of course, yesterday QVC filed a motion opposing the Preferreds' action.

QVC was quite frank in stating that it can not survive in any form if confirmation is stayed while waiting for an Appeals Court decision,  noting that it could take a year or more.

QVC cited the ongoing costs of the Chapter 11 such as attorneys and financial advisors. 

As others have noted here, vendors are reluctant to deliver product unless paid in cash or delivery is secured by a letter of credit.  This situation will get worse if confirmation is delayed any longer.

Most interesting, to me, is the disclosure of an employee incentive and retention program, intended to keep key employees who might otherwise leave due to the filing.  Thus far, this program has cost $70 million!  Retention bonuses really aren't that unusual,  but that's a lot.  Seems like a large number of employees may have jumped ship.

QVC has requested that if the Court stays the confirmation,  the Preferred Shareholders be required to post a bond of $900 million+ to cover Debtors various costs.

Nothing is smooth or easy.  It surely doesn't look good for the viability of this business if not resolved quickly.

[santorini]

Very interesting.  Thank you for keeping us updated.

I'm a little shocked about the retention bonuses.  I would think they would be able to find replacements for a lot less money and might even prefer that those higher paid hosts leave the network.  Now they're spending millions to keep them?  

[RescueLover]

I suppose the incentive and retention program is to keep Top Executives from quitting during all the turmoil.


Can You imagine the entire GLOBAL OPERATION shutting down because of it. 🥴

[RescueLover]

Not the hosts….


It takes Highly Experienced Management to function each day.

[They CallMe MRWILKES]

I believe that this retention program is for a wide variety of employees,  including hosts.  Could be why some are still there.  Key employees work in every department.

[JudyL]

I would think the Preferred Shareholders would want the Company to continue and work towards getting back on its feet.  Seems like they are trying to sabotage the reorganization?  What do the Preferred Shareholders gain by doing this and possibly the Company shutting down?

[santorini]

Good point, @RescueLover.  My mind went straight to the hosts but this has to mean management instead.  Thanks.

[They CallMe MRWILKES]

From the QVC filing;  Debtors Objection to Preferred Shareholders Emergency Motion

Make no mistake: a stay of the Confirmation Order would wreak havoc. Start with 

the Debtors.  Even just the threat of a potential chapter 11 proceeding “put a lot more stress on the system.”   (Wafford Testimony, Day 2: 347:22–23.)

It caused vendors to demand letters of credit or prepayment before shipping inventory.

It increased employee anxiety, which prompted the need for retention and incentive plans to convince valued team members to stay on.   And it caused the Debtors to incur tens of millions of dollars in professional fees.

[RescueLover]

It’s probably why the Hosts want to join the Union.


They don’t feel protected like the higher ups are and know they can be replaced if necessary.

[kaydee50]

I guess that's one of the reasons for so many "only order of the year" comments.

If I were a QVC/HSN employee I would be spiffing up my resume and actively job hunting including the hosts.

$70 million to retain employees???  No one is irreplaceable.  Well, maybe SK--LOL!!!