{"id":"court_ctb_1634_0","court":"CTB","case_no":"22-50073","doc_number":1634,"sub_number":0,"doc_type":"ORDER","filed_date":"2023-04-05","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 and GENEVER \\* HOLDINGS CORPORATION, \\* \\* Debtor. \\* HK INTERNATIONAL FUNDS Adv. Proc. No. 22-05003 INVESTMENTS (USA) LIMITED, \\* \\* Bridgeport, Connecticut Plaintiff, \\* March 23, 2023 \\* v. \\* \\* LUC A, DESPINS, \\* \\* Defendant. \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* TRANSCRIPT OF MOTION TO QUASH SUBPOENA FROM TRUSTEE; OBJECTION AND CROSS-MOTION TO COMPEL; APPLICATION TO EMPLOY PALLAS PARTNERS LLP AS U.K. SOLICITORS; MOTION TO QUASH SUBPOENA FILED BY RICHARD N. FREETH; OBJECTION AND CROSS-MOTION TO COMPEL and MOTION TO EXTEND TIME TO RESPOND TO PRELIMINARY INJUNCTION ORDER TO MARCH 27, 2023 BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Defendant, NICHOLAS A. BASSETT, ESQ. Luc A. Despins, Chapter 11 G. ALEXANDER BONGARTZ, ESQ. Trustee: Paul Hastings, LLP 200 Park Avenue New York, NY 10166 DOUGLAS G. SKALKA, ESQ. PATRICK R. LINSEY, ESQ. Neubert Pepe & Monteith, PC 195 Church Street New Haven, CT 06510 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\nAPPEARANCES: (Cont'd.) Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings, LLP 200 Park Avenue New York, NY 10166 For the Creditor, Pacific ANNECCA SMITH, ESQ. Alliance Asia Opportunity Robinson & Cole Fund L.P.: 28 Trumbull Street Hartford, CT 06103 For the Creditors Committee: KRISTIN MAYHEW, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 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 Jiaming Liu and RICHARD N. FREETH, ESQ. Himalaya Investment LLC, Freeth & Associates Interested Party: 260 Madison Avenue New York, NY 10016 For Pacific Alliance Asia STUART M. SARNOFF, ESQ. Opportunity Fund, L.P.: O'Melveny & Myers, LLP 7 Times Square New York, NY 10036 For Mei Guo and HK Int'l AARON ROMNEY, ESQ. Funds Investment (USA): Zeisler & Zeisler, P.C. 10 Middle Street Bridgeport, CT 06604 LEE VARTAN, ESQ. Chiesa Shahinian & Giantomasi, P.C. One Boland Drive West Orange, NJ 07052\n\n2\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 3 of 52\n\nHo Wan Kwok - March 23, 2023 3 (Proceedings commenced at 11:07 a.m.) THE COURTROOM DEPUTY: Case No. 22-50073, Ho Wan Kwok, and Case No. 22-5003, HK International Funds Investments versus Despins. THE COURT: Good morning. If we could have appearances for the record starting with the Chapter 11 Trustee, please. MR. DESPINS: Good morning, Your Honor. Luc Despins, Chapter 11 Trustee. THE COURT: Good morning. MR. BASSETT: Good morning, Your Honor. THE COURT: And counsel for the -- go ahead, Attorney Bassett. I was just going to say and counsel for the Trustee, please. MR. BASSETT: Sorry, Your Honor. Nick Bassett, from Paul Hastings, counsel for the Chapter 11 Trustee. MR. SKALKA: Good morning, Your Honor. Douglas Skalka, as local counsel of Neubert Pepe & Monteith, on behalf of the Trustee. THE COURT: Good morning. MR. SMITH: Good morning, Your Honor. Stuart Sarnoff, of O'Melveny & Myers, on behalf of creditor PAX. THE COURT: Good morning. MS. SMITH: Good morning, Your Honor. Annecca Smith, of Robinson & Cole, Connecticut counsel for PAX.\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 4 of 52\n\nHo Wan Kwok - March 23, 2023 4 THE COURT: Good morning. MS. MAYHEW: Good morning, Your Honor. Kristin Mayhew, Pullman & Comley, on behalf of the Creditors Committee. THE COURT: Good morning. MS. CLAIBORN: Good morning, Your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good morning. Then, Attorney Freeth, the motions -- you have some motions on at 10 o'clock. Could you please note your appearance for the record. MR. FREETH: Sure. Richard Freeth, Freeth & Associates, for Interested Party Liu. THE COURT: I'm sorry. I couldn't hear you, Mr. Freeth. Could you speak -- I don't know where your microphone is, but our record in the bankruptcy court is all audio so we -- if we can't hear you, that won't pick up, it won't make a record, so I'm going to ask you to do that again, please. MR. FREETH: Understood. My apologies. My name is Richard Freeth, Freeth & Associates, and I am here on behalf of -- for lack of a better term we call it an Interested Party, Mr. Liu, L-I-U, who received a subpoena, actually two subpoenas. THE COURT: And are you also appearing on behalf\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 5 of 52\n\nHo Wan Kwok - March 23, 2023 5 of a corporate entity? MR. FREETH: Yes. His LLC, which is called Himalaya Investments -- Investment, LLC. THE COURT: Okay. Thank you. Good morning. Attorney Linsey, did you want to note your appearance for the record? MR. LINSEY: Thank you, Your Honor. I'm up in Judge Tancredi's court this morning, but I'm trying to be on when I can. I apologize for coming in late. Patrick Linsey, Connecticut counsel for the Trustee. THE COURT: Good morning. All right. So on the calendar at 11:00 a.m. are some discovery disputes, but also an application to employ that the Chapter 11 Trustee has filed with regard to retention of a solicitor in London. And I'd like to take that application to employ first please, which is 1496. MR. DESPINS: Good morning, Your Honor. Luc Despins, Chapter 11 Trustee. We filed this application to retain the Pallas firm as our solicitors. As you recall, that we had disclosed, this is at the beginning of the case, that Paul Hastings represented certain UBS entities and we had, you know, indicated that the firm would not be involved. I was able to (indiscernible) to UBS, but the firm would not be involved in the UBS matters.\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 6 of 52\n\nHo Wan Kwok - March 23, 2023 6 And that issue was also raised in the U.K. proceedings by Ace Decade and others. And we confirmed to the court in the U.K. that only I would be receiving information regarding UBS and would be retaining a separate solicitor firm to handle the UBS matters. And so that's how we're before the Court on the retention of the Pallas firm to be our solicitor counsel with respect to UBS matters in the U.K., Your Honor. I don't know if Your Honor has specific questions. THE COURT: I do not have any questions at the moment other than once the solicitor is retained, if no one opposes it, and I think the United States Trustee's Office has filed a statement of no objection, what are the next steps in the litigation in England? MR. DESPINS: So as I mentioned at the last hearing, UBS was unsuccessful in its attempt in the Court of Appeals to get the jurisdictional decision reversed, so now it goes back to the lower court, the trial court, and we believe that UBS has three months from the date of service of that Court of Appeals order, which just happened yesterday or the day before, to file a defense to the claim, so that's the next step. Obviously, there are issues, as I mentioned, with respect to costs and in the sense that in the U.K. if you're not successful in the litigation, your costs would be\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 7 of 52\n\nHo Wan Kwok - March 23, 2023 7 awarded against the party that's not successful. And UBS is raising that issue vis-a-vis the Trustee and also vis-a-vis Ace Decade, and those issues are percolating now. So these are not public filings but they're hanging in the background. Basically UBS's position is that it needs to be protected in the event it prevails for the fees and expenses incurred in its defense. So that's the -- so the next steps is not for several months, Your Honor, but there's a lot of activity in the background with respect to these issues that I just described. THE COURT: Okay. Thank you for that update. I appreciate that. Attorney Claiborn? MS. CLAIBORN: Thank you, Your Honor. I filed a statement of no objection which is at ECF 1542. THE COURT: Yes. Thank you. I've seen that statement of no objection. Does anyone else wish to be heard on the application of the Trustee to retain and employ Pallas as solicitors in the United Kingdom? (No response.) THE COURT: All right. Hearing nothing, then, no one has filed any written objection to the application and\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 8 of 52\n\n| | Ho Wan Kwok - March 23, 2023
8 |\n|----|---------------------------------------------------------------|\n| 1 | there is no one participating in this hearing today that is |\n| 2 | objecting to the application.
I understand the reasons why |\n| 3 | the Trustee is seeking to retain the solicitors in the |\n| 4 | United Kingdom.
So for all those reasons, the application |\n| 5 | is granted. |\n| 6 | Trustee Despins, I'm going to make very minor |\n| 7 | changes to the proposed order, and they're not substantive |\n| 8 | in any way, in my opinion, the second page of the order. |\n| 9 | I think it's probably because the Southern |\n| 10 | District of New York has amended its standing order of |\n| 11 | reference, but the United States District Court for the |\n| 12 | District of Connecticut has not, so it's still -- the order |\n| 13 | of reference is still the order from 1984 signed by Judge |\n| 14 | Daly who was the District Court Judge at the time, Chief |\n| 15 | District Court Judge at the time, so I'm going to remove the |\n| 16 | words as amended at the top, the fourth line on page 2 of |\n| 17 | the order. |\n| 18 | And then before it is hereby ordered language, all |\n| 19 | I'm going to say is -- after a hearing held on -- just take |\n| 20 | out the after due deliberation and sufficient cause, we've |\n| 21 | already found all that above. |\n| 22 | So just change that, those minor changes and then |\n| 23 | the order will enter unless you have any concerns about what |\n| 24 | I just said. |\n| 25 | MR. DESPINS:
Not at all, Your Honor.
Thank you. |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 9 of 52\n\n| | Ho Wan Kwok - March 23, 2023
9 |\n|----|---------------------------------------------------------------|\n| 1 | THE COURT:
Okay.
All right.
Thank you. |\n| 2 | So the application is granted and the order will |\n| 3 | enter with minor changes noted on the record.
Okay?
I |\n| 4 | assume that will be later today or tomorrow at the latest. |\n| 5 | And I agree that your application was filed under |\n| 6 | our local rules within the time -- within 30 days of when |\n| 7 | the solicitor started rendering services, so that their |\n| 8 | services will be effective as of January 26th, 2023.
Okay? |\n| 9 | MR. DESPINS:
Thank you, Your Honor. |\n| 10 | THE COURT:
Okay.
Thank you. |\n| 11 | Now, moving onto the other matters at 11:00, there |\n| 12 | are, Attorney Freeth has filed a motion to quash a subpoena |\n| 13 | directed to his individual client, which is ECF No. 1465, |\n| 14 | and a motion to quash subpoena directed to the corporate |\n| 15 | entity, which Attorney Freeth has described this morning as |\n| 16 | the individual's LLC, which is 1541.
And each one of those |\n| 17 | motions has an objection and cross-motion to compel filed by |\n| 18 | the Trustee. |\n| 19 | So, Attorney Freeth, to me, and you can -- you can |\n| 20 | state if you think I'm incorrect, but I believe the |\n| 21 | objections that you have in your motion to quash in both the |\n| 22 | subpoena directed to the individual and the subpoena |\n| 23 | directed to the corporation are substantially the same, is |\n| 24 | that correct? |\n| 25 | MR. FREETH:
Yes. |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 10 of 52\n\nHo Wan Kwok - March 23, 2023 10 THE COURT: Okay. MR. FREETH: That is correct, Your Honor. THE COURT: Okay. And then I see, it seems to me anyway, that there have been some discussions had between the parties with regard to the subpoenas but, I believe, unless something has occurred recently, that there's no agreement with regard to these motions between the parties, is that correct? MR. FREETH: At the moment, that's correct. THE COURT: Okay. So you, Attorney Freeth, want to quash the subpoenas because you believe that the Trustee shouldn't have served them, he should have done more due diligence and that they're broad, overly broad, is that correct? MR. FREETH: Well, the first half, yes, (indiscernible). The second half are technical things as far as CP -- it's cited in the motion. But he's in Scottsdale, Arizona, Mr. Liu, and his LLC is an Arizona LLC. And the subpoenas that he received directed him to appear and produce, and et cetera, in New York, obviously, more than 100 miles from where he resides or works, and so we have a technical issue that was the other half of my arguments for the quash. THE COURT: Okay. But I've read -- I think I've read in the documents that were in response to the motion to\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 11 of 52\n\nHo Wan Kwok - March 23, 2023 11 quash, that the Trustee has offered to travel to Arizona and conduct the deposition in Arizona within 100 miles of where your client, individual client, either lives or the business -- the business address of the corporate client, isn't that correct? MR. FREETH: That was brought up in our discussions. Again, we didn't have a conclusion to those discussions. We started talking and then the, well, the filed a motion to (indiscernible). The client gave the message to me that, okay, well, I guess we're not negotiating anything (indiscernible). THE COURT: I can't understand what you're saying. Attorney Freeth, I can't understand what you're saying. MR. FREETH: I'm sorry. THE COURT: You just have to talk closer to the microphone because I can't understand the words. I understood some of it, but I didn't understand all of it. MR. FREETH: I apologize. I'm fighting a cold, so I'm not exactly -- THE COURT: Okay. That may be. Yeah. That may be the reason why it sounds funny. Go ahead. MR. FREETH: I'll start from the beginning of what I -- the last part that I just said. We were in discussions to have some sort of solutions like that, but to me that begged the question he's\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 12 of 52\n\nHo Wan Kwok - March 23, 2023 12 the wrong person. They named him because he happened to choose Himalaya, which is the largest mountain chain in the world, (indiscernible), so he gets dragged into (indiscernible) and he has to spend his time dealing with a thing that -- I volunteered to provide an affidavit. I spent time with him on the phone. I went over every single element of the subpoenas to confirm that what he's telling me (indiscernible) case was correct, that he doesn't know any of the parties, has no information, has no documentation, doesn't even know 99 percent of the people, I've vaguely heard of Mr. Kwok. That's it. And that was where we left off. But as I mentioned, when we were trying to talk of some way to resolve things, they filed a motion to compel, which to me communicated that they want to do things forcefully. So I guess there's nothing else for me to say at this point other than hope that we can get to a resolution with the motion to quash. THE COURT: Okay. Well, you -- both sides have ongoing obligations to meet and confer and act in good faith with regard to discovery requests under the Federal Rules of Civil Procedure. You indicated, Attorney Freeth, that you offered an affidavit, but I haven't seen any affidavit from your\n\nHo Wan Kwok - March 23, 2023 13 client yet, have I? I don't see anything in the record of this case. MR. FREETH: No. We drafted it already. I can have it submitted probably in 48 hours if he can sign it before a notary out in Arizona. I'm assuming he has access to them somewhere in Scottsdale. So it's already drafted. We can probably turn it around maybe even in 24 hours. THE COURT: Have you shown that affidavit to Mr. Despins or his counsel? MR. FREETH: No, we can -- no, I don't believe we did. So I can send that to him first for his approval. THE COURT: Well, it's not necessarily his approval, but it's -- if yor clients -- see, first of all, Attorney Freeth, in bankruptcy cases, Rule 2004 discovery is broad and it's akin to a fishing exposition -- expedition. There's a number of cases that say that. It is broader than a subpoena in a specific lawsuit or adversary proceeding because in certain cases, like the case that is before this court now, the Trustee's charged with investigating the affairs of the debtor in order to determine whether or not there are assets available to pay the claims of creditors. MR. FREETH: Of course. THE COURT: So while you're -- while you may -- I think you -- I know you've argued that the subpoenas are Case 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 13 of 52\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 14 of 52\n\n| | Ho Wan Kwok - March 23, 2023
14 |\n|----|---------------------------------------------------------------|\n| 1 | broad.
That's not necessarily a basis to quash a subpoena |\n| 2 | in connection with a Rule 2004 examination, number one. |\n| 3 | Number two, I have read in the papers that the |\n| 4 | Trustee and his counsel are willing to come to Arizona to |\n| 5 | conduct the deposition and to obtain document. |\n| 6 | So I'm not sure what -- why that -- you continue |\n| 7 | to raise the objection about it being outside of New York, |\n| 8 | because they've already said they're going to come to |\n| 9 | Arizona to do that.
So I don't see that that's a |\n| 10 | sustainable objection or basis to grant your motion to |\n| 11 | quash. |\n| 12 | So the two bases upon which you've asserted in |\n| 13 | your motion that the subpoenas should be quashed that the |\n| 14 | discovery is overly broad and the Trustee hasn't done |\n| 15 | anything that he needs to do for due diligence is not a -- |\n| 16 | is not a basis upon which this court would grant a motion to |\n| 17 | quash a Rule 2004 subpoena. |\n| 18 | And your other basis for outside of -- 100 miles |\n| 19 | outside of Arizona, the Trustee has stated in pleadings in |\n| 20 | this case that he will go to Arizona.
So that's another -- |\n| 21 | that basis to grant a motion to quash is also not |\n| 22 | sustainable at this point. |\n| 23 | So what other arguments do you have that would -- |\n| 24 | that you would like the Court to consider in your assertion |\n| 25 | that the subpoenas should be quashed? |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 15 of 52\n\nHo Wan Kwok - March 23, 2023 15 MR. FREETH: Well, to be specific, the subpoena says -- it doesn't say anything about going to Arizona. It's only what he said after a reasonable -- THE COURT: I understand it doesn't say. We're beyond the subpoena now. We're at the motion to quash stage and the response, right? And the response says that they're going to go to Arizona. So I'm not going to make your clients come to New York. That's fine. MR. FREETH: Okay. THE COURT: But they've already -- they've already conceded one of your arguments in your motion to quash, which is, okay, then we'll go to Arizona. So that's taken care of. MR. FREETH: Okay. THE COURT: So what's -- MR. FREETH: I believe that -- I believe that my client would do as, you know, instructed if this is what the order of the Court is, that he -- if someone on behalf of the Trustee goes there and does what they want to do there. I believe he's amenable. My personal objection is that it's a waste of his time. It's not fair to him. But if you're going to order that, even though he clearly (indiscernible), you don't have to take my word for it, or his word for it, I understand, but I do think it's practically speaking a waste of the\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 16 of 52\n\nHo Wan Kwok - March 23, 2023 16 Trustee's time and my client's time. But, sure. THE COURT: Well, maybe the Trustee would agree with you if you provided him with an affidavit that is signed by your client individually and your client on behalf of the corporation. I don't know. But he hasn't been provided with that yet, so he doesn't have anything to work with other than what he had originally which was a right to conduct a Rule 2004 examination and subpoena the individual client and the corporate client. So it's possible that if you provide him that with information. I have no idea. But with regard to your motions to quash and the bases set forth in your motions to quash, the Court finds that your argument about the 100-mile issue, which is a valid argument, is moot because the Trustee is going to go to Arizona. That's what he said. So he's already conceded that part of your argument. MR. FREETH: Okay. THE COURT: The argument with regard to the broadness of the subpoena, again, under Rule 2004, that's what is allowed under the bankruptcy rules. And I'm not suggesting that you would necessarily understand that unless you practiced in the Bankruptcy Court, but that is a well-known -- a well-known and well-settled principle of discovery under Rule 2004 of the\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 17 of 52\n\nHo Wan Kwok - March 23, 2023 17 bankruptcy rules. And that has been cited across the country in almost every jurisdiction as a broader discovery than would be allowed under the discovery rules in a specific adversary proceeding or civil cause of action. MR. FREETH: I understand that, Your Honor. THE COURT: So how would you like to proceed, Attorney Freeth? Are you going to -- how would you like to proceed? MR. FREETH: I can provide to counsel for the Trustee our draft or proposed affidavit for our client to sign time. And if they find it acceptable or some versions thereof acceptable, then we could resolve it that way quickly. Barring that, then my client, I believe, would appear, if he was instructed to by counsel. So if need be, then we can do it that way. But I'd like to be able to save everybody time. So maybe if I can have a window, at least maybe a day, where I can provide them. Like I said, this is rough. As soon as I'm off the phone to the counsel for the Trustee I'll draft a subpoena -- I'm sorry, affidavit. And if they find it acceptable, we can have it signed within a day or two. THE COURT: Trustee Despins or Attorney Bassett?\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 18 of 52\n\nHo Wan Kwok - March 23, 2023 18 MR. BASSETT: Yeah. Your Honor, Nick Bassett, from Paul Hastings, on behalf of the Trustee. I'll be addressing this matter this morning. So just -- just a couple of remarks, and I'll respond specifically to the proposal regarding the affidavit in a moment. And I do feel compelled to raise this because in the papers, Your Honor, there were accusations that the Trustee and/or his counsel had failed to act with professionalism in pursuing the subpoena. I think that's paragraph 2 of the motion to quash. Obviously, we take exception to that. And I can assure the Court that the Trustee did have a good-faith basis for pursuing the subpoena. As the Court is aware, as it has come up in the past hearings on numerous occasions, you know, we've told the Court that the Trustee has a number of people who have provided information concerning the debtor and his organization, and that it is including the Himalaya entities with which the Court is very familiar from the PI hearing and otherwise. We filed this particular 2004 motion in I believe it was December of 2022. Prior to that, in mid-November of 2022, we received a tip or an email from one of the people who often provides us with information identifying some of\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 19 of 52\n\nHo Wan Kwok - March 23, 2023 19 the quote/unquote, \"Himalaya foreign entities.\" One of the entities in that email was Himalaya New World, Inc., which the Court may remember was the entity owned by a witness who testified in support of the debtor at his PI hearing. That tip obviously turned out to be correct as that witness confirmed on the stand. Another entity, an individual, named in that correspondence was the recipient of this 2004 subpoena, Mr. Freeth's client, and the entity that he controls. So that was the basis for serving it at that time. Your Honor, since then, you know, we've done further diligence. And just to point out a couple of things in the papers, Attorney Freeth said that his client is, you know, working as a delivery person at approximately \\$3,000 a month. That's his job. What we've come to understand, is in addition to this LLC in which we've received no explanation as to what type of business it's engaged in if it's not related to the debtor or his group of companies. In addition to that, Mr. Liu, the target of the subpoena, is the co-trustee of another entity called the Himalaya Revocable Trust. This is all from public property records in Arizona. That entity in turn owns at least five, maybe six, different real properties which appear to have a value of at least two to \\$3 million.\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 20 of 52\n\nHo Wan Kwok - March 23, 2023 20 And, you know, look, it could be -- it could be a coincidence. You know, these entities may have nothing to do the debtor. In this case, it could have been wrong. So as we told Mr. Freeth that we are willing to entertain an affidavit. We have no incentive to put anyone through unnecessary burdens in responding to a subpoena if they actually have no relevant information. In fact, I think the correspondence between us sort of left off on March 10th where Attorney Linsey had told Attorney Freeth that if he wanted to send an affidavit, we would consider that. And we stand by that. And we will consider whatever he would want to send. The only thing I would note is that, you know, that affidavit, for it to be acceptable to the Trustee, cannot simply say, you know, I know nothing and my Himalaya entities have nothing to do with the debtor. You know, given the circumstances, we're obviously going to require some explanation as to, you know, what do these entities actually do then. You know, how did he come to acquire these properties, things of that nature, to help us reconcile the assertion with sort of the facts that we've come to understand. The last thing I would note that is a connection that I think would need to be addressed is that Attorney Freeth happens to be the attorney who is counsel for a group\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 21 of 52\n\nHo Wan Kwok - March 23, 2023 21 of plaintiffs who filed a FARA action against Paul Hastings asserting that Paul Hastings and Trustee Despins are somehow acting at the behest -- acting at the behest of the Chinese Communist Party, et cetera. So, again, maybe that's a coincidence, but I think the affidavit needs to address how this individual came to be represented by Attorney Freeth. So these are the types of the details that we're going to need to have addressed for us to get comfortable that there's nothing further to explore here. The last thing I'd note is that we, as the Court recognized, you know, we would come to Arizona. We also had proposed to make it easier for everybody to do the deposition, if there is one, remotely. And obviously the documents, as is customary, could be provided electronically to resolve any concern about that as well. So with that, Your Honor, that's all I have to say. I don't think it's a basis to quash the subpoena. But the Trustee will be reasonable in continuing to work with Mr. Freeth and his client to see if there's a way to resolve this without imposing an unnecessary, undue burden on anyone. THE COURT: Attorney Freeth? MR. FREETH: Your Honor, might I be heard? Oh, thank you.\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 22 of 52\n\nHo Wan Kwok - March 23, 2023 22 THE COURT: Attorney Freeth, any response? MR. FREETH: The latter part of Mr. Bassett's comments about other businesses or LLC's, I have no knowledge about. So it may be that -- maybe it would behoove everyone for them to do this in person because they have the information that I spoke with Mr. Liu. According to him, you know, he's a simple guy. He only has this one business entity that he created to try to do a real estate project that never even got off the ground. This other information is new to me. I don't know. I don't know any of this. So if he's involved with other businesses, then maybe the ability to resolve this by an affidavit is wishful thinking. And I do object to their deposing other matters not relevant to this pending matter. I don't think -- I don't think it's relevant at all as far as my relationship with a particular client. I'm not going to get into that. So that's all I have to say. THE COURT: Okay. MR. FREETH: I'm willing to try to -- THE COURT: So what I need to know, Attorney Freeth, are you withdrawing these motions to quash then because you're going -- because you're acknowledging that the Trustee's going to examine your clients and require\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 23 of 52\n\nHo Wan Kwok - March 23, 2023 23 documents? MR. FREETH: No. If they're going to withdraw the motions to compel, I'll withdraw the motion to quash, and we'll operate under the -- under the subpoenas as they are and just have them done, executed in Arizona by agreement. THE COURT: Attorney Bassett? MR. BASSETT: I'm sorry, Your Honor. I missed the question that was directed to me. THE COURT: What I'm asking is, given what we just discussed this morning, I asked Attorney Freeth is he was going to withdraw the motions to quash the subpoenas, because he's just said that even though he may give an affidavit it may not be enough. And that as long as you're going to come to Arizona and conduct these depositions in person that you should proceed with the subpoenas as issued and that you'll -- What Attorney Freeth didn't say, but I would order, is that the parties confer on a date and time for these depositions to -- these Rule 2004 examinations to occur. Then he asked in response, and he said, I asked if he was, Attorney Freeth, if he was going to withdraw the motions to quash and he said he would do so if you withdrew your objection and your cross-motion to compel. MR. BASSETT: If the result, Your Honor, is that\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 24 of 52\n\nHo Wan Kwok - March 23, 2023 24 Mr. Freeth's clients are going to comply with the subpoenas, then, of course, we would withdraw the motion to compel. And his withdrawal of the motion to quash obviously would be acceptable as well. THE COURT: Okay. So then what we're going to do is, ECF 1465, the motion to quash the subpoena is withdrawn on the record for the reasons stated on the record. And the objection and cross-motion to compel is withdrawn as well on the record for the reasons stated on the record. And the same will be true with regard to the motion to quash that was filed on behalf of the corporate entity and the objection to that motion and the motion to -- the cross-motion to compel. And what the parties need to do now is you need to get together and agree on dates for compliance with the subpoena, including the date by which the documents will be produced and that are responsive to the subpoena and the date on which the examinations will be held. Okay? MR. FREETH: I've got it. Yes. THE COURT: All right. MR. BASSETT: Thank you, Your Honor. THE COURT: Anything further with regard to the discovery matters? (No response.)\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 25 of 52\n\n| | Ho Wan Kwok - March 23, 2023
25 |\n|----|----------------------------------------------------------------|\n| 1 | THE COURT:
Okay.
Thank you. |\n| 2 | Attorney Freeth, we have another matter on the |\n| 3 | calendar at 11:30 that does not involve you.
You're welcome |\n| 4 | to stay, but you do not have to stay.
That's your choice. |\n| 5 | MR. FREETH:
Appreciate it, Your Honor.
Thank |\n| 6 | you, very much. |\n| 7 | THE COURT:
Okay.
Thank you. |\n| 8 | MR. FREETH:
Thank you. |\n| 9 | THE COURT:
All right.
Then on the calendar at |\n| 10 | 11:30, the Court set a hearing this morning on the motion to |\n| 11 | extend time to respond to a preliminary injunction order |\n| 12 | filed on behalf of Mei Guo and HK International Fund |\n| 13 | Investments and required Attorney Romney and Attorney Vartan |\n| 14 | to -- and/or, but it appears they're both here, so I would |\n| 15 | need you both to note your appearances for the record, |\n| 16 | please. |\n| 17 | MR. ROMNEY:
Thank you. |\n| 18 | Aaron Romney, Zeisler & Zeisler, on behalf of Mei |\n| 19 | Guo and HKI Investments. |\n| 20 | MR. VARTAN: Good morning, Your Honor.
Lee Vartan |\n| 21 | on behalf of the same parties. |\n| 22 | THE COURT:
Good morning. |\n| 23 | All right.
I set this hearing because the motion |\n| 24 | to extend the time that you filed at, you know, whatever |\n| 25 | time it was, a little after 11:00, which was timely, didn't |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 26 of 52\n\nHo Wan Kwok - March 23, 2023 26 provide at least the Court with the understanding of why you needed additional time until March 27. The information that was to be provided was Ms. Guo's individual address and the landowner of the building or apartment she lives which you agreed to provide and it would be deemed highly confidential in connection with the protective order that's been in place in the main case since, you know, I don't have the date in front of me, but it's August at the -- for months, for lack of a better term. So why do you need additional time to provide that information to the Trustee that you agreed, during the hearing on March 15th that we had, that you would provide to the Trustee and designate that as highly confidential in connection or in accordance with the provisions of the protective order. MR. VARTAN: Your Honor, I can clarify that. So we were required under the Court's order to provide the information that Your Honor just put on the record by Friday, March 17th, which we did do. We did provide that information to Mr. Bassett and to Mr. Luft. The information that was required to be provided by yesterday, we did bring information. It was under -- the information was to be provided under I believe subparagraph (d) of the preliminary injunction order, which I think is Docket Entry 142.\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 27 of 52\n\n| | Ho Wan Kwok - March 23, 2023
27 |\n|----|---------------------------------------------------------------|\n| 1 | THE COURT:
Okay.
And what information is that? |\n| 2 | MR. VARTAN:
That information had to do with any |\n| 3 | and all property that was owned or controlled by HK USA or |\n| 4 | Ms. Guo, individually.
And the property was not defined |\n| 5 | anywhere in the order, but that was really not the reason, |\n| 6 | of course, for seeking additional time as we put forward in |\n| 7 | our submission from last night. |\n| 8 | Ms. Guo is in the process of looking to obtain |\n| 9 | criminal counsel to advise her on all that's going on.
And |\n| 10 | some of this, of course, Your Honor is well familiar with |\n| 11 | based upon our last appearance on March 15th. |\n| 12 | She's not yet retained criminal counsel and she |\n| 13 | needs criminal counsel to consult with Mr. Romney and with |\n| 14 | me about how she's going to proceed with respect to the |\n| 15 | obligations under the preliminary injunction order. |\n| 16 | Then I believe, Your Honor, there's a PJR order |\n| 17 | within 30 days of entry of that order, which I believe was |\n| 18 | March 17th, Ms. Guo is required to sit for a deposition. |\n| 19 | And, again, she would want to consult with criminal counsel |\n| 20 | before she does though.
That's not time sensitive in the |\n| 21 | same way the corporate March 22nd obligation was. |\n| 22 | THE COURT:
All right.
Let's go back.
Because |\n| 23 | the preliminary injunction order, you're saying she had to |\n| 24 | produce what in connection? |\n| 25 | First of all, it's at HK, but, what paragraph are |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 28 of 52\n\nHo Wan Kwok - March 23, 2023 28 you saying that she needed to provide information and she has not yet? What is the -- I don't see what you're talking about. Are you sure you're not talking about the prejudgment remedy order, the motion for disclosure of assets, that's part of that order? MR. DESPINS: Your Honor, this is Trustee Despins here. It's subparagraph (d) of the preliminary injunction order. The counter defendant shall identify to the Trustee and to the Court within five days of entry of this order, so last Friday -- THE COURT: Oh, (d), (d), okay. MR. DESPINS: -- any other property in which they hold an interest. And counter defendant shall not transfer, encumber, remove or dispose, et cetera, et cetera, of such property. THE COURT: Okay. So subparagraph (d) of page -- okay. I see. I couldn't -- I didn't understand that's what Mr. Vartan said. All right. So, Mr. Vartan, as we discussed last week, neither HK or Mei Guo are under indictment, so what -- what is -- you know, I mean, getting criminal -- you agreed to -- you consented and agreed to the entry of this order. And there's no -- unless you're showing me there's some indictment that issued in the last two or three days\n\nHo Wan Kwok - March 23, 2023 29 against Mei Guo or HK International, then I don't understand the need for additional time. MR. VARTAN: Your Honor, there is no new indictment. But what we had put on the record on the 15th, and will again put on the record here is that Ms. Guo is at least named glancingly in the indictment as relative one or relative two. I think Your Honor is aware that she is named as a relief defendant in the SEC complaint. Since we were before Your Honor, I learned that there was a companion complaint, not an indictment, that was issued out of the Southern District of New York. We know of no charges against Ms. Guo. We know of no imminent charges against Ms. Guo. There may never be charges. But the point is that we're operating five days into all of this. There's a lot going on, as I know Your Honor knows. And Ms. Guo, as do Mr. Romney and I, feel it's prudent for her to consult with criminal counsel before making further representations given that there is effectively complete overlap, as I understand it, between what's happening in this court in the adversary proceeding and what has been itemized or described in the indictment and the SEC complaint. So we understand, of course, what the order says. Case 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 29 of 52\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 30 of 52\n\nHo Wan Kwok - March 23, 2023 30 We did not want to ignore the obligation in the order which is why she is seeking criminal counsel to consult with her. We would ask for a brief adjournment or continuance for us to meet or address that obligation. I think Monday is not so significant, and ask -- given the fact that the indictment was just handed down on March 15th. THE COURT: Trustee Despins or Mr. Bassett, what's your position regarding the requested extension of time? MR. BASSETT: Sure. I'm happy to address that, Your Honor. Again, Nick Bassett, from Paul Hastings, on behalf of the Trustee. You know, our position is I think consistent with some of the remarks the Court made insofar as, you know, this order was consented to and it contained the deadline that it contains at the time of that consent. It was then submitted to the Court, again, contained that language and there was no response or objection to the deadline at that time. So it seems to us that, you know, there's really no basis for this request at this time. All that being said, you know, they are requesting in this instance, which, you know, by comparison is a relatively modest extension as compared to other requests that have been made, so I think the Trustee is prepared to not oppose an extension to Monday, which is next Monday,\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 31 of 52\n\n| | Ho Wan Kwok - March 23, 2023
31 |\n|----|---------------------------------------------------------------|\n| 1 | March 27th, to provide this information subject to, you |\n| 2 | know, a couple of I would say caveats or conditions, the |\n| 3 | first of which is the Trustee expects and would respectfully |\n| 4 | request that the Court order that there be no further |\n| 5 | extension beyond next Monday. |\n| 6 | Obviously, we don't want to be in a position where |\n| 7 | this is just the first request and then Monday comes around |\n| 8 | and we find out they need more time.
In that circumstance, |\n| 9 | the Trustee would certainly have an issue. |\n| 10 | The other point that I would make is -- and we've |\n| 11 | already been down the road of the debtor at least in this |\n| 12 | case asserting that he can't provide any information at all |\n| 13 | to the Trustee on account of the Fifth Amendment, and his |\n| 14 | Act of Production Doctrine privilege that he's asserted, |\n| 15 | which as the Court is aware from the hearing we had earlier |\n| 16 | this week, the debtor made that assertion over a month ago, |\n| 17 | before any criminal charges were announced. |\n| 18 | So the reason I bring that up is because we also |\n| 19 | don't really want to be in a position where we find out on |\n| 20 | Monday that Ms. Guo and HK are somehow saying they can't |\n| 21 | produce anything, give us any information, on that same |\n| 22 | basis. |\n| 23 | You know, any opposition by the Trustee to this |\n| 24 | request of extension is with the understanding and |\n| 25 | expectation that actual information concerning assets in |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 32 of 52\n\n| | Ho Wan Kwok - March 23, 2023
32 |\n|----|--------------------------------------------------------------|\n| 1 | accordance with the order will be provided on Monday. |\n| 2 | So with that, and, again, just to reiterate as we |\n| 3 | have over the last couple of hearings, that the Trustee |\n| 4 | cannot emphasize enough how he does not want to have the |\n| 5 | criminal charges pending against the debtor to be used |\n| 6 | continually for further delay. |\n| 7 | With all the sort of, you know, reservations, if |\n| 8 | you will, in this instance, given the relatively limited |\n| 9 | nature of the request for an extension, we would not have an |\n| 10 | opposition to the extension until Monday being granted. |\n| 11 | THE COURT:
Okay.
Thank you. |\n| 12 | Attorney Vartan or Attorney Romney, any response |\n| 13 | to Attorney Bassett? |\n| 14 | MR. VARTAN:
I just have two quick responses, Your |\n| 15 | Honor. |\n| 16 | Certainly we're not going to seek additional time. |\n| 17 | As we've represented to the Court, Ms. Guo is actively |\n| 18 | seeking criminal representation and so that will be secured |\n| 19 | well before Monday, and that attorney, he or she, will be on |\n| 20 | board and able to appropriately advise Ms. Guo. |\n| 21 | Certainly with respect to what that advice is, I |\n| 22 | don't think either Attorney Romney or I are in a position to |\n| 23 | prejudge what criminal counsel is going to tell her.
I |\n| 24 | don't think I'm prepared, nor could I be to say that the |\n| 25 | advice is going to be to produce documents or not produce |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 33 of 52\n\n| | Ho Wan Kwok - March 23, 2023
33 |\n|----|----------------------------------------------------------------|\n| 1 | documents.
That's the whole point of her consulting with |\n| 2 | criminal counsel in the first place. |\n| 3 | THE COURT:
So what are you going to do then on |\n| 4 | Monday, Attorney Vartan?
How are you going to comply with |\n| 5 | paragraph (d) -- |\n| 6 | MR. VARTAN:
D like door, Your Honor. |\n| 7 | THE COURT:
Yes.
On page -- how are you going to |\n| 8 | comply with that then?
You're not -- the criminal lawyer |\n| 9 | isn't coming into this court and representing her.
You are. |\n| 10 | So how are you going to comply with that? |\n| 11 | MR. VARTAN:
I wouldn't be in a position to tell |\n| 12 | the Court that at this point because we haven't consulted |\n| 13 | with our client, nor is criminal counsel on board.
So at |\n| 14 | this point, it would be premature for me to say what will |\n| 15 | happen on Monday because there is no criminal attorney |\n| 16 | presently representing Ms. Guo. |\n| 17 | THE COURT:
That's not my question.
My question |\n| 18 | is how are you going -- Attorney Vartan, you have to figure |\n| 19 | out what the eventualities are, right?
What are the |\n| 20 | possibilities? |\n| 21 | The possibilities are you either give the Trustee |\n| 22 | an entire list of information that is responsive to (d) or |\n| 23 | you don't.
And if you don't, that's -- you're going to say |\n| 24 | because that's on the advice of her criminal counsel? |\n| 25 | MR. VARTAN:
Again, I can't predict the future -- |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 34 of 52\n\n| | Ho Wan Kwok - March 23, 2023
34 |\n|----|------------------------------------------------------------------|\n| 1 | THE COURT:
Well, yes, you can. |\n| 2 | MR. VARTAN:
Your Honor is correct. |\n| 3 | THE COURT:
Because you're her lawyer in this |\n| 4 | courtroom you, can predict the future.
You are saying that |\n| 5 | you need an extension of time to -- because she has to |\n| 6 | consult with a criminal lawyer.
Okay.
And you've said that |\n| 7 | you need that extension of time because you don't -- because |\n| 8 | the criminal lawyer may have to provide her with advice |\n| 9 | about criminal matters.
This isn't a criminal matter.
This |\n| 10 | is a civil action -- |\n| 11 | MR. VARTAN:
But I -- |\n| 12 | THE COURT:
-- in the Bankruptcy Court in which |\n| 13 | you, as her lawyer, consented to the entry of a preliminary |\n| 14 | injunction. |\n| 15 | So, yes, you can predict what's going to happen. |\n| 16 | You're either going to comply or you're not.
So I want to |\n| 17 | know how you're not going to comply.
What are you going to |\n| 18 | say?
And the lawyer -- you're her lawyer here, Counsel. |\n| 19 | Remember, you're her lawyer. |\n| 20 | MR. VARTAN:
Understood.
Understood.
But all I'm |\n| 21 | saying is, in complying, and we certainly do not waive her |\n| 22 | Constitutional right, nor could we. |\n| 23 | So to the extent that providing certain |\n| 24 | information is going to potentially incriminate her, and |\n| 25 | that's the purpose of consulting with a criminal counsel, we |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 35 of 52\n\n| | Ho Wan Kwok - March 23, 2023
35 |\n|----|----------------------------------------------------------------|\n| 1 | may take the position that we're not able to provide some or |\n| 2 | all of the information required. |\n| 3 | THE COURT:
All right.
Well, if you do that -- |\n| 4 | MR. VARTAN:
But I don't know that at this point. |\n| 5 | THE COURT:
-- then you're going to have to |\n| 6 | support that with law.
You're not -- I'm not going -- it's |\n| 7 | not going to be acceptable compliance for you to say on the |\n| 8 | advice of her criminal counsel we are not going -- she's not |\n| 9 | going to comply.
That's not compliance. |\n| 10 | And you have obligations, as a lawyer in this |\n| 11 | court, subject to discovery and other rules that are |\n| 12 | applicable in this case, and the preliminary injunction |\n| 13 | order that you consented to the entry of, your compliance is |\n| 14 | going to have to establish a legal basis why she would not - |\n| 15 | - she and HK would not comply with (d) in the preliminary |\n| 16 | injunction order. |\n| 17 | So, for example, with regard to Mr. Kwok, he |\n| 18 | asserted his Fifth Amendment privilege on February 7th, but |\n| 19 | he didn't say -- he didn't submit any bases legally to |\n| 20 | support why that was applicable to the civil matter that was |\n| 21 | pending in front of him at that time when there was not any |\n| 22 | criminal matter pending against him in that time.
And, |\n| 23 | therefore, those issues are to be briefed and heard.
And |\n| 24 | I'm telling you right now I'm not setting a new |\n| 25 | briefing schedule with regard to this.
You consented to the |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 36 of 52\n\nHo Wan Kwok - March 23, 2023 36 entry of the preliminary injunction. So if you fail to comply, if your attempt at compliance is we've been told by her criminal counsel, whoever that might be, by the way, which you're going to have to disclose, and you're going to have to have an affidavit of that criminal counsel that says I advised my client, or clients, not to respond to the preliminary injunction order, paragraph (d), that they consented to because it exposes them to criminal liability. So you're going to have to do that and you're going to have to have an affidavit of that counsel and you're going to have to have law that supports that claim. Without that, you will not be in compliance with the preliminary injunction order. And then you'll be -- they'll\n\n be subject to further and appropriate relief which could include additional sanctions.\n\n So I want to be very clear that by coming in and saying, well, she needs to get a criminal lawyer so we don't know what's going to happen, that's not accurate. You do know what's going to happen. You're either going to comply or you're not going to comply.\n\n And let's assume that you're not going to comply because you're going to be -- because you're going to say that you were told by criminal counsel that it could implicate her criminally.\n\nWell, again, you're going to have to disclose that\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 37 of 52\n\n| | Ho Wan Kwok - March 23, 2023
37 |\n|----|--------------------------------------------------------------|\n| 1 | criminal counsel, that criminal counsel's going to have to |\n| 2 | file an affidavit in this court that says that's the advice |\n| 3 | that was provided and that it was -- and it's a proper |\n| 4 | assertion of whatever that advice is sustained by law. |\n| 5 | If those things don't happen, then your clients, |\n| 6 | HK and Ms. Guo, will be in -- will be -- will have violated |\n| 7 | an order which seeks relief to which they consented to. |\n| 8 | Do you have any questions about that? |\n| 9 | MR. VARTAN:
No.
No, Your Honor.
But, you know, |\n| 10 | I guess I would say two things. |\n| 11 | Again, at no point in any of this has Ms. Guo, nor |\n| 12 | could we, or could she waive her Fifth Amendment rights. |\n| 13 | And the whole -- this is not, you know, done against the |\n| 14 | backdrop of speculation or done against the backdrop of the |\n| 15 | potentiality of criminal charges.
There are live criminal |\n| 16 | charges that were brought -- |\n| 17 | THE COURT:
Not against your clients, Mr. Vartan. |\n| 18 | MR. VARTAN:
There's -- |\n| 19 | THE COURT:
Not against your clients. |\n| 20 | MR. VARTAN:
There's a live SEC complaint where my |\n| 21 | client is named as a relief defendant.
And whether she |\n| 22 | makes -- |\n| 23 | THE COURT:
That's not a criminal action, is it? |\n| 24 | Is that a criminal action or a civil action? |\n| 25 | MR. VARTAN:
There need not be a criminal action |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 38 of 52\n\nHo Wan Kwok - March 23, 2023 38 pending in order to rightly invoke your Fifth Amendment rights. This is black letter law. THE COURT: So show me the -- it's not black letter law. But you're going to have cite the law -- MR. VARTAN: It is. THE COURT: -- that supports your assertion, Mr. Vartan. That's what you're going to have to do. I think I've been very clear about that. MR. VARTAN: And there's no issue in doing that because, again, there need not be a pending criminal matter in order for someone to invoke their Fifth Amendment rights. That is black letter law. THE COURT: Okay. We'll see. I'd like to see it in black and white, Mr. Vartan. You can show me in your -- MR. VARTAN: I will provide that, Your Honor. THE COURT: Because it's -- it appears likely then what we're going to find on Monday is that you're not going to comply with this order. MR. VARTAN: That's not -- that's not to keep -- again, the whole point of what we put forward to the Court was to say that we want to consult with competent criminal counsel. That that is her right. It makes perfect sense to want to do that here given an indictment and an SEC complaint and another complaint. We don't know what the U.S. Attorney's Office is\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 39 of 52\n\n| | Ho Wan Kwok - March 23, 2023
39 |\n|----|------------------------------------------------------------------|\n| 1 | thinking about, contemplating or doing. So I can't tell you |\n| 2 | what criminal counsel is going to tell us and, therefore, |\n| 3 | we're going to be representing to the Court or the Trustee. |\n| 4 | What I will say is -- |\n| 5 | THE COURT:
What other complaint are you talking |\n| 6 | about? |\n| 7 | MR. VARTAN:
That there's a complaint, or there's |\n| 8 | a criminal complaint, against Yvette Wang -- |\n| 9 | THE COURT:
Okay. |\n| 10 | MR. VARTAN:
-- that was also filed. |\n| 11 | So at the end of the day, Your Honor, very simply, |\n| 12 | we don't know what is in the mind of the U.S. Attorney for |\n| 13 | the Southern District of New York. |\n| 14 | We do know that whatever is happening in this |\n| 15 | proceeding is very likely overlapping with what is |\n| 16 | enumerated in the indictment and so it's perfectly |\n| 17 | reasonable for Mei Guo to want to consult with criminal |\n| 18 | counsel.
And I can't prejudge what criminal counsel is |\n| 19 | going to tell her. |\n| 20 | THE COURT:
Well, yes, you can, because you told |\n| 21 | me you're a criminal defense lawyer.
You can prejudge.
You |\n| 22 | can have a very good idea of what criminal counsel's going |\n| 23 | to tell her.
You've made it clear to the Court that that's |\n| 24 | what your area of expertise is. |\n| 25 | MR. VARTAN:
But I'm not, as Your Honor made |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 40 of 52\n\n| | Ho Wan Kwok - March 23, 2023
40 |\n|----|----------------------------------------------------------------|\n| 1 | clear, I'm not here as her criminal attorney.
I'm here as |\n| 2 | her civil attorney in the adversary proceeding. |\n| 3 | THE COURT:
Yeah.
But you just said you can't |\n| 4 | begin to predict.
I disagree with you.
I think you can |\n| 5 | predict.
You can predict what the advice may be. |\n| 6 | MR. VARTAN:
Maybe better stated -- |\n| 7 | THE COURT:
So I just want to be clear for the |\n| 8 | record, Mr. Vartan, you've got to be careful about what you |\n| 9 | say. |\n| 10 | Because when you say you can't possibly begin to |\n| 11 | predict what criminal counsel will say, I don't think that's |\n| 12 | -- that is not persuasive to the Court when you've made it |\n| 13 | clear to the Court on many occasions that you're a criminal |\n| 14 | defense lawyer.
So I just don't -- so I think we just stop |\n| 15 | that conversation right now, Mr. Vartan. |\n| 16 | Now, the only other thing I'm going to say to you |\n| 17 | and Mr. Romney is that I want to be very clear on the record |\n| 18 | about your motion for extension of time, because in your |\n| 19 | motion for extension of time, in paragraph 6, at ECF 154, |\n| 20 | you say thereafter HK USA and Ms. Guo consented to the |\n| 21 | entry, for the time being, of a prejudgement attachment |\n| 22 | order and preliminary injunction.
That statement for the |\n| 23 | time being is inaccurate.
And if you don't strike that from |\n| 24 | the pleading, then I will. |\n| 25 | Because I -- we can go back and listen to the |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 41 of 52\n\n| | Ho Wan Kwok - March 23, 2023
41 |\n|----|---------------------------------------------------------------|\n| 1 | hearing.
You consented to the entry of the orders clearly |\n| 2 | and you said -- and I said and you can have whatever |\n| 3 | applicable non-bankruptcy law rights that you have that |\n| 4 | exist, that existed before you consented and existed after |\n| 5 | you consented, which is you can move to dissolve the |\n| 6 | prejudgment remedy or set aside the preliminary injunction, |\n| 7 | but it is not for the time being. |\n| 8 | And if I see that again in any pleading that you |\n| 9 | sign under Rule 11, then you will be sanctioned.
You'll be |\n| 10 | further sanctioned. |\n| 11 | So are you agreeing on the record that the words |\n| 12 | for the time being can be stricken? |\n| 13 | MR. ROMNEY:
Your Honor, Aaron Romney, Zeisler & |\n| 14 | Zeisler.
I signed this pleading.
No, I'm not. |\n| 15 | THE COURT:
So did Mr. Vartan, Mr. Romney.
So did |\n| 16 | Mr. Vartan.
You both did.
So go ahead. |\n| 17 | MR. ROMNEY:
When I said for the time being in the |\n| 18 | pleading that I signed, I was referring to Your Honor's |\n| 19 | comment on the record consistent with Connecticut law that |\n| 20 | we have the right to seek to modify or discharge the PJR. |\n| 21 | That was my intention -- |\n| 22 | THE COURT:
But that doesn't mean you don't |\n| 23 | consent, Mr. Romney.
That doesn't mean you didn't consent. |\n| 24 | You'd have to have a basis. |\n| 25 | MR. ROMNEY:
I didn't say that I didn't consent. |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 42 of 52\n\nHo Wan Kwok - March 23, 2023 42 I'm sorry if -- THE COURT: Okay. Well, for the time being implies that. MR. ROMNEY: I apologize if that's the way that those words were interpreted. But the intention behind those words when I signed this pleading in good faith was referring to our rights to seek to modify based on future events, Your Honor. THE COURT: Okay. That's fair. Then I appreciate you've made that clarification on the record. Thank you. MR. ROMNEY: Thank you, Your Honor. THE COURT: Okay. All right. Then with regard to the motion for extension of time, the motion for extension of time will be granted through March 27th for the reasons stated on the record. There will be no further extensions, not only because the Chapter 11 Trustee's counsel has asked for that, but because Attorney Vartan has stated on the record that he will not seek any additional time, and that criminal counsel will be secured well before Monday. That's what Attorney Vartan's representations to the Court have been on the record. So an order will enter to that extent probably later today. Now, with regard to other matters that -- whether or not Attorney Romney or Attorney Vartan or anybody else\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 43 of 52\n\n| | Ho Wan Kwok - March 23, 2023
43 |\n|----|--------------------------------------------------------------|\n| 1 | wants to continue to participate in this hearing, you're |\n| 2 | welcome to, but you don't have to. |\n| 3 | I asked the Trustee to consider some issues with |\n| 4 | regard to Epiq during our hearings a few days ago and I |\n| 5 | wanted to address that. |\n| 6 | And I also wanted to address that we have an |\n| 7 | application for compensation pending, which under the rules, |\n| 8 | Rule 2002, requires notice to be provided to all creditors. |\n| 9 | But we don't know who all creditors are at this |\n| 10 | point, because of the Epiq issues and, so, therefore, I was |\n| 11 | going to ask you, Trustee Despins, do you -- are you seeking |\n| 12 | to have a hearing set on that application for compensation |\n| 13 | in the next 30 to 45 days? |\n| 14 | If you are, I don't know if we're going to have an |\n| 15 | entire service list available because of the issues with |\n| 16 | Epiq, as far as names that have been captured under both |\n| 17 | public proofs of claim and confidential proofs of claim. |\n| 18 | And it looks like there may be some duplication on a claim |\n| 19 | that was filed here in the court and then sent to Epiq and |\n| 20 | then Epiq may have entered it again. |\n| 21 | So there's a lot of service issues, unfortunately, |\n| 22 | that I think absolutely can be corrected and put in order, |\n| 23 | but I don't know that that will be done in the next week or |\n| 24 | two so I wanted to ask you about that as well. |\n| 25 | MR. DESPINS:
Yes.
And I will, Your Honor, in two |\n| | |\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 44 of 52\n\nHo Wan Kwok - March 23, 2023 44 seconds. But before Mr. Romney and Mr. Vartan leave, I want to give them a heads-up that I'm going to raise an issue related to the Lady May. But to answer your question, what I -- well, obviously, would like, and this is going back to September expenses, and I would (indiscernible), but we would -- we could move -- I believe the Court has the ability to narrow the notice to the (indiscernible) -- THE COURT: I agree. You'd have to file a motion, but you could do that. MR. DESPINS: And so we will do that. We will do that. THE COURT: Okay. Why don't you do that. Then that will be -- that will address the issue at least for the time being. MR. DESPINS: Okay. So, Your Honor, I didn't want to cut you off, but can I raise the Lady May issue at this point? THE COURT: And then we'll go back to Epiq after you raise the Lady May issue. MR. DESPINS: Okay. THE COURT: Okay? MR. DESPINS: So the Lady May issue, and I want to be clear, I'm not -- I don't want to be perceived as\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 45 of 52\n\nHo Wan Kwok - March 23, 2023 45 presumptuous in anyway, but if, and there are a lot of if's here, but if the Court were going to grant the relief we're seeking in the summary judgment on Monday, we would have only 24 hours to get insurance. And I'm told that if the ship does not have insurance, it's a huge problem from a maritime law point of view. And so where I'm heading is that we would file today a motion to show notice to have a motion allowing us to use the repair reserve to make the payment of the insurance on the ship, and we'd have that heard either immediately after the hearing on Monday or Tuesday morning. Again, I want to be careful. I don't want to be presumptuous, but the point is that we would not have -- if we were going to prevail, we would not have time to turn and file that motion and have it heard, so we need to file it as kind of a conditional motion. I would stipulate that the opponents of that don't need to file papers against that because, you know, we don't want them to spend money on this, but basically it could be heard immediately after on Monday on the summary judgment, depending on Your Honor's ruling. If the ruling is not favorable to us, then there's nothing to be heard. But if it's favorable to us, you know, it's an emergency that it be heard. And so we haven't filed this. We just wanted to\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 46 of 52\n\nHo Wan Kwok - March 23, 2023 46 give you the heads-up, and give Zeisler and Mr. Vartan the heads-up that we were going to file that motion to short notice. So that's all I wanted to accomplish with that, Your Honor, for now. THE COURT: Okay. Thank you. So, Attorney Romney and Attorney Vartan, you just heard what the Trustee said. He's going to file an emergency motion. He's asking for it to be scheduled on the 27th following the preliminary -- excuse me, the summary judgment hearing, and he's saying that he will waive any requirement for you to file any written response. You can make your argument at that hearing. Do you have any questions about that? I mean, nothing's going to happen until he files that motion obviously, but that's what he's saying he's going to file. MR. ROMNEY: Aaron Romney, Zeisler & Zeisler, on behalf of HK International and Mei Guo. I guess what I would say is if Trustee Despins has a motion to file, we will read it. I'm unfamiliar with any rule of civil procedure that would preclude us from objecting to a motion in writing. THE COURT: Oh, he's not -- he's not saying he's precluding you. That's not at all what he said, Attorney Romney. He said and I won't make them do it in writing so\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 47 of 52\n\nHo Wan Kwok - March 23, 2023 47 they don't have to spend money. And it's a timing issue. It's an emergency. He didn't say you couldn't do it. He was trying to be -- he was actually trying to be professional in my opinion and, say, look, I'm not giving them a lot of time, so I'm not going to -- if they don't have time to file a written objection, I get it, and let them object orally. That's all he said. He wasn't trying to preclude you. MR. ROMNEY: I appreciate the professional courtesy, Trustee Despins, and Your Honor for the explanation. I misunderstood. That sounds great. We will review his motion and we will respond to it and perhaps we will have no objection. THE COURT: Okay. Great. And if you have an objection and you want to file one, then you're all -- you're more than welcome too, Attorney Romney. Okay? I'm not -- I would never preclude anyone from filing anything unless the rules or the circumstances justified it. So anyway -- you understand. All he's saying is, that, Judge, don't make them have to file something in writing if they don't have a lot of time to do it. They have a right to make their oral objection at the hearing. That's what he said. I'm fine with that. But that doesn't preclude you, Attorney Romney, from filing something. Okay?\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 48 of 52\n\nHo Wan Kwok - March 23, 2023 48 MR. ROMNEY: Sounds great, and I very much appreciate the courtesy, Trustee Despins. MR. DESPINS: Thank you. THE COURT: Okay. So, Trustee Despins, that motion that you're speaking of you think will be filed before the close of business today? MR. DESPINS: Yes. Yes, Your Honor. THE COURT: Okay. Thank you. All right. Then with regard to the Epiq issue, Trust Despins, did you have an opportunity to discuss with them the issues that we -- and maybe you haven't, the issues that we talked about I guess just -- what's today, Thursday -- so I guess Tuesday about whether they were going to keep the docket up and whether they were going to continue to allow you and the United States Trustee and parties to the protective order, which includes the committee, to have access to confidential information? MR. DESPINS: Yes, Your Honor. So those discussions took place. This is a bit unorthodox, Your Honor, but I am here with my colleague, Mr. Bongartz, who has had those discussions. THE COURT: Okay. MR. DESPINS: He has not appeared yet, but it probably would make better sense for him to address these issues. I can, but it's going to be less efficient than if\n\nHo Wan Kwok - March 23, 2023 49 he does. With your permission, can we do that? He's just here beside me. THE COURT: I have no problem with it. I have no problem. And you can just file an appearance after the hearing, please. MR. BONGARTZ: Okay. I'll just announce my appearance. I'm Alex Bongartz, with Paul Hastings, for the Chapter 11 Trustee. So I believe there were three open issues that Your Honor had asked that we talk to Epiq about. So the first one is the data room of the claims to which certain authorized parties, the Trustee, committee counsel, would continue to have access to Epiq. It has no issue with continuing to maintain that data room and keep uploading claims to the extent (indiscernible) require the clerk to share claims that get filed with the clerk. But Epiq is prepared to continue to maintain that data room for the benefit of the authorized parties that are entitled to receive access to it. So that was issue one. Issue number two was the online docket to the main case that is currently being maintained on the Epiq case website for the Kwok matter. Epiq did also okay and is agreeable to maintain and continue maintaining that website going forward. To be clear, this will only be the docket in the main case. It would not be the claims register or any docket in the\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 49 of 52\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 50 of 52\n\nHo Wan Kwok - March 23, 2023 50 adversary proceedings. THE COURT: I agree. MR. BONGARTZ: And it would just be for -- THE COURT: I agree with that. Okay. MR. BONGARTZ: Okay. And then the third point is the claims submission portal, which is part of the case website on the Epiq web page. I think we previously raised the concern to keep the portal open for the time being. I want to add one additional point in that regard. And that is the governmental bar date in the Genever Holdings Corporation case has not yet passed. It is April 10th of this year. And so at a minimum we would ask that the portal be kept open until then, or say the end of April, so that both the governmental claims as well as any other late filed claims, you know, could still be submitted. Obviously, Epiq would forward any claims that do get filed, as it has done in the past, to the clerk of the court so the clerk would know about those claims as well. Again, none of those claims get posted on the Epiq website. THE COURT: Yeah. And none of the claims -- even if Epiq were to receive claims, they're not going to put them -- make them as part of a register, correct? MR. BONGARTZ: No. No. THE COURT: They're going to take them and forward\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 51 of 52\n\nHo Wan Kwok - March 23, 2023 51 them to the clerk of the court? MR. BONGARTZ: Correct. THE COURT: Okay. MR. BONGARTZ: Absolutely correct. THE COURT: All right. Well, I think that does address the three issues then. And so what we need -- what we're going to need -- the Court will do is we'll get together a proposed order that will be shared with the parties, including the debtor's counsel. And before it gets docketed, everybody will have an opportunity to make any comments about it and then we'll go from there. Okay? MR. BONGARTZ: Thank you. THE COURT: Does that make sense, Counsel? MR. BONGARTZ: Yes, it does. Thank you. THE COURT: I don't know when that order will be available, probably by early next week. And then there will be some time frame set for parties to file any comments or suggest any comments or changes to the order before it enters. Okay? MR. BONGARTZ: Thank you, Your Honor. THE COURT: All right. Thank you. I appreciate the update. MR. BONGARTZ: You're welcome. THE COURT: All right. I believe that that\n\nCase 22-50073 Doc 1634 Filed 04/05/23 Entered 04/05/23 08:30:41 Page 52 of 52\n\nHo Wan Kwok - March 23, 2023 52 concludes all of the business in these matters today unless someone has some other issue that they want to raise. (No response.) THE COURT: Okay. Then thank you, all. And court is adjourned. ALL COUNSEL: Thank you, Your Honor. (Proceedings concluded at 12:19 p.m.) I, CHRISTINE FIORE, Certified Electronic Court Reporter and Transcriber, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above-entitled matter. 15 April 3, 2023 16 Christine Fiore, CERT","body_zh":null,"key_entities":["Kwok","Ho Wan Kwok","Despins","Je","Guo","Paul Hastings","Himalaya","Luc Despins","CIPA","Chinese Communist Party"],"ecf_references":[{"doc_number":154,"court":"CTB"},{"doc_number":1465,"court":"CTB"},{"doc_number":1542,"court":"CTB"}],"word_count":13628,"status":"published","published_at":"2023-04-05 00:00:00","created_at":"2023-04-05","updated_at":"2026-07-07 07:53:51"}