{"id":"court_ctb_1614_0","court":"CTB","case_no":"22-50073","doc_number":1614,"sub_number":0,"doc_type":"ORDER","filed_date":"2023-03-29","title":"UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \\* Case No. 22-50073 (JAM) \\* HO WAN KW","summary_zh":null,"summary_en":null,"body_en":"UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \\* Case No. 22-50073 (JAM) \\* HO WAN KWOK, GENEVER HOLDINGS \\* CORPORATION and GENEVER \\* HOLDINGS, LLC, \\* \\* Debtor. \\* \\* LUC A. DESPINS, et al., \\* Adv. Proc. No. 22-05027 \\* Plaintiffs, \\* \\* v. \\* \\* BRAVO LUCK LIMITED, et al., \\* \\* Defendants. \\* HK INTERNATIONAL FUNDS Adv. Proc. No. 22-05003 INVESTMENTS (USA) LIMITED, \\* \\* Plaintiff, \\* \\* v. \\* \\* LUC A. DESPINS, \\* \\* Defendant. \\* \\* GENEVER HOLDINGS, LLC, et al.,\\* Adv. Proc No. 23-05002 \\* Plaintiffs, \\* \\* Bridgeport, Connecticut v. \\* March 21, 2023 \\* HO WAN KWOK, et al., \\* \\* Defendants. \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* Proceedings recorded by electronic sound recording, transcript produced by transcription service. **Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992**\n\nTRANSCRIPT OF ORDER GRANTING REQUEST FOR STATUS CONFERENCE MOTION TO EXTEND TIME TO RESPOND TO ORDER TO SHOW CAUSE TO 4/27/23; MOTION TO CONTINUE HEARING ON MOTION TO REMOVE TRUSTEE; MOTION TO EXTEND TIME TO RESPOND TO COMPLAINT TO 4/10/23; MOTION TO EXPEDITE HEARING ORDER GRANTING REQUEST FOR STATUS CONFERENCE BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Creditor, Pacific ANNECCA SMITH, ESQ. Alliance Asia Opportunity Robinson & Cole Fund L.P.: 28 Trumbull Street Hartford, CT 06103 STUART SARNOFF, ESQ. PETER FRIEDMAN, ESQ. O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, NY 10036 For the Chapter 11 Trustee: NICHOLAS BASSETT, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 PATRICK LINSEY, ESQ. Neubert, Pepe and Monteith 195 Church Street New Haven, CT 06510 Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 For the U.S. Trustee: HOLLEY L. CLAIBORN, ESQ. Office of the United States Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT 06510 For the Creditors Committee: KRISTIN B. MAYHEW, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601\n\n2\n\nAPPEARANCES: (Cont'd) For The Sherry-Netherland, SHERRY J. MILLMAN, ESQ. Creditor: Stroock & Stroock & Lavan 180 Maiden Lane New York, NY 10038 TARUNA GARG, ESQ. Murtha Cullina 280 Trumbull Street Hartford, CT 06103 For the debtor, Mei Guo and ERIC A. HENZY, ESQ. HK International: JAMES M. MORIARTY, ESQ. Zeisler & Zeisler, P.C. 10 Middle Street, 15th Floor Bridgeport, CT 06604 For Bravo Luck Limited, FRANCIS J. LAWALL, ESQ. Interested Party: Troutman Pepper Hamilton Sanders LLP 1313 N. Market Street Washington, DC 19801 For Hing Chi Ngok, EVAN S. GOLDSTEIN, ESQ. Interested Party: Updike, Kelly & Spellacy, P.C. 225 Asylum Street, 20th Floor Hartford, CT 06103\n\n3\n\nHo Wan Kwok-March 21, 2023 4 (Proceedings commenced at 2:35 p.m.) THE COURT: Case No. 22-50073, Ho Wan Kwok and Genever Holdings Corporation and Genever Holdings, LLC; 22- 500, excuse me -- 23-05002, Genever Holdings LLC, et al, and Kwok, et al, 23-05002, Genever Holdings, LLC, et al., vs. Kwok, et al., 22-05003, HK International Funds Investments, USA, Limited vs. Despins; 22-05027, Despins, et. al. versus Bravo Luck Limited, et al. THE COURT: Okay. Thank you. If we could have appearances for the record starting with the Chapter 11 Trustee, please. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. THE COURT: Good afternoon. MR. BASSETT: Good afternoon, Your Honor. Nick Bassett from Paul Hastings on behalf of the Chapter 11 Trustee. THE COURT: Good afternoon. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey, Connecticut counsel for the Trustee. THE COURT: Good afternoon. MS. CLAIBORN: Good afternoon. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon. MS. MAYHEW: Good afternoon, Your Honor. Kristin\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 5 of 100\n\n| | Ho Wan Kwok-March 21, 2023
5 |\n|----|----------------------------------------------------------------|\n| 1 | Mayhew, Pullman & Comley, on behalf of the Official |\n| 2 | Committee of Unsecured Creditors. |\n| 3 | THE COURT:
Good afternoon. |\n| 4 | MR. SARNOFF:
Good afternoon, Your Honor.
Stuart |\n| 5 | Sarnoff, O'Melveny & Myers.
Thank you for granting remote |\n| 6 | access to my partner, Peter Friedman, whose plane got |\n| 7 | delayed.
He's with me today as well.
And Annecca Smith |\n| 8 | local counsel Robinson & Cole on behalf of PAX. |\n| 9 | THE COURT:
Good afternoon. |\n| 10 | Could you hear all that?
Was that okay for you? |\n| 11 | You couldn't really hear it. |\n| 12 | I'm sorry, Mr. Sarnoff.
I am going to have to |\n| 13 | make you come forward to a microphone because we just can't |\n| 14 | pick it up. |\n| 15 | MR. SARNOFF:
Stuart Sarnoff on behalf of creditor |\n| 16 | PAX.
Mr. Friedman, my partner, is accessed remotely because |\n| 17 | he had a problem with his plane.
And Annecca Smith, of |\n| 18 | Robinson & Cole, is our local counsel and is here as well on |\n| 19 | behalf of PAX. |\n| 20 | THE COURT:
Thank you very much.
Thank you. |\n| 21 | Attorney Henzy? |\n| 22 | MR. HENZY:
Eric Henzy, of Zeisler & Zeisler, for |\n| 23 | the debtor. |\n| 24 | THE COURT:
Good afternoon. |\n| 25 | MR. MORIARTY:
Good afternoon, Your Honor.
James |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 6 of 100\n\nHo Wan Kwok-March 21, 2023 6 Moriarty, Zeisler & Zeisler, for the debtor, Mei Guo, and HK International. THE COURT: Good afternoon. MR. MORIARTY: Good afternoon. MS. GARG: Good afternoon, Your Honor. Taruna Garg, of Murtha Cullina, representing the Sherry-Netherland. THE COURT: Good afternoon. MS. MILLMAN: Good afternoon, Your Honor. Sherry Millman, with Strook & Strook & Lavan, also representing the Sherry-Netherland. THE COURT: Good afternoon. Thank you both for coming forward so we can hear your appearances. Anyone else noting an appearance for the record? (No response.) THE COURT: Okay. Mr. Despins, this is your request for a status conference, so please proceed. Oh, I'm sorry. We didn't talk to people on the Zoom. My fault. You can come forward, Mr. Despins, but I forgot to take Mr. Lawall's and Mr. Goldstein's appearances. MR. GOLDSTEIN: Yes, Your Honor. Good afternoon. Evan Goldstein on behalf of Hing Chi Ngok. THE COURT: And, Mr. Lawall, you just have to unmute yourself. MR. LAWALL: My apologies, Your Honor. Good\n\nHo Wan Kwok-March 21, 2023 7 afternoon. Fran Lawall, Troutman Pepper, on behalf of Bravo Luck. Your Honor, thank you for allowing us to participate by Zoom. THE COURT: You're welcome. And good afternoon. And, Mr. Friedman, obviously, we've taken your appearance for the record. Thank you. MR. FRIEDMAN: Thank you. Thank you, Your Honor. MR. DESPINS: Good afternoon, Your Honor. May I approach? THE COURT: Please. Thank you. Go right ahead. MR. DESPINS: So good afternoon, Your Honor. For the record, Luc Despins, Chapter 11 Trustee. I'm just -- I'm going to cover a lot of this quickly, but I think it's important for the record. So on March 15th, the debtor was arrested at the Sherry-Netherland Apartments. Just to be clear, the apartment is owned by Genever BVI, a Chapter 11 debtor, which is itself wholly-owned by Genever U.S., which is the BVI entity. And Mr. Kwok was the sole shareholder of these -- one of these entities until we took over and so, therefore, the Trustee is the sole controlling party of these entities at this time. I forgot to mention at the last hearing that Yvette Wang was also arrested last -- on March 15th. You may remember Ms. Wang was the person that I think Mr. Kwok Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 7 of 100\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 8 of 100\n\n| | Ho Wan Kwok-March 21, 2023
8 |\n|----|---------------------------------------------------------------|\n| 1 | mentioned was the controlling shareholder, or director of |\n| 2 | Ace Decade, one of the two, and he could not reach her or |\n| 3 | was unable to reach her, did not know how to reach her. |\n| 4 | But, anyway, she was arrested as well for the |\n| 5 | same, participation in the same types of offenses that Mr. |\n| 6 | Kwok was charged with, and she's held, my understanding, on |\n| 7 | 5 million bail until the \\$5 million bail is posted. |\n| 8 | I also understand that there was -- that the FBI |\n| 9 | found \\$100,000 -- more than \\$100,000 in cash in her |\n| 10 | apartment when they arrested her. |\n| 11 | Later in that day on March 15th, a fire broke out |\n| 12 | at the Sherry-Netherland apartment.
The Trustee's informed |\n| 13 | that at that time there were only FBI agents in the |\n| 14 | apartment. |\n| 15 | Yesterday, Your Honor, we filed a proposed amended |\n| 16 | emergency order seeking to allow the Trustee's investigation |\n| 17 | team to also access that apartment.
I'll cover that later. |\n| 18 | THE COURT:
Okay. |\n| 19 | MR. DESPINS:
Page 2, damage to the Sherry |\n| 20 | Netherland apartment.
Obviously, we have not been in the |\n| 21 | apartment so we -- this is really hearsay, but it appears |\n| 22 | that the damage is I would say material and/or substantial. |\n| 23 | And I wanted to add that I am not one of the |\n| 24 | parties that can visit the apartment, and that's not an |\n| 25 | accident.
I wanted it that way because I don't want any |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 9 of 100\n\n| | Ho Wan Kwok-March 21, 2023
9 |\n|----|---------------------------------------------------------------|\n| 1 | allegations that somehow I was on the premises at any time. |\n| 2 | So Judge Cyganowski is really the only one that has access |\n| 3 | from the point of view of the Genever debtors to that |\n| 4 | property. |\n| 5 | But today, as of this time, no one has access to |\n| 6 | the property because the investigation is ongoing.
And if |\n| 7 | the -- so it's either a combination of the FBI and the |\n| 8 | Southern District of -- or the, sorry, the Police Department |\n| 9 | of the City of New York.
But at this time, no one has |\n| 10 | access.
I confirmed this again with counsel for the Sherry |\n| 11 | Netherland who is in the courtroom. |\n| 12 | Once access is open to others then we will allow |\n| 13 | others.
For example, the insurance companies have been |\n| 14 | clamoring to have access, and we told them no one can have |\n| 15 | access because it's still being -- the scene is still being |\n| 16 | investigated. |\n| 17 | In terms of insurance coverage, you know, I want |\n| 18 | to be careful here.
I'm going to talk about the policies, |\n| 19 | not -- you know, some people should not take this as money |\n| 20 | in the bank, far from it, but there's a policy that insures |\n| 21 | the apartment itself and its contents and the maximum amount |\n| 22 | there is 28 million.
I'm advised by AIG, the insurance |\n| 23 | company, that the maximum coverage there is 28 million and |\n| 24 | change.
I think it's 28,134,000.
But, anyway -- so it's |\n| 25 | around 28 million. |\n| | |\n\n#### Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 10 of\n\n| | 100
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10 |\n|----|----------------------------------------------------------------|\n| 1 | And on top of that, there's third-party liability |\n| 2 | policies in place.
We don't have copies of those yet, but |\n| 3 | we've been informed by AIG that those policies -- there's a |\n| 4 | first layer of policy for \\$1 million, third-party liability, |\n| 5 | and there's a supplemental policy for another \\$10 million. |\n| 6 | And so that is for a total of \\$11 million of third-party |\n| 7 | liability.
And I'm advised that those amounts do not reduce |\n| 8 | the 28.
So they're separate policies. |\n| 9 | And, again, you know, we caution people from |\n| 10 | thinking that this is money in the bank at this time. |\n| 11 | The next item on the agenda, Your Honor, I want to |\n| 12 | spend some time on this, it's very important, is that the |\n| 13 | events of last week really call for a reset in these cases. |\n| 14 | And what do I mean by reset? |\n| 15 | Your Honor, PAX spent years and millions of |\n| 16 | dollars chasing Mr. Kwok in a New York State Court -- and, |\n| 17 | again, to be clear, this is not evidence, this is just the |\n| 18 | Trustee's views -- and that resulted in a very clear -- in |\n| 19 | very clear findings by Judge Ostrager, not only about the |\n| 20 | yacht, but also about Mr. Kwok and the way he conducts |\n| 21 | business regarding the use of shell companies, shell games |\n| 22 | that he played, et cetera. |\n| 23 | And in a bizarre way, Mr. Kwok got a second life |\n| 24 | in Chapter 11.
And I'll explain why to me it's not so |\n| 25 | bizarre, but he filed schedules and statements of financial |\n| | |\n\n#### Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 11 of\n\n| | 100 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
11 |\n| 1 | affairs showing practically no assets and no transfers of |\n| 2 | any kind practically in the 90 days or the year before the |\n| 3 | filing.
These are the sworn-to statements that he filed. |\n| 4 | And I say perhaps it was not so bizarre because |\n| 5 | people believed that he would come up with a settlement. |\n| 6 | And, in fact, there were discussions of settlement prior to |\n| 7 | the appointment of the trustee.
And there was a lot of |\n| 8 | activity on that front for a while.
And then the offer to |\n| 9 | settle was withdrawn and then a trustee was appointed. |\n| 10 | Upon the appointment of the Trustee, what happened |\n| 11 | is we went into what I would call an investigation mode, |\n| 12 | full-bore investigation mode, but that -- those efforts were |\n| 13 | impeded at every turn by the debtor.
This cost the estate |\n| 14 | millions of dollars.
I want to be clear about this. |\n| 15 | There's just non-stop examples of Kwok, or what I call his |\n| 16 | proxies or his surrogates objecting to everything, |\n| 17 | appealing, challenging discovery at every turn. |\n| 18 | And that includes the daughter and the son.
The |\n| 19 | son through Bravo Luck.
And we know, you know, Golden |\n| 20 | Spring, Ace Decade, the whole saga over Ace Decade, and so I |\n| 21 | don't need to repeat that here. |\n| 22 | But millions of dollars were spent on that which |\n| 23 | is clear now that it was a charade.
And I'm sorry to be so |\n| 24 | crude about it.
But the charade I'm referring to are the |\n| 25 | schedules of assets and liabilities and the statement of |\n| | |\n\n| | Case 22-50073
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12 |\n| 1 | financial affairs.
Those bear no relationship to reality. |\n| 2 | We know it now.
And this is why there needs to be a reset |\n| 3 | in the case.
I'll be more explicit in what I mean by that. |\n| 4 | And nevertheless, in the case, you know, before |\n| 5 | the indictments, there was this whole process about a |\n| 6 | settlement, potential settlement.
There was a lot of |\n| 7 | energies spent on that. |\n| 8 | And then there was the whole First Amendment, |\n| 9 | alleged, I would call faked First Amendment harassment |\n| 10 | campaign which kept everyone busy for at least two months. |\n| 11 | And all this sideshow happened for a purpose, |\n| 12 | which was to keep us from focusing on the obvious thing |\n| 13 | here, which is that the schedules of assets and liabilities |\n| 14 | and the statement of financial affairs were fictions. |\n| 15 | And we need to hit the reset button because the |\n| 16 | SEC complaint and the DOJ indictment, although they're not |\n| 17 | -- they have not been proven, they're allegations and we |\n| 18 | understand all of that, but they clearly paint a picture, |\n| 19 | the picture that we have been advocating all along, which is |\n| 20 | this concept that the son somehow is a successful |\n| 21 | businessman that's funding his father's expenses and his |\n| 22 | defense counsel, and also paying for his sister's yacht. |\n| 23 | And the fact that the daughter would own a \\$30 million |\n| 24 | yacht, that's all a fiction. |\n| 25 | And what I want to focus the Court on is in the |\n\n| | Case 22-50073
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13 |\n| 1 | indictment, there are specific allegations about transfers |\n| 2 | of millions of dollars from Kwok to the daughter and the |\n| 3 | son.
And you might say how do you know it's the daughter |\n| 4 | and the son? |\n| 5 | Well, there are two relatives mentioned, and, you |\n| 6 | know, they mention the relative -- I forget whether it's |\n| 7 | number one or number two -- but relative X is, you know, |\n| 8 | involved with the Lady May, so we know who that is.
And the |\n| 9 | other relative is involved in a different capacity.
That's |\n| 10 | the son.
So we know they're making allegations about |\n| 11 | transfers of millions of dollars. |\n| 12 | So this is not spin by the DOJ.
They're alleging |\n| 13 | at specific times transfers of millions of dollars to the |\n| 14 | son, to the daughter, to the wife.
I'm saying DOJ.
It |\n| 15 | includes the SEC. |\n| 16 | And the point is these allegations have not been |\n| 17 | proven.
We understand that.
But the DOJ would not be |\n| 18 | making allegations, specific allegations to transfers unless |\n| 19 | there was substantial evidence of that.
So what does that |\n| 20 | mean? |\n| 21 | From our point of view, Your Honor, and I'm sorry |\n| 22 | to say it that way, but it's obvious that this pretense that |\n| 23 | the son is paying for Zeisler and for Walken is just not |\n| 24 | reality. |\n| 25 | And I want to be clear, I am sure they got money |\n| | |\n\n#### Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 14 of\n\nHo Wan Kwok-March 21, 2023 14 from entities that they believe are controlled by the son or the son told them that that's where the money comes from, but we know this is Kwok paying Kwok.\n\n And that's pretty serious. And that -- and that applies across the board. It applies to the expenses for the yacht, et cetera, et cetera. And these companies are created every day. There's a new name every day. I swear there has to be an employee that works for Kwok whose only job is to come up with names for these companies because they're creating some every day. And there's than 500 companies at this point that are part of the Kwok empire.\n\n And this is why Zeisler has to file supplemental disclosures saying, well, actually, it's not the son, it's company X, Macarone or whatever, it changes names all the time. That's because they're engaged in exactly what the DOJ -- they, I want to be clear, I'm talking about the son and the father here, not Zeisler -- are engaged in this shell game that Ostrager described.\n\n And there's another event, you know, that calls for a reset, which is there's not going to be plan funded by Mr. Kwok or his family. That's over. That was fiction we believe. And we believe it's over now and that changes the dynamic completely.\n\n And so you might think, Your Honor, this is an interesting speech, but practically what does that mean? So\n\n| | Case 22-50073
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15 |\n| 1 | let me talk about really concrete things. |\n| 2 | The ownership of the Sherry-Netherland apartment, |\n| 3 | you have to recall, Genever USA is the owner, legal titled |\n| 4 | owner of that apartment.
So if somebody is claiming an |\n| 5 | interest in that, it's their burden to show that, in fact, |\n| 6 | Genever is not the owner. |\n| 7 | And so the party that's coming in is Bravo Luck, |\n| 8 | which is the son of Mr. Kwok, saying, well, I have this |\n| 9 | trust agreement, and trust agreement which was never |\n| 10 | disclosed during three or four years of litigation before |\n| 11 | Judge Ostrager, was never mentioned to Judge Ostrager.
What |\n| 12 | does that tell you about the views of the lawyers who |\n| 13 | defended Mr. Kwok? |\n| 14 | Because this would have been a trump card for them |\n| 15 | to say, wait a minute, that apartment is not owned by Kwok. |\n| 16 | It's owned by the son.
That's an easy one, right?
But |\n| 17 | never mentioned for three years in that litigation. |\n| 18 | So now we have this agreement that they're |\n| 19 | providing saying, well, the son owns the Sherry-Netherland. |\n| 20 | And there's a fundamental issue here, which is there are two |\n| 21 | people to that agreement, the father and the son.
I don't |\n| 22 | think the father is going to come and testify about that |\n| 23 | agreement.
And now that leaves the son. |\n| 24 | And so practically what I think the Court should |\n| 25 | do, not today, but soon, is to direct Mr. Lawall to confirm |\n\n| | Case 22-50073
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16 |\n| 1 | that the son will come to the United States to submit to a |\n| 2 | deposition to explain the facts surrounding that trust |\n| 3 | agreement. |\n| 4 | And why do I say that?
Because I don't believe |\n| 5 | that anybody in their right mind would ever tell him to come |\n| 6 | to the United States to testify in this, not only because we |\n| 7 | believe that his testimony that he gave elsewhere is not |\n| 8 | accurate, but because he's a relief defendant in the SEC |\n| 9 | action and he's named as a transferee of millions of dollars |\n| 10 | in the DOJ investigation.
But I don't care what his reasons |\n| 11 | are or not. |\n| 12 | But we cannot be spending hundreds of thousands of |\n| 13 | dollars on that litigation which is based on this fiction |\n| 14 | that somehow the son could buy a \\$70 million apartment. |\n| 15 | And if he wants to pursue that and try to undo the |\n| 16 | presumption, which is that we own the apartment because it's |\n| 17 | owned by Genever, he needs to come to the United States and |\n| 18 | be deposed.
If not, Your Honor, there should be a very |\n| 19 | streamlined process to establish or to confirm title in |\n| 20 | Genever USA.
So that's one of the -- |\n| 21 | I also forgot to mention that Mr. Kwok testified |\n| 22 | in the Ostrager litigation that it was Mr. Zang Wey, not the |\n| 23 | son, that owned the apartment.
But that's a different -- |\n| 24 | that's a different issue. |\n| 25 | So other aspects of the reset button, Your Honor, |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 17 of\n\nHo Wan Kwok-March 21, 2023 17 the proxies or satellites, what I call the satellites of Kwok or Kwok himself, should not get the benefit from his incarceration or from the fire at the Sherry-Netherland. This case needs to continue to move on. And what I mean by that is, this is like a runway at the airport. There are dozens of planes that need to take off and people are saying, well, there's no rush, nobody's going on vacation, we can wait for the planes to take off later. But that's wrong. Because although it's true that nobody's going to rent the apartment next week or the week after or the week after that, I understand that, we need to get rid of all the -- we need to clean up all these alleged ownership or rights that these people think that they have, because they will appeal, and that's going to take time. So we need to have all these planes take off so the runway is clear. And trust me, Your Honor, there will be many issues in this case that will be appealed. And, therefore, waiting because the debtor is in prison or because there was a fire is not the right thing to do. Could they -- could they get one week? This is -- actually we've offered them one week, sure. But generally this case needs to move forward. Other aspects of the reset button, I believe that\n\n## Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 18 of\n\n| | 100
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counsel for Kwok and counsel for the proxies and satellites |\n| | |\n| 2 | need to take responsibility for promoting the fiction at |\n| 3 | this point.
And the fiction, as I told you, is that he owns |\n| 4 | nothing.
It's all owned by them.
And by that I mean that |\n| 5 | they cannot just say my client told me so and that's what |\n| 6 | I'm arguing in court. |\n| 7 | We're at a point now where they have to have a |\n| 8 | good-faith belief in what they're advancing, including the |\n| 9 | fact that the yacht is owned by the daughter, including the |\n| 10 | fact that the apartment is owned by the son, including the |\n| 11 | fact that the wife owns the -- owned the two houses in |\n| 12 | Connecticut, in Greenwich.
I mean, that's just -- it's all |\n| 13 | fiction. |\n| 14 | And so lawyers need to have a responsibility for |\n| 15 | that because it's costing the estate hundreds of thousands |\n| 16 | of dollars to deal with these issues. |\n| 17 | So where is this case heading? |\n| 18 | First, Your Honor, we need to secure assets, which |\n| 19 | involves getting ownership of assets or at least obtaining |\n| 20 | PJR's over those assets. |\n| 21 | Second, we need to pursue the proxies, satellites, |\n| 22 | for recoveries.
That means the daughter, the son, the wife, |\n| 23 | et cetera.
And there are other companies as well. |\n| 24 | Third, we need to monetize assets and get the |\n| 25 | legal infrastructure in place to start making distributions |\n\n| | Case 22-50073
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19 |\n| 1 | to holders of valid claims.
We cannot wait for the criminal |\n| 2 | case to be resolved.
That will take -- I'm not a -- so it |\n| 3 | could take I should say years to resolve. |\n| 4 | And if we can get assets and we can monetize them |\n| 5 | and distribute them to real creditors, we should do that |\n| 6 | because that's our duty, and I think that it's fundamental. |\n| 7 | Fourth, we need to do all of that while |\n| 8 | eliminating or minimizing any potential conflict with the |\n| 9 | DOJ because we have a mutual shared goal which is to |\n| 10 | compensate victims. |\n| 11 | And I've done a number of cases, Your Honor, with |\n| 12 | the DOJ on the other side and I'm familiar with their |\n| 13 | forfeiture rights. |\n| 14 | I think Your Honor dealt with this in the -- was |\n| 15 | it the Goldberg case or one of these cases, and, you know, |\n| 16 | they have very powerful tools. |\n| 17 | And we're not interested in what's happening in |\n| 18 | their case and they're not interested in what's happening |\n| 19 | here except if this case is going to somehow impede their |\n| 20 | prosecution.
And that is why, Your Honor, we're in constant |\n| 21 | contact with them with respect to the assets only. |\n| 22 | So, for example, before we filed this motion for |\n| 23 | summary judgment that we wanted heard on an expedited basis, |\n| 24 | we called them.
We had a call with them on Saturday to say |\n| 25 | we want to make sure you understand we are seeking ownership |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 20 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
20 |\n| 1 | of the yacht now which is on your list of future potential |\n| 2 | forfeiture.
And they understood that and basically the |\n| 3 | message was go in peace.
We understand you need to do that. |\n| 4 | We're not going to interfere with that in any way. |\n| 5 | And we will continue to do that for every material |\n| 6 | decision in the case because there's no point in being in |\n| 7 | conflict with them because they are seeking to return money |\n| 8 | to victims and so are we. |\n| 9 | Okay.
So, Your Honor, that's the general speech. |\n| 10 | I apologize if it took too long.
Now, I'm ready to turn to |\n| 11 | point B, which is update on Sherry-Netherland apartment. |\n| 12 | And we didn't intend this to be a real formal, |\n| 13 | pretrial conference of any kind.
This is -- sorry.
To be |\n| 14 | clear, there are many adversary proceedings involving the |\n| 15 | Sherry-Netherland.
This is the ownership adversary |\n| 16 | proceedings, the three of them that have been consolidated. |\n| 17 | So we have no specific update other than what I've |\n| 18 | covered before on this one, except that we renew our request |\n| 19 | that Mr. Lawall be compelled to file, you know -- he can |\n| 20 | have enough time to consult with this client, but we need to |\n| 21 | understand that the son will come to the U.S. to testify |\n| 22 | under oath.
Because if that's not happening, that's a huge |\n| 23 | waste of time. |\n| 24 | So there are other Sherry-Netherland related |\n| 25 | adversary proceedings and those involve the termination of |\n\n## Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 21 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
21 |\n| 1 | the use by Mr. Kwok and potentially other family members of |\n| 2 | the apartment.
And on that the issue is very simple.
You |\n| 3 | know, they filed, or a number of them filed a request to |\n| 4 | say, oh, we should get three more weeks because of the |\n| 5 | incarceration or because of the fire.
There's no rush |\n| 6 | because nobody can use the apartment anyway. |\n| 7 | And I told you, Your Honor, our view is, okay, if |\n| 8 | they need more time, a week is plenty of time, but we need |\n| 9 | to move forward on this because we need to clear all of |\n| 10 | these things out for other matters that need to be -- that |\n| 11 | need to be dealt with.
Otherwise the runway will be |\n| 12 | completely congested. |\n| 13 | Next, is still -- I'm sorry.
In that adversary |\n| 14 | proceeding, the second one, which is what's called the |\n| 15 | termination of use adversary proceeding, Bravo Luck filed an |\n| 16 | intervention motion. |\n| 17 | We've had discussions with them about settling |\n| 18 | that by basically saying that nothing that will happen in |\n| 19 | that proceeding will affect the ownership issue, but those |\n| 20 | discussions are still pending. |\n| 21 | Still in the Sherry-Netherland, the last point, |\n| 22 | point two, is the emergency order.
We submitted a |\n| 23 | modification yesterday to provide that the Trustee -- not |\n| 24 | the Trustee, but the experts retained by the Trustee should |\n| 25 | have access to the apartment subject to supervision from the |\n| | |\n\n| | 100 |\n|----|--------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
22 |\n| 1 | Sherry-Netherland. |\n| 2 | The point is very simple, Your Honor.
You can |\n| 3 | imagine that with these sums involved, there could be a |\n| 4 | debate over coverage based on various arguments.
And our |\n| 5 | job is to make sure there is coverage if we can because |\n| 6 | that's in the interest of the estate. |\n| 7 | And so if the insurance companies who financially |\n| 8 | are conflicted, I'm not saying this in a negative way, but |\n| 9 | it's not in their interest of paying normally, if they're |\n| 10 | going to have their experts there, we want to have our |\n| 11 | people side by side with them to see what they're doing, |\n| 12 | what they're looking at, so that if there's ever an issue |\n| 13 | six months down the road, we're in the position where |\n| 14 | there's an expert from AIG that comes in with this, you |\n| 15 | know, video with very detailed information, and our expert |\n| 16 | comes in to say I never saw the place, I have no idea what |\n| 17 | went on there, so that's why we want access. |\n| 18 | You know, again, if people want to object to that, |\n| 19 | we'd be happy to entertain their objections, but we think |\n| 20 | that that modification should be made to the emergency order |\n\n to allow us to send our own experts to monitor what's going on.\n\n Moving on, Your Honor, to the Lady May. That's item C. As we said in our motion that's being heard now, today, seeking an expedited hearing, we're really concerned\n\n| | Case 22-50073
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23 |\n| 1 | that in light of the recent events, and we know that Mr. |\n| 2 | Vartan as lead counsel is not here, not on Zoom either, that |\n| 3 | the Lady May is being abandoned.
So I'm happy to be wrong |\n| 4 | on that. |\n| 5 | But, you know, they called us like on March 6th to |\n| 6 | say, oh, we can't get -- this was before the fire, Your |\n| 7 | Honor, they called us to say we can't get insurance for the |\n| 8 | Lady May.
It expires on March 28.
And the reason they said |\n| 9 | is that the ownership of the yacht -- and, you know, the |\n| 10 | subtext there is Kwok, and, you know -- we cannot let this |\n| 11 | asset be uninsured. |\n| 12 | And also at the same time, remember you had |\n| 13 | ordered that the daughter appear here for a hearing on the |\n| 14 | issue of Lamp Capital's obligation to pay.
Well they |\n| 15 | withdrew that motion, which they thought was a clever way |\n| 16 | of, well, then she doesn't need to appear, because it's |\n| 17 | their motion and, therefore, she doesn't need to appear and |\n| 18 | we don't need to deal with that issue and we'll just let the |\n| 19 | Trustee deal with the consequences. |\n| 20 | But, you know, we're, you know, and creditors are |\n| 21 | calling me.
You know, I'll say -- sorry to out PAX, but |\n| 22 | they're saying what are you doing Trustee to protect this |\n| 23 | asset?
If there's a fire at the Sherry-Netherland, there |\n| 24 | could be a fire there too.
So what are you doing about |\n| 25 | this? |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 24 of\n\nHo Wan Kwok-March 21, 2023 24 And my response is I don't own that asset. I can't go in and insure or put, you know, security guards there. I have no control over this asset. And on top of that, Your Honor, we received a call from the Yachtzoo folks today saying that they have no more -- there's no contact between them and what they call the family office, which is probably Golden Spring or something like that, and that they're concerned that the yacht is being abandoned. They didn't use those terms. That's my spin on it to be fair. They're concerned that there are no more payments being made and that they don't know what the future holds. So, therefore, what we did, Your Honor, is to file a discrete summary judgment just on the collateral estoppel. And I want to be very clear, Your Honor, that's not my preference. That was not my preference. Why? Because I believe the evidence is compelling as a package. I believe that that count is compelling as well. But I don't -- I never want to put all my eggs in the same basket, but here we are doing that because that's the only claim that's discrete, that's legal in nature only. There's no witnesses there, meaning there's, you know, no need to bring Judge Ostrager as a witness to see what he said. We have that. The Trustee does not need to testify because I had no knowledge of this. I didn't exist\n\n| | Case 22-50073
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25 |\n| 1 | at that time.
And it's a very discrete count, but it gives |\n| 2 | us ownership.
We believe it should give us ownership of the |\n| 3 | ship. |\n| 4 | As I said, that's not our preference.
I'd rather |\n| 5 | have a full-blown hearing because we believe the evidence is |\n| 6 | compelling.
But the facts force us to seek summary |\n| 7 | judgment.
And we're not saying that's the basis to grant |\n| 8 | summary judgment. |\n| 9 | We're just saying that -- explaining to the Court |\n| 10 | why we are seeking summary judgment on that count only |\n| 11 | because that's the only one we see as a clear path without |\n| 12 | evidence, without delay, to get title to the ship, which is |\n| 13 | important to protect the ship. |\n| 14 | We also believe that's there no prejudice at all |\n| 15 | to the other side because, one, this issue has been on the |\n| 16 | table for more than six months.
Two, fully briefed.
For |\n| 17 | the PJR, this issue of collateral estoppel was fully briefed |\n| 18 | on both sides.
And I expressly told the team do not add one |\n| 19 | new case to the brief so that nobody can say, oh, there's a |\n| 20 | new argument, et cetera.
It's exactly the same argument, |\n| 21 | the same cases, same case law, it's all the same. |\n| 22 | So we were ready to argue this before Your Honor |\n| 23 | on March 15th, so people should be ready to do that.
We |\n| 24 | said, next week, on Monday, because that's the day before |\n| 25 | the expiration of the insurance coverage not knowing your |\n| | |\n\n| | Case 22-50073
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26 |\n| 1 | calendar, Your Honor. |\n| 2 | But the point is people should be ready to brief |\n| 3 | that like immediately because it's already been briefed.
So |\n| 4 | that's the Lady May and the situation there from our |\n| 5 | perspective. |\n| 6 | And I want to be clear that before doing this we |\n| 7 | did send the team, what I call the Kwok team and the Lady |\n| 8 | May team, an email saying, look, we understand the policy is |\n| 9 | about to expire.
If we're wrong, if you found somebody |\n| 10 | else, tell us.
That was sent on Saturday. |\n| 11 | If we're wrong about your willingness to fund the |\n| 12 | cost of the Lady May, you know, tell us.
Other than through |\n| 13 | the repair reserve which they've already taken the position |\n| 14 | that it should be taken out of the repair reserve, other |\n| 15 | than that, you know, tell us.
And there was no response. |\n| 16 | There's still no response to date.
So that's more than 48 |\n| 17 | hours ago.
So that's why we're proceeding in that fashion, |\n| 18 | Your Honor. |\n| 19 | So, Your Honor, there are updates on the 2004 |\n| 20 | discovery, but -- and they're matters on specifically on |\n| 21 | 2004 that I believe you scheduled. |\n| 22 | For example, the issue if the debtor should get |\n| 23 | more time to respond to the refusal to produce based on the |\n| 24 | Fifth Amendment.
I believe that you scheduled that for |\n| 25 | today.
Mr. Bassett will handle that. |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 27 of\n\nHo Wan Kwok-March 21, 2023 27 I just don't want to spend -- take too much of your time. But I think I've covered a lot of ground. I'm sure that opposing counsel will have views. And also people on what I would call our side of the aisle may have views as well. So at this point, subject to Your Honor having questions for me, I think I will let others be heard on these various issues. THE COURT: Okay. I do have a question or two. And I think I understood your report. So taking your report in order. So you don't have any -- you don't have any information yourself right now about what the status of the damage to the apartment is? You just, you said you had hearsay basically at this point. MR. DESPINS: Correct. It's materially substantial, but I don't have first hand, no. THE COURT: And they're -- your understanding is that there's some investigation by authorities? MR. DESPINS: Correct. THE COURT: The FBI, the fire -- MR. DESPINS: Yes. So I've checked twice a day, and she's been properly annoyed with me for doing this, but counsel for the Sherry-Netherland, saying can we get in, can we get in, can we get in? Not we, but the insurance people and all that. And she's reported to me every time it's a\n\n| | Case 22-50073
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28 |\n| 1 | sealed place.
Only the police department or the FBI can |\n| 2 | have access.
The minute it's open, we will let you know. |\n| 3 | So as of today, as of now.
But she's here.
She has new |\n| 4 | news, she will tell us, so I don't think there's, you know, |\n| 5 | still a closed scene. |\n| 6 | THE COURT:
Okay.
And with regard to the |\n| 7 | insurance coverage issue that you raised, does the estate |\n| 8 | have to make a formal claim on AIG's policies here, or -- |\n| 9 | MR. DESPINS:
Well, we have in a sense that we put |\n| 10 | them on notice. |\n| 11 | THE COURT:
Okay. |\n| 12 | MR. DESPINS:
And so we're covering those bases. |\n| 13 | But I think we're talking about a lot of time before we hear |\n| 14 | what their position is. |\n| 15 | THE COURT:
Understood. |\n| 16 | MR. DESPINS:
Yeah. |\n| 17 | THE COURT:
Just curious about the claim issue. |\n| 18 | With regard to a hearing we've already had on the |\n| 19 | Sherry-Netherland and the motion, I think it was a motion |\n| 20 | that you filed to allow Sotheby's to also lease the |\n| 21 | property, not just try to sell the property, there was a |\n| 22 | notation on the docket I believe that we needed a new |\n| 23 | proposed order to grant that.
And I don't think we've seen |\n| 24 | that yet with regard to the Sherry-Netherland.
At least if |\n| 25 | it's been filed, I haven't seen it. |\n\n| | Case 22-50073
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29 |\n| 1 | MR. DESPINS:
I thought we had.
But my colleague |\n| 2 | is here.
If I may consult? |\n| 3 | THE COURT:
Sure. |\n| 4 | MR. DESPINS:
I'm told that it was emailed to the |\n| 5 | courtroom deputy on March 10th, the revised order. |\n| 6 | THE COURT:
Oh, okay.
Well, then I -- we'll find |\n| 7 | that.
Okay.
I don't -- maybe I'm wrong, but I didn't see |\n| 8 | it.
So that might be my fault. |\n| 9 | The amended emergency order that you filed |\n| 10 | yesterday with regard to the access to the apartment, are |\n| 11 | you asking that that be set for a hearing or are you asking |\n| 12 | the Court to enter that? |\n| 13 | MR. DESPINS:
We're asking the Court to enter it. |\n| 14 | Unless people have objections.
But I have not heard |\n| 15 | objections.
But of course given it's done on 24-hour's |\n| 16 | notice -- |\n| 17 | THE COURT:
All right.
We'll address that then. |\n| 18 | MR. DESPINS:
Yeah. |\n| 19 | THE COURT:
I'll need to address that as part of |\n| 20 | this conference. |\n| 21 | So one thing we haven't done yet is -- one of the |\n| 22 | matters -- mean, we set the hearing today on the status |\n| 23 | conference in which you stated that you were going to |\n| 24 | address the things that you have addressed in your report. |\n| 25 | We have not addressed the -- |\n\n| | Case 22-50073
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30 |\n| 1 | MR. DESPINS:
The motion to remove the Trustee. |\n| 2 | THE COURT:
Right. |\n| 3 | MR. DESPINS:
Yeah. |\n| 4 | THE COURT:
And when you talk about the PJR |\n| 5 | hearing that was supposed to start last week, obviously that |\n| 6 | didn't start.
Well, it started.
We had a hearing. |\n| 7 | MR. DESPINS:
Yeah. |\n| 8 | THE COURT:
But the orders have entered. |\n| 9 | But with regard to the issue about the summary |\n| 10 | judgment on the collateral estoppel effect of Justice |\n| 11 | Ostrager's findings regarding the ownership of the boat, |\n| 12 | that's something you want to be addressed before next |\n| 13 | Tuesday? |\n| 14 | MR. DESPINS:
Yeah.
We want Your Honor today to |\n| 15 | schedule a hearing so that it's -- of course, we don't know |\n| 16 | your schedule, so we said Monday because wanted to give them |\n| 17 | the most amount of time possible to challenge this.
So they |\n| 18 | would file a response on Sunday and then we would have a |\n| 19 | hearing on Monday.
Not ideal for anyone, but that's what we |\n| 20 | propose. |\n| 21 | But for us, we believe that's the only clear |\n| 22 | chance, and I say chance, not a guarantee, of getting |\n| 23 | insurance in place by -- before the expiration of the other |\n| 24 | policy. |\n| 25 | THE COURT:
Okay.
I just wanted to make sure I |\n| | |\n\nHo Wan Kwok-March 21, 2023 31 understood your request. MR. DESPINS: Yeah. So on the issue of removing the Trustee, Your Honor, this is another, you know, reset button issue. Whatever the merits of that motion were then, which I thought didn't, had no merits, but at this point, we believe it's sanctionable for them to prosecute that motion today given what has transpired since then. THE COURT: Okay. MR. DESPINS: But I'll let them be heard on that. THE COURT: Right. I'm just -- I'm just trying to keep everything in order here. Just give me one moment, please. (Pause.) THE COURT: So, Trustee Despins, you also said that at one point, and I think you don't want to address it right now, but you talked about the 2004 discovery issues. And then I have no idea where things stand with regard to the contempt findings made with regard to the HK parties and what has happened with Golden Spring and Lamp Capital on the order to show cause. I think we have a hearing scheduled on that correct, April 18th, I think it is. And there was an issue about service of that the first time, service of the order to show cause on Golden Spring and Lamp Capital. And where does that stand? Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 31 of\n\n| | Case 22-50073
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32 |\n| 1 | MR. BASSETT:
Good afternoon, Your Honor. |\n| 2 | THE COURT:
Good afternoon. |\n| 3 | MR. BASSETT:
For the record, it's Nick Bassett, |\n| 4 | from Paul Hastings, on behalf of the Chapter 11 Trustee. |\n| 5 | I'm happy to address those issues, Your Honor. |\n| 6 | So with respect to -- first of all, I'm happy to |\n| 7 | provide a more extensive update on 2004 discovery generally |\n| 8 | if that would be helpful to the Court. |\n| 9 | THE COURT:
I don't think we need to do that right |\n| 10 | at the moment. |\n| 11 | MR. BASSETT:
Okay. |\n| 12 | THE COURT:
But Trustee Despins mentioned it. |\n| 13 | What I'm really trying to understand is -- |\n| 14 | MR. BASSETT:
Sure. |\n| 15 | THE COURT:
-- there are a lot of things |\n| 16 | obviously, but there was the contempt finding with the HK |\n| 17 | parties and Attorney Vartan.
I know that you asked for some |\n| 18 | time, additional time, to file your documents with regard to |\n| 19 | fees and that's fine.
I think that was granted even, I |\n| 20 | believe.
Okay. |\n| 21 | And then with regard to Golden Spring and Lamp |\n| 22 | Capital, the issue when we had that -- we had a hearing a |\n| 23 | few weeks ago and the issue was that the order to show cause |\n| 24 | hadn't been served. |\n| 25 | And then there was something filed by the HK |\n| | |\n\n| | Case 22-50073
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33 |\n| 1 | parties I believe that at least gave an address for Lamp |\n| 2 | Capital that you didn't have before for service.
Is that |\n| 3 | correct? |\n| 4 | MR. BASSETT:
That's exactly right, Your Honor. |\n| 5 | As I reported at the last hearing at which we |\n| 6 | addressed this topic, we had received notification that the |\n| 7 | registered agent we had served previously for Lamp Capital |\n| 8 | was reporting that they no longer served as the registered |\n| 9 | agent, so that was the issue that we were having at the |\n| 10 | time.
We were able to resolve that and find a party to |\n| 11 | serve based on what Your Honor just alluded to. |\n| 12 | THE COURT:
Okay. |\n| 13 | MR. BASSETT:
I believe it was the HK parties who, |\n| 14 | themselves, served Lamp Capital through an individual whose |\n| 15 | name has come up throughout the course of these proceedings. |\n| 16 | So we have -- we've served Lamp Capital through that person. |\n| 17 | We also -- and this happened I think just |\n| 18 | yesterday as a matter of fact, and we also have served |\n| 19 | Golden Spring again. |\n| 20 | And we will, if we have not already, be filing |\n| 21 | certificates of service on the docket so they will then have |\n| 22 | notice from our perspective of the hearing on the 18th on |\n| 23 | the order to show cause.
And we're prepared to appear then |\n| 24 | and, you know, address whatever issues may need to be |\n| 25 | addressed at that time. |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 34 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
34 |\n| 1 | THE COURT:
Okay.
And then I don't know if you're |\n| 2 | the right person to answer this question or the Trustee is |\n| 3 | or a combination of both of you, or anyone else I suppose |\n| 4 | that might want to be heard, so Yvette Wang has been |\n| 5 | arrested according to the Trustee.
And how does that impact |\n| 6 | what's going on with the Ace Decade entities in the UBS |\n| 7 | litigation in London? |\n| 8 | MR. DESPINS:
If I may, Your Honor, I'll address |\n| 9 | that? |\n| 10 | THE COURT:
Yes. |\n| 11 | MR. DESPINS:
So what's happening in the U.K. is |\n| 12 | that there's still people appearing on behalf of Ace Decade |\n| 13 | saying -- lawyers, not saying who they're getting their |\n| 14 | instructions from, but -- and who claim that their clients |\n| 15 | control Ace Decade.
They're not saying who that is. |\n| 16 | And the Appellate Court in the U.K. ruled in favor |\n| 17 | of -- ruled against UBS, meaning found that there's |\n| 18 | jurisdiction in the U.K. to proceed with the claim. |\n| 19 | So what's happening right now is that UBS has sent |\n| 20 | me a letter saying you sat on the sidelines on the appeal. |\n| 21 | Going forward we need to know what your position is because |\n| 22 | the costs here will be in the order of maybe 300-500,000 |\n| 23 | pounds.
And so I'm dealing with that issue. |\n| 24 | But they're making the same request of Ace Decade |\n| 25 | and I understand there are negotiations going on between Ace |\n\n| | Case 22-50073
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35 |\n| 1 | Decade and UBS on that matter. |\n| 2 | So the point is, I don't know what impact Yvette |\n| 3 | Wang has on this.
To be clear, our position has always been |\n| 4 | -- |\n| 5 | THE COURT:
Well, isn't that the whole -- wasn't |\n| 6 | that the whole issue before was that -- |\n| 7 | MR. DESPINS:
Yes.
Well, our position has always |\n| 8 | been Yvette Wang is just a -- she's a title holder.
She has |\n| 9 | no -- she's an assistant.
She doesn't make decisions.
She |\n| 10 | just -- she's the owner or the controlling person of many of |\n| 11 | Mr. Kwok's entities, but it means nothing in terms of really |\n| 12 | her decision-making power.
It's all Kwok decides. |\n| 13 | So the answer is I don't know who's behind Ace |\n| 14 | Decade.
Personally, I think it's Kwok.
But I can't -- |\n| 15 | THE COURT:
What about -- weren't you -- I mean, |\n| 16 | maybe Mr. Bassett has to answer this question too, but |\n| 17 | wasn't there a problem with you trying to subpoena her |\n| 18 | because you didn't have an address and nobody would provide |\n| 19 | you with an address -- |\n| 20 | MR. DESPINS:
Correct. |\n| 21 | THE COURT:
-- and all the questions that were |\n| 22 | asked said we don't know how to locate her. |\n| 23 | MR. DESPINS:
Yes. |\n| 24 | THE COURT:
Well, do you know how to locate her |\n| 25 | now? |\n| | |\n\nHo Wan Kwok-March 21, 2023 36 MR. DESPINS: Well, we know which -- where we can locate her, yes. THE COURT: Okay. MR. DESPINS: We know she's at the -- THE COURT: So then you could serve her with a subpoena? Well, I don't know if you're going to, but you're saying -- MR. DESPINS: No. THE COURT: -- you can locate her now? MR. DESPINS: Well -- THE COURT: The issue -- at least as of now because there's an arrest. There's an indictment? MR. DESPINS: Correct. Well, there's -- THE COURT: What is there? MR. DESPINS: I don't know if it's a -- it was not a grand jury indictment. It was some other form that I'm not familiar with. But certainly she was charged with something. And she was held on \\$5 million bail. So I don't know if she posted bail or not. So we will check the docket in our case to see if she was released. But if she's going to be released, I know that one of the conditions is that she had to stay at her apartment with ankle bracelet and the whole -- THE COURT: Okay. MR. DESPINS: -- you know, the whole thing. Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 36 of\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 37 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
37 |\n| 1 | THE COURT:
All right.
I just -- that's, you |\n| 2 | know, that's an issue that's been raised before this court |\n| 3 | several times -- |\n| 4 | MR. DESPINS:
Yeah. |\n| 5 | THE COURT:
-- the issue of Ace Decade, who |\n| 6 | controls it, and the issue about Ms. Wang and her location. |\n| 7 | MR. DESPINS:
Yes. |\n| 8 | THE COURT:
So I assume if she's been arrested, |\n| 9 | somebody knows where she is. |\n| 10 | MR. DESPINS:
Yeah.
We know where she is, yeah. |\n| 11 | THE COURT:
All right. |\n| 12 | MR. DESPINS:
Yes. |\n| 13 | THE COURT:
Then the only other questions or |\n| 14 | issues that the parties, you know, asked the Court to look |\n| 15 | at, well, I don't know if all the parties asked the Court to |\n| 16 | look at, but you did, I know that, you asked me last week |\n| 17 | when we were starting the PJR hearing to look at the |\n| 18 | indictment that names Mr. Kwok and Mr. Je I believe. |\n| 19 | And there were assets that were -- seemed to be |\n| 20 | identified in that indictment that I'd never heard of in |\n| 21 | this case.
So is that the issues that you're trying to work |\n| 22 | out with the Department of Justice? |\n| 23 | MR. DESPINS:
That's one of the items that we're |\n| 24 | going to discuss with them.
There are two types of issues. |\n| 25 | Assets that they have actually frozen, like bank accounts. |\n| | |\n\nHo Wan Kwok-March 21, 2023 38 THE COURT: Yeah, I saw that. MR. DESPINS: And that -- and there's hundreds -- THE COURT: I'm talking more about things -- MR. DESPINS: Yeah. THE COURT: -- that I'd never heard. Not that I should. I'm just saying. There's a -- there's a -- MR. DESPINS: No. For example, there's a house in New Jersey. THE COURT: Right. That was one. MR. DESPINS: That was news to us. THE COURT: And then a number of luxury automobiles. MR. DESPINS: We knew about some of those, but -- THE COURT: Okay. MR. DESPINS: -- so we were -- you know, that's one -- it was on our task list. So, yeah. We learned of new things in there. So one of the discussion items with them is how do we proceed? Because they're on the same wavelength that we need to make distributions to victims as quickly as possible. They know that even though they have stronger and better tools than we have in terms of identifying assets and all that, that we probably can proceed faster than them because they need to wait for a criminal conviction and that Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 38 of\n\n| | Case 22-50073
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39 |\n| 1 | could take a long time.
A trial is not likely to happen for |\n| 2 | a year or so.
So that's one of the discussions I am -- we |\n| 3 | need to have with them.
And hopefully it will be -- |\n| 4 | I mean, in the past, Your Honor, you know this |\n| 5 | from Goldberg, is that in the past these -- the way these |\n| 6 | cases have been resolved is the Chapter 11 Trustee gets |\n| 7 | appointed in both courts. |\n| 8 | Well, I'm already a Chapter 11 Trustee in this |\n| 9 | court, but gets appointed as the forfeiture manager or |\n| 10 | receiver, I forget the exact term, in the other court, and |\n| 11 | then this court has jurisdiction over how that process |\n| 12 | works. |\n| 13 | By the way, I don't want to mislead anyone. |\n| 14 | Nobody has agreed to that.
I'm just saying that there have |\n| 15 | been -- there are many examples involving Ponzi schemes or |\n| 16 | other cases of the sort where the Government realizes that |\n| 17 | they're very good at finding people, finding assets, but |\n| 18 | they're not the best at distributing assets and |\n| 19 | understanding who has a valid claim and who doesn't. |\n| 20 | So just to give you an example, the Fair Fund that |\n| 21 | the SEC collected for the GTV matter more than a year ago, |\n| 22 | only 70 million of that 425 million has been distributed. |\n| 23 | I'm not knocking them.
I'm just saying that they're -- this |\n| 24 | is not what they do. |\n| 25 | THE COURT:
So is one of the issues that you're |\n| | |\n\nHo Wan Kwok-March 21, 2023 40 going to have to coordinate at some point I would assume is the -- some people -- you've made -- some people have made comments about this SEC complaint and Fair Fund, but I don't believe that's anywhere in the record of this case I don't think. But you've talked about it so I have an idea. MR. DESPINS: Yes. THE COURT: And actually, one of the witnesses testified about it -- MR. DESPINS: Yes. THE COURT: -- during the preliminary injunction hearing, right? She got back half of what she put in. MR. DESPINS: The 500,000. THE COURT: So, yeah. MR. DESPINS: The Government employee, yes. THE COURT: So I have an idea about what it is, but I don't -- I'm not professing to fully understand it. But is one of the issues that you're going to have to deal with in this case and with the I guess the Securities and Exchange Commission, if there are claims asserted in both that proceeding and this proceeding? MR. DESPINS: Yes. Except that -- So just a little bit of background on that case. Kwok was not a named party in that case. THE COURT: Okay. Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 40 of\n\nMR. DESPINS: His companies, again, that's my spin\n\n## Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 41 of\n\n| | 100 |\n|----|------------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
41 |\n| 1 | on it, were involved.
And so what happened is the SEC |\n| 2 | realized that there was a public offering going on that was |\n| 3 | not registered and there were thousands of people sending |\n| 4 | money in.
So they froze that.
They were able to freeze the |\n| 5 | money or most of the money.
I think they're missing 37 |\n| 6 | million -- I shouldn't say 37 million because that's going |\n| 7 | to look like the other 37 -- but 30 million and change is |\n| 8 | missing, but they were able to freeze 425 million. |\n| 9 | And so they told the victims please come to us, |\n| 10 | file a request to receive some money.
People have done |\n| 11 | that.
But most of them are in Mandarin, not English |\n| 12 | speakers, so there's a lot of -- and so, therefore, to date, |\n| 13 | they've only been able to validate 70 million of |\n| 14 | distributions -- |\n| 15 | THE COURT:
Okay. |\n| 16 | MR. DESPINS:
-- out of the 425. |\n| 17 | THE COURT:
Now, what you just said is -- I may be |\n| 18 | just -- again, I don't -- you have a lot more knowledge than |\n| 19 | I do, but the 400 and some odd thousand that you're -- |\n| 20 | million, excuse me -- that you're talking about that the SEC |\n| 21 | has frozen, is that separate and distinct from the monies |\n| 22 | that are set forth in the -- |\n| 23 | MR. DESPINS:
From the 600, yeah.
From the 630, |\n| 24 | yes. |\n| 25 | THE COURT:
Okay.
Okay. |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 42 of\n\n| | Ho Wan Kwok-March 21, 2023
42 |\n|----|--------------------------------------------------------------|\n| 1 | MR. DESPINS:
A lot of money.
Yes. |\n| 2 | THE COURT:
Okay.
All right.
That's -- |\n| 3 | MR. DESPINS:
It's 630 plus 425, yes. |\n| 4 | THE COURT:
Okay.
All right. |\n| 5 | Now, I think, unless someone has some objection to |\n| 6 | the contrary, that we should deal with the issues in the |\n| 7 | main case first and then turn to specific motions and things |\n| 8 | that are in the adversary proceedings, that we put -- you |\n| 9 | know, as part of this status conference so that we can try |\n| 10 | to figure out where we're going from here.
All right. |\n| 11 | So if I were to look at the main case first, and I |\n| 12 | could be completely wrong, but it seems to me, unless the |\n| 13 | attorneys for Mr. Kwok and Ms. Guo and HK have some other |\n\n position, and maybe Mr. Kwok's spouse, does anyone have an objection to the motion to amend the emergency order about access to the apartment?\n\n I have looked at the order. I have to tell you have I studied it? No. But I've looked at it. And my original -- my review of it was that it didn't seem to me to be controversial. However, I obviously could be wrong. I mean, that parties -- it got filed yesterday. I don't remember what time it got filed. We've had hearings today. I've looked at -- I've looked at it.\n\n Does any party, either in the courtroom or on the phone, on the Zoom hearing, have an objection to the entry\n\nHo Wan Kwok-March 21, 2023 43 of the amended emergency order regarding access to the Sherry-Netherland apartment? MR. MORIARTY: Your Honor, James Moriarty on behalf of the debtor. Between Attorney Henzy and I, admittedly we did not look at that order yesterday. I don't recall seeing it come through on ECF. THE COURT: It did though because I got it. MR. MORIARTY: Okay. THE COURT: So then you got it. MR. MORIARTY: I don't doubt it. THE COURT: Yeah. MR. MORIARTY: As I said, I didn't see it. THE COURT: No. I'm just telling you it did, that's all. MR. MORIARTY: If we -- if we can have a chance to take a look at it, maybe the Trustee's counsel has a copy, I don't think we've going to have an objection. THE COURT: We can print out a copy for you right now if you'd like. MR. MORIARTY: We do need to read it first. THE COURT: I understand. Hold on a second. Okay? MR. MORIARTY: Sure. Thank you. MR. DESPINS: We have a copy here. Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 43 of\n\nHo Wan Kwok-March 21, 2023 44 MR. MORIARTY: They have a copy over there, Your Honor. THE COURT: Oh, they have a copy right there? MR. MORIARTY: Thank you. (Pause.) THE COURT: All right. Well, hold on a second. (Pause.) THE COURT: So the proposed amended order appears as 1562. And it may be, Mr. Moriarty, you didn't know what it was because it doesn't say in the title, you know, you'd have to open up the document, that it shows that it's amending the order about the access to the apartment. So in your ECF notification, I think it just said notice of proposed order or something. MR. MORIARTY: So having looked at it, no objection, Your Honor. THE COURT: Okay. Thank you. MR. LAWALL: Your Honor? THE COURT: Yes. MR. LAWALL: On Zoom, Your Honor, again, Fran Lawall on behalf of Bravo. Your Honor, the concern we have is not giving the Trustee access and the ability to investigate, it's simply that Bravo, again, given the ownership issues, would like to be able to do a walk-through with the Trustee so we can Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 44 of\n\n| | Case 22-50073
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45 |\n| 1 | report to the client the status of the property and have the |\n| 2 | ability to hire our own investigator so that there's |\n| 3 | complete transparency here. |\n| 4 | Obviously, there's been a lot of allegations, |\n| 5 | which this is not the appropriate place to refute, but there |\n| 6 | is a significant issue with respect to ownership and we |\n| 7 | would simply like to have the ability to have our own |\n| 8 | independent investigator come in, work closely with the |\n| 9 | Trustee's investigator, so there's full transparency, but to |\n| 10 | make sure that we have access and we understand exactly what |\n| 11 | happened here as well. |\n| 12 | We would not impede the Trustee's investigation, |\n| 13 | but we would like the ability to bring in our own |\n| 14 | investigator to take a look at what's happening given the |\n| 15 | serious allegations that exist here. |\n| 16 | And until the issue with respect to ownership of |\n| 17 | this property is determined, and we can speak to that in a |\n| 18 | couple of minutes, Your Honor, when you turn to the Sherry |\n| 19 | issues, but at this stage, those issues remain live and they |\n| 20 | are important. |\n| 21 | And, again, we're not looking to impede the |\n| 22 | Trustee's doing.
Simply to make sure that we are able to |\n| 23 | take a look independently and see exactly what happened |\n| 24 | here. |\n| 25 | MR. DESPINS:
Your Honor? |\n\nHo Wan Kwok-March 21, 2023 46 THE COURT: Yes. MR. DESPINS: Thank you. I need to address that because Bravo Luck is Kwok. Okay. Let's not kid ourselves. The DOJ, FBI, I don't think he's going to -- I don't want to get involved in whether -- what rights he has to go and inspect the property. Whether he has these rights under criminal law, he'll exercise those rights, but not through the back door of Bravo Luck. I am 150 percent motivated to find that there's no coverage issue so that I'm covering the bases for Bravo Luck here. The argument that somehow -- on what planet would we go there and try to find that there's no coverage? That's insanity. My job is to get all the coverage that's available. So we don't need to have Bravo Luck, which by the way, let's not kid ourselves, Bravo Luck is Mr. Lawall and the son of the debtor. The debtor is in prison. You know, this court should not be involved in whatever the rights of the defendant in a criminal case are to send someone to inspect the property or not. That's for the criminal court to decide that. If he has that right, God bless him, he'll have access. But it's not for this court to do that. And to allow Bravo Luck access is really, you Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 46 of\n\nHo Wan Kwok-March 21, 2023 47 know, a disguised way for the debtor to have access. Because the argument that an allegation's been made, yeah, tons of allegations have been made. But my job as the Trustee, as I said, is for everyone to see I want insurance coverage. So if anything, we're in a bizarre way aligned on that issue. So we don't need to have supervision. And it's just going to muddy the water with the criminal case and I don't want to do that, Your Honor. MR. LAWALL: Your Honor, if I may? I have been listening to the Trustee besmirch counsel, Bravo Luck and everyone else without evidence and at some point it's got to stop. The Trustee itself filed a motion with respect to the ownership issue. The Trustee acknowledges the \\$70 million came from Bravo Luck to buy this property. We have been before this court at every step of the way trying to move this litigation forward in a respectful way where evidence actually matters. The Trustee is trying to run roughshod over this. But to take shots at counsel, Your Honor, are entirely inappropriate. All we're asking for, Your Honor, and we're not trying to delay this, simply there is an ownership issue. And we will be there. There are issues with respect to Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 47 of\n\nHo Wan Kwok-March 21, 2023 48 insurance. It goes beyond insurance, Your Honor. Because if there are allegations with respect to how this happened, the Trustee has made wild allegations. And at some point, they're probably going to spin an allegation that somehow Bravo Luck caused this fire. I'm saying, Your Honor, respectfully, enough already. All we're asking for is to follow the procedure. Let us -- let us at least have our own expert with the Trustee at our own cost to investigate what happened here. That's all. But I apologize, Your Honor, for getting animated. THE COURT: That's fine. MR. DESPINS: Your Honor, there was no allegations vis-a-vis -- first of all, I haven't heard -- I have not made any allegations regarding how the fire started or anything like that. So the allegations were about the fact that there's -- that the schedules of assets and liabilities in this case are fiction and I stand by that. Now, no argument has been made as to how and why the Trustee is not completely motivated to find coverage here and to find all the arguments in support of coverage, which should be Bravo Luck's position as well. So the only reason why they should have access is Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 48 of\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 49 of\n\n| | 100 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
49 |\n| 1 | because there's another angle that they want to pursue.
If |\n| 2 | they -- if they think they should be covered, so do we. |\n| 3 | That's our job to try to make sure there is coverage. |\n| 4 | So what's the argument as to why they need to be |\n| 5 | involved? |\n| 6 | MR. LAWALL:
Your Honor, the reason is simple. |\n| 7 | The Trustee has repeatedly turned allegations into facts and |\n| 8 | then asked Your Honor to act on them.
We don't want the |\n| 9 | Trustee doing this in connection with the investigation. |\n| 10 | All we're asking for is to have an independent |\n| 11 | investigator, which, Your Honor, you can review the results. |\n| 12 | But we do, given the way the Trustee has conducted himself |\n| 13 | up to now, we are concerned about the neutrality of this |\n| 14 | investigation. |\n| 15 | THE COURT:
Well, let me -- let me just stop you |\n| 16 | for a second, Counsel. |\n| 17 | The only change to the order that's requested, |\n| 18 | that was requested in the -- an order has already entered. |\n| 19 | The only change in the order that was requested yesterday |\n| 20 | was to -- for access to any experts engaged by the Trustee |\n| 21 | and/or Genever U.S. to investigate the condition of the |\n| 22 | Sherry-Netherland apartment and/or the circumstances of the |\n| 23 | fire as accompanied by personnel of the Sherry-Netherland. |\n| 24 | So no one is going into the apartment other than |\n| 25 | authorities that have the right to go into the apartment |\n| | |\n\n| Case 22-50073
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50 |\n| over which this court has no jurisdiction to -- they have to |\n| be accompanied by the personnel of the Sherry-Netherland. |\n| So with that in place, I think your clients interests are |\n| protected. |\n| And I'm prepared to enter that order with that |\n| change.
Okay?
So I understand your concerns, but I'm |\n| overruling your concerns. |\n| And I'm going to enter the amended emergency order |\n| with the -- with that, that's the only change in the order. |\n| The order's been in place since last week.
So it will be -- |\n| I will tell the courtroom deputy that the order appears in |\n| 15 -- document I.D. ECF No. 1562, and the conclusion of the |\n| hearings today -- |\n| Oh, I'm sorry, Counsel.
Did you wish to be heard? |\n| MS. MILLMAN:
Yes, Your Honor. |\n| Not to challenge entry of the amended order now -- |\n| THE COURTROOM DEPUTY:
I'm sorry, Your Honor. |\n| THE COURT:
Yeah.
Hold on one second. |\n| MS. MILLMAN:
Yeah.
This is Sherry -- |\n| THE COURT:
Just if you'd state your name for the |\n| record, please. |\n| MS. MILLMAN:
Apologies.
This is Sherry Millman |\n| with Strook on behalf of the Sherry-Netherland.
And we're |\n| not by any means challenging the changes to the order. |\n| I just wanted to state again for the record that |\n| |\n\nHo Wan Kwok-March 21, 2023 51 as I think Mr. Despins told the Court the Sherry-Netherland is under direction from the federal, you know, authorities investigating that no one can get in as of yet. THE COURT: Sure. MS. MILLMAN: So any implementation of the other aspects of this order would await the authorities instructing us -- THE COURT: Absolutely. MS. MILLMAN: -- that we're allowed to. THE COURT: Absolutely. And the only addition to the order that the Trustee's asked for says any experts engaged by the Trustee. So he hasn't done that yet as far as I know. And so this is -- this is just to have that provision in the order. And I completely agree with you. When we discussed this order last week at the hearings, we all understood that this is an investigation scene that is under the jurisdiction apparently of the FBI, the New York City Police and Fire Department. So this court has no control over any of those entities and would never expect to have control. All this order does is -- not all, but what it does is once there's an ability for any of the parties in this order, other than those investigation authorities to have access, they will have access, but only with regard to Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 51 of\n\n| | Case 22-50073
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52 |\n| 1 | your clients being -- accompanying them through access. |\n| 2 | MS. MILLMAN:
Correct.
Correct. |\n| 3 | THE COURT:
So there will be a record kept by your |\n| 4 | client -- |\n| 5 | MS. MILLMAN:
Correct.
Correct. |\n| 6 | THE COURT:
-- of every time anybody other than |\n| 7 | the authorities over which this court has no jurisdiction |\n| 8 | accesses the apartment, and your client will accompany those |\n| 9 | people -- |\n| 10 | MS. MILLMAN:
Correct. |\n| 11 | THE COURT:
-- through the apartment at all times. |\n| 12 | MS. MILLMAN:
Correct, Your Honor. |\n| 13 | THE COURT:
And that's what the order provides. |\n| 14 | MS. MILLMAN:
Yes, Your Honor.
I understand. |\n| 15 | THE COURT:
Yup. |\n| 16 | MS. MILLMAN:
But I just didn't want there to be |\n| 17 | any misunderstanding. |\n| 18 | THE COURT:
No, I appreciate that.
No.
I know |\n| 19 | that no one has access to this apartment.
I mean, I don't |\n| 20 | know, I've been told -- |\n| 21 | MS. MILLMAN:
Yes. |\n| 22 | THE COURT:
-- but it seems logical, correct -- |\n| 23 | MS. MILLMAN:
Correct. |\n| 24 | THE COURT:
-- that no one would have access to |\n| 25 | this apartment at this time.
There's an ongoing |\n| | |\n\n| | Case 22-50073
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53 |\n| 1 | investigation -- |\n| 2 | MS. MILLMAN:
Correct. |\n| 3 | THE COURT:
-- of which has nothing to do with -- |\n| 4 | (Courtroom audio recording equipment malfunction occurred |\n| 5 | between 3:45:33 p.m. and 3:51:30 p.m.
No available audio |\n| 6 | recording between these time stamps.) |\n| 7 | THE COURT:
--
and so what I'm saying to you is |\n| 8 | it's going to be heard fairly soon.
The issue is, is your |\n| 9 | client going to withdraw the motion or proceed with it? |\n| 10 | Which is completely -- you know, that |\n| 11 | determination needs to be made.
I understand that.
And I'm |\n| 12 | not quarreling with it.
But it's going to happen one way or |\n| 13 | another because it has to happen. |\n| 14 | You can't have a case where there's a position of |\n| 15 | a party that says the Trustee who's acting on behalf of |\n| 16 | everyone can't act.
I'm not going to go through three or |\n| 17 | four more months of things and then five months from now |\n| 18 | decide that he can't be the Trustee.
That makes no sense. |\n| 19 | I mean, it's a -- it's an imperative issue in the |\n| 20 | case. |\n| 21 | MR. HENZY:
Your Honor, I understand.
I point out |\n| 22 | the motion's been pending for two and a half months, but -- |\n| 23 | THE COURT:
The reason's been pending for two and |\n| 24 | a half months, as you well know -- |\n| 25 | MR. HENZY:
Is because of the mediation. |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 54 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
54 |\n| 1 | THE COURT:
It's also because of the preliminary |\n| 2 | injunction and the other issues that -- |\n| 3 | MR. HENZY:
There's been a lot -- |\n| 4 | THE COURT:
-- the Court has had to address -- |\n| 5 | MR. HENZY:
Right. |\n| 6 | THE COURT:
-- and the Federal Rules of Civil |\n| 7 | Procedure require the Court to address first. |\n| 8 | MR. HENZY:
Understood, Your Honor. |\n| 9 | THE COURT:
Okay. |\n| 10 | MR. HENZY:
Your Honor, I would ask through April |\n| 11 | 13.
And I understand everything you've said. |\n| 12 | I don't know when I'm going to be able to speak to |\n| 13 | my client.
The communication I've gotten through the, you |\n| 14 | know, frankly, prospective criminal counsel is that -- and |\n| 15 | it's not to say that the bankruptcy is not extremely |\n| 16 | important, but that's -- that is not his priority today.
It |\n| 17 | just is not.
Which I, maybe I'm alone on this, but I |\n| 18 | understand that -- |\n| 19 | THE COURT:
I don't think anybody's quarreling |\n| 20 | with that.
I mean -- |\n| 21 | MR. HENZY:
So I -- |\n| 22 | THE COURT:
-- but the issue still is either the |\n| 23 | motion gets withdrawn, it gets granted, or it gets denied. |\n| 24 | MR. HENZY:
Understood, Your Honor. |\n| 25 | THE COURT:
Okay? |\n| | |\n\nHo Wan Kwok-March 21, 2023 55 MR. HENZY: And I would ask for a continuance through April 13. And, Your Honor, I will say I want this to be resolved also, believe me. So I just -- I need to talk to the client. I don't know when I'm going to be able to do that. You know, we're whatever it is, five days out from fairly significant events taking place. I don't know what ability I'm going to have to communicate unless and until he's got criminal counsel. Now, again, maybe the federal public defender will speak to me. I'm not sure about that because I think that that counsel's input here is going to be important. So, anyway, I would ask that the motion be continued to April 13. I understand that I'm going to need to press it as quickly as possible and report to the parties and to the Court what the decision is. THE COURT: Okay. Thank you. Trustee Despins? MR. DESPINS: Yeah. Your Honor, there is a prejudice to the pendency of this matter. I remember something along those lines being raised in the U.K. about the Trustee might be removed. So we just can't have this, you know, stay out there, particularly given that the arguments in that motion about the settlement was undone for improper reasons, all proved Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 55 of\n\n| | Case 22-50073
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56 |\n| 1 | out to be true.
Meaning true that the arguments that I made |\n| 2 | about H Coin and all that, exactly what happened. |\n| 3 | So that's why I say that to prosecute this motion |\n| 4 | at this time is sanctionable and we will seek sanctions. |\n| 5 | And it should be -- |\n| 6 | MR. HENZY:
And he can beat it to death.
Okay.
I |\n| 7 | have a client and I need to speak to my client.
I don't |\n| 8 | think that's hard to understand.
If he wants to threaten me |\n| 9 | with sanctions because I have a client and I need to speak |\n| 10 | to my client, then he can -- he can threaten me with |\n| 11 | sanctions.
I don't think this is -- the position is hard to |\n| 12 | understand though, Your Honor. |\n| 13 | You have a person who's in jail.
He's my client. |\n| 14 | I can't make decisions independent of my client.
I have to |\n| 15 | speak to my client. |\n| 16 | THE COURT:
Anyone else wish to be heard? |\n| 17 | What's the U.S. Trustee's Office position on the |\n| 18 | motion to remove the Trustee? |\n| 19 | MS. CLAIBORN:
Your Honor, it does need an end. |\n| 20 | THE COURT:
I can't hear you, Attorney Claiborn. |\n| 21 | I'm sorry. |\n| 22 | MS. CLAIBORN:
I think this microphone is -- |\n| 23 | THE COURT:
That microphone doesn't seem to be |\n| 24 | working.
Huh?
Sorry. |\n| 25 | (Pause.) |\n\nHo Wan Kwok-March 21, 2023 57 MS. CLAIBORN: Your Honor, I wanted to say that I do think that the motion to remove the Trustee does need an end and it can't stay in perpetuity. And I think that what I didn't quite understand from what Attorney Henzy said is whether or not he actually has tried to speak to his client. I heard different things around other people not being to access his client, but I don't know whether or not he personally tried and was not able to access his client. Long story short, I realize that there are competing interests for Mr. Kwok right now, but this bankruptcy case does need to go and move and it can't sit here until Mr. Kwok decides to prioritize it. So it may be that the Court's best solution is to impose a date and a response time and then Mr. Kwok will have to abide by that. THE COURT: What do you mean a response time? MS. CLAIBORN: Meaning that a continuance to April 13th may just result in Mr. Henzy showing up on April 13th saying I haven't been able to get access to my client. I don't know what the answer is. THE COURT: I see. I just wanted to make sure I understood. MS. CLAIBORN: And what I'm suggesting is that we pick a path that has a very specific time frame for action Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 57 of\n\nHo Wan Kwok-March 21, 2023 58 and decision making. THE COURT: Okay. Thank you. MR. HENZY: Your Honor? THE COURT: Yes. MR. HENZY: I have said I am going to try to the best of my ability, whatever that ability is, to communicate with my client as soon as I can. I'm not a criminal lawyer. Right now, my communication has been through prospective criminal counsel. So I don't know when I'll be able to communicate with my client and when my client will be ready and in a position to talk about this motion. I'm going to act with as much diligence as I possibly can. I'm committing to the Court to that, to the parties, but I can't -- I can't do any more than that. THE COURT: Okay. Thank you. Does anyone else wish to be heard on the motion to remove the Trustee? (No response.) THE COURT: Okay. I will take a look at the -- right now, we have it scheduled for Thursday. It can't be this Thursday because you have, excuse me, a mediation in another case in this that's already been ordered by a court. So I, Mr. Despins, am not going to move forward with the motion to remove the Trustee on Thursday. I don't Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 58 of\n\n| | Case 22-50073
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59 |\n| 1 | know what I'm going to do yet.
I heard what everyone has |\n| 2 | said.
I'm going to think about it and probably -- |\n| 3 | What we need to think about is are the matters on |\n| 4 | -- are the other matters on Thursday, one of I think you're |\n| 5 | seeking to employ counsel in the U.K.
And I don't remember, |\n| 6 | I'll look right now, what the other matters are on Thursday. |\n| 7 | Hold on one second, please. |\n| 8 | So right now, what's scheduled, oh, are motions to |\n| 9 | quash subpoenas and a cross-motion to compel the |\n| 10 | application.
It's all -- mostly is discovery related. |\n| 11 | The motion to remove the Trustee will not be going |\n| 12 | forward on Thursday, the 23rd, at noon.
That's clear.
When |\n| 13 | it will, I'll take a look at it and we'll go from there. |\n| 14 | With regard to the discovery issues on Thursday, |\n| 15 | let's come back to those after we go through the specific |\n| 16 | matters in each of the adversary proceedings.
Okay? |\n| 17 | But just so everyone's clear, we are not having a |\n| 18 | hearing on the motion to remove the Trustee on Thursday, |\n| 19 | March 23rd.
That will be continued and I will figure out |\n| 20 | till what date and time after the hearing today. |\n| 21 | All right.
Now, let's -- now we can start turning |\n| 22 | to, I'm sorry, we still have to deal with the motion to |\n| 23 | extend time to respond to the show cause order with regard |\n| 24 | to Mr. Kwok. |\n| 25 | Mr. Moriarty, I think you filed that motion, |\n| | |\n\nHo Wan Kwok-March 21, 2023 60 correct? MR. MORIARTY: I did, Your Honor. THE COURT: Okay. Go right ahead. MR. MORIARTY: Thank you, Your Honor. James Moriarty for the debtor, Ho Wan Kwok. Your Honor, the debtor's response to the order to show cause, which requires him to show cause for his invocation of his Fifth Amendment privilege against self- incrimination in response to this court's order on a motion compel, is currently due on March 28th, 2023. For the reasons that Attorney Henzy just articulated, the inability to get to speak with Mr. Kwok, and really importantly for this issue, Your Honor, we had been communicating on this issue with criminal counsel who had represented Mr. Kwok in various matters, those attorneys are not going to be representing him in this criminal case. 17 Mr. Kwok does not have private criminal counsel at this point in time. He's represented by a public defender as Attorney Henzy said. Mr. Kwok has, we believe, been engaged in trying to find counsel based on conversations that Attorney Henzy has had. So what we're asking for is a 30-day extension to April 27th, 2023 to respond to the order to show cause so that we can communicate with our client regarding the response and communicate with his criminal counsel regarding Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 60 of\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 61 of\n\n| | 100 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
61 |\n| 1 | this response which is really going to be a critical |\n| 2 | response because it's a Fifth Amendment issue.
And there |\n| 3 | can't be any doubt at this point in time that Mr. Kwok has a |\n| 4 | reasonable belief that his liberty is in jeopardy since he's |\n| 5 | been indicted and arrested. |\n| 6 | And as we pointed out, one other point, Your |\n| 7 | Honor, in the motion, the Department of Justice is taking a |\n| 8 | very hard stance on Mr. Kwok being let out on bail. |\n| 9 | Nobody's made a bail application at this point in time. |\n| 10 | But assuming that he remains incarcerated, to the |\n| 11 | extent this court orders him to do something, I don't know |\n| 12 | how he could possibly do it.
So that's another factor that |\n| 13 | goes into moving for this extension of time. |\n| 14 | THE COURT:
Okay.
Thank you. |\n| 15 | Response to the motion, please. |\n| 16 | MR. BASSETT:
Your Honor, again, Nick Bassett, |\n| 17 | from Paul Hastings, on behalf of the Trustee. |\n| 18 | The Trustee opposes the request, Your Honor.
In |\n| 19 | fact, strongly opposes the request for an extension for |\n| 20 | several reasons. |\n| 21 | First, I think we need to not be blind to the |\n| 22 | history here and how long it's taken to get to this point. |\n| 23 | I won't go way back to the beginning, but as the Court well |\n| 24 | knows, we've been seeking this discovery from the Trustee |\n| 25 | since August. |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 62 of\n\nHo Wan Kwok-March 21, 2023 62 We went through a long arduous process of having a motion to compel, a hearing on that motion, an order that was not followed, an order to show cause. And it was on February 7th actually that the -- and it was even prior to that that we learned from his counsel that the debtor was going to be asserting the Fifth Amendment in a blanket manner supposedly to prevent him from producing a single additional document to the Trustee on any topic whatsoever. And then on February 7th, the debtor submitted a declaration with this court, at that time, that's a month and eight days before the announcement of the indictment and the criminal charges, he at that point had already taken the position that in his view under the law he had the right to assert the Fifth Amendment in blanket fashion as to all discovery sought for him. So to allow the debtor to now -- and I'll get to other points in a moment, but just to level set where we are, to allow the debtor to now get an additional 30 days, he was supposed to comply with the Court's order compelling production in January. And then he was supposed to, if he was going to assert a Fifth Amendment privilege in his declaration that the Court ordered him to do on February 7th, he should have explained at that time why it was appropriate for him to\n\n# Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 63 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
63 |\n| 1 | make that assertion and why he, in fact, is entitled to rely |\n| 2 | on the Fifth Amendment to not produce any documents. |\n| 3 | So, yes, the criminal charges have now been filed. |\n| 4 | But as of February 7th, he represented to this court in a |\n| 5 | declaration that his counsel submitted saying he had the |\n| 6 | Fifth Amendment protection at that time.
At a minimum, they |\n| 7 | need to be able to explain to the Court why that was |\n| 8 | justified then. |\n| 9 | If anything now, in light of the criminal charges, |\n| 10 | he may have other things to add to it, but he thought at |\n| 11 | that time he had the ability to make that argument and that |\n| 12 | should be explained. |\n| 13 | The other thing is there's absolutely no reason he |\n| 14 | can't respond by the 28th, which is the current deadline. |\n| 15 | Yes, I understand counsel apparently -- you know, |\n| 16 | I don't know the extent to which access has been tried to |\n| 17 | get by Zeisler to their client.
I understand there's an |\n| 18 | issue with criminal counsel.
But it will be nearly two |\n| 19 | weeks by the 28th since his arrest.
That, under the |\n| 20 | circumstances, I mean, it should be -- it should be enough |\n| 21 | time for them to find a way to consult with their client. |\n| 22 | I don't know what COVID protocols there are at the |\n| 23 | jail, but it can't be that he's not able to visit with |\n| 24 | counsel while he's being held.
That just can't be. |\n| 25 | The other thing I would say is this idea that he |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 64 of\n\n| | 100
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can't produce -- and the statement in the motion for an |\n| | |\n| 2 | extension was actually shocking when I read it -- the |\n| 3 | statement was that so long as the debtor's incarcerated, |\n| 4 | which based on the charges could theoretically be for the |\n| 5 | rest of his life, he's not able to produce documents in |\n| 6 | response to an order on a motion to compel. |\n| 7 | I don't know why the debtor would need to be |\n| 8 | outside of jail to have his counsel and others in possession |\n| 9 | of documents of which he has custody or control why he can't |\n| 10 | do that while he's incarcerated.
Of course he can.
So I |\n| 11 | don't understand that at all. |\n| 12 | The last point I would make, Your Honor, is that |\n| 13 | there is real urgency here.
We can't just sit back and let |\n| 14 | the debtor continue to perpetually ignore orders of this |\n| 15 | court and ignore his discovery obligations as he has for |\n| 16 | nearly the past year, especially in light of recent events. |\n| 17 | Your Honor, there have been news reports.
And |\n| 18 | obviously what happened at the Sherry-Netherland is under |\n| 19 | investigation.
We don't know what the cause will be.
But |\n| 20 | the New York Post reported that one of the things that's |\n| 21 | being investigated is whether the fire was started remotely |\n| 22 | in the apartment. |\n| 23 | And just a few hours ago, a reputable news outlet |\n| 24 | published a story talking about how in 2017 a Chinese court |\n| 25 | found that the debtor's brother and three other defendants |\n| | |\n\n| | Case 22-50073
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65 |\n| 1 | had burned 80 to 90 -- 70 to 80 boxes of documents, burned |\n| 2 | 70 to 80 boxes of documents that contained accounting |\n| 3 | records, receipts, et cetera that would have been damaging |\n| 4 | to the debtor. |\n| 5 | So, Your Honor, in light of what's going on, there |\n| 6 | are admittedly a lot of crazy events that none of us every |\n| 7 | anticipated, we can't be in a world where whoever has |\n| 8 | documents that might be critical to this case that we |\n| 9 | requested long ago can just sit on them and we the Trustee |\n| 10 | have to bear the risk of what might happen to those |\n| 11 | documents in the future. |\n| 12 | So we strongly object.
And to a 30-day extension, |\n| 13 | we absolutely object to that, Your Honor.
There's no reason |\n| 14 | it should be delayed at all, and certainly not by 30 days. |\n| 15 | Thank you. |\n| 16 | THE COURT:
The only thing I would say in response |\n| 17 | to what you just said, Counsel, is with regard to the |\n| 18 | reports about the fire and the burning of other information |\n| 19 | some time ago, there's nothing in the record here in this |\n| 20 | court to support any of that, so I have to not consider |\n| 21 | that.
I mean, it's not at this point, you know -- |\n| 22 | MR. BASSETT:
And I'm not asking the Court to |\n| 23 | consider that, Your Honor, as facts.
Certainly not.
All |\n| 24 | I'm saying is that just in light of the possibility that |\n| 25 | anything can happen -- |\n\nHo Wan Kwok-March 21, 2023 66 THE COURT: I understand that. I mean -- MR. BASSETT: -- we can't be in a world where we just sit back and wait. THE COURT: -- that's possible in any situation, right? I understand your point. I do understand that point. But, you know, unless and until the investigation produces some -- the investigation by the authorities who are investigating, right, produces something about how the fire was started or whatever, I just am not taking that into consideration. What I'm taking into consideration are issues that both parties have raised, which are that the discovery's been pending since August of 2020, that there have been different orders of this court that have required compliance with that discovery, that Mr. Kwok filed a blanket assertion of his Fifth Amendment privilege in February before -- I think more than a month before the indictment was issued, and that counsel is saying they need time to communicate with him. I'm going to take all of that into consideration in determining what to do in connection with the motion for extension of time. MR. FRIEDMAN: Your Honor. THE COURT: I think Mr. Friedman wants to be Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 66 of\n\n| | Case 22-50073
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67 |\n| 1 | heard. |\n| 2 | Hold on just a second, Mr. Friedman. |\n| 3 | MR. FRIEDMAN:
Yes.
I just wanted to make -- |\n| 4 | sorry. |\n| 5 | THE COURT:
Just hold on a second. |\n| 6 | So, Mr. Bassett, is there anything else you wanted |\n| 7 | to add? |\n| 8 | MR. BASSETT:
No.
Thank you, Your Honor. |\n| 9 | THE COURT:
Okay.
Thank you. |\n| 10 | All right.
Go ahead, Mr. Friedman. |\n| 11 | MR. FRIEDMAN:
Your Honor, I just wanted to say we |\n| 12 | think it's really important that this issue get addressed |\n| 13 | quickly because, for example, the debtor's obligations are |\n| 14 | ongoing. |\n| 15 | The debtor may, in the context of his defense, |\n| 16 | receive financial information from the Government, that is, |\n| 17 | the Government's required to produce.
He may on his own |\n| 18 | accord, if he has counsel, go out and do an investigation |\n| 19 | that would bring into -- under his auspices, custody or |\n| 20 | control, financial documents in order to disprove the |\n| 21 | Government's allegations, and those should be turned over to |\n| 22 | the Trustee because they relate to the debtor's financial |\n| 23 | condition. |\n| 24 | And, you know, once those are out there, they |\n| 25 | should be produced immediately if they're in the debtor's |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 68 of\n\n| | 100 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
68 |\n| 1 | custody, control, or one of his agents.
And resolving this |\n| 2 | issue I think will bring that issue to a head as well and on |\n| 3 | the Trustee hopefully with additional information to be able |\n| 4 | to pursue the debtor's assets wherever they are. |\n| 5 | THE COURT:
Okay.
Anyone else wish to be heard on |\n| 6 | the motion to extend time for Mr. Kwok to respond to the |\n| 7 | order to show cause? |\n| 8 | MR. MORIARTY:
Your Honor, if I may, just a couple |\n| 9 | of points. |\n| 10 | THE COURT:
Go right ahead. |\n| 11 | MR. MORIARTY:
To the extent that the Court finds |\n| 12 | that Mr. Kwok's invocation of his Fifth Amendment privilege |\n| 13 | was appropriate -- |\n| 14 | THE COURT:
I couldn't hear you.
I'm sorry. |\n| 15 | Could you say that again? |\n| 16 | MR. MORIARTY:
Sure. |\n| 17 | THE COURT:
His invocation of his Fifth Amendment? |\n| 18 | MR. MORIARTY:
Privilege was appropriate under the |\n| 19 | circumstances -- |\n| 20 | THE COURT:
You mean as of February 7th? |\n| 21 | MR. MORIARTY:
Correct. |\n| 22 | THE COURT:
Okay.
Go ahead. |\n| 23 | MR. MORIARTY:
Then he has applied with the |\n| 24 | Court's order because he has invoked his Fifth Amendment |\n| 25 | privilege under the Constitution which he's entitled to do. |\n| | |\n\nHo Wan Kwok-March 21, 2023 69 And that is one of the reasons why it's critical that we have access to Mr. Kwok's criminal counsel once criminal counsel is retained. As I said, we had been working with criminal counsel on this issue. They're moving on. Mr. Kwok is in the process of retaining new criminal counsel. We're asking for 30 days to protect a constitutional right and that's all that we're asking for. Thank you. THE COURT: Okay. Anything further from anyone? (No response.) THE COURT: Okay. I will review this matter. And as true with the motion for extension of time on the hearing to remove the Trustee, I will rule hopefully within the next few days. But I'm going to review it all given what we've all talked about today. All right. And as far as the other matters on the calendar today, I'm going to turn -- I am now going to turn to specific adversary proceedings. Give me one second, please. It may be more than one. Okay. (Pause.) THE COURT: So now we're turning to the adversary proceedings. And I'm first going to turn to 23-05002, Genever Holdings, LLC, et al, versus Kwok, et al. And there are two motions that I said we were going to discuss at the Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 69 of\n\n| | Case 22-50073
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70 |\n| 1 | hearing, at the status conference today in that adversary |\n| 2 | proceeding. |\n| 3 | And the first motion is the motion to extend time |\n| 4 | to respond to the complaint, Mr. Moriarty, that you filed on |\n| 5 | behalf of the defendant, Mr. Kwok, seeking an extension of |\n| 6 | time until April 10 to respond to the complaint. |\n| 7 | MR. MORIARTY:
Yes, Your Honor. |\n| 8 | And it's probably not fair to do this, but we |\n| 9 | asked for 21 days.
The Trustee agreed to seven.
If the |\n| 10 | Trustee is willing to split the difference and agree to 14, |\n| 11 | and if the Court's willing to do that, we would say the |\n| 12 | extension to April 3rd, 2023, that should give us sufficient |\n| 13 | time.
This is going to be an answer to a complaint.
That |\n| 14 | should give us sufficient time to communicate with our |\n| 15 | client hopefully and also to get the client's position on |\n| 16 | this. |\n| 17 | As Your Honor probably recalls, this is really a |\n| 18 | case to effectively evict the debtor and his family from the |\n| 19 | Sherry-Netherland.
And in light of what happened, I would |\n| 20 | like to speak to my client and determine if there's been a |\n| 21 | change of position.
Maybe there hasn't been, but maybe |\n| 22 | there has been. |\n| 23 | THE COURT:
Attorney Bassett? |\n| 24 | MR. BASSETT:
Your Honor, I think it's been a |\n| 25 | theme today that obviously the Trustee's view -- |\n| | |\n\nHo Wan Kwok-March 21, 2023 71 THE COURT: Can you get the microphone closer to you? I'm sorry. MR. BASSETT: That's okay. The Trustee's view is -- is very clearly, as the Trustee stated in his status report and as I was communicating during the last matter that, you know, we cannot be in a position where there are continual delays in the progress that the Trustee is trying to make in this case as a result of the recent events, et cetera. That very significant caveat being said, in the case of this particular request, we had said, you know, we'll give you a week to kind of get your bearings and get the answer on file. We're not going to stand in the way of extending that to 14 days, so we're fine with that. THE COURT: So you'll agree to April 3rd? MR. BASSETT: That's correct, Your Honor. THE COURT: Okay. Thank you. Then the motion to extend time will be granted in part and the extension will be granted through and including April 3rd. Okay, Mr. Moriarty? MR. MORIARTY: Yes, Your Honor. And I know Attorney Goldstein also has a motion for his client at this time. THE COURT: Yeah. He's next. That's the next Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 71 of\n\nHo Wan Kwok-March 21, 2023 72 matter. Thank you. All right. Hold on -- just let me make a note. (Pause.) THE COURT: All right. So then the next matter in 22, sorry, 23-05002 is the motion to extend time to respond to complaint to April 10. Attorney Goldstein, you represent the defendant in that, in connection with ECF No. 31, correct? MR. GOLDSTEIN: Yes, Your Honor. I represent Hing Chi Ngok. And we filed our first motion for an extension of time to respond to the complaint of the 21 days based on the previous conversation of the Court and the Trustee. If the Trustee is willing to extend the time to 14 days, Ms. Ngok would agree to the same. THE COURT: Thank you. Attorney Bassett? MR. BASSETT: That's fine, Your Honor. THE COURT: All right. So then the motion to extend time to respond to complaint will be granted in part. An order will enter granting an extension of time to April 3rd. MR. GOLDSTEIN: Thank you, Your Honor. THE COURT: Thank you. Then turning to the adversary 22-05003, HK Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 72 of\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 73 of\n\nHo Wan Kwok-March 21, 2023 73 International, the HK International adversary proceeding. This is the motion to expedite the hearing on the summary judgment motion, correct? MR. DESPINS: Yes, it is, Your Honor. THE COURT: Okay. And so you're asking that the summary judgment motion -- well, no one has responded yet because it was filed yesterday. So what is the -- what are the -- what is the HK parties' response to the motion to expedite the hearing on the summary judgment? MR. MORIARTY: Good afternoon, Your Honor. James Moriarty, from Zeisler & Zeisler, for the HK parties as Your Honor just described them. The summary judgment motion was filed on Sunday/Monday. Part of it was filed Sunday evening, late. Part of it was filed on Monday morning early. The Trustee is asking that the HK parties respond to this motion within six days and that the Court hold a hearing on the seventh day. The local rule, as Your Honor knows, is 21 days to respond to motions. And motions for summary judgment generally are even further than that by agreement. We wouldn't ask for more than 21 days here. The issue that the Trustee raises is a res judicata issue and it was addressed in prior briefing.\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 74 of\n\nHo Wan Kwok-March 21, 2023 74 But this is a summary judgment motion. This is not a motion for judgment on the pleadings or a motion to dismiss. It's a summary judgment motion. The Trustee, through his counsel, has filed a I believe 48-paragraph, I could be off by a couple, Local Rule 56(a)(1) statement. HK is required to respond to that Local Rule 56(a)(1) statement. It's required to prepare its own 56(a)(2) statement with evidence. And there may be some additional facts that HK wants point out based on the record before Judge Ostrager, which is primarily what the Trustee relies on. There also may be evidentiary issues that the HK parties which to address within the 56(a)(1) statement of the Trustee. Is all of the evidence that the Trustee is relying on admissible? We don't know because we've only had the motion for a day. To require the HK parties, and I believe it's just HK in this case, Your Honor, not also Ms. Guo -- THE COURT: Yes, it is. MR. MORIARTY: -- so to require to HK to respond to a summary judgment motion where the Trustee is seeking a judgment which would give the Trustee title to the Lady May, a 25-ish million dollar asset, in six days is just fundamentally unfair. HK should have at least the full 21 days to respond to this motion, Your Honor.\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 75 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
75 |\n| 1 | THE COURT:
Okay.
Well, I'm not sure if I |\n| 2 | completely agree with you that it's fundamentally unfair.
I |\n| 3 | understand your argument.
But Mr. Vartan represented HK and |\n| 4 | Ms. Guo and he has an appearance in this adversary |\n| 5 | proceeding in the matter before Justice Ostrager, and so I'm |\n| 6 | not sure it's fundamentally unfair.
However, I will take |\n| 7 | into consideration what you've said. |\n| 8 | The problem is in this situation the same |\n| 9 | counsel's been involved for several years now.
The matters |\n| 10 | in front of Justice Ostrager were brought to the Court's |\n| 11 | attention I think on the second or third day of the filing |\n| 12 | of this case.
We're more than a year past that now. |\n| 13 | And Attorney Vartan, not only has he appeared here |\n| 14 | and made arguments on behalf of HK and Mei Guo, but |\n| 15 | apparently argued this and introduced evidence and |\n| 16 | introduced witnesses on behalf of HK and Mei Guo in the PAX |\n| 17 | litigation in front of Justice Ostrager even though those |\n| 18 | parties were not parties to that litigation. |\n| 19 | So while I hear what you're saying, I think that |\n| 20 | this is -- this is not a normal case where someone has been |\n| 21 | met with a motion for summary judgment and never had an |\n| 22 | opportunity to litigate or discuss these issues in the past. |\n| 23 | And as a summary judgment motion does, and this |\n| 24 | one appears to do, it's saying there's already a final |\n| 25 | judgment that can't be disturbed. |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 76 of\n\n| | 100 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
76 |\n| 1 | Now, you all have briefed the issue.
And |\n| 2 | apparently under New York Law, the ability to make a finding |\n| 3 | of collateral estoppel or res judicata is not impacted by a |\n| 4 | pending appeal where it would be in Connecticut under |\n| 5 | Connecticut law. |\n| 6 | So I will consider everything you've said, but I |\n| 7 | think that this is a different situation. |\n| 8 | If this was a case where there was no prior |\n| 9 | litigation among the parties, if the same entity who |\n| 10 | voluntarily commenced this adversary proceeding by the way, |\n| 11 | HK commenced this adversary proceeding, not Trustee Despins, |\n| 12 | and HK was represented in the action in which the Trustee is |\n| 13 | asking this court to make findings based on collateral |\n| 14 | estoppel or res judicata by the same lawyer who's in this |\n| 15 | case in front of this court, so it's not the same. |\n| 16 | It doesn't mean I might not agree with you fully, |\n| 17 | ultimately, but it's not the same.
It's not as if this was |\n| 18 | a brand new case filed and nobody had any idea of what was |\n| 19 | going on. |\n| 20 | And, in fact, you know, summary judgment in |\n| 21 | Connecticut -- and the district court rule says, which is |\n| 22 | the rule we follow with regard to summary judgment, that, |\n| 23 | you know, you don't -- you don't seek summary judgment in a |\n| 24 | district court unless you're convinced you're going to be |\n| 25 | successful. |\n| | |\n\nHo Wan Kwok-March 21, 2023 77 I mean, there's a -- there's very strong words that the district court judges includ in their local rules on summary judgment. I have to look at them sometimes. I don't remember all the words. But it says the Court appreciates the utility of summary judgment as a tool to manage the Court's workload by avoiding unnecessary trials. But at the same time, the Court wishes to discourage the filings of motions for summary judgment in circumstances where responsible counsel and self-represented parties should recognize the motion cannot be granted. Therefore, the Court has adopted this local rule to remind counsel and self-represented parties of the standard for summary judgment and of their obligations with respect to motions for summary judgment. So I just, you know, that's something that I look at anyway when motions for summary judgment are filed. It doesn't mean that it means the summary judgment motion is granted. It's that there's a -- the party who files the motion for summary judgment has an obligation to assert that there's no genuine issue of material fact to try. And if the -- if Trustee Despins is correct, which I don't know if he is or not, then -- and collateral estoppel can apply based upon a prior ruling that is -- under New York has collateral estoppel effect, then I don't Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 77 of\n\nHo Wan Kwok-March 21, 2023 78 know -- I'm not sure what there would be to try. What you're asking is -- you're saying you need time to respond. The 21-day response period would be what? MR. MORIARTY: I believe April 10th, Your Honor. I believe. THE COURT: April 10th? MR. MORIARTY: Yes. MR. DESPINS: Your Honor, may I be heard on this? THE COURT: Yes. MR. DESPINS: I have to say I'm quite surprised by the argument here. Of course, in theory, they should get 21 days, but not a word about the insurance lapsing on the 28th. Not a word about, don't worry, we have the money. We'll pay the crew. We'll pay. So that's what tips this. One, there's no prejudice because this had already been fully briefed. The only thing that changed is that the standard -- the standard of proof is different on summary judgment than on prejudgement attachment, of course. But the -- We cited the same cases, exactly the same cases. Didn't add one case. So there's no surprise. This is just, you know, re-jiggering their brief that they already filed in opposition to this. So there's no -- there's no prejudice to them. Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 78 of\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 79 of\n\nHo Wan Kwok-March 21, 2023 79 But the prejudice to the estate here is that if we're right that this is our yacht, there's no insurance on the 28th. They're not paying for anything. The crew is going to walk. So the point is that from the estate's point of view there is extreme prejudice. And the fact that he's not saying a word about that really surprised me. I thought they would say the Trustee's being an alarmist. We're going to take care of this. It's fine. But, no. It's scorched earth, meaning they're walking away from the ship. So we need to protect the estate. And that's plenty of reason to overcome the 21 days. And if it were not for the fact that there's no prejudice, there's extreme prejudice to the estate if we don't go forward, Your Honor. Thank you. THE COURT: Thank you. Mr. Moriarty? MR. MORIARTY: Your Honor, the -- so there is an issue with insurance. And I'm not denying that there's an issue with insurance. THE COURT: You just need to talk a little louder so we can hear you. MR. MORIARTY: Sure. THE COURT: Go ahead. MR. MORIARTY: I said there is an issue with\n\n| | Case 22-50073
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80 |\n| 1 | insurance.
And I'm not denying that there's an issue with |\n| 2 | insurance. |\n| 3 | But what I'm focused on and what's before the |\n| 4 | Court is the motion to force a response to a summary |\n| 5 | judgment motion on six days. |\n| 6 | THE COURT:
I understand.
I guess what Mr. |\n| 7 | Despins is saying though is if you come up with payment for |\n| 8 | insurance, he won't press the summary judgment motion. |\n| 9 | MR. MORIARTY:
Right.
And it's not -- the issue's |\n| 10 | not payment, Your Honor.
The issue is the ability to |\n| 11 | procure a policy.
That's the issue. |\n| 12 | THE COURT:
Well, you've had a policy in the past. |\n| 13 | What happened? |\n| 14 | MR. MORIARTY:
People will not -- insurers will |\n| 15 | not write it. |\n| 16 | THE COURT:
Why? |\n| 17 | MR. MORIARTY:
Well, what we've been told is the |\n| 18 | primary issue is what they call the UBO, the ultimate |\n| 19 | beneficial owner.
And where this -- so this is hearsay, |\n| 20 | Your Honor.
I'm just telling you what's been explained to |\n| 21 | me. |\n| 22 | This came up and really started to be an issue for |\n| 23 | insurer of vessels after the Russia/Ukraine war started and |\n| 24 | yachts of Russian oligarchs were being seized by western |\n| 25 | governments.
Not because the insurers were on the hook for |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 81 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
81 |\n| 1 | the value of the boats, but because the insurers were |\n| 2 | concerned about reputational risks and because the insurers |\n| 3 | were concerned about violating sanctions orders that were |\n| 4 | put in place by western governments. |\n| 5 | Now, that's not our issue here.
It's not a |\n| 6 | Ukraine/Russia issue.
But as a result of that issue, |\n| 7 | insurers started to look at what they call ultimate |\n| 8 | beneficial owner.
And here they see a relationship, whether |\n| 9 | it's correct, incorrect, true or not true, between this |\n| 10 | yacht and Mr. Kwok and they refused to write a policy. |\n| 11 | THE COURT:
Well, who wrote the policy that was in |\n| 12 | play -- that's in place until the 28th? |\n| 13 | MR. MORIARTY:
It is a company by the name of -- |\n| 14 | just give me -- Skuld, S-K-U-L-D.
That policy expired |\n| 15 | actually on February 28th.
Skuld agreed to extend it by one |\n| 16 | month and they've refused to extend it going forward. |\n| 17 | THE COURT:
Okay.
And who negotiated with them to |\n| 18 | agree to extend it by one month? |\n| 19 | MR. MORIARTY:
I believe -- I don't know, Your |\n| 20 | Honor.
I know that there was attorneys in my office that |\n| 21 | had conversations, but I can't tell you who negotiated that |\n| 22 | with them. |\n| 23 | THE COURT:
But your office negotiated an |\n| 24 | extension? |\n| 25 | MR. HENZY:
No.
I believe, Your Honor, that an |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 82 of\n\n| | 100 |\n|----|--------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
82 |\n| 1 | attorney in my office had discussions with whoever |\n| 2 | negotiated the extension, but I don't think we negotiated |\n| 3 | the extension. |\n| 4 | THE COURT:
Okay.
Well, who was it that -- |\n| 5 | MR. HENZY:
And I don't -- |\n| 6 | THE COURT:
-- negotiated the extension? |\n| 7 | MR. HENZY:
I don't know. |\n| 8 | MR. MORIARTY:
Yeah.
Your Honor, I -- |\n| 9 | THE COURT:
Well, you have to know.
Somebody in |\n| 10 | your office has to know if they had discussions with |\n| 11 | somebody who negotiated the extension. |\n| 12 | MR. MORIARTY:
I agree.
But it wasn't myself and |\n| 13 | it wasn't Attorney Henzy.
There's obviously -- |\n| 14 | THE COURT:
But let's just step back.
Listen to |\n| 15 | what you just said to me, right?
You said no insurer will |\n| 16 | insure because, whether they're right or wrong, they |\n| 17 | associate the yacht with Mr. Kwok.
That's what you just |\n| 18 | said, right? |\n| 19 | MR. MORIARTY:
That's what we have been told. |\n| 20 | THE COURT:
Okay.
So then if you can't get an |\n| 21 | extension of the insurance, why shouldn't the Trustee move |\n| 22 | forward with summary judgment in that short amount of time? |\n| 23 | Because the insurers think that the yacht is associated with |\n| 24 | Mr. Kwok. |\n| 25 | MR. MORIARTY:
Your Honor, two things. |\n| | |\n\nHo Wan Kwok-March 21, 2023 83 One, the Trustee could have moved for this motion or he could have moved for summary judgment months ago if he believes -- THE COURT: Not with regard to the fact that the insurance is lapsing. MR. MORIARTY: I agree. But if it's just a legal issue and it's that simple of a motion, he could have made the motion a long time ago. But there's also no guarantee that the -- THE COURT: But that doesn't matter. That doesn't matter. Let's just cut to the chase of what really matters here, right? MR. MORIARTY: There's no guarantee that the Trustee is going to be able to insure this boat either. So he's seeking to take this asset on six-days notice with no guarantee that he's going to be able to get a policy. THE COURT: And so why do you care? About that. About that. I'm saying -- I'm just trying to understand your thought process. MR. MORIARTY: So I -- THE COURT: Why would you care if the Trustee can't get a policy? MR. MORIARTY: Because the whole basis for the Trustee's we need this done yesterday is there's not going to be insurance. And if the Trustee can't get a policy, Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 83 of\n\n| | Case 22-50073
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84 |\n| 1 | then that's not a basis for moving this forward at lightning |\n| 2 | speed. |\n| 3 | THE COURT:
Well, what are you going -- what's |\n| 4 | your client going to do?
You're client's going to let the |\n| 5 | policy lapse and not have any insurance?
Isn't that -- |\n| 6 | isn't that -- wouldn't that be cause of action right there |\n| 7 | to not insure and asset that your client claims the entity |\n| 8 | owns? |\n| 9 | MR. MORIARTY:
Your Honor, the client can only do |\n| 10 | what the client can do.
And -- |\n| 11 | THE COURT:
But I don't know what that means. |\n| 12 | MR. MORIARTY:
So we've -- again, my |\n| 13 | understanding, I wasn't involved in this, have had |\n| 14 | discussions or there have been discussions with 13 carriers, |\n| 15 | none of whom are willing to write a policy on this boat. |\n| 16 | And it's a particular type of insurance.
It's called |\n| 17 | protection and indemnity insurance.
There's three other |\n| 18 | policies that are currently in place and they're in place |\n| 19 | through 2024.
But for some reason, and again-- |\n| 20 | There's been three reasons.
The primary reason |\n| 21 | has been this UBO, ultimate beneficial owner.
The two other |\n| 22 | reasons that have been given for the refusal to write |\n| 23 | policies are the boat is in the navigable waters of the |\n| 24 | United States and the owner is a U.S. company.
Why that |\n| 25 | matters to insurers, Your Honor, I don't know. |\n| | |\n\nHo Wan Kwok-March 21, 2023 85 THE COURT: Well, we need to find out, right? Otherwise, you're going to have to respond to the summary judgment motion. So do you want to try to find the answers to these questions and inform the Court, or do you want to -- I mean, I know you don't want to respond to the summary judgment motion. But, I mean, you know, you can't have an asset, a potential asset that's subject to a temporary restraining order that your client agreed to, by the way, your client agreed to all that, now subject to a PJR, and another preliminary injunction, be uninsured. I mean, you just can't have that, right? So, you know, we can either try to come up with a solution to that or then I may have no choice but to mandate that you respond to summary judgment over your objection. And I understand your objection. I do. I'm not quarreling with it. But, you know, you -- you know. Some of us are old enough to remember that the first thing Judge Krechevsky used to say is do you have insurance? And if you didn't, he didn't want to hear about it or he said you better get that insurance and not come back into this courtroom until you have it. Right? So the -- we need to solve the problem one way or Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 85 of\n\n| | Case 22-50073
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86 |\n| 1 | another.
But we've got to solve -- |\n| 2 | MR. MORIARTY:
Your Honor -- |\n| 3 | THE COURT:
We can't wait until next week to solve |\n| 4 | it.
Today is Tuesday, right? |\n| 5 | MR. MORIARTY:
It is. |\n| 6 | THE COURT:
We don't have a lot of time.
And I've |\n| 7 | seen insurance binders written in, you know, three hours. |\n| 8 | So what -- it can happen.
I mean, it could happen.
I'm not |\n| 9 | saying it will happen.
I'm saying it's not outside of the |\n| 10 | realm of possibility, right?
So we need to figure out how |\n| 11 | that's going to happen or I may have to do what the |\n| 12 | Trustee's asking me to do. |\n| 13 | MR. MORIARTY:
Understood, Your Honor. |\n| 14 | Is there a time by which you would like us to |\n| 15 | report back? |\n| 16 | THE COURT:
Well, let me think about that.
I |\n| 17 | mean, we have hearings scheduled on Thursday.
I don't know |\n| 18 | if Thursday gives you enough -- if, for example, you report |\n| 19 | back that there's no way that there's insurance coverage for |\n| 20 | another month or two, I'm cutting into your time to respond |\n| 21 | to summary judgment if I have to go down the path that the |\n| 22 | Trustee has proposed. |\n| 23 | So that's up to you I suppose in some respects.
I |\n| 24 | mean, I don't think we should go beyond Thursday.
I think |\n| 25 | our Thursday hearings are at 11 a.m. |\n| | |\n\n| | Case 22-50073
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87 |\n| 1 | What were you going to say, Trustee Despins. |\n| 2 | MR. DESPINS:
Your Honor, we have people looking |\n| 3 | for insurance in a presumptuous way in the event the Court |\n| 4 | would grant the relief we're seeking.
And these people need |\n| 5 | to be working full bore.
We cannot wait until Thursday to |\n| 6 | know. |\n| 7 | THE COURT:
Okay. |\n| 8 | MR. MORIARTY:
Your Honor, we'll report back by 5 |\n| 9 | p.m. tomorrow if that's acceptable to the Court. |\n| 10 | THE COURT:
Well, I think we're going to have to |\n| 11 | have a hearing.
I don't think it's necessarily report back. |\n| 12 | I'm going to have to listen to what you have to say, right, |\n| 13 | because then I'm going to have to rule.
I'm going to have |\n| 14 | to figure out -- if you can't -- and whether you can or |\n| 15 | cannot, I have no idea. |\n| 16 | But if there's no ability from your perspective to |\n| 17 | have some insurance on this yacht after the 28th of March, |\n| 18 | then I may have no choice then but to move.
I have to |\n| 19 | protect, I don't, but the Court as the person that oversees |\n| 20 | the case as a whole, has to make sure that there are |\n| 21 | protections in place for assets.
I mean, you know -- |\n| 22 | So I think we have to have a hearing.
I think |\n| 23 | we'll have to continue this. |\n| 24 | But what I'll do is, and I might do the same on |\n| 25 | Thursday too, we'll see, and it's only under the specific |\n\nHo Wan Kwok-March 21, 2023 88 circumstances of what's going on right now, okay, because there's a lot going on as you can tell. We've been sitting here talking for a long time. I'm sure everybody's tired, but we have to deal with these issues. Let me just look back at the calendar for a second, please. (Pause.) THE COURT: Did you have a thought before I said something, Counsel? Were you going to say something else? MR. MORIARTY: I did, Your Honor. May I just speak with the Trustee for a moment? THE COURT: Certainly. Go right ahead. (Pause.) MR. MORIARTY: So, Your Honor, what I just spoke to the Trustee about is, and we've agreed that we will report back by 5 o'clock tomorrow, that we either have found insurance or we don't, and if we don't, then the Court can grant the Trustee's motion. THE COURT: All right. All right. MR. MORIARTY: Then that saves us from having -- THE COURT: So when you report back, you're going to send an email to the courtroom deputy box with CC'ing, is that what you're planning on doing? MR. MORIARTY: Yes. THE COURT: Okay. By 5 p.m. tomorrow? Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 88 of\n\nHo Wan Kwok-March 21, 2023 89 MR. MORIARTY: Yes. THE COURT: So, okay. All right. And if you don't have insurance, then what I would do is grant their scheduling order essentially -- MR. MORIARTY: Okay. THE COURT: -- requiring you to respond, to the extent that you decide to, to respond to the motion for summary judgment. And then we'll -- so we're looking for a hearing on Monday the 27th on the summary judgment motion? MR. DESPINS: Yes, Your Honor. And just to clarify, this is bound and paid insurance, you know, THE COURT: You know, whatever you two agreed to is fine with me. I just -- there has to be insurance. There just has to be. So when I'm looking at Monday's calendar, I have a couple of things that I could -- it's not -- I can -- they're easily movable, but I'm thinking obviously -- I don't know if you agree, Attorney Moriarty, but from what I've seen so far, it's a legal argument. You may disagree with it. I'm not -- I would expect that you both wouldn't need more than an hour each side for an argument. Do you think you'd need more than an hour each side for argument? MR. BASSETT: No, Your Honor. I would say less Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 89 of\n\nHo Wan Kwok-March 21, 2023 90 than that. MR. MORIARTY: I don't think so, Your Honor. The one thing that I do want to say, and Attorney Vartan's name has come up a few times today, he had a 2 o'clock court hearing in New Jersey today. This was scheduled yesterday. My expectation is that he is going to be arguing this motion on Monday. MR. DESPINS: Yes. MR. MORIARTY: But I do not believe -- THE COURT: You want to go text him? Because we're having a hearing on Monday if there isn't an agreement with insurance. So I'm not changing the time because of -- I mean, that's not your issue. I understand that. But I'm not changing the time once I set it because of his availability or unavailability. MR. MORIARTY: Just so I'm clear, Your Honor, you're saying text him and find out his schedule on Monday so we -- THE COURT: Yeah. MR. MORIARTY: Okay. THE COURT: I mean, I'm prepared to start this hearing at 11:00 a.m., give each side an hour each at the most. That's it. MR. MORIARTY: Okay. All right. May I step out? THE COURT: Yes, please. Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 90 of\n\n| | Case 22-50073
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91 |\n| 1 | MR. MORIARTY:
Thank you. |\n| 2 | THE COURT:
Yes, please. |\n| 3 | Why don't we take a five-minute recess, or, you |\n| 4 | know, maybe ten minutes. |\n| 5 | But, Attorney Moriarty, that's what I need you to |\n| 6 | do, okay, and then you can report back. |\n| 7 | MR. MORIARTY:
Yes. |\n| 8 | THE COURT:
Okay.
If Mr. Moriarty needs more |\n| 9 | time, Attorney Henzy, let me know. |\n| 10 | MR. HENZY:
I'm just -- I'm going to step out, |\n| 11 | Your Honor, and try to see if I can find (indiscernible) -- |\n| 12 | (Court recessed at 4:43 p.m.) |\n| 13 | (Proceedings resumed at 4:53 p.m.) |\n| 14 | THE COURT:
Go right ahead.
Did you have a chance |\n| 15 | to reach out? |\n| 16 | MR. MORIARTY:
I did, Your Honor, but I was |\n| 17 | unsuccessful. |\n| 18 | THE COURT:
You were unsuccessful? |\n| 19 | MR. MORIARTY:
Yes. |\n| 20 | THE COURT:
All right.
Well, then you'll have to |\n| 21 | be prepared to argue the motion for summary judgment if -- |\n| 22 | you or someone in your office if Mr. Vartan is not |\n| 23 | available, if there is not insurance by tomorrow, because |\n| 24 | I'm going to have that hearing on Monday morning regardless. |\n| 25 | Okay? |\n\nHo Wan Kwok-March 21, 2023 92 MR. MORIARTY: Okay. I understand, Your Honor. Thank you. THE COURT: All right. So we're going to -- we're going to -- so the motion to expedite the hearing on the motion for summary judgment, I'm not going to touch that right now. Because if tomorrow at 5:00, there's a -- I'm correct, right? Tomorrow at 5:00, if there's a report that there's insurance for a period of time, we're not going forward with summary judgment next Monday or are we, Attorney -- Trustee Despins? MR. DESPINS: No. Conceptually, yes. I'm just thinking whether it would be better to schedule that hearing and cancel it or -- that's really your decision? THE COURT: Well, I guess we'll grant it in part and schedule it and we'll enter something. It won't be in tonight. It will be tomorrow for Monday at 11:00, with the understanding that if there's some agreement with regard to insurance by 5:00 p.m. tomorrow, that hearing may not proceed on Monday at 11:00. Now, that doesn't mean -- we'll have to -- we can discuss it again on Thursday I suppose. I mean, I don't know if you're -- if either of you are planning on being here on Thursday. I'm not sure it impacts the debtor directly. MR. MORIARTY: I don't believe -- Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 92 of\n\nHo Wan Kwok-March 21, 2023 93 THE COURT: They're mostly discovery issues on Thursday now that the motion to remove the trustee won't be heard on Thursday. MR. MORIARTY: Correct. I know Attorney Henzy won't be here because he'll be somewhere else. THE COURT: Right. Right. I'm sorry. I forgot. MR. MORIARTY: And I don't know that anybody else from my office plans to be here. But if the Court schedules something that causes us to be here, we'll be here. THE COURT: Well, this is what -- let me just ask everyone before we go any further. I think, except for one thing that I haven't addressed with the parties yet, that I've addressed everything that you asked, Trustee Despins, and that the Court ordered today, is that correct? MR. DESPINS: That's correct. THE COURT: I mean, is there -- I have one issue I need to raise with everyone, but it's not -- it's not anything with regard to what you've all talked about today. MR. DESPINS: That's correct. That's correct, Your Honor. THE COURT: Okay. So what I'm going to do is as follows. I have one issue still. We have one issue. So we talked about this, Trustee Despins a few weeks ago, well before any of the events of last week, and Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 93 of\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 94 of\n\n| | 100 |\n|----|------------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
94 |\n| 1 | it had to do with Epiq's services and the fact that the |\n| 2 | clerk of the court and Epiq have been talking about |\n| 3 | transferring all the information back to the -- to this |\n| 4 | court, the clerk's office, to have the public claims |\n| 5 | register be in the control of the clerk's office with all |\n| 6 | the public claims and then have the confidential claims also |\n| 7 | be in control of the clerk's office but under seal, you |\n| 8 | know. |\n| 9 | And your concern was, or one of your concerns, and |\n| 10 | I think maybe the committee raised a concern and the U.S. |\n| 11 | Trustee raised a concern, about your ability to get into |\n| 12 | what is basically a portal to review claims. |\n| 13 | And so I think, although I think you need to |\n| 14 | confirm this and then you can tell me on Thursday, okay, |\n| 15 | that Epiq would still allow that to happen for the Trustee, |\n| 16 | the U.S. Trustee, and the committee if you want to get that |\n| 17 | information that way. |\n| 18 | But if they don't, you can still get it through |\n| 19 | the clerk's office.
There's going to be some kind of |\n| 20 | listing of confidential claims say, you know, confidential |\n| 21 | claimant one through whatever it is. That will be on the |\n| 22 | docket of the main case.
Nobody will know who the claimants |\n| 23 | are or anything.
So there's ways that it can happen.
But I |\n| 24 | don't know. |\n| 25 | You have to -- I would -- I think it makes sense |\n\n| | Case 22-50073
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95 |\n| 1 | for you to talk to Epiq.
You retained them.
So see if they |\n| 2 | can keep that open. |\n| 3 | And see if they can keep open, if you wanted to, |\n| 4 | and I think you said you did, and I understand why you did, |\n| 5 | that -- I'm speaking to you, Trustee Despins. |\n| 6 | I'm looking at you, but obviously this is audio so |\n| 7 | nobody can understand who I'm speaking to -- that you wanted |\n| 8 | to have the docket still be available so that -- but that |\n| 9 | would mean that Epiq would have to continue to upload and |\n| 10 | maintain the docket.
I don't know if they're willing to do |\n| 11 | that or if you want them to do that or whatever. |\n| 12 | But I need to know those two issues by Thursday. |\n| 13 | Okay?
If possible, I need to understand what your thoughts |\n| 14 | are.
Because I have to enter some kind of order that amends |\n| 15 | their services and still -- they're still going to be -- and |\n| 16 | my understanding is they completely agree that they'll still |\n| 17 | be compelled to turn over any proofs of claim they get to |\n| 18 | the clerk's office if they get any more.
My understanding |\n| 19 | is there haven't been any proofs of claim for the last week |\n| 20 | or two. |\n| 21 | But we need to make sure that there's an order |\n| 22 | that they understand their ongoing obligations with regard |\n| 23 | to any proofs of claim they might receive. |\n| 24 | Then, whether or not they're going to keep this |\n| 25 | ability for you and the parties to the protective order and |\n| | |\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 96 of\n\n| | 100 |\n|----|--------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
96 |\n| 1 | the U.S. Trustee to get into, which is part of the bar date |\n| 2 | order, right, the bar date order talks about the protective |\n| 3 | order, to get into this shared information so you can see |\n| 4 | it, and whether or not they're going to maintain the docket, |\n| 5 | which would require them to do something, which I don't know |\n| 6 | if they're willing to do. |\n| 7 | So you need to talk to them about that.
Okay? |\n| 8 | MR. DESPINS:
Will do. |\n| 9 | THE COURT:
They'd have to continue to maintain |\n| 10 | the docket. |\n| 11 | MR. DESPINS:
Will do, Your Honor. |\n| 12 | THE COURT:
Okay.
Then the only other thing I |\n| 13 | would say with regard to the claims in the case, I don't |\n| 14 | know the number, but I understand it's, you know, between |\n| 15 | public and confidential claims, it's over a thousand claims. |\n| 16 | You know, whatever it is, it is. |\n| 17 | MR. DESPINS:
I think it's over 1300. |\n| 18 | THE COURT:
Okay.
Whatever it is, it is.
It's a |\n| 19 | substantial number. |\n| 20 | Our local rules have a process for the -- of how |\n| 21 | claims are objected to, both individual claims or omnibus |\n| 22 | claims. |\n| 23 | What that order is going to provide whenever I |\n| 24 | enter it after you give me an update on Thursday, Trustee |\n| 25 | Despins, is it's going to provide for a 45-day response |\n| | |\n\n## Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 97 of\n\n| | 100 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
97 |\n| 1 | period, as opposed to a 30-day response period, because of |\n| 2 | the specific facts and circumstances of this case and |\n| 3 | because claimants are located all over the place and they |\n| 4 | need to have appropriate time to have things mailed and |\n| 5 | whatever.
If they're not ECF filers, they're going to have |\n| 6 | to get mailed an objection to a proof of claim. |\n| 7 | I know that's off in the future, but I still have |\n| 8 | to enter this order to make sure it makes sense.
Okay? |\n| 9 | That will have to happen.
Everybody's going to have to |\n| 10 | understand that. |\n| 11 | And the other thing that people will have to |\n| 12 | understand is that there may -- most of the claims will have |\n| 13 | two claim numbers.
A claim number from Epiq and a claim |\n| 14 | number from the Court.
You just figure it out.
It's not |\n| 15 | going to be that hard.
We'll be able to figure it out. |\n| 16 | But just so everybody understands, since |\n| 17 | everything's coming back to the clerk's office, there is |\n| 18 | going to be two ways that you can identify a proof of claim. |\n| 19 | And we'll deal with that.
We'll address it when it happens. |\n| 20 | Okay. |\n| 21 | But given the orders in the Norwich case, and then |\n| 22 | apparently other cases throughout the country, as I said in |\n| 23 | prior hearings, I just don't want to have hearings about |\n| 24 | what was disclosed and not disclosed.
And it's just -- |\n| 25 | there's too many things that we need to address in this case |\n| | |\n\n| | Case 22-50073
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98 |\n| 1 | and we're not going to -- I don't want to spend any time on |\n| 2 | that.
So that's where we are. |\n| 3 | Does anybody have any questions about that?
That |\n| 4 | issue? |\n| 5 | MR. DESPINS:
No, Your Honor. |\n| 6 | THE COURT:
Okay.
All right.
Then with regard to |\n| 7 | Thursday's hearings, what I'm going to do is I'm going to |\n| 8 | allow those hearings to be held via Zoom since there's a |\n| 9 | possibility everybody has to be back here on Monday for |\n| 10 | another hearing.
And they are discovery issues, in my |\n| 11 | opinion. |\n| 12 | The motion to remove the Trustee is not going to |\n| 13 | be heard on the 23rd, so that's coming off the calendar. |\n| 14 | So the only things on the calendar on Thursday are |\n| 15 | motions to quash subpoenas and an application to employ. |\n| 16 | That's the only other thing. |\n| 17 | That can be -- I'm going to allow it to be held |\n| 18 | via Zoom so that we can try to minimize some costs here in |\n| 19 | the case. |\n| 20 | If there were other more substantial matters to be |\n| 21 | heard that day, which there were, but it's not going to be, |\n| 22 | then I would have required everyone to be here in person. |\n| 23 | But right now, given the specific facts and circumstances of |\n| 24 | these cases as they exist now, that's what I'm going to do. |\n| 25 | So I will -- I have to talk to the courtroom |\n| | |\n\nHo Wan Kwok-March 21, 2023 99 deputies about do the parties have to reach out to get -- we haven't even set up the Zoom information so I don't have it yet to give to you. But is that how it should be obtained from the parties for Thursday? They will reach out to the courtroom deputy box and then the Zoom information will be provided? THE COURTROOM DEPUTY: Calendar connect. THE COURT: Calendar connect box. Sorry. The calendar connect box. Okay. Sorry. Thank you. And then you will be provided with the information for the Zoom hearing. And it will be, you know, limited to participants in that hearing. Okay? Anything further we need to address this afternoon then? (No response.) THE COURT: All right. So, Attorney Moriarty, once we hear from you, and you'll CC, obviously, the Trustee and everything when you send your email tomorrow afternoon about the insurance. If there is not an agreement, then that -- the order will -- I've already scheduled the hearing for Monday at 11:00, but then that order will follow, which will require your reply in connection with the request that the Trustee made. Okay? Case 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 99 of\n\nCase 22-50073 Doc 1614 Filed 03/29/23 Entered 03/29/23 20:07:05 Page 100 of\n\n| | 100 |\n|----|-------------------------------------------------------------|\n| | Ho Wan Kwok-March 21, 2023
100 |\n| 1 | MR. MORIARTY:
Yes, Your Honor. |\n| 2 | THE COURT:
All right.
No one has any further |\n| 3 | questions?
Or is there anything else we need to address? |\n| 4 | (No response.) |\n| 5 | THE COURT:
All right.
Then court is adjourned. |\n| 6 | MR. DESPINS:
Thank you. |\n| 7 | (Proceedings adjourned at 5:05 p.m.) |\n| 8 | I, CHRISTINE FIORE, court-approved |\n| 9 | transcriber and certified electronic reporter and |\n| 10 | transcriber, certify that the foregoing is a correct |\n| 11 | transcript from the official electronic sound recording of |\n| 12 | the proceedings in the above-entitled matter. |\n| 13 | |\n| 14 | |\n| 15 | March 27, 2023 |\n| 16 | Christine Fiore, CERT |\n| 17 | |\n| 18 | |\n| 19 | |\n| 20 | |\n| 21 | |\n| 22 | |\n| 23 | |\n| 24 | |\n| 25 | |\n| | |","body_zh":null,"key_entities":["Kwok","Ho Wan Kwok","Despins","Je","Guo","Paul Hastings","CIPA","forfeiture","Luc Despins","GTV"],"ecf_references":[{"doc_number":31,"court":"CTB"},{"doc_number":1562,"court":"CTB"}],"word_count":28305,"status":"published","published_at":"2023-03-29 00:00:00","created_at":"2023-03-29","updated_at":"2026-07-07 07:53:41"}