{"id":"court_ctb_183_0","court":"CTB","case_no":"22-50073","doc_number":183,"sub_number":0,"doc_type":"MOTION","filed_date":null,"title":"UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION HO WAN KWOK1","summary_zh":null,"summary_en":null,"body_en":"# **UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION**\n\nHO WAN KWOK1\n\nChapter 11 Case No.\n\n22-50073 (JAM)\n\nDebtor.\n\nPacific Alliance Asia Opportunity Fund L.P.,\n\nMovant\n\nv.\n\nHo Wan Kwok,\n\nRespondent.\n\n# **PACIFIC ALLIANCE ASIA OPPORTUNITY FUND L.P.'S MOTION TO DISMISS CHAPTER 11 CASE OR, IN THE ALTERNATIVE, PARTIAL JOINDER TO UNITED STATES TRUSTEE'S MOTION FOR AN ORDER DIRECTING THE APPOINTMENT OF A CHAPTER 11 TRUSTEE**\n\n1 The last four digits of the Debtor's taxpayer identification number are 9595.\n\n# **TABLE OF CONTENTS**\n\n# **Page**\n\n| | | PRELIMINARY STATEMENT 7 | | | |\n|----------------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|\n| BACKGROUND 10 | | | | | |\n| | | JURISDICTION 22 | | | |\n| | | RELIEF REQUESTED 22 | | | |\n| | | ARGUMENT 22 | | | |\n| I. | | THE COURT SHOULD DISMISS THE PETITION FOR CAUSE. 22 | | | |\n| | A. | The Court Should Dismiss the Petition for Cause Because Kwok Is
Misusing the Bankruptcy System. 23 | | | |\n| | B. | The Court Should Dismiss This Chapter 11 Case as a Bad Faith
Filing. 29 | | | |\n| | C. | The Court Should Dismiss the Petition for Cause Because Kwok's
Estate Continues to Diminish and There Is No Reasonable
Likelihood of Rehabilitation. 35 | | | |\n| | D. | The Court Should Dismiss the Petition for Cause Because Kwok Is
Grossly Mismanaging the Estate 36 | | | |\n| II. | | DISMISSAL—RATHER THAN CONVERSION OR THE APPOINTMENT OF
A TRUSTEE OR EXAMINER—IS THE BEST DISPOSITION UNDER THE
CIRCUMSTANCES. 39 | | | |\n| III. | | IN THE ALTERNATIVE, PAX JOINS IN THE UNITED STATES TRUSTEE'S
MOTION FOR A CHAPTER 11 TRUSTEE. 39 | | | |\n| | A. | There is \"Cause\" to Appoint a Trustee. 40 | | | |\n| | B. | Appointing a Trustee Is in the Interests of All Parties. 43 | | | |\n| CONCLUSION 44 | | | | | |\n\n#### **TABLE OF AUTHORITIES**\n\n# **Page(s)**\n\n# **Cases**\n\n| Baker v. Latham Sparrowbush Assocs., (In re Cohoes Indus. Terminal, Inc.),
931 F.2d 222 (2d Cir. 1991) 23 | |\n|---------------------------------------------------------------------------------------------------------------------------------|--|\n| C-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave. P'ship),
113 F.3d 1304 (2d Cir. 1997) 17, 25, 29 | |\n| E. Profit Corp. Ltd. v. Strategic Vision US LLC,
No. 18-CV-2185 (LJL), 2021 WL 2554631 (S.D.N.Y. June 22, 2021) 15, 16 | |\n| Falk & Siemer, LLP v. Maddigan (In re Maddigan),
312 F.3d 589 (2d Cir. 2002) 18 | |\n| Grogan v. Garner,
498 U.S. 279 (1991) 18 | |\n| In re 167 West 133rd St. Hous. Dev. Fund Corp.,
No. 18-12043 (JLG), 2018 WL 4637460 (Bankr. S.D.N.Y. Sept. 25, 2018) 23, 25 | |\n| In re 68 West 127 Street, LLC,
285 B.R. 838 (Bankr. S.D.N.Y. 2002) 24, 28 | |\n| In re AdBrite Corp.,
290 B.R. 209 (Bankr. S.D.N.Y. 2003) 29 | |\n| In re Am. Prop. Corp.,
44 B.R. 180 (Bankr. M.D. Fla. 1984) 18 | |\n| In re AMC Realty Corp.,
270 B.R. 132 (Bankr. S.D.N.Y. 2001) 17 | |\n| In re Ancona,
No. 14-10532, 2016 WL 7868696 (Bankr. S.D.N.Y. Nov. 30, 2016) 34, 35, 36, 37 | |\n| In re Ashley River Consulting, LLC,
No. 14-13406 (MG), 2015 WL 1540941 (Bankr. S.D.N.Y. Mar. 31, 2015) 34, 35 | |\n| In re Babayoff,
445 B.R. 64 (Bankr E.D.N.Y 2011) 33 | |\n| In re Balco Equities Ltd., Inc.,
312 B.R. 734 (Bankr. S.D.N.Y. 2004) 17 | |\n| In re BH S & B Holdings, LLC,
439 B.R. 342 (Bankr. S.D.N.Y. 2010) 29 | |\n| In re Bonded Mailings Inc.,
20 B.R. 781 (Bankr. E.D.N.Y. 1982) 35 | |\n\n# **TABLE OF AUTHORITIES (continued)**\n\n| Page(s) |\n|-----------------------------------------------------------------------------------------------------------------------------------------|\n| In re Briarpatch Film Corp.,
281 B.R. 820 (Bankr. S.D.N.Y. 2002) 24 |\n| In re Briggs-Cockerham, L.L.C.,
2010 WL 4866874 (Bankr. N.D. Tex. 2010) 29 |\n| In re Builders Grp. & Dev. Corp.,
No. 13-04867 (ESL), 2014 Bankr. LEXIS 2092 (Bankr. D.P.R. May 8, 2014) 31 |\n| In re D&G Constr. Dean Gonzalez, LLC,
635 B.R. 232 (Bankr. E.D.N.Y. 2021) 21 |\n| In re Eljamal,
No. 17-CV-7870 (KMK), 2018 WL 4735719 (S.D.N.Y. Sept. 28, 2018) 38 |\n| In re Futterman,
584 B.R. 609 (Bankr. S.D.N.Y. 2018) 37 |\n| In re Gateway Access Solutions. Inc.,
374 B.R. 556 (Bankr. M.D. Pa. 2007) 31 |\n| In re G-I Holdings, Inc.,
385 F. 3d. 313 (3rd Cir. 2004) 31 |\n| In re Halal 4 U LLC,
No. 08–15216, 2010 WL 3810860 (Bankr. S.D.N.Y. 2010) 31 |\n| In re Hampton Hotel Inv'rs, L.P.,
270 B.R. 346 (Bankr. S.D.N.Y. 2001). 36 |\n| In re HBA E., Inc.,
87 B.R. 248 (Bankr. E.D.N.Y. 1988) 22 |\n| In re Head,
223 B.R. 648 (Bankr. W.D.N.Y. 1998) 17 |\n| In re Hostess Brands, Inc.,
No. 12-22052 (RDD), 2013 WL 82914 (Bankr. S.D.N.Y. Jan. 7, 2013) 21 |\n| In re Ionosphere Clubs Inc.,
113 B.R. 164 (Bankr. S.D.N.Y. 1990) 34, 38 |\n| In re Island Helicopters, Inc.,
211 B.R. 453 (Bankr. E.D.N.Y. 1997) 23 |\n| In re Murray,
543 B.R. 484 (Bankr. S.D.N.Y. 2016), aff'd, 565 B.R. 527 (S.D.N.Y. 2017), aff'd, 900 F.3d 53
(2d Cir. 2018) 17, 28 |\n\n# **TABLE OF AUTHORITIES (continued)**\n\n| | Page(s) |\n|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|\n| In re Nat'l Rifle Assoc'n of Am. and Sea Girt LLC,
No. 21-30085, 2021 WL 1970738 (Bankr. N.D. Tex. May 11, 2021) 19 | |\n| In re Red Bull Taxi Inc.,
2017 Bankr. LEXIS 1209 (Bankr. S.D.N.Y. May 3, 2017) 29 | |\n| In re Rent-A-Wreck of America, Inc.,
580 B.R. 364 (Bankr. D. Del. 2018) 19 | |\n| In re Ridgemour Meyer Props., LLC,
413 B.R. 101 (Bankr. S.D.N.Y. 2008) 38 | |\n| In re Sakon,
617 B.R. 7 (Bankr. D. Conn. 2020) 30 | |\n| In re Sapphire Dev., LLC,
No. 13-50043, 2015 WL 5579545 (Bankr. D. Conn. June 26, 2015) aff'd sub nom. Sapphire
Dev., LLC v. McKay, 549 B.R. 556 (D. Conn. 2016) 17, 33 | |\n| In re SGL Carbon Corp.,
200 F.3d 154 (3d Cir. 1999) 21, 24 | |\n| In re Sillerman,
605 B.R. 631 (Bankr. S.D.N.Y. 2019) 31, 34 | |\n| In re Syndicom Corp.,
268 B.R. 26 (Bankr. S.D.N.Y. 2001) 23, 24, 26 | |\n| In re The Bridge to Life, Inc.,
330 B.R. 351, 357 (Bankr. E.D.N.Y. 2005). 22 | |\n| In re V. Savino Oil & Heating Co., Inc.,
99 B.R. 518 (Bankr. E.D.N.Y. 1989) 34 | |\n| In re Wally Findlay Galleries (New York) Inc,
36 B.R. 849 (Bankr. S.D.N.Y. Feb. 10, 1984) 21, 22 | |\n| Liona Corp., Inc. v. PCH Assocs., (In re PCH Assocs.),
949 F.2d 585 (2d Cir. 1991) 21 | |\n| Marrama v. Citizens Bank of Mass.,
549 U.S. 365 (2007) 1 | |\n| Marsch v. Marsch (In re Marsch),
36 F.3d 825 (9th Cir. 1994) 21 | |\n| Midatlantic Nat'l Bank v. Anchorage Boat Sales, Inc. (In re Anchorage Boat Sales, Inc.),
4 B.R. 635 (Bankr. E.D.N.Y. 1980) 34 | |\n\n| Pac. All. Asia Opportunity Fund L.P. v. Wan, | |\n|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--|\n| 199 A.D.3d 423 (1st Dep't 2021) 12 | |\n| Sapphire Dev., LLC v. McKay,
549 B.R. 556 (D. Conn. 2016) 23 | |\n| SEC v. Miller,
808 F.3d 623 (2d Cir. 2015) 19 | |\n| Taberna Preferred Funding IV, Ltd. v. Opportunities II Ltd. (In re Taberna Preferred Funding
IV, Ltd.),
594 B.R. 576 (Bankr. S.D.N.Y. 2018) 17, 23 | |\n| Wilk Auslander LLP v. Murray (In re Murray),
900 F.3d 53 (2d Cir. 2018) 17, 21, 22, 23 | |\n| Statutes | |\n| 11 U.S.C. § 1104(a)(1) 34 | |\n| 11 U.S.C. § 1104(a)(2) 35 | |\n| 11 U.S.C. § 1112(b) 16 | |\n| 11 U.S.C. § 1112(b)(1) 33 | |\n| 11 U.S.C. § 1112(b)(4)(A) 29 | |\n\nPacific Alliance Asia Opportunity Fund L.P. (\"PAX\") hereby (i) moves pursuant to section 1112(b) of title 11 of the United States Code (the \"Bankruptcy Code\") for the entry of an order dismissing the above-captioned case; or (ii) in the alternative, partially joins in the United States Trustee's Examiner/Trustee Motion (as defined below) to the extent it requests the appointment of a chapter 11 trustee pursuant to Bankruptcy Code section 1104(a), and respectfully represents as follows:\n\n# **PRELIMINARY STATEMENT2**\n\n1. This is not a proper chapter 11 case. There is no \"honest but unfortunate debtor\" seeking a clean start or to use the Bankruptcy Code to reorganize.3 There is no business to reorganize and, taking Ho Wan Kwok (the \"Debtor\" or \"Kwok\") at his word, no value to protect. Nor is there a proverbial \"race to the courthouse\" among creditors seeking recoveries. Instead, this chapter 11 case is the latest, most strident gambit of Kwok to delay, deceive, and defraud his creditors, and to continue to evade legitimate court orders.\n\n2. Kwok's *modus operandi* is to park, shield and secrete his assets through family members and shell companies to protect his fortune and to avoid repaying his debt to PAX. As described in more detail below, after years of unsuccessfully trying to get Kwok to repay the loan he had personally guaranteed, PAX tracked down and sued Kwok in New York State Court, and secured a more than \\$116 million judgment.4 But that judgment didn't resolve matters, as it should have; rather, it was just the beginning of a still-ongoing cat-and-mouse game that has forced PAX to expend enormous time and resources chasing collection, as Kwok had \"secreted his assets in a\n\n2 All exhibit citations are to the exhibits attached to the Declaration of Peter Friedman in Support of PAX's Motion to Dismiss (\"Friedman Decl.\"). The Debtor's Declaration Pursuant to Local Bankruptcy Rule 1007-2 attached to the Voluntary Petition for Non-Individuals Filing for Bankruptcy [ECF No. 1] is referred to as the \"Debtor's Decl.\" Unless otherwise noted, all emphasis is added, and all internal quotations and citations are omitted.\n\n3 *Marrama* v. *Citizens Bank of Mass.*, 549 U.S. 365, 367 (2007).\n\n4 *See* Friedman Decl., Ex. 1, Judgment at 1, *PAX v. Kwok*, Supreme Court of the State of New York (the \"New York Court\"), Index. No. 652077/2017 (the \"New York Action\"), Dkt. No. 716 (Feb. 3, 2021).\n\nmaze of corporate entities and with family members.\"5 In fact, the New York Court noted that the case against Kwok contained \"1,180 docket entries—almost all of which involve defendant Kwok['s] efforts to avoid and deceive his creditors by parking his substantial personal assets with a series of corporations, trusted confidants, and family members.\"6\n\n3. Not only did Kwok frustrate and hinder PAX's collection efforts, he repeatedly flouted New York State court orders, which led to the entry of a \\$134 million civil contempt fine payable to PAX.7 And one day before that fine was due to be paid, Kwok filed this chapter 11 case in an obvious attempt to avoid both payment and possible incarceration for his contumacious behavior.8\n\n4. Kwok's post-petition behavior has been no better, and the Court should dismiss this case for a number of reasons:\n\n *First*, Kwok is abusing the bankruptcy system. He has no business to reorganize or liquidate, and creditors will not benefit from his attempted use of the bankruptcy process. This case is a litigation tactic in what is essentially a two-party civil dispute. PAX is by far Kwok's largest creditor and the debt owed to PAX, and the consequences of Kwok hiding assets, impelled Kwok to file this chapter 11 case. Of the 158 supposed creditors, only one other beside PAX has a judgment against Kwok, and the amount of that judgment is only for attorney's fees.9 All others are speculative potential liabilities or alleged debts owed to insiders.\n\n5 Friedman Decl., Ex. 2, Decision & Order on Motion, at 1, *PAX v. Kwok,* Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 1181 (Feb. 9, 2022) (the \"Final Contempt Order\").\n\n6 *Id.* at 1.\n\n7 *Id.* at 10.\n\n8 *See* Voluntary Petition for Non-Individuals Filing for Bankruptcy, (Feb. 15, 2022) ECF No. 1.\n\n9 Friedman Decl., Ex. 3, March 1, 2022 Hrg. Tr. at 43:5–20.\n\n- *Second*, Kwok is acting in bad faith by improperly attempting to make PAX relitigate already-resolved legal issues in a new forum.10 Kwok's proposed debtor-in-possession financing agreement confirms his bad faith: he is proposing to borrow \\$8 million from family members (PAX believes this money is actually Kwok's) to protect what he asserts is an estate worth \\$3,850.11 And the vast majority of that loan will go to fight with creditors over their claims, rather than enhance creditor recoveries.\n- *Third*, Kwok's estate is diminishing and has no reasonable prospect of rehabilitation, an enumerated cause for dismissal under the Bankruptcy Code.\n\n5. But if the Court is unwilling to dismiss this case, PAX joins in the United States Trustee's request for appointment of a chapter 11 trustee because Kwok cannot serve as a fiduciary for creditors based on his long and disturbing record of hiding assets, playing shell games, and the conflict of interests that align himself and his family on the one hand against his legitimate creditors like PAX on the other. A debtor-in-possession must put his non-insider creditors first, something that Kwok has shown he cannot and will not do. As the United States Trustee noted, the Debtor's submission of self-serving filings to the Court \"telegraphs the Debtor's inability and/or unwillingness to recognize and accept his obligations to provide full, complete and accurate\n\n10 As PAX will explain in greater detail in its forthcoming motion to remand, Kwok's initiation of this chapter 11 proceeding and subsequent removal of the civil action pending before the New York State Supreme Court (Index. No. 652077/2017) is a transparent attempt to re-litigate issues already decided by that court. Specifically, Kwok inappropriately seeks to challenge (i) the New York Court's order granting summary judgment in PAX's favor on PAX's breach-of-contract claim, and (ii) the New York Court's February 9, 2022 order holding Kwok in civil contempt for failing to return the Lady May yacht—which the New York Court found Kwok \"beneficially owns and controls\"—to New York, and imposing a \\$134 million fine against Kwok.\n\n11 *See* Official Form 106 Summary of Assets & Liabilities & Certain Statistical Information (Mar. 9, 2022), ECF No. 78. The Court can infer two things from that proposed transaction: First, the Debtor knows that his asset disclosures are materially false and Golden Spring's cash is readily available to defend his falsehoods. Second, Golden Spring will spend massive sums to manipulate this proceeding to protect itself from alter ego, veil piercing, and substantive consolidation claims. Otherwise, spending over 2,000% of the Debtor's alleged assets to fund a chapter 11 case makes no sense. Understood in this light, the proposed financing is further evidence of Kwok's bad faith.\n\ninformation, **to fulfill fiduciary obligations** to his estate and his creditors, and to meet his obligations as a debtor in possession.\"12\n\n#### **BACKGROUND**\n\n6. PAX sued Kwok in April 2017 in New York, asserting a breach-of-contract claim under Hong Kong law against Kwok. In April 2019, PAX added a veil-piercing claim against Genever Holdings LLC (\"Genever NY\") and Genever Holdings Corporation (\"Genever BVI\" and, together with Genever NY, the \"Genever Defendants\").13 PAX won its breach-of-contract claim in September 2020 and judgment was entered in February 2021.14 Since then, PAX has been attempting to collect against Kwok by focusing principally on two assets: a New York City penthouse apartment in the Sherry-Netherland Hotel that Kwok owns through shell companies (the \"Residence\") and a luxury yacht called the \"Lady May.\"\n\n#### **The Parties' Relationship and PAX's Initial Loans**\n\n7. In early 2008, Kwok sought funding from PAX to finish construction of the Beijing Pangu Plaza, one of Kwok's real estate projects.15 PAX loaned Kwok's companies \\$100 million in two installments, which, after a series of partial repayments and extensions, by early 2011 had a balance owed of approximately \\$46 million.16\n\n8. On March 16, 2011, PAX and a Kwok-controlled entity named Shiny Times Holdings Limited (\"Shiny Times\") entered a new facility (the \"2011 Loan Facility\") that Kwok guaranteed (the \"2011 Personal Guarantee\"). These contracts superseded the parties' prior\n\n15 Friedman Decl., Ex. 5, Statement of Material Facts in Supp. of Pl. PAX's Mot. for Partial Summary Judgment, at ¶ 1, *PAX v. Kwok et al.,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. 410. 16 *Id.* at ¶ 23.\n\n12 United States Trustee's Mot. for an Order Directing the Appointment of an Examiner or, in the Alternative, Mot. for Order Directing the Appointment of a Chapter 11 Trustee (Mar. 19, 2022) ECF No. 102 at 2 (emphasis added). 13 Friedman Decl., Ex. 4, Amended Complaint, *PAX v. Kwok et al.,* Case No. 22-01073-dsj (Bankr. S.D.N.Y.), ECF No. 3.\n\n14 *See* Friedman Decl., Ex. 1.\n\nagreements, recapitalized the amount due as \\$46,426,489, and provided that interest would accrue at 15% annually until a repayment date of June 30, 2012.17 Under the 2011 Personal Guarantee, Kwok \"irrevocably and unconditionally . . . guarantee[d] to PAX the due and punctual payment of [Shiny Times'] [o]bligations [under the 2011 Facility] and agree[d] that promptly on PAX's demand he will pay to PAX all [o]bligations that are due but unpaid.\"18 The Personal Guarantee also entitled PAX to reimbursement, including legal fees, for its enforcement efforts.19\n\n9. Neither Shiny Times nor Kwok made any payments under the 2011 Loan Facility or the 2011 Personal Guarantee by the mid-2012 deadline.20\n\n10. To resolve the outstanding debt, the parties then entered into a series of settlement agreements, but Kwok and his companies continually failed to perform their obligations thereunder.21 Specifically, in April 2013, PAX, Shiny Times, Kwok, and Beijing Pangu Investment Co. Ltd. (\"Beijing Pangu\") (another Kwok-affiliated entity) entered into a deed of settlement (\"2013 Deed of Settlement\"), which provided that Shiny Times' debt to PAX would be discharged in return for PAX receiving legal ownership of three apartments at Pangu Plaza (the \"Apartments\").22 The 2013 Deed of Settlement contained ten conditions precedent in connection with the sale and purchase of each of the Apartments that needed to be satisfied by June 2013, or else the settlement would terminate and the 2011 Loan Facility and 2011 Personal Guarantee would revert to being in full force and effect.23 PAX and Kwok subsequently executed four extensions to the 2013 Deed of Settlement, the last of which required that all ten conditions\n\n*17 Id.* at ¶ 1.\n\n18 Friedman Decl., Ex. 6, The 2011 Personal Guarantee, at KWOK000653, *PAX v. Kwok,* Index No. 652077/2017,\n\n(N.Y. Sup. Ct.), Dkt. No. 455.\n\n19 *Id.* at KWOK000655.\n\n20 *See* Friedman Decl., Ex. 5, at ¶¶ 29–30.\n\n21 *See id.* at 10–17.\n\n22 *Id.* at ¶¶ 39–40.\n\n23 *Id.* at 12–13.\n\nprecedent all be satisfied by June 2015.24 Kwok again failed to comply by that revised deadline,25 and the 2011 Loan Facility and 2011 Personal Guarantee reverted to being fully operative as of June 30, 2015.26\n\n# **Kwok Flees China and Purchases the Residence**\n\n11. In \"late January or early February 2015,\" the Government of the People's Republic of China (\"PRC\") charged Kwok with multiple crimes, including corruption, and seized his PRC assets—among them the Beijing Pangu complex that included the Apartments.27 Shortly before that, in late 2014, Kwok fled China.28 Notably, Kwok and PAX agreed on February 10, 2015 to the fourth and final extension of the 2013 Deed of Settlement, setting a June 30, 2015 deadline to satisfy the conditions precedent.29\n\n12. On or around February 13, 2015,30 just three days after signing the final extension with PAX, Kwok formed two shell companies: (i) Genever NY31 and (ii) Genever BVI.32 Kwok is the sole shareholder33 and director of Genever BVI,34 which in turn is the sole member of the\n\n24 *Id.* at ¶ 47.\n\n25 *Id.* at ¶¶ 54–55. Namely, Kwok failed (i) to deliver clean title, (ii) to provide PAX with an invoice for the purchase of the apartments, (iii) to provide PAX with evidence regarding the payment of relevant taxes and charges in connection with the sale and purchase of the apartments, and (iv) to deliver the house ownership certificates of any of the three apartments to PAX. *Id.* at ¶¶ 55–59.\n\n26 *Id.* at ¶ 62.\n\n27 Friedman Decl., Ex. 7, Wengui Compl., *Wengui v. Wu*, Case No. 18-cv-00845 (S.D.N.Y.), at ¶ 57.\n\n28 *Id.* at ¶ 23.\n\n29 Friedman Decl., Ex. 8, Fourth Deed of Settlement, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 472.\n\n30 Friedman Decl., Ex. 9, Genever Defendants' Corporate Documents, *PAX v. Kwok et al.,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 252 at SN 0159 (Genever Holdings Corporation), SN 0196 (Genever Holdings LLC). 31 *Id.* at SN 0198–206.\n\n32 *Id.* at SN 0159.\n\n33 *Id.* at SN 0160–61; Friedman Decl., Ex. 10, Yan Ping Wang Aff., at ¶ 4 & Ex. A, *Pax v. Kwok et al.,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 182.\n\n34 Friedman Decl., Ex. 9 at SN 0162–63.\n\nGenever NY.35 Kwok then purchased—through the Genever Defendants—the Residence on March 6, 201536 for \\$67.5 million in cash.37\n\n13. Neither Genever NY nor Genever BVI has any assets,38 employees,39 phone number,40 offices,41 or source of revenue.42\n\n# **HK International Purchases the Lady May**\n\n14. Also in February 2015, Hong Kong Investments Limited (\"HK International\") purchased the Lady May for €28 million. HK International is a Hong Kong company that Kwok set up and funded in 2006, before parking it in late 2014 with a family business associate for no consideration just before being criminally charged and fleeing Asia.43 In June of 2017, the business associate transferred HK International to Kwok's daughter, Mei Guo, for \\$1.44 Subsequently, Ms. Guo established Hong Kong International Funds Investments (USA) Limited, LLC (\"Hong Kong International USA\"), a Delaware LLC,45 and transferred title to the Lady May to that Delaware shell entity, once again for no consideration.46\n\n38 Friedman Decl., Ex. 13, Podhaskie Dep. Tr. at 47:19–22; 100:10–101:19.\n\n35 *Id.* at SN 0198–206.\n\n36 Friedman Decl., Ex. 11, Executed Contract of Sale at SN 0349, *PAX v. Kwok et al.,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 256.\n\n37 Friedman Decl., Ex. 12 at 4, *In re Genever Holdings LLC*, Case No. 20-12411-jlg (Bankr. S.D.N.Y.), ECF No. 4. Given accruing interest, this amount was almost equal to what Kwok owed to PAX at that point in time under his March 16, 2011 personal guarantee.\n\n39 *Id.* at 36:17–19; 96:18–20.\n\n40 *Id.* at 36:20–23; 96:21–23.\n\n41 *Id.* at 35:4–6; 96:10–14.\n\n42 *Id.* at 100:8–25.\n\n43 Final Contempt Order at 4.\n\n44 *Id*.\n\n45 *Id*.\n\n46 Hong Kong International USA is a company with \"no directors, officers, or employees; [it] has no dedicated email server or e-mail suffix; does not file tax returns; and has no bank account and is not otherwise 'capitalized.'\" Friedman Decl., Ex. 14, June 7, 2021 letter from L. Vartan to E. Moss, *PAX v. Kwok et al.,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1075.\n\n#### **PAX Prevails in New York Action Breach-of-Contract Claim**\n\n15. On September 15, 2020, the New York Court granted partial summary judgment in PAX's favor on the breach-of-contract claim (the \"Summary Judgment Order\").47 On December 18, 2020, the New York Court awarded PAX \"damages of \\$46,426,489.00 plus contractual interest pursuant to the 2011 Personal Guarantee at a rate of 15% per annum from effective date of December 31, 2010 and at the statutory rate of 9% per annum from the date of entry of this decision and order.\"48 The judgment was entered on February 3, 2021 as \\$116,402,019.57.49\n\n16. The New York Court scheduled a trial on the veil-piercing claim against the Genever Defendants for January 2021,50 but, due to the COVID-19 pandemic, that trial subsequently was postponed indefinitely. On October 12, 2020, Genever NY filed for chapter 11 bankruptcy in the Bankruptcy Court for the Southern District of New York (the \"Genever NY Bankruptcy Case\"),51 temporarily staying PAX's judgment efforts against Genever NY and the Genever Defendants, until that court granted stay relief to allow PAX to prosecute, and Genever NY to defend, the New York Action.52\n\n47 Friedman Decl., Ex. 15, Decision & Order on Motion at 7, *PAX v. Kwok et al.,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 549.\n\n48 Friedman Decl., Ex. 16, Decision & Order on Damages, at 5, *PAX v. Kwok et al.,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 685.\n\n49 Friedman Decl., Ex. 1 at 2.\n\n50 Friedman Decl., Ex. 15 at 7–8.\n\n51 *In re Genever Holdings,* Case No. 20-12411-jlg (Bankr. S.D.N.Y.).\n\n52 Friedman Decl., Ex. 17, Order Granting Debtor's Second Renewed Motion to Approve the Revised Settlement Agreement, *In re: Genever Holdings, LLC*, Case No. 20-12411-jlg (Bankr. S.D.N.Y.), ECF 141. As explained below, PAX later successfully moved for turnover of Kwok's shares of Genever BVI under New York CPLR § 5225. *See infra* ¶¶ 22–23.\n\n17. On March 4, 2021, Kwok appealed the Summary Judgment Order.53 The appeal is fully briefed and argued, and was pending in the New York Appellate Division, First Department, but is now stayed due to Kwok's chapter 11 filing.54\n\n#### **Post-Judgment Collection Efforts**\n\n18. On September 30, 2020, the New York Court entered a temporary restraining order preventing Kwok from, among other things, \"interference with any property in which he has an interest.\"55 On October 15, 2020 the New York Court permanently (i) \"restrained [Kwok] from making or causing any sale, assignment, transfer, or interference with any property in which he has an interest, whether directly or indirectly, and from paying over or otherwise disposing of any debt now due or thereafter coming due to him . . . \"; and (ii) specifically restrained \"Mr. Kwok and/or the registered owners of (1) the Residence at the Sherry-Netherland Hotel and (2) the yacht, 'the Lady May' . . . from making or causing any sale, assignment, transfer, or interference with those assets.\"56 The New York Court also held that PAX was entitled to post-judgment discovery of the Residence and the Lady May and any other assets that Kwok directly or indirectly owns.57\n\n19. PAX then undertook a year-long effort to enforce its judgment,58 during which time \"PAX encountered difficulty identifying assets over which Kwok exercised control because Kwok, who is a self-declared multi-billionaire, had secreted his assets in a maze of corporate entities and with family members. This scheme has enabled Kwok to assert that he has no assets despite his\n\n53 Friedman Decl., Ex. 18, Notice of Appeal, *PAX v. Kwok.,* Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 725. 54 *See* Friedman Decl., Ex. 19, Appellant's Br., *PAX v. Kwok.,* Case No. 2021-00740 (N.Y. App. Div.), Dkt. No. 12; Friedman Decl., Ex. 20, Respondent's Br., *PAX v. Kwok.,* Case No. 2021-00740 (N.Y. App. Div.), Dkt. No. 14;\n\nFriedman Decl., Ex. 21, Reply Br., *PAX v. Kwok.,* Case No. 2021-00740 (N.Y. App. Div.), Dkt. No. 16.\n\n55 Friedman Decl., Ex. 22, Decision & Order on Motion, *PAX v. Kwok.,* Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 591.\n\n56 Friedman Decl., Ex. 23, Decision & Order on Motion, at 1, *PAX v. Kwok,* Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 630.\n\n57 *Id.* at 2.\n\n58 Final Contempt Order, at 1.\n\nlavish lifestyle . . .\"59 PAX's efforts were further thwarted by Kwok's invocation of his Fifth Amendment right in connection with PAX's post-judgment discovery requests.60\n\n20. One of the funding sources from which PAX sought discovery was Golden Spring (New York) Limited (\"GSNY\").\n\n21. GSNY purportedly is wholly owned by a Hong Kong company,61 which (like other companies in which Kwok shields his assets) is technically owned by Kwok's son, Qiang Guo,62 and allegedly is the Kwok \"family office.\"63 Kwok has conceded that (i) when he fled China, he set up GSNY and funded it with his own money,64 and (ii) GSNY paid all of his personal expenses and funds his litigation.65 The New York Court observed that it was \"quite undisputed that [GSNY] has funded seven-figure payments to facilitate Mr. Kwok's lifestyle, and Mr. Kwok leads a rather extravagant lifestyle, [despite] purport[ing] to have zero assets whatsoever.\"66\n\n# **Genever BVI Turnover Proceedings**\n\n22. Because they were the sole asset Kwok admitted to owning, PAX moved for turnover of Kwok's shares in Genever BVI, the ultimate owner of the Residence, under CPLR\n\n59 *Id*.\n\n60 *Id.* at 9.\n\n61 Friedman Decl., Ex. 24, Aff. of Kwok Ho Wan in Supp. of Pl.'s Opp'n to Def.'s Mot. to Dismiss the Compl., *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 764 at ¶ 33.\n\n62 *See* Friedman Decl., Ex. 25, Kwok Dep. Tr. at 63:19–20, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 785.\n\n63 Final Contempt Order, at 5; Friedman Decl., Ex. 26, Feb. 2, 2022 Hr'g Tr. at 79:4–7, *PAX v. Kwok et al.,* Index No. 652077/2017, (N.Y. Sup. Ct.) (Stockil testifying that direction comes \"through the family office,\" which \"is called Golden Spring\").\n\n64 Friedman Decl., Ex. 24 at ¶ 36 (\"In April 2015, Mr. Wong, Ms. Fu, and Ms. Lam assisted me with setting up Golden Spring New York by transferring funds from one of my accounts at UBS to Golden Spring New York's JPMorgan Chase bank account in New York.\").\n\n65 *See* Friedman Decl., Ex. 27, Feb. 1, 2021 Letter from M. Carvalho, counsel for Kwok, to E. Moss, counsel for PAX, at 2, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 765; Decl. of Mr. Ho Wan Kwok In Supp. of the Chapter 11 Case & Certain Motions, ECF No. 107 at ¶¶ 17, 18, 35.\n\n66 Friedman Decl., Ex. 28, May 27, 2021 Hr'g Tr. at 9:25–10:3, *PAX v. Kwok et al.,* Index No. 652077/2017, (N.Y. Sup. Ct.). In connection with the same discovery motion, the court said that Kwok \"ha[d] exhausted the Court's patience with his antics,\" and that \"Kwok believes that these court proceedings are a game of evasion\" \"that he wants to play.\" *Id.* at 9:1–3, 9:23–24.\n\n§ 5225.67 On September 22, 2021, the New York Court granted PAX's motion (the \"Genever Turnover Order\") and, subject to the BVI court modifying certain restraining orders it previously had issued (which it did in early December 2021), required Kwok to \"take whatever steps are necessary in the British Virgin Islands to turn[]over all share certificates with respect to his 100% ownership interest in Genever Holdings Corporation.\"68 Kwok did not appeal the Genever Turnover Order.\n\n23. When Kwok failed to initiate the turnover of his shares, PAX moved for another order of civil contempt.69 That motion was fully briefed on January 25, 2022.70 When Kwok filed this chapter 11 case, PAX, at the recommendation of the New York Court,71 withdrew its motion without prejudice.72\n\n#### **The Lady May Contempt Proceedings**\n\n24. Despite the New York Court's orders restraining Kwok and/or the registered owners of the Lady May from removing the yacht from the court's jurisdiction, Kwok allowed the Lady May to flee New York on or around October 9, 2021.73 PAX moved for, and the New York Court granted, PAX's motion for civil contempt on March 16, 2021, explaining that \"it is clear that there has been an intolerable amount of gamesmanship, dissembling, and deceit in proceedings\n\n67 *See* Friedman Decl., Ex. 29, PAX's Mot. for a Turnover Order Against Def. Miles Kwok & Appointment of a Receiver, *PAX v. Kwok et al.,* Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 846.\n\n68 Friedman Decl., Ex. 30, Decision & Order on Post-Judgment Turnover, at 1, *PAX v. Kwok et al.,* Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 904.\n\n69 Friedman Decl., Ex. 31, Notice of Motion for Order of Civil Contempt for Failure to Comply with Court's Turnover Order, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1078.\n\n70 Friedman Decl., Ex. 32, PAX's Reply Mem. of Law in Further Supp. of Mot. for Order of Civil Contempt, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1116.\n\n71 Friedman Decl., Ex. 33, Feb. 18, 2022 Court Notice, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1191; Freidman Decl., Ex. 34, Suggestion of Bankruptcy, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1190.\n\n72 Friedman Decl., Ex. 35, Decision & Order on Voluntary Withdrawal of Contempt Motion, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1193.\n\n73 Friedman Decl., Ex. 36, Decision & Order of Conditional Contempt, at 2, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 728.\n\nbefore this New York Court relating to the whereabouts and ownership of the yacht 'Lady May' . . . . Rather than catalogue the many 'shell games' defendant Kwok has engaged in with the assistance of counsel who should know better,\" \"[f]or every day the yacht is outside the jurisdiction of this Court after May 15, 2021, defendant Kwok will be fined \\$500,000.\"74\n\n25. Kwok appealed the New York Court's March 16, 2021 order to the First Department, but remained in contempt for 268 days.75 The First Department affirmed the New York Court's order on November 4, 2021, finding that \"[t]he motion court acted within its discretion in holding defendant in civil contempt, as plaintiff established by clear and convincing evidence that defendant violated a lawful, clear mandate of the court, of which he had knowledge, and that such violation resulted in prejudice to plaintiff's rights.\"76 The First Department held that \"the daily fine of \\$500,000.00 was intended to strongly encourage [Kwok] to purge himself of the contempt, which, despite being permitted to accomplish, he has shown no interest in doing.\"77 The First Department also \"instructed\" the New York Court \"to proceed with an evidentiary hearing to resolve a dispute as to ownership and control of the yacht.\"78\n\n26. That evidentiary hearing was held on February 2, 2022, and the New York Court heard testimony from seven witnesses, including Kwok's daughter, the purported owner of the Lady May.79 On February 9, 2022 the New York Court issued a final Order of Civil Contempt (the \"Yacht Contempt Order\").80 The New York Court found that \"Kwok exercised dominion and\n\n74 *Id.*\n\n75 *Pac. All. Asia Opportunity Fund L.P. v. Wan*, 199 A.D.3d 423, 423 (1st Dep't 2021).\n\n76 *Id*.\n\n77 *Id.*\n\n78 *Id.* Kwok filed a Motion for Leave to Appeal to the Court of Appeals on December 3, 2021, which was denied by the First Department on January 20, 2022. Friedman Decl., Ex. 37, Order, *PAX v. Kwok,* Case No. 2021-01010 (N.Y. App. Div.), Dkt. No. 22.\n\n79 Friedman Decl., Ex. 38, Third Interim Decision + Order on Conditional Contempt, *PAX v. Kwok et al.,* Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 1098.\n\n80 Final Contempt Order at 1.\n\ncontrol over [] the Lady May\"81 and that \"[t]he testimony adduced at the hearing out of the mouths of defendants' witnesses clearly and convincingly demonstrated that Kwok beneficially owns and controls the Lady May and has utter contempt for this Court and the judicial process.\"82\n\n27. The New York Court imposed a \\$134 million fine, based on the \"268 days,\" \"[a]s of February 7, 2022,\" that \"the Lady May ha[d] remained outside the jurisdiction of the Court.\"83 The New York Court ordered Kwok to remit the \\$134 million to PAX within five business days, noting that the Court would be \"prepared to exercise its full authority Judiciary Law § 753,\" New York's civil contempt provision.84\n\n28. On February 14, 2022, Kwok filed a notice of appeal of the Yacht Contempt Order and requested an emergency interim stay pending appeal.85 The Appellate Division, First Department denied Kwok's request the next day.86\n\n29. Also on February 14, 2022, Kwok borrowed \\$1 million and used it to pay Brown Rudnick as a retainer fee in connection with this chapter 11 case—a final pre-bankruptcy act of contempt in violation of the New York Court's October 15, 2020 restraining order.87\n\n81 *Id.* at 2.\n\n82 *Id.* at 4.\n\n83 *Id.* at 10.\n\n84 *Id.* at 10; *see also* Friedman Decl., Ex. 39, Final Order of Civil Contempt, *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1182.\n\n85 Friedman Decl., Ex. 40, Notice of Appeal, *PAX v. Kwok,* Case No. 2022-00609 (N.Y. App. Div., First Dep't), Dkt. No. 1.\n\n86 *See* Friedman Decl., Ex. 41, Summary Statement on Application For Expedited Service and/or Interim Relief, *PAX v. Wan*, Case No. 2022-00609 (App. Div., First Dep't), NYSCEF Doc. No. 5.\n\n87 *See Global Notes and Statements of Limitations, Methodology, and Disclaimers Regarding the Debtor's Schedules of Assets and Liabilities and Statement of Financial Affairs*, ECF No. 77 at 13 (\"Lamp loaned the Debtor \\$1 million, and the Debtor directed Lamp to remit the proceeds of the loan directly to Brown Rudnick\" as a retainer fee in connection with these proceedings). *See also id.*, at 17 (documenting two payments pf \\$500,000 by Lamp, on behalf of Kwok, to Brown Rudnick LLP on 2/14/2022 and 2/15/2022). Lamp Capital LLC is also an insider of the Debtors.\n\n### **Kwok Files For Bankruptcy**\n\n30. The evening before the contempt fine was due to be paid, Kwok filed this chapter 11 case.88 Although Kwok represents under oath that he has only \\$50,001 to \\$100,000 in assets89—omitting the valuable Lady May, which remains outside of the United States,90 unsupervised by any trustworthy fiduciaryKwok did not file for bankruptcy when the \\$116 million judgment in PAX's favor was rendered against him on the underlying breach of contract claim.\n\n31. On March 19, 2022, the United States Trustee filed the *United States Trustee's Motion for an Order Directing the Appointment of an Examiner or, in the Alternative, Motion for Order Directing the Appointment of a Chapter 11 Trustee* [ECF No. 102] (the \"Examiner/Trustee Motion\").\n\n32. On March 20, 2022, the Debtor filed the *Declaration of Mr. Ho Wan Kwok in Support of the Chapter 11 Case and Certain Motions* [ECF No. 107] (the \"Kwok Declaration\"). The Kwok Declaration shows that Kwok's purpose in this chapter 11 case is to relitigate issues previously determined by the New York Court, including the validity of his personal guaranty and his ownership of the Lady May.91 As described below, the attempt to relitigate these issues is not a proper use of the bankruptcy system.\n\n88 *See* Voluntary Chapter 11 Petition, ECF No. 1.\n\n89 Voluntary Chapter 11 Petition, ECF No. 1 at 7. Notably, this representation is itself inconsistent with his subsequently filed Summary of Assets, filed on March 9, 2022 (ECF No. 78 at 1), which thereafter listed his aggregate assets at only \\$3,850, and his interest in the payments made on his behalf to retain Brown Rudnick's services. *See Global Notes and Statements of Limitations, Methodology, and Disclaimers Regarding the Debtor's Schedules of Assets and Liabilities and Statement of Financial Affairs*, ECF 77 at 17 (documenting two payments pf \\$500,000 by Lamp, on behalf of Kwok, to Brown Rudnick LLP on 2/14/2022 and 2/15/2022). 90 Friedman Decl., Ex. 42 (location of Lady May as of April 6, 2022).\n\n91 *See, e.g.*, ECF No. 107, Kwok Declaration at ¶ 41 (stating that ownership of the Lady May is an issue that \"will be presented squarely to this Court for appropriate resolution.\").\n\n33. On March 22, 2022, the Debtor filed the *Debtor's Motion for Entry of Interim and Final DIP Orders (I) Authorizing the Debtor to Obtain Unsecured, Subordinated Postpetition Financing and (II) Scheduling Interim and Final Hearings, and (III) Granting Related Relief* [ECF No. 117] (the \"Kwok DIP Motion\"). In the Kwok DIP Motion, Kwok continued his pattern of deception, claiming that the proposed debtor-in-possession loan was not from an insider, even though the lender is Golden Spring.92\n\n#### **The Eastern Profit Case**\n\n34. In addition to the facts set out above, the Court should consider relevant findings of fact in the *Eastern Profit* case—a matter involving another one of Kwok's shell companies.93 That case confirms Kwok's history of misbehavior, and casts further doubt on representations Kwok and his counsel have made to this Court. For example, although Kwok claims he is a dissident persecuted by the Chinese Communist Party (the \"CCP\"),94 the *Eastern Profit* court concluded that there was \"no clear and convincing evidence as to whether [Kwok] is a supporter or opponent of the CCP,\" after hearing extensive evidence.95\n\n35. There, one of Kwok's shell companies, Eastern Profit Corporation Limited (\"Eastern Profit\"), filed a breach-of-contract claim against Strategic Vision US LLC (\"Strategic Vision\"). Eastern Profit had hired Strategic Vision to collect intelligence on Chinese government officials.96 During contract negotiations, Kwok indicated that \"to protect his confidentiality and anonymity, he would not sign or be a party to the Agreement but that a separate entity would sign\n\n92 *See* Checklist for Motions and Orders for Use of Cash Collateral and Post-Petition Financing at § (6)(e), attached as Exhibit C to the Debtor's Motion for Entry of Interim and Final DIP Orders (I) Authorizing the Debtor to Obtain Unsecured, Subordinated Postpetition Financing and (II) Scheduling Interim and Final Hearings and (III) Granting Related Relief, ECF No. 117.\n\n93 *See E. Profit Corp. Ltd. v. Strategic Vision US LLC*, No. 18-CV-2185 (LJL), 2021 WL 2554631, at \\*1 (S.D.N.Y. June 22, 2021) (Liman, J.).\n\n94 Kwok Declaration, at ¶ 4; Friedman Decl., Ex. 3, March 1, Hrg. Tr. at 15:20–25.\n\n95 *E. Profit Corp.* 2021 WL 2554631, at \\*18..\n\n96 *Id.* at \\*2.\n\nand be a party.\"97 Kwok later tried to distance himself from Eastern Profit, but the court held that it was a \"shell for [Kwok] and his family.\"98 The court reasoned \"[a]t the time, Eastern was registered to the same address as [Kwok's] family office in Hong Kong. It is now registered to an address that is also the residential address of [Kwok's] daughter.\"99 The court also pointed out that although the company was held by a third party at the time the parties entered into the contract, it was since transferred to Kwok's daughter for no consideration.100 Additionally, the court held that Kwok directed transfers of funds in and out of shell companies and had shell companies make gifts on his behalf.101 The parallels here are unmistakable.\n\n#### **JURISDICTION**\n\n36. This Court has jurisdiction over this motion pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). The statutory bases for the relief requested herein are Bankruptcy Code sections 1104 and 1112.\n\n#### **RELIEF REQUESTED**\n\n37. Pursuant to Bankruptcy Code section 1112(b), PAX requests entry of an order dismissing the above-captioned chapter 11 case. In the alternative, pursuant to Bankruptcy Code section 1104(a), PAX requests that the Court appoint a chapter 11 trustee.\n\n#### **ARGUMENT**\n\n#### **I. THE COURT SHOULD DISMISS THE PETITION FOR CAUSE.**\n\n38. Under Bankruptcy Code section 1112(b), this Court can dismiss a chapter 11 petition for \"cause.\" 11 U.S.C. § 1112(b).\n\n97 *Id.* at \\*7.\n\n98 *Id.*\n\n99 *Id.*\n\n100 *Id.*\n\n101 *Id.* at 1, 6, 12, 28.\n\n39. The Bankruptcy Code contains sixteen non-exhaustive examples of cause and also vests the Court with considerable discretion to dismiss this bankruptcy case for any \"unenumerated cause.\"102 Four distinct instances of cause are directly applicable here: the first two are unenumerated and the final two are enumerated in section 1112(b)(4). *First*, the Debtor's bankruptcy case is an abuse of the bankruptcy system for illegitimate purposes—it provides no benefit to creditors and is a dilatory litigation tactic in what is essentially a two-party dispute with PAX. *Second*, the Debtor's chapter 11 case was filed in bad faith. *Third*, Kwok's self-proclaimed \\$3,850 estate continues to diminish while its prospects for \"rehabilitation\" are non-existent, providing cause for dismissal under Bankruptcy Code section 1112(b)(4)(A). *Fourth*, Kwok's behavior constitutes \"gross mismanagement of the estate,\" as set forth in Bankruptcy Code section 1112(b)(4)(B).\n\n# **A. The Court Should Dismiss the Petition for Cause Because Kwok Is Misusing the Bankruptcy System.**\n\n40. Misuse of the Bankruptcy Code constitutes \"cause\" for dismissal. *Wilk Auslander LLP v. Murray (In re Murray)*, 900 F.3d 53, 60–61 (2d Cir. 2018) (*citing In re Head*, 223 B.R. 648, 653–54 (Bankr. W.D.N.Y. 1998) (dismissing for an \"unenumerated cause\")); *Taberna Preferred Funding IV, Ltd.* v. *Opportunities II Ltd. (In re Taberna Preferred Funding IV, Ltd.)*, 594 B.R. 576, 602 (Bankr. S.D.N.Y. 2018) (finding cause where \"no bankruptcy purpose is served by this filing\" and dismissing petition). The Court should dismiss this chapter 11 case because\n\n102 *See In re Murray*, 543 B.R. 484, 492 (Bankr. S.D.N.Y. 2016), *aff'd*, 565 B.R. 527 (S.D.N.Y. 2017), *aff'd*, 900 F.3d 53 (2d Cir. 2018); *In re AMC Realty Corp.*, 270 B.R. 132, 147 (Bankr. S.D.N.Y. 2001) (dismissing chapter 11 case for \"non-enumerated cause\"); *In re Balco Equities Ltd., Inc.*, 312 B.R. 734, 748–49 (Bankr. S.D.N.Y. 2004) (observing that \"cause\" under section 1112(b) \"may be found based on unenumerated factors\"). By having discretion to dismiss for non-enumerated causes, courts can use their \"equitable powers to reach an appropriate result in individual cases.\" *C-TC 9th Ave. P'ship* v. *Norton Co. (In re C-TC 9th Ave. P'ship)*, 113 F.3d 1304, 1311 n.5 (2d Cir. 1997). *See also, In re Sapphire Dev., LLC*, No. 13-50043, 2015 WL 5579545, at \\*3 (Bankr. D. Conn. June 26, 2015), *aff'd sub nom. Sapphire Dev., LLC v. McKay*, 549 B.R. 556 (D. Conn. 2016).\n\nKwok is misusing the bankruptcy system for at least three reasons under well-settled controlling authority.\n\n#### **(i) Kwok's Purposes for the Chapter 11 Case Are Illegitimate**\n\n41. *First*, this is not a legitimate reorganization. \"[A] central purpose of the Bankruptcy Code is to provide a procedure by which certain insolvent debtors can reorder their affairs, make peace with their creditors, and enjoy a new opportunity in life with a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.\" *Grogan* v. *Garner*, 498 U.S. 279, 286 (1991). As the Second Circuit has emphasized, \"the general purpose of bankruptcy law is to provide the bankrupt with comprehensive, much needed relief from the burden of his indebtedness by releasing him from virtually all his debts.\" *Falk & Siemer, LLP* v. *Maddigan (In re Maddigan)*, 312 F.3d 589, 596 (2d Cir. 2002). To that end, \"debtors seeking protection of the Bankruptcy Court must have real debt, real creditors, and a legitimate business purpose.\" *In re Am. Prop. Corp.*, 44 B.R. 180, 182 (Bankr. M.D. Fla. 1984).\n\n42. This case represents a classic misuse of the bankruptcy process. Here, Kwok has no legitimate business purpose for this chapter 11 case and is not seeking a new opportunity to engage in any future business. The articulated purpose for this bankruptcy case is to \"allow a reasoned vetting of all pertinent demonstrable case facts, without prejudicing any creditor's economic rights.\"103 Kwok's own words prove the case for dismissal. If no creditor's economic rights are to be prejudiced, then all creditors will be paid in full (presumably by Kwok or his family members). A chapter 11 case is not needed to do that. Instead, what Kwok really wants is another bite at the litigation apple—that is, for this Court to \"vet\" Justice Ostrager's findings and prevent Justice Ostrager from making new findings. But, the vetting of the facts has either already occurred\n\n103 Decl. of Mr. Ho Wan Kwok In Supp. of the Chapter 11 Case & Certain Motions, ECF No. 107 at ¶ 4.\n\nor can occur in the applicable non-bankruptcy fora. The New York Court—on the basis of an extensive, multi-year evidentiary record and, with respect to Kwok's contempt of court, a live trial—already has determined that Kwok owes PAX hundreds of millions of dollars. Relitigating those facts established by competent authority is not a valid bankruptcy purpose, but rather, as discussed below, an improper litigation tactic aimed at delaying and evading judgment enforcement.\n\n43. The other principal purpose of this chapter 11 case—to avoid incarceration or the other consequences of Kwok's civil contempt—is equally anathema to the purposes of the Bankruptcy Code. \"[T]he Bankruptcy Code does not provide sanctuary from this kind of threat.\" *In re Nat'l Rifle Assoc'n of Am. and Sea Girt LLC*, No. 21-30085, 2021 WL 1970738, at \\*14 (Bankr. N.D. Tex. May 11, 2021).\n\n#### **(ii) Kwok's Chapter 11 Case Fails to Preserve Value for Creditors**\n\n44. *Second*, Kwok's chapter 11 case does not provide value to creditors that would be lost outside of bankruptcy. As a Delaware bankruptcy court explained, a bankruptcy case must \"seek to create or preserve some value that would otherwise be lost—not merely distributed to a different stakeholder—outside of bankruptcy.\" *In re Rent-A-Wreck of America, Inc.,* 580 B.R. 364, 373 (Bankr. D. Del. 2018) (dismissing a chapter 11 petition filed shortly after a contempt order was issued after years of litigation unfavorable to debtors, whose \"sole motive\" was to reject a franchise agreement it had been unsuccessful in terminating). Value is often created in chapter 11 by \"centraliz[ing] all disputes concerning property of the debtor's estate,\" which is \"one of the core purposes of bankruptcy.\" *SEC* v. *Miller*, 808 F.3d 623, 630 (2d Cir. 2015). But Kwok is barely making an effort to do so. Kwok expressly disclaims having any valuable assets other than a few business suits and a dog—including his continued protestation that he has no ownership in or control over the Lady May.104 Also, notwithstanding his prior representations that he (and/or his shell companies) owns the Residence, he now avers that he has no economic interest in it.105 And in any event, Kwok and his family are attempting to have claims regarding the Residence resolved in the Genever NY Bankruptcy Case (or a proceeding in the British Virgin Islands), not here.\n\n45. Although Kwok makes a feeble nod to the concept of a \"race to the courthouse\" among \"competing\" unsecured creditors,106 this notion makes no sense given that this chapter 11 case was, in Debtor's own words, commenced with the \"clear intention of satisfying his creditors' allowed claims in full,\"107 using funds Kwok will receive purportedly from his family members or his speculative litigation claims. If creditor claims (all of which arise under non-bankruptcy law) can be satisfied in full without using estate assets, this chapter 11 case serves no point. With the exception of the PAX litigation, roughly two dozen cases against the Debtor represent independent, contingent claims that, although they ultimately might yield claims against Debtor's property, have not yet resulted in disputes over Kwok's assets.108 These cases have no apparent common nucleus of operative facts or overlapping legal issues. Thus, with designs to pay these claims in full out of purported non-estate assets, Kwok's chapter 11 case is a transparent attempt at improper forum shopping.\n\n46. Indeed, the PAX litigation is essentially the *only* dispute over satisfying a current, non-contingent creditor—there is no risk of creditors overrunning the debtor and precluding their equal treatment. The questions surrounding what constitutes property available to judgment\n\n104 *See, e.g.*, *id.* at ¶ 41.\n\n105 *Id.* at ¶ 17 (stating that he \"hold[s] the interest in the Sherry-Netherland apartment in trust for my son\").\n\n106 *Id.* at ¶ 4.\n\n107 Debtor's Motion to Extend Time to File Schedules of Assets and Liabilities and Statements of Financial Affairs, ECF 27, at ¶ 12.\n\n108 Kwok Declaration, at 10–12.\n\ncreditors have either already been litigated or otherwise may most easily be litigated in their existing jurisdictions.\n\n# **(iii) Kwok's Bankruptcy Petition Is Fundamentally a Litigation Tactic in a Two-Party Dispute**\n\n47. *Third*, and relatedly, courts dismiss bankruptcy petitions where the filing of a case under the Bankruptcy Code is a \"litigation tactic\" in a \"two-party dispute.\" *In re Murray*, 900 F.3d at 60–61 (holding that such misuse is \"cause\" for dismissal, whether or not classified as \"bad faith\"); *see also In re SGL Carbon Corp.*, 200 F.3d 154, 165 (3d Cir. 1999) (\"Because filing a Chapter 11 petition merely to obtain tactical litigation advantages is not within 'the legitimate scope of the bankruptcy laws,' courts have typically dismissed Chapter 11 petitions under these circumstances . . . .\") (quoting *Marsch v. Marsch (In re Marsch)*, 36 F.3d 825, 828 (9th Cir. 1994)); *In re D&G Constr. Dean Gonzalez, LLC*, 635 B.R. 232, 240 (Bankr. E.D.N.Y. 2021) (\"[U]se of the bankruptcy process merely as a platform to delay the lawful exercise of state law rights and attack final orders of other courts, warrants dismissal [. . .].\"). \"A bankruptcy proceeding by its very nature requires collective action,\" *Liona Corp., Inc.* v. *PCH Assocs. (In re PCH Assocs.)*, 949 F.2d 585, 605 (2d Cir. 1991), and \"the bankruptcy process . . . is a multi-party process, and not just a simple two-party dispute.\" *In re Hostess Brands, Inc.*, No. 12-22052 (RDD), 2013 WL 82914, at \\*3 (Bankr. S.D.N.Y. Jan. 7, 2013). This sham filing has nothing to do with collective action or multiple parties. It is about Kwok frantically trying to extricate himself from the consequences of the breach-of-contract and civil contempt judgments entered in PAX's litigation against him.\n\n48. The bankruptcy court's decision in *In re Wally Findlay Galleries (New York) Inc*. bears special emphasis. 36 B.R. 849, 851 (Bankr. S.D.N.Y. Feb. 10, 1984). The court there dismissed the bankruptcy because, like here, (i) the petition was filed around the same time of an adverse ruling in the underlying litigation in attempt to avoid the consequences of that ruling, and\n\n(ii) there was no valid reorganization prospect:\n\nIt is clear that the debtor did not file its petition to reorganize, but rather as a litigating tactic in its dispute with [the creditors]. The petition was filed the same day that judgments on the promissory notes were entered in the state court . . . *The debtor filed its petition herein to avoid the consequences of adverse state court decisions while it continues litigating.* . . . The debtor is unable to propose a meaningful plan of reorganization until its litigation with [the creditors] is resolved. Thus, it is evident that the debtor seeks to use this court not to reorganize, but to relitigate. *This is an impermissible use of Chapter 11 of the Bankruptcy Code.*\n\n*Id.* (emphasis added).\n\n49. Here, the judgment Kwok is running from is a two-party dispute \"involving nonbankruptcy law brought in the bankruptcy court in the guise of being a reorganization of some sort under Chapter 11.\" *In re The Bridge to Life, Inc.*, 330 B.R. 351, 357 (Bankr. E.D.N.Y. 2005) (quoting *In re HBA E., Inc.*, 87 B.R. 248, 260 (Bankr. E.D.N.Y. 1988)).\n\n50. *Murray* is also instructive. There, a creditor filed an involuntary Chapter 7 petition against an individual to enforce a judgment where the debtor's sole asset was an apartment he owned with his wife. *In re Murray*, 900 F.3d at 53, 57. The creditor was prohibited under state law from enforcing the judgment against the wife's interest, and so sought bankruptcy remedies that could force the sale of the entire apartment. *Id.* The court dismissed the petition as an improper use of the bankruptcy system for two principal reasons: (i) the petitioning creditor was not substantially prejudiced by relying on non-bankruptcy remedies, and (ii) the interest of the debtor and the bankruptcy system as a whole would be advanced by dismissal. *Id.* at 61.\n\n51. The same is true here. Kwok would not be prejudiced by finally having to answer for a debt he agreed to guarantee nearly a decade ago. PAX easily proved its breach-of-contract claim, and the time has come for Kwok to repay. The only \"prejudice\" to Kwok, if any, from\n\n28\n\ndismissing this chapter 11 case is that he will not be able to perpetuate his ongoing shell game before this Court and will have to return to Justice Ostrager, who has already made clear that he will not tolerate any further gamesmanship. As in *Murray*, Kwok's mere \"preference for bankruptcy remedies to solve (or more accurately here, to avoid the consequences of) a two-party dispute cannot outweigh the lack of any other bankruptcy-related purpose.\" *Id.* at 62. Moreover, the bankruptcy system has no interest in keeping this case, which, as explained above, serves no bankruptcy-related purpose. *See In re Taberna Preferred Funding IV, Ltd.*, 594 B.R. at 602, 606 (following *Murray* and dismissing involuntary chapter 11 petition for unenumerated cause).\n\n#### **B. The Court Should Dismiss This Chapter 11 Case as a Bad Faith Filing.**\n\n52. \"It is well-settled that the filing of a bankruptcy petition in bad faith constitutes cause for dismissal or conversion of a case under the Bankruptcy Code section 1112(b).\" *In re 167 West 133rd St. Hous. Dev. Fund Corp.*, No. 18-12043 (JLG), 2018 WL 4637460, at \\*8 (Bankr. S.D.N.Y. Sept. 25, 2018); *Baker* v. *Latham Sparrowbush Assocs. (In re Cohoes Indus. Terminal, Inc.)*, 931 F.2d 222, 228 (2d Cir. 1991) (\"[B]ankruptcy filings must be made in good faith.\"). And \"courts that consider bad faith to be cause to dismiss often classify . . . inappropriate use [of the Bankruptcy Code] as evidence of bad faith.\" *In re Murray*, 900 F.3d at 60. The good-faith requirement is thus a \"policing mechanism\" to ensure that those who seek bankruptcy relief \"do so only to accomplish the aims and objectives of bankruptcy reorganization philosophy and for no other purpose.\" *In re Syndicom Corp.*, 268 B.R. 26, 49 (Bankr. S.D.N.Y. 2001) (quoting *In re Island Helicopters, Inc.*, 211 B.R. 453, 462 (Bankr. E.D.N.Y. 1997)). \"Bankruptcy is an equitable remedy. When it is invoked to accomplish ends inconsistent with its equitable purposes, the bankruptcy court must dismiss the proceeding.\" *Sapphire Dev., LLC* v. *McKay*, 549 B.R. 556, 558 (D. Conn. 2016). The \"good faith standard protects the jurisdictional integrity of the bankruptcy courts by rendering their equitable weapons . . . available only to those debtors and creditors with clean hands.\" *In re SGL Carbon Corp.*, 200 F.3d 154, 161 (3d Cir. 1999). Here, Kwok's unclean hands preclude his use of this Court to further delay and defraud creditors.\n\n53. Since lack of good faith does not lend itself to precise definition, courts \"may consider any factors which evidence an intent to abuse the judicial process and the purposes of the reorganization provisions.\" *In re Syndicom Corp.*, 268 B.R. at 49. Once the good faith of a debtor is called into question, the burden shifts to the debtor to demonstrate that the petition was filed in good faith. *Id.*\n\n54. Kwok has engaged in a protracted wrongful pattern and practice of evading the repayment of his debts to PAX. Kwok filed this chapter 11 case immediately upon facing the consequences of the civil contempt order against him. He did so to have another bite at the apple in a different forum before a different judge. As noted above, Kwok's chapter 11 filing is accurately characterized as an attempt to relitigate his losses before Justice Ostrager. This is the essence of bad faith. *See In re Briarpatch Film Corp.*, 281 B.R. 820, 834–35 (Bankr. S.D.N.Y. 2002) (finding bad faith when the reason for filing bankruptcy was to relitigate merits of state court decision).\n\n55. As discussed above, the Court need not reach the bad-faith inquiry because it can and should dismiss this chapter 11 case for the independent reason that Kwok is seeking to misuse the bankruptcy system. In any event, it is difficult to imagine a more compelling example of bad faith than this chapter 11 case, where Kwok is brazenly abusing judicial process.\n\n56. As courts within the Second Circuit have observed, the \"critical\" test for a debtor's lack of good faith remains whether on the filing date there was no reasonable likelihood that the debtor intended to reorganize and whether there is no reasonable possibility that the debtor would emerge from bankruptcy. *In re 68 West 127 Street, LLC*, 285 B.R. 838, 846 (Bankr. S.D.N.Y.\n\n30\n\n2002). Thus, a lack of good faith requires both (i) subjective bad faith—\"meant to insure that the Debtor actually intends to use chapter 11 to reorganize . . . and not simply to cause hardship or delay\"—and (ii) objective futility—\"whether a reorganizing is realistically possible.\" *In re 167 West 133rd St. Hous. Dev. Fund Corp.*, No. 18-12043 (JLG), 2018 WL 4637460, at \\*8, 10 (Bankr. S.D.N.Y. Sept. 25, 2018). PAX can establish both elements here.\n\n#### **(i) Subjective Bad Faith**\n\n57. Kwok is acting in bad faith because he does not intend to use the bankruptcy to reorganize. Self-evidently, there is nothing to reorganize. Kwok asserts that, aside from a few business suits and a dog, he has no personal assets (other than speculative litigation claims) and will rely on \"gifts\" from family members to satisfy in full claims against him. What Kwok actually wants is to forestall contempt sanctions, and to relitigate cases he has previously lost with the ultimate goal of frustrating (or at least delaying) PAX's ability to collect on its judgments.\n\nCourts consider the eight bad-faith factors laid out in *C-TC*:\n\n(1) the debtor has only one asset; (2) the debtor has few unsecured creditors whose claims are small in relation to those of the secured creditors; (3) the debtor's one asset is the subject of a foreclosure action as a result of arrearages or default on the debt; (4) the debtor's financial condition is, in essence, a two party dispute between the debtor and secured creditors which can be resolved in the pending state foreclosure action; (5) the timing of the debtor's filing evidences an intent to delay or frustrate the legitimate efforts of the debtor's secured creditors to enforce their rights; (6) the debtor has little or no cash flow; (7) the debtor can't meet current expenses including the payment of personal property and real estate taxes; and (8) the debtor has no employees.\n\n*C-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave. P-Ship)*, 113 F.3d 1304*,* 1311 (2d Cir. 1997).\n\n58. Courts also consider four additional factors set forth in *Syndicom*: (1) whether the case was filed as a \"tactical\" step in connection with the debtor's state court battles; (2) whether there was financial pressure on the debtor occasioned by a creditor other than the counterparty to the two-party dispute, or financial distress as a consequence of other creditors' claims; (3) whether unsecured creditors would not benefit in any material way from the debtor's filing and would not be prejudiced in any material way as a result of relief from the stay; and (4) whether the case was filed with the purpose and effect of securing benefits for non-debtor individuals in contrast to securing benefits for the debtor. *Syndicom*, 268 B.R. at 52–53.\n\n59. Here, as set forth below, *almost all* of the factors weigh in PAX's favor:\n\n| C-TC Factor 1:
Single Asset | Kwok claims to have title only to de minimis assets with only
contingent litigation claims (for which he needs funds from debtor-in
possession financing from his family members to prosecute). By his
telling, he will rely on \"gifts\" from his family to satisfy creditor
claims rather than using his own assets. Although there is obvious
reason to doubt the veracity of Kwok's claims that the money he is
using is not his own (which PAX intends to prove at an appropriate
time), by Kwok's own word, this factor weighs against him. |\n|--------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| C-TC Factor 2:
Few, Relatively
Small Unsecured
Creditors | The petition has nothing to do with protecting secured creditors or
legitimate unsecured creditors. If anything, PAX's claim, which has
been liquidated and was on the cusp of reaching Kwok's hidden
assets, is harmed by this chapter 11 case. For purposes of this factor,
given the size and status of PAX's claim and the absence of any
secured creditors, PAX is tantamount to a secured creditor. Kwok has
no interest in using estate assets to protect his other contingent
creditors. |\n| C-TC Factor 3:
Asset Subject to
Foreclosure | Before this case, PAX was targeting the Lady May to partially satisfy
its judgment in New York. The Residence is currently subject to the
Genever NY Bankruptcy Case. In both cases, Kwok claims these
assets do not belong to him (despite his numerous representations to
the contrary). |\n| C-TC Factor 4:
Financial Condition
Essentially from
Two-Party Dispute
That Can Be
Resolved in Pending
State Action | This case should be seen as a classic two-party dispute that began with
a litigation filed 2017 and ultimately resolved in 2021, and was
precipitated by Kwok's obvious effort to evade the serious
consequences of a final civil contempt order. Even after entry of the
Summary Judgment Order against Kwok, he did not seek bankruptcy
protection despite his claim he would never be able to pay that debt.
Even when he was being fined \\$500,000 per day for being in
contempt of court, he did not seek bankruptcy protection despite his
assertion he would never be able to pay that debt. Only when
confronted with severe contempt sanctions—when his litigation
defenses were exhausted—did Kwok hastily file this chapter 11 case. |\n\n| C-TC Factor 5:
Timing of Filing
Evidences Intent to
Delay or Frustrate
Legitimate
Enforcement | The petition's timing makes plain that this chapter 11 case is an
attempt to avoid the New York Court order and frustrate PAX's
legitimate efforts to enforce its rights as a judgment creditor. This
factor weighs extremely heavily in favor of dismissal, because the
timing of Kwok's filing was motivated by something far worse than
frustration of a secured creditor's rights: this case was filed to
undermine the rule of law and allow Kwok to circumvent compliance
with a court-ordered sanction. Moreover, this chapter 11 case was
filed in an effort to keep the Lady May outside of the United States
and in the hands of Kwok's family members, rather than being
returned to and secured within the jurisdiction for use as an asset to
satisfy creditor claims. |\n|--------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| C-TC Factor 6:
Little or No Cash
Flow | Kwok claims to have no material cash flows other than gifts or loans
from family. |\n| C-TC Factor 7:
Cannot Meet Current
Expenses | Kwok claims to have no assets at all (other than a few business suits, a
dog and some speculative litigation claims) and no living expenses. |\n| C-TC Factor 8:
No Employees | Kwok has represented under oath that he has no business, employees
or operations. |\n| Syndicom Factor 1:
Case Filed as Tactical
Step in State Court
Battles | Given the timing and the petition's stated purpose—re-litigating state
court claims—it is an obviously improper \"tactical step\" in Kwok's
dispute with PAX. |\n| Syndicom Factor 2:
Financial Pressure
Other Than Two
Party Dispute | There was no financial pressure on Kwok from any creditor other than
PAX. All of the other creditors are unliquidated, de minimis, or
insiders. |\n| Syndicom Factor 3:
Unsecured Creditors
Benefit or Prejudiced
by Filing or Relief
from Stay | This chapter 11 case will not help any legitimate unsecured creditors
but will materially prejudice the largest unsecured creditor with a
major claim: PAX has an enforceable breach-of-contract judgment
and an enforceable contempt judgment. Kwok's only purpose in
filing the petition is to gain a new forum in which to try to argue that
he has no assets to satisfy those judgments—the precise type of shell
game that Justice Ostrager said must stop. |\n\n| Syndicom Factor 4:
Case Filed for
Securing Benefits for
Non-Debtors, Not
Creditors | The only purpose of this chapter 11 case was to benefit Kwok and his
family. It was not filed to benefit any legitimate creditor. Kwok is
disavowing assets he has either been found by a court of competent
jurisdiction to own (i.e., the Lady May) or assets, like the Residence
and the shares of Genever BVI, that he has held himself out to own. |\n|------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| | Rather than marshaling it for creditors, Kwok is fighting to keep the
Lady May in his family's possession. Additionally, Kwok's purported
reliance on support from family members and other affiliates to fund
creditor claims is clearly a precursor to those parties seeking debtor
and third-party releases for their participation in the shell games
identified by Justice Ostrager as designed to harm PAX. And the
notion that his \"family office\" (GSNY) would provide \\$8 million in
DIP financing in connection with an estate the Debtor claims is worth
only \\$3,850—i.e., providing more than \\$2,000 in financing for every
\\$1 in the estate—demonstrates that this case is being used improperly
to protect Golden Spring (and the other entities controlled by Kwok's
family where his assets really lie). |\n\n# **(ii) Objective Futility**\n\n60. \"[A] debtor's behavior can be so egregious. . . that there may be no need to look into . . . the reasonable likelihood of the debtor confirming a chapter 11 plan in a reasonable time.\" *In re 68 West 127 Street, LLC*, 285 B.R. 838, 847 (Bankr. S.D.N.Y. 2002). Kwok's behavior here can readily be characterized as such, given the timing of the filing of this chapter 11 case and its purpose. But even if the Court were to consider objective futility, that test is met here because Kwok's stated goal is to account for his (alleged \\$3,850 worth of) assets, an outcome that can just as easily be achieved outside of bankruptcy through state court litigation. *See In re Murray*, 543 B.R. 484, 492 (Bankr. S.D.N.Y. 2016), *aff'd*, 565 B.R. 527 (S.D.N.Y. 2017), *aff'd*, 900 F.3d 53 (2d Cir. 2018) (bankruptcy can't be used where available non-bankruptcy remedies are available).\n\n61. Moreover, it is unlikely Kwok could ever confirm a plan he proposes. As noted above, the Debtor's creditors consist of (i) PAX; (ii) contingent litigation creditors with unliquidated claims; and (iii) family-member insiders, who, even if a \"creditor,\" or \"impaired,\" whose votes on a plan will not be counted pursuant to Bankruptcy Code section 1129(a)(1). PAX is the largest creditor by a very significant margin (even larger when considering only non-insider creditors)—its assent will be necessary for any successful plan. In the face of PAX's opposition to this entire sham bankruptcy, the bankruptcy case is objectively futile. *See In re C-TC*, 113 F.3d at 1311–12 (where debtor's \"financial problems involve only a two party dispute with [a single creditor] that can be resolved in [a] pending state court action,\" the debtor \"enjoyed no likelihood of rehabilitation and would be unable to effectuate a plan due to [that single creditor's] opposition\").\n\n# **C. The Court Should Dismiss the Petition for Cause Because Kwok's Estate Continues to Diminish and There Is No Reasonable Likelihood of Rehabilitation.**\n\n62. Section 1112(b)(4)(A) directs dismissal where there is a \"substantial or continuing loss\" to the estate and \"the absence of a reasonable likelihood of rehabilitation.\" As to the first factor, multiple courts find that substantial or continuing loss occurs when the debtor has a negative cash flow. *See, e.g.*, *In re Red Bull Taxi Inc.*, 2017 Bankr. LEXIS 1209, at \\*6 (Bankr. S.D.N.Y. May 3, 2017) (citing *In re AdBrite Corp.*, 290 B.R. 209, 215–16 (Bankr. S.D.N.Y. 2003) (collecting cases)).\n\n63. Courts have also recognized that that where a debtor proposes a liquidating reorganization, there is no likelihood of rehabilitation, as that term is used in Bankruptcy Code section 1112(b)(4)(A), so that the second prong of that ground for cause is necessarily established. *See, e.g.*, *In re BH S & B Holdings, LLC*, 439 B.R. 342, 353 (Bankr. S.D.N.Y. 2010).\n\n64. Courts have also found cause under section 1112(b)(4)(A) where the debtor had no \"hard\" assets, no operations, no employees, and no ongoing business to rehabilitate, and where its only potential assets were litigation claims. *See In re Briggs-Cockerham, L.L.C.*, No. 10-34222- BJH, 2010 WL 4866874 (Bankr. N.D. Tex., Nov. 23, 2010). For example, in *In re Sakon*, this\n\nCourt found \"cause\" under a continuing loss theory, given that the individual chapter 11 debtor had no operating business to rehabilitate, no cash flow, no revenues, and no incremental or meaningful progress toward the filing and funding of a feasible and confirmable plan. 617 B.R. 7, 15–18 (Bankr. D. Conn. 2020).\n\n65. Kwok claims to have no liquid assets or cash flow. In Kwok's view of the world presented to this Court under oath, essentially every penny of cash that comes into the estate is either a gift or a loan from the assets of family members for the purpose of funding administrative expenses. This continued accrual of expenses with no income constitutes a \"continuing loss\" to the estate under the first prong of section 1112(b)(4)(A).109 And Kwok's professed lack of any business or other value-generating activities means there is nothing to \"rehabilitate\" under the second prong. Continuing the chapter 11 proceedings would only drive up the administrative expenses without any apparent benefit to Kwok's creditors—aside from the insiders and their professionals whose fees continue to accrue. The dismissal of Kwok's chapter 11 case is the appropriate, statutorily prescribed fix to derail this gravy train.\n\n# **D. The Court Should Dismiss the Petition for Cause Because Kwok Is Grossly Mismanaging the Estate**\n\n66. To determine \"gross mismanagement of the estate,\" under section 1112(b)(4)(B) of the Bankruptcy Code, case law requires the Court to look to the Debtor's actions towards its creditors. *In re Builders Grp. & Dev. Corp.*, No. 13-04867 (ESL), 2014 Bankr. LEXIS 2092, at\n\n109 In reality, we still know very little about the actual value of Kwok's real assets, which PAX believes are hidden across the globe in the name of affiliated entities or family members, or how much income they may actually generate. Given these assets are not being treated by the estate's fiduciary as estate assets, we assume they are also diminishing in value available to creditors. (Kwok and his family have every incentive to strip these assets of value for themselves before the shell game is up and the truth is uncovered.) But that assumption is unnecessary for the Court's purposes here. Without prejudice to PAX's rights to contest the scope and value of Kwok's actual estate in the future, and crediting every inference in favor of Kwok's sworn representations to this Court, then the estate contains only one potentially material asset—comprised of his unrealized litigation claims— which at best is speculative, illiquid, and essentially unaffected by this chapter 11 case. By definition, the continued accrual of administrative expenses and other obligations is diminishing the estate.\n\n\\*19–20 (Bankr. D.P.R. May 8, 2014). \"A debtor in possession is vested with significant powers under the provision of the Bankruptcy Code. As is often the case, those powers come with certain responsibilities. Significantly, a debtor in possession owes a fiduciary duty to its creditors.\" *In re Gateway Access Solutions. Inc.*, 374 B.R. 556, 565 (Bankr. M.D. Pa. 2007) (citing *In re G-I Holdings, Inc.*, 385 F. 3d. 313, 319 (3rd Cir. 2004)). *See also In re Sillerman,* 605 B.R. 631, 651 (Bankr. S.D.N.Y. 2019) (noting failure to discharge fiduciary duties and conflicts of interest as \"gross mismanagement\" under section 1112(b)(4)(B) of the Bankruptcy Code).\n\n67. It is hard to conceive of a more egregious violation of Kwok's duty to creditors than to openly flout Judge Ostrager's order to return the *Lady May* to the jurisdiction of the United States for the satisfaction of debt owed to creditors. The fact that this valuable asset continues to this day to be off the coast of Europe110 and thus out of reach of creditors, and that Kwok has not lifted a finger to bring it back to local waters, is a stark betrayal of Kwok's duty as a debtor-inpossession in this chapter 11 case.\n\n68. Moreover, Kwok continues to mislead the Court and his creditors about his assets. Courts have concluded that a debtor's postpetition behavior supported a finding of \"gross mismanagement\" within the meaning of Bankruptcy Code section 1112(b)(4)(B) where the debtor had failed to accurately represent its interests in its properties, among other things. *See In re Halal 4 U LLC*, No. 08–15216, 2010 WL 3810860, at \\*4 (Bankr. S.D.N.Y. Sept. 24, 2010). Here, Kwok simply cannot be believed about the nature of his assets, where they have been secreted, or what is happening to them. As noted above, Kwok has made various transfers of assets to insiders for no consideration and is making no effort to recover them. And, as the evidence regarding the\n\n110 *See* Friedman Decl., Ex. 42. (location of Lady May as of April 6, 2022 in France).\n\nResidence shows, Kwok has continued his pattern of representing that he owns valuable assets when it suits him, but denying it when doing so benefits his family and harms his creditors.\n\n69. Under section 1112(b)(2) of the Bankruptcy Code, once a party establishes cause to convert or dismiss, the debtor or any party opposing conversion/dismissal can defeat the motion to dismiss or convert by showing (1) unusual circumstances exist, (2) a reasonable likelihood that a chapter 11 plan will be timely confirmed, and (3) that a reasonable justification exists for the act or omission constituting cause, and that such act or omission will be rectified within a reasonable period of time.111 This provision provides no refuge for Kwok. It is difficult to conceive of any unusual circumstances that could possibly justify Kwok's protracted contemptuous behavior. Kwok will not find any case support for such a proposition. That alone must end the inquiry, since to fall under the exception the Debtor must meet all three tests. But, as noted above, Kwok would also fail to show any likelihood of a chapter 11 plan being confirmed. Moreover, Kwok has conditioned the funding of the case on his remaining in control over his estate, so without that untenable outcome, there will be no funding to confirm a chapter 11 plan.112 Finally, while Kwok can certainly change course and in the future refrain from his gross mismanagement of the estate, there is certainly no reasonable justification for it thus far, or cause to believe anything will differ going forward. Accordingly, Kwok's gross mismanagement constitutes \"cause\" to dismiss his chapter 11 case.\n\n111 Cause based on substantial or continuing loss and the absence of a reasonable likelihood of rehabilitation, covered in section I.C. above, is not subject to this exception (and, therefore, not subject to cure).\n\n112 Debtor's Motion for Entry of Interim and Final DIP Orders (I) Authorizing the Debtor to Obtain Unsecured, Subordinated Postpetition Financing and (II) Scheduling Interim and Final Hearings, and (III) Granting Related Relief, ECF No. 117, Ex. C (DIP Loan Agreement) at §§ 8.01 (f), (g).\n\n# **II. DISMISSAL—RATHER THAN CONVERSION OR THE APPOINTMENT OF A TRUSTEE OR EXAMINER—IS THE BEST DISPOSITION UNDER THE CIRCUMSTANCES.**\n\n70. Once cause for relief under section 1112(b) is established, the Bankruptcy Code requires the Court to either dismiss the case, convert it to chapter 7, or appoint a chapter 11 trustee or examiner, \"whichever is in the best interests of creditors and the estate.\" 11 U.S.C. § 1112(b)(1). Courts have \"wide discretion to decide whether to convert the case to one under Chapter 7 or to dismiss.\" *In re Sapphire Dev., LLC,* No. 13-50043, 2015 WL 5579545, at \\*6 (Bankr. D. Conn. June 26, 2015) (citing *In re Babayoff,* 445 B.R. 64, 76 (Bankr. E.D.N.Y. 2011)) (internal citations omitted). In *Sapphire Development*, the Court ordered dismissal of the case after determining that the petition was filed in bad faith, finding that as between conversion or dismissal, the result was the same for all creditors and the movant had specifically requested dismissal. *Id.*, at \\*6–7.\n\n71. Here, dismissal is clearly the most appropriate remedy. It is what PAX has requested, and each creditor should be permitted to pursue their unrelated claims and remedies in state court. PAX's efforts to date in state court have ensured that at least some of Kwok's sizable assets are revealed, and, if successful, its veil-piercing claims will pave the way for other creditors to collect on future judgments as well.\n\n# **III. IN THE ALTERNATIVE, PAX JOINS IN THE UNITED STATES TRUSTEE'S MOTION FOR A CHAPTER 11 TRUSTEE.**\n\n72. If the Court declines to dismiss the case, then it should appoint a chapter 11 trustee under Bankruptcy Code section 1104(a), which is the alternative relief requested by the United States Trustee in the Examiner/Trustee Motion.113\n\n113 A chapter 11 trustee is preferable to conversion to chapter 7 because it allows for increased creditor involvement in the trustee process—PAX is by far the largest creditor of the Kwok estate—and it provides additional flexibility under chapter 11 for the simultaneous pursuit of claims and consideration of a plan.\n\n73. Section 1104(a)(1) of the Bankruptcy Code provides that the Court \"*shall* order the appointment of a trustee for cause, including fraud, dishonesty, incompetence or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case.\" 11 U.S.C. § 1104(a)(1) (emphasis added). The enumerated \"list of wrongs constituting 'cause' that warrants the appointment of a trustee is not exhaustive.\" *In re Ashley River Consulting, LLC*, No. 14-13406 (MG), 2015 WL 1540941, at \\*9 (Bankr. S.D.N.Y. Mar. 31, 2015) (citation omitted). \"[A]ny one of these causes . . . mandates appointment of a trustee.\" *In re V. Savino Oil & Heating Co., Inc.*, 99 B.R. 518, 527 (Bankr. E.D.N.Y. 1989). \"A court may consider both the pre- and post-petition misconduct of the current management when making the determination that 'cause' exists for the appointment of a trustee.\" *In re Ashley River Consulting*, 2015 WL 1540941 at \\*10 (citing *Midatlantic Nat'l Bank v. Anchorage Boat Sales, Inc. (In re Anchorage Boat Sales, Inc.)*, 4 B.R. 635, 644–45 (Bankr. E.D.N.Y. 1980)). \"The statute is mandatory and dictates that upon a finding of cause, the court is required to appoint a chapter 11 trustee.\" *In re Sillerman*, 605 B.R. 631, 642 (Bankr. S.D.N.Y. 2019).\n\n74. \"Even if a court does not find that cause exists to appoint a chapter 11 trustee under\" section 1104(a)(1), the court may still appoint a trustee under section 1104(a)(2) \"if such appointment is in the interest of creditors, any equity security holders, and other interests of the estate . . .\" *In re Ancona*, No. 14-10532, 2016 WL 7868696, at \\*12 (Bankr. S.D.N.Y. Nov. 30, 2016) (citing 11 U.S.C. § 1104(a)(2)). Section 1104(a)(2) \"creates a flexible standard and allows the appointment of a trustee even when no 'cause' exists.\" *In re Ionosphere Clubs Inc.*, 113 B.R. 164, 168 (Bankr. S.D.N.Y. 1990).\n\n# **A. There is \"Cause\" to Appoint a Trustee.**\n\n75. *First*, there is \"cause\" to appoint a trustee because, as detailed above, Kwok has a long history of dishonest and fraudulent conduct. *See, e.g., In re Ashley River Consulting*, 2015\n\nWL 1540941 at \\*10 (finding cause under § 1104(a)(1) where \"the Debtors' principal . . . was not only found to be guilty of affirmative fraud and gross, wanton, and willful misconduct . . . but he was also found to be the 'alter ego of [debtor]' that should be held accountable for diverting and commingling funds . . .\"); *In re Bonded Mailings Inc.*, 20 B.R. 781, 786 (Bankr. E.D.N.Y. 1982) (appointment of a trustee warranted where debtor had committed fraud upon one of its creditors by conduct designed to frustrate the creditor's attempt to enforce its judgment which resulted in a shifting of assets between two corporate debtors and hopelessly confused their records).\n\n76. Justice Ostrager recognized precisely that in the State Court Action:\n\nThe Court believes, as reflected in the September 15, 2020 [summary judgment] order that *Mr. Kwok has attempted to mislead the Court*. The Court believes that *Mr. Kwok is, as the plaintiff contends, playing a shell game with his assets, and has violated if not the letter of court orders, the spirit of court orders*. . . . So we are not going to have any more shell games.114\n\n77. *Second*, there is \"cause\" to appoint a trustee because the Debtor has inherent conflicts of interest with its related entities. \"[F]actors warranting the appointment of a trustee under section 1104(a)(1) include conflicts of interest.\" *In re Ancona*, 2016 WL 7868696 at \\*9. Here, as detailed above, the Debtor suffers from incurable conflicts of interest that require appointment of a trustee. Kwok filed the petition for the precise purpose of evading contempt sanctions, trying to avoid bringing his assets into a jurisdiction where they could be used to satisfy creditor claims, and getting another bite at the apple at hiding his assets among family and affiliates. Kwok intends to satisfy creditor claims using assets of the very family members and shell entities that Justice Ostrager held he had conspired with and misused to the detriment of creditors. That Kwok engages in this behavior was also confirmed in the *Eastern Profit* case, where Judge Liman made findings of fact that Kwok uses shell companies and family members to\n\n114 Friedman Decl., Ex. 43, October 15, 2020 Hr'g Tr., *PAX v. Kwok et al.,* Index No. 652077/2017, (N.Y. Sup. Ct.), at 21:14–22:7 (emphasis added).\n\nmake gifts on his own behalf. Kwok cannot possibly be expected to act as a fiduciary and navigate this chapter 11 case for the benefit of creditors when, taking Kwok at his word, his real purpose in filing was antithetical to paying creditors, and when the only realistic sources of recovery lie with his own family and affiliates.\n\n78. It would thus be impossible for Kwok to comply with his fiduciary duty to fairly marshal assets for the benefit of *all* creditors, including PAX—because he filed this chapter 11 case precisely to try to exploit bankruptcy to PAX's detriment (and Kwok's own benefit). Under similar circumstances, Courts have determined such a conflict untenable and grounds for appointment of a trustee. *See, e.g.*, *In re Ancona*, 2016 WL 7868696 at \\*9–10 (debtor's \"refusal … to investigate claims that are held by insiders evidences the unhealthy conflict of interest in this case, and highlights the need to appoint a neutral trustee to carry out, in an unbiased manner, the Debtor's fiduciary duties.\"); *In re Hampton Hotel Inv'rs, L.P.*, 270 B.R. 346, 357 (Bankr. S.D.N.Y. 2001) (\"If allowed to manage the Debtor, [Debtor's general partner] would continue to face a blatant conflict of interest, as between maximizing the assets of the partnership available for satisfaction of creditor claims, on the one hand, and looking to his personal resources to satisfy those claims, on the other. [Debtor's general partner] has every incentive to delay and/or impair any attempt to marshal his assets for the benefit of the Debtor's creditors.\").\n\n79. Here, for example, Kwok eschews ownership of the Residence, while previously having held himself out as its owner. And he has refused to turn over the *Lady May*, presumably so his family can continue to use and enjoy it in direct violation of court orders. In fact, Kwok has not lifted a finger to use his ample powers under the Bankruptcy Code to seek return of the Lady May. Instead, he has shown he wants to try to re-litigate ownership of his yacht for the benefit of his family members.115 Kwok wants these assets to remain with his family and not be used to pay his creditors. Kwok's alignment is thus, untenably, with his family (and the affiliated entities he controls), and not his creditors.\n\n80. *Third*, there is \"cause\" to appoint a trustee because, as detailed above (section I.D.), the Debtor is unable or unwilling to comply with his basic fiduciary duties. *See, e.g.*, *In re Futterman*, 584 B.R. 609, 619 (Bankr. S.D.N.Y. 2018) (finding cause under section 1104(a)(1) due to a lack of \"confidence that [debtor] will abide by the fiduciary obligations that he would owe\" and noting that debtor \"does not have the confidence of his main creditors…\"); *see also, In re Ancona*, 2016 WL 7868696 at \\*8 (finding cause under § 1104(a) \"based on its finding of 'cause' under section 1112(b)\" including debtor's failure to comply with the fiduciary duties of a debtorin-possession).116\n\n### **B. Appointing a Trustee Is in the Interests of All Parties.**\n\n81. Even if the Court finds there are no grounds for cause (and PAX respectfully submits that such grounds are overwhelming), the Court should appoint a trustee under the interest of creditors' test of subsection (a)(2). Among the factors to be considered in appointing a trustee under section 1104(a)(2) are:\n\n(i) the trustworthiness of the debtor; (ii) the debtor in possession's past and present performance and prospects for the debtor's rehabilitation; (iii) the confidence—or lack thereof—of the business community and of creditors in present management; and (iv) the benefits derived by the appointment of a trustee, balanced against the cost of the appointment.\n\n115 In his Objection to PAX's motion to confirm the inapplicability of the stay to the Final Contempt Order, Kwok previewed his intent to attempt to re-litigate the issue of ownership of the Lady May. Kwok asserts that the Final Contempt Order was \"wrongfully issued against him,\" and that Kwok's interest in the Lady May is \"ultimately [to] *be determined*.\" Objection to Lift Stay, ECF No. 83 (Mar. 15, 2022), at ¶¶ 4, 14.\n\n116 In addition to the foregoing bases for appointment of a chapter 11 trustee, facts supporting a finding of \"cause\" under § 1112(b) also support cause under 1104(a), including, among other things, inadequate reporting (section I. C. n. 109, *supra*). *See*, *In re Ancona*, 2016 WL 7868696 at \\*8 (finding cause under § 1104(a) \"based [on] its finding of 'cause' under section 1112(b).\").\n\n*In re Ridgemour Meyer Props., LLC*, 413 B.R. 101, 112 (Bankr. S.D.N.Y. 2008) (quoting *In re Ionosphere Clubs Inc.*, 113 B.R. at 168). However, \"the standard is a flexible one.\" *In re Eljamal*, No. 17-CV-7870 (KMK), 2018 WL 4735719, at \\*7 (S.D.N.Y. Sept. 28, 2018) (quoting *Ridgemour Meyer Props., LLC*, 413 B.R. at 112).\n\n82. As set forth in detail above, those factors all weigh heavily against the Debtor remaining in possession. *First*, Kwok is the antithesis of trustworthy. *Second*, Kwok commenced this chapter 11 case for the sole and improper purpose of delaying and frustrating the unfavorable outcomes and consequences of the action before the New York Court; the Debtor has no prospects for rehabilitation because he either has no assets or refuses to properly disclose and make them available for creditors. *Third*, PAX, Kwok's largest creditor, rightfully has absolutely no confidence in Kwok's management and control of his estate or his ability to do anything constructive (or legal) with the estate for the benefits of creditors. *Fourth*, the benefits of appointing a trustee far outweigh the costs. No business will suffer, no employees will lose their jobs, no vendors will go unserved if a trustee is appointed, because Kwok avers to have no business to rehabilitate and no employees, jobs or vendors to protect. Once appointed, the trustee would assume immediate control and oversight over Kwok's affairs and begin working for creditors rather than against them. And, if Kwok's family (or, as PAX suspects, more accurately Kwok himself) does not wish to fund a chapter 11 case with a trustee appointed, they—and Kwok—can face the consequences of case dismissal.\n\n#### **CONCLUSION**\n\n83. WHEREFORE, PAX respectfully requests for all of the reasons stated above that this Court: (i) dismiss the chapter 11 case; (ii) in the alternative, appoint a chapter 11 trustee; and (iii) grant such other and further relief as the Court may deem just and proper.\n\n44\n\nDated: April 6, 2022 Hartford, Connecticut\n\n#### **Pacific Alliance Asia Opportunity Fund L.P.**\n\n*By: /s/ Patrick M. Birney*\n\nPatrick M. Birney (CT No. 19875) Annecca H. Smith (CT No. 31148) **ROBINSON & COLE LLP** 280 Trumbull Street Hartford, CT 06103 Telephone: (860) 275-8275 Facsimile: (860) 275-8299 E-mail: pbirney@rc.com asmith@rc.com\n\n-and-\n\nPeter Friedman (admitted *pro hac vice*) Stuart M. Sarnoff (admitted *pro hac vice*) **O'MELVENY & MYERS LLP** Seven Times Square New York, NY 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061 Email: pfriedman@omm.com ssarnoff@omm.com\n\n### **CERTIFICATE OF SERVICE**\n\nI hereby certify that on April 6, 2022, a copy of the foregoing was filed electronically through the Court's CM/ECF System. Notice of this filing will be sent by e-mail to all partiesreceiving notice by operation of the court's electronic filing system. Parties in interest may access this filing through the Court's CM/ECF System.\n\n /s/ *Patrick M. Birney* Patrick M. Birney","body_zh":"美国康涅狄格联邦破产法院布里奇波特分院\n\nHO WAN KWOK（郭文贵）1\n\n第11章案件编号\n\n22-50073 (JAM)\n\n债务人。\n\nPacific Alliance Asia Opportunity Fund L.P.（太平洋联盟亚洲机会基金有限合伙企业），\n\n动议申请人\n\n诉\n\nHo Wan Kwok（郭文贵），\n\n被申请人。\n\nPACIFIC ALLIANCE ASIA OPPORTUNITY FUND L.P.要求驳回第11章案件的动议，或作为备选方案，部分加入美国受托人要求作出命令指示指定第11章受托人的动议\n\n1 债务人纳税人识别号的最后四位数字为9595。\n\n目录\n页码\n\n初步陈述 7\n\n背景 10\n\n管辖权 22\n\n请求的救济 22\n\n论证 22\n\nI. 法院应基于事由驳回申请。 22\n\nA. 由于Kwok滥用破产制度，法院应基于事由驳回申请。 23\n\nB. 法院应将本第11章案件作为恶意提交予以驳回。 29\n\nC. 由于Kwok的破产财产持续减少，且不存在合理的重整可能性，法院应基于事由驳回申请。 35\n\nD. 由于Kwok严重管理不善破产财产，法院应基于事由驳回申请。 36\n\nII. 在此情形下，驳回——而非转换或指定受托人或审查员——是最佳处置方式。 39\n\nIII. 作为备选方案，PAX加入美国受托人要求指定第11章受托人的动议。 39\n\nA. 存在指定受托人的“事由”。 40\n\nB. 指定受托人符合所有当事人的利益。 43\n\n结论 44\n\n引用文献目录\n页码\n\n判例\n\nBaker v. Latham Sparrowbush Assocs., (In re Cohoes Indus. Terminal, Inc.),\n931 F.2d 222 (2d Cir. 1991) 23\n\nC-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave. P'ship),\n113 F.3d 1304 (2d Cir. 1997) 17, 25, 29\n\nE. Profit Corp. Ltd. v. Strategic Vision US LLC,\nNo. 18-CV-2185 (LJL), 2021 WL 2554631 (S.D.N.Y. June 22, 2021) 15, 16\n\nFalk & Siemer, LLP v. Maddigan (In re Maddigan),\n312 F.3d 589 (2d Cir. 2002) 18\n\nGrogan v. Garner,\n498 U.S. 279 (1991) 18\n\nIn re 167 West 133rd St. Hous. Dev. Fund Corp.,\nNo. 18-12043 (JLG), 2018 WL 4637460 (Bankr. S.D.N.Y. Sept. 25, 2018) 23, 25\n\nIn re 68 West 127 Street, LLC,\n285 B.R. 838 (Bankr. S.D.N.Y. 2002) 24, 28\n\nIn re AdBrite Corp.,\n290 B.R. 209 (Bankr. S.D.N.Y. 2003) 29\n\nIn re Am. Prop. Corp.,\n44 B.R. 180 (Bankr. M.D. Fla. 1984) 18\n\nIn re AMC Realty Corp.,\n270 B.R. 132 (Bankr. S.D.N.Y. 2001) 17\n\nIn re Ancona,\nNo. 14-10532, 2016 WL 7868696 (Bankr. S.D.N.Y. Nov. 30, 2016) 34, 35, 36, 37\n\nIn re Ashley River Consulting, LLC,\nNo. 14-13406 (MG), 2015 WL 1540941 (Bankr. S.D.N.Y. Mar. 31, 2015) 34, 35\n\nIn re Babayoff,\n445 B.R. 64 (Bankr E.D.N.Y 2011) 33\n\nIn re Balco Equities Ltd., Inc.,\n312 B.R. 734 (Bankr. S.D.N.Y. 2004) 17\n\nIn re BH S & B Holdings, LLC,\n439 B.R. 342 (Bankr. S.D.N.Y. 2010) 29\n\nIn re Bonded Mailings Inc.,\n20 B.R. 781 (Bankr. E.D.N.Y. 1982) 35\n\n引用文献目录（续）\n\n页码\n\nIn re Briarpatch Film Corp.,\n281 B.R. 820 (Bankr. S.D.N.Y. 2002) 24\n\nIn re Briggs-Cockerham, L.L.C.,\n2010 WL 4866874 (Bankr. N.D. Tex. 2010) 29\n\nIn re Builders Grp. & Dev. Corp.,\nNo. 13-04867 (ESL), 2014 Bankr. LEXIS 2092 (Bankr. D.P.R. May 8, 2014) 31\n\nIn re D&G Constr. Dean Gonzalez, LLC,\n635 B.R. 232 (Bankr. E.D.N.Y. 2021) 21\n\nIn re Eljamal,\nNo. 17-CV-7870 (KMK), 2018 WL 4735719 (S.D.N.Y. Sept. 28, 2018) 38\n\nIn re Futterman,\n584 B.R. 609 (Bankr. S.D.N.Y. 2018) 37\n\nIn re Gateway Access Solutions. Inc.,\n374 B.R. 556 (Bankr. M.D. Pa. 2007) 31\n\nIn re G-I Holdings, Inc.,\n385 F. 3d. 313 (3rd Cir. 2004) 31\n\nIn re Halal 4 U LLC,\nNo. 08–15216, 2010 WL 3810860 (Bankr. S.D.N.Y. 2010) 31\n\nIn re Hampton Hotel Inv'rs, L.P.,\n270 B.R. 346 (Bankr. S.D.N.Y. 2001). 36\n\nIn re HBA E., Inc.,\n87 B.R. 248 (Bankr. E.D.N.Y. 1988) 22\n\nIn re Head,\n223 B.R. 648 (Bankr. W.D.N.Y. 1998) 17\n\nIn re Hostess Brands, Inc.,\nNo. 12-22052 (RDD), 2013 WL 82914 (Bankr. S.D.N.Y. Jan. 7, 2013) 21\n\nIn re Ionosphere Clubs Inc.,\n113 B.R. 164 (Bankr. S.D.N.Y. 1990) 34, 38\n\nIn re Island Helicopters, Inc.,\n211 B.R. 453 (Bankr. E.D.N.Y. 1997) 23\n\nIn re Murray,\n543 B.R. 484 (Bankr. S.D.N.Y. 2016), aff'd, 565 B.R. 527 (S.D.N.Y. 2017), aff'd, 900 F.3d 53\n(2d Cir. 2018) 17, 28\n\n引用文献目录（续）\n\n页码\n\nIn re Nat'l Rifle Assoc'n of Am. and Sea Girt LLC,\nNo. 21-30085, 2021 WL 1970738 (Bankr. N.D. Tex. May 11, 2021) 19\n\nIn re Red Bull Taxi Inc.,\n2017 Bankr. LEXIS 1209 (Bankr. S.D.N.Y. May 3, 2017) 29\n\nIn re Rent-A-Wreck of America, Inc.,\n580 B.R. 364 (Bankr. D. Del. 2018) 19\n\nIn re Ridgemour Meyer Props., LLC,\n413 B.R. 101 (Bankr. S.D.N.Y. 2008) 38\n\nIn re Sakon,\n617 B.R. 7 (Bankr. D. Conn. 2020) 30\n\nIn re Sapphire Dev., LLC,\nNo. 13-50043, 2015 WL 5579545 (Bankr. D. Conn. June 26, 2015) aff'd sub nom. Sapphire\nDev., LLC v. McKay, 549 B.R. 556 (D. Conn. 2016) 17, 33\n\nIn re SGL Carbon Corp.,\n200 F.3d 154 (3d Cir. 1999) 21, 24\n\nIn re Sillerman,\n605 B.R. 631 (Bankr. S.D.N.Y. 2019) 31, 34\n\nIn re Syndicom Corp.,\n268 B.R. 26 (Bankr. S.D.N.Y. 2001) 23, 24, 26\n\nIn re The Bridge to Life, Inc.,\n330 B.R. 351, 357 (Bankr. E.D.N.Y. 2005). 22\n\nIn re V. Savino Oil & Heating Co., Inc.,\n99 B.R. 518 (Bankr. E.D.N.Y. 1989) 34\n\nIn re Wally Findlay Galleries (New York) Inc,\n36 B.R. 849 (Bankr. S.D.N.Y. Feb. 10, 1984) 21, 22\n\nLiona Corp., Inc. v. PCH Assocs., (In re PCH Assocs.),\n949 F.2d 585 (2d Cir. 1991) 21\n\nMarrama v. Citizens Bank of Mass.,\n549 U.S. 365 (2007) 1\n\nMarsch v. Marsch (In re Marsch),\n36 F.3d 825 (9th Cir. 1994) 21\n\nMidatlantic Nat'l Bank v. Anchorage Boat Sales, Inc. (In re Anchorage Boat Sales, Inc.),\n4 B.R. 635 (Bankr. E.D.N.Y. 1980) 34\n\nPac. All. Asia Opportunity Fund L.P. v. Wan,\n199 A.D.3d 423 (1st Dep't 2021) 12\n\nSapphire Dev., LLC v. McKay,\n549 B.R. 556 (D. Conn. 2016) 23\n\nSEC v. Miller,\n808 F.3d 623 (2d Cir. 2015) 19\n\nTaberna Preferred Funding IV, Ltd. v. Opportunities II Ltd. (In re Taberna Preferred Funding\nIV, Ltd.),\n594 B.R. 576 (Bankr. S.D.N.Y. 2018) 17, 23\n\nWilk Auslander LLP v. Murray (In re Murray),\n900 F.3d 53 (2d Cir. 2018) 17, 21, 22, 23\n\n法规\n\n11 U.S.C. § 1104(a)(1) 34\n\n11 U.S.C. § 1104(a)(2) 35\n\n11 U.S.C. § 1112(b) 16\n\n11 U.S.C. § 1112(b)(1) 33\n\n11 U.S.C. § 1112(b)(4)(A) 29\n\nPacific Alliance Asia Opportunity Fund L.P.（“PAX”）特此根据《美国法典》第11编（“破产法典”）第1112(b)条，(i) 提出动议，请求作出命令驳回上述标题所示案件；或 (ii) 作为备选方案，在其根据《破产法典》第1104(a)条请求指定第11章受托人的范围内，部分加入美国受托人的审查员／受托人动议（定义见下文），并谨陈如下：\n\n初步陈述2\n\n1. 本案并非适当的第11章案件。不存在寻求重新开始或寻求利用《破产法典》进行重整的“诚实但不幸的债务人”。3 没有可供重整的业务，而且，若按Ho Wan Kwok（“债务人”或“Kwok”）自己的说法，也没有任何价值有待保护。债权人之间也不存在那种众所周知的为获得清偿而“争相诉诸法院”的情形。相反，本第11章案件是Kwok为拖延、欺骗和诈欺其债权人，并继续规避合法法院命令而采取的最新、最为激烈的策略。\n\n2. Kwok的一贯做法是通过家庭成员和空壳公司存放、隐蔽和藏匿其资产，以保护其财富并避免偿还其对PAX所负债务。如以下更详细所述，在多年未能促使Kwok偿还其亲自担保的贷款后，PAX追查到Kwok，并在纽约州法院起诉他，获得了一项超过$116 million的判决书。4 但该判决书并未如其本应那样解决问题；相反，它仅仅是一场至今仍在进行的猫鼠游戏的开端。该游戏迫使PAX耗费巨大的时间和资源追索执行，因为Kwok已“将其资产藏匿于一个由公司实体和家庭成员构成的迷宫中。”5 事实上，纽约法院指出，针对Kwok的案件包含“1,180项案卷记录——其中几乎全部涉及被告Kwok通过将其大量个人资产存放于一系列公司、受其信赖的亲信和家庭成员名下，以规避和欺骗其债权人的行为。”6\n\n2 所有证据附件引用均指PAX支持其驳回动议的Peter Friedman（彼得·弗里德曼）声明（“Friedman声明”）所附附件。作为非个人申请人自愿破产申请书[ECF No. 1]附件提交的、债务人根据当地破产规则1007-2作出的声明，称为“债务人声明”。除非另有说明，所有强调均为后加，且省略所有内部引文和引用。\nMarrama v. Citizens Bank of Mass., 549 U.S. 365, 367 (2007).\n\n4 参见Friedman声明，附件1，判决书第1页，PAX v. Kwok, Supreme Court of the State of New York（“纽约法院”）, Index. No. 652077/2017（“纽约诉讼”）, Dkt. No. 716 (Feb. 3, 2021).\n\n3. Kwok不仅挫败和阻碍了PAX的追索努力，他还反复藐视纽约州法院命令，因而被判处应向PAX支付$134 million民事藐视法庭罚款。7 且在该罚款到期支付前一天，Kwok提交了本第11章案件，显然意图规避付款及其因藐视法庭行为而可能遭受的监禁。8\n\n4. Kwok在申请提交后的行为也并无改善，法院应基于多项理由驳回本案：\n\n第一，Kwok正在滥用破产制度。他没有可供重整或清算的业务，债权人也不会从其试图利用破产程序中获益。本案是在实质上为双方当事人的民事争议中所采取的诉讼策略。PAX远为Kwok最大的债权人，对PAX所负的债务以及Kwok藏匿资产所造成的后果，促使Kwok提交本第11章案件。在158名所谓债权人中，除PAX外，只有另一名债权人对Kwok持有判决书，且该判决书所涉金额仅为律师费。9 其他均为推测性的潜在责任或据称欠付内部人士的债务。\n\n5 Friedman声明，附件2，动议裁决及命令，第1页，PAX v. Kwok, Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 1181 (Feb. 9, 2022)（“最终藐视法庭命令”）。\n\n6 同上，第1页。\n\n7 同上，第10页。\n\n8 参见非个人申请人自愿破产申请书，(Feb. 15, 2022) ECF No. 1。\n\n9 Friedman声明，附件3，March 1, 2022 Hrg. Tr. 第43:5–20页。\n\n第二，Kwok正以恶意行事，不当地试图迫使PAX在新的法庭重新诉讼已获解决的法律问题。10 Kwok拟议的债务人占有融资协议证实了其恶意：他拟议向家庭成员借入$8 million（PAX认为这笔钱实际上属于Kwok），以保护其主张价值为$3,850的破产财产。11 该笔贷款的绝大部分将用于与债权人就其债权进行争斗，而非提高债权人的清偿回收。\n\n第三，Kwok的破产财产正在减少，且不存在合理的重整前景；这是《破产法典》所列明的驳回事由。\n\n5. 但是，如果法院不愿驳回本案，PAX将加入美国受托人关于指定第11章受托人的请求，因为基于Kwok长期且令人不安的藏匿资产、玩弄空壳公司把戏的记录，以及一方面他与其家庭成员、另一方面PAX等合法债权人之间相互对立的利益冲突，Kwok不能作为债权人的受托义务人。债务人占有必须将其非内部人士债权人置于首位；Kwok已表明他不能也不会这样做。正如美国受托人指出，债务人向法院提交的自利性文件“表明债务人无能力和／或不愿意认识并接受其提供完整、完备和准确的义务”\n\n10. 如PAX将在其即将提出的发回动议中更详细地说明，Kwok（郭文贵）启动本第11章程序并随后移送在New York State Supreme Court（纽约州最高法院）待决的民事诉讼（Index. No. 652077/2017），是企图重新审理该法院已经裁决事项的明显行为。具体而言，Kwok不当寻求质疑：(i) New York Court（纽约法院）就PAX的违约索赔作出有利于PAX的简易判决的命令；以及(ii) New York Court于February 9, 2022作出的命令，该命令认定Kwok因未将Lady May游艇——New York Court认定Kwok“实益拥有并控制”该游艇——返还纽约而构成民事藐视法庭，并对Kwok处以$134 million罚款。\n\n11. 见Official Form 106 Summary of Assets & Liabilities & Certain Statistical Information (Mar. 9, 2022), ECF No. 78。法院可从该拟议交易中推断出两点：第一，债务人知道其资产披露存在重大虚假，而Golden Spring的现金可随时用于为其虚假陈述辩护。第二，Golden Spring将耗费巨额资金操纵本程序，以保护自身免受另我、揭开公司面纱及实质合并索赔。否则，花费债务人所称资产的2,000%以上来资助一宗第11章案件毫无意义。从这一角度理解，拟议融资进一步证明Kwok缺乏诚信。\n\n信息，以履行其对其破产财产和债权人的信义义务，并履行其作为占有中债务人的义务。”12\n\n背景\n\n6. PAX于April 2017在纽约起诉Kwok，依据香港法律向Kwok主张违约索赔。于April 2019，PAX针对Genever Holdings LLC（“Genever NY”）和Genever Holdings Corporation（“Genever BVI”，并与Genever NY合称“Genever Defendants”）增加了一项揭开公司面纱索赔。13 PAX于September 2020在其违约索赔中胜诉，并于February 2021登记判决书。14 自此，PAX一直试图向Kwok追偿，主要聚焦于两项资产：Kwok通过空壳公司持有的位于Sherry-Netherland Hotel（谢里-内德兰酒店）的纽约市顶层公寓（“Residence”）以及一艘名为“Lady May”的豪华游艇。\n\n当事人之间的关系及PAX的初始贷款\n\n7. 2008年初，Kwok向PAX寻求资金，以完成其房地产项目之一Beijing Pangu Plaza（北京盘古大观）的建设。15 PAX分两期向Kwok的公司出借$100 million；在一系列部分偿还及展期后，截至2011年初，未偿余额约为$46 million。16\n\n8. 于March 16, 2011，PAX与一家由Kwok控制、名为Shiny Times Holdings Limited（“Shiny Times”）的实体订立了一项新融资安排（“2011 Loan Facility”），Kwok为此提供担保（“2011 Personal Guarantee”）。这些合同取代了当事人先前的\n\n15 Friedman Decl., Ex. 5, 支持原告PAX部分简易判决动议的重大事实陈述，at ¶ 1, PAX v. Kwok et al., Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. 410。\n\n16 同上，at ¶ 23。\n\n12 United States Trustee（美国受托人）要求作出命令指示任命审查员，或作为替代方案，要求作出命令指示任命第11章受托人的动议 (Mar. 19, 2022), ECF No. 102 at 2（着重号为原文所加）。\n\n13 Friedman Decl., Ex. 4, 修正起诉书，PAX v. Kwok et al., Case No. 22-01073-dsj (Bankr. S.D.N.Y.), ECF No. 3。\n\n14 见Friedman Decl., Ex. 1。\n\n协议，将应付金额重述为$46,426,489，并规定在June 30, 2012还款日之前按年利率15%计息。17 根据2011 Personal Guarantee，Kwok“不可撤销且无条件地……向PAX保证[Shiny Times]的[2011 Facility项下]义务将得到适当且及时的支付，并同意在PAX提出要求后，其将立即向PAX支付所有到期未付的义务。”18 Personal Guarantee还赋予PAX就其执行工作获得偿还的权利，包括律师费。19\n\n9. 截至2012年年中到期日，Shiny Times和Kwok均未根据2011 Loan Facility或2011 Personal Guarantee作出任何付款。20\n\n10. 为解决未偿债务，当事人随后订立了一系列和解协议，但Kwok及其公司持续未能履行其在该等协议项下的义务。21 具体而言，于April 2013，PAX、Shiny Times、Kwok及Beijing Pangu Investment Co. Ltd.（“Beijing Pangu”）（另一家与Kwok有关联的实体）订立了一份和解契约（“2013 Deed of Settlement”），规定Shiny Times对PAX的债务将予以解除，以PAX获得Pangu Plaza内三套公寓（“Apartments”）的法定所有权作为交换。22 2013 Deed of Settlement载有与每套Apartments买卖有关的十项先决条件，该等条件须于June 2013前满足，否则和解将终止，2011 Loan Facility和2011 Personal Guarantee将恢复完全有效。23 PAX和Kwok随后对2013 Deed of Settlement签署了四次展期，其中最后一次要求所有十项先决条件\n\n17 同上，at ¶ 1。\n\n18 Friedman Decl., Ex. 6, 2011 Personal Guarantee, at KWOK000653, PAX v. Kwok, Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 455。\n\n19 同上，at KWOK000655。\n\n20 见Friedman Decl., Ex. 5, at ¶¶ 29–30。\n\n21 见同上，at 10–17。\n\n22 同上，at ¶¶ 39–40。\n\n23 同上，at 12–13。\n\n均须于June 2015前满足。24 Kwok再次未能在该修订期限前遵守，25 2011 Loan Facility和2011 Personal Guarantee自June 30, 2015起恢复完全有效。26\n\nKwok逃离中国并购置Residence\n\n11. 于“late January or early February 2015”，Government of the People's Republic of China（中华人民共和国政府）（“PRC”）以包括腐败在内的多项罪名指控Kwok，并查封其PRC资产——其中包括含有Apartments的Beijing Pangu综合体。27 此前不久，即2014年末，Kwok逃离中国。28 值得注意的是，Kwok和PAX于February 10, 2015同意对2013 Deed of Settlement作出第四次也是最后一次展期，将满足先决条件的期限定为June 30, 2015。29\n\n12. 于February 13, 2015前后，30 即在与PAX签署最终展期仅三日后，Kwok设立了两家空壳公司：(i) Genever NY31及(ii) Genever BVI。32 Kwok是Genever BVI的唯一股东33及董事，34 而Genever BVI又是\n\n24 同上，at ¶ 47。\n\n25 同上，at ¶¶ 54–55。即，Kwok未能：(i)交付无瑕疵产权；(ii)向PAX提供购买公寓的发票；(iii)向PAX提供有关支付与公寓买卖相关税费的证据；以及(iv)向PAX交付任何一套三套公寓的房屋所有权证书。同上，at ¶¶ 55–59。\n\n26 同上，at ¶ 62。\n\n27 Friedman Decl., Ex. 7, Wengui Compl., Wengui v. Wu, Case No. 18-cv-00845 (S.D.N.Y.), at ¶ 57。\n\n28 同上，at ¶ 23。\n\n29 Friedman Decl., Ex. 8, 第四份和解契约，PAX v. Kwok, Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 472。\n\n30 Friedman Decl., Ex. 9, Genever Defendants的公司文件，PAX v. Kwok et al., Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 252 at SN 0159 (Genever Holdings Corporation), SN 0196 (Genever Holdings LLC)。\n\n31 同上，at SN 0198–206。\n\n32 同上，at SN 0159。\n\n33 同上，at SN 0160–61；Friedman Decl., Ex. 10, Yan Ping Wang Aff., at ¶ 4 & Ex. A, Pax v. Kwok et al., Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 182。\n\n34 Friedman Decl., Ex. 9 at SN 0162–63。\n\nGenever NY的唯一成员。35 随后，Kwok通过Genever Defendants于March 6, 201536以现金$67.5 million购置Residence。37\n\n13. Genever NY和Genever BVI均无任何资产、38 雇员、39 电话号码、40 办公室41或收入来源。42\n\nHK International购置Lady May\n\n14. 同样于February 2015，Hong Kong Investments Limited（“HK International”）以€28 million购置Lady May。HK International是一家香港公司，由Kwok于2006年设立并注资；在其即将被刑事指控并逃离亚洲之前，Kwok于2014年末将该公司无偿转至一名家族商业伙伴名下。43 于June of 2017，该商业伙伴以$1将HK International转让给Kwok的女儿Mei Guo（郭美）。44 随后，Guo女士设立了Hong Kong International Funds Investments (USA) Limited, LLC（“Hong Kong International USA”），一家特拉华州有限责任公司，45 并再次无偿将Lady May的所有权转至该特拉华州空壳实体。46\n\n38 Friedman Decl., Ex. 13, Podhaskie Dep. Tr. at 47:19–22; 100:10–101:19。\n\n35 同上，at SN 0198–206。\n\n36 Friedman Decl., Ex. 11, 已签署的买卖合同，at SN 0349, PAX v. Kwok et al., Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 256。\n\n37 Friedman Decl., Ex. 12 at 4, In re Genever Holdings LLC, Case No. 20-12411-jlg (Bankr. S.D.N.Y.), ECF No. 4。鉴于利息不断累积，该金额几乎等于Kwok在当时根据其March 16, 2011个人担保对PAX所负的金额。\n\n39 同上，at 36:17–19; 96:18–20。\n\n40 同上，at 36:20–23; 96:21–23。\n\n41 同上，at 35:4–6; 96:10–14。\n\n42 同上，at 100:8–25。\n\n43 Final Contempt Order at 4。\n\n44 同上。\n\n45 同上。\n\n46 Hong Kong International USA是一家“没有董事、高管或雇员；[其]没有专用电子邮件服务器或电子邮件后缀；不申报纳税；且没有银行账户，亦未以其他方式‘资本化’”的公司。Friedman Decl., Ex. 14, L. Vartan致E. Moss的June 7, 2021信函，PAX v. Kwok et al., Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1075。\n\nPAX在纽约诉讼的违约索赔中胜诉\n\n15. 于September 15, 2020，New York Court就违约索赔作出有利于PAX的部分简易判决（“Summary Judgment Order”）。47 于December 18, 2020，New York Court判给PAX“$46,426,489.00损害赔偿，另加根据2011 Personal Guarantee自December 31, 2010生效日起按年利率15%计算的合同利息，以及自本裁决及命令登记之日起按年利率9%的法定利率计算的利息。”48 判决书于February 3, 2021以$116,402,019.57登记。49\n\n16. New York Court原定于January 2021就针对Genever Defendants的揭开公司面纱索赔进行审理，50 但由于COVID-19疫情，该审理随后被无限期延期。于October 12, 2020，Genever NY向Bankruptcy Court for the Southern District of New York（纽约南区破产法院）申请第11章破产（“Genever NY Bankruptcy Case”），51 暂时中止了PAX针对Genever NY和Genever Defendants的判决执行工作，直至该法院解除中止，以允许PAX进行诉讼并允许Genever NY就New York Action（纽约诉讼）进行抗辩。52\n\n47 Friedman Decl., Ex. 15, 关于动议的裁决及命令，at 7, PAX v. Kwok et al., Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 549。\n\n48 Friedman Decl., Ex. 16, 关于损害赔偿的裁决及命令，at 5, PAX v. Kwok et al., Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 685。\n\n49 Friedman Decl., Ex. 1 at 2。\n\n50 Friedman Decl., Ex. 15 at 7–8。\n\n51 In re Genever Holdings, Case No. 20-12411-jlg (Bankr. S.D.N.Y.)。\n\n52 Friedman Decl., Ex. 17, 准许债务人第二次续期动议以批准修订和解协议的命令，In re: Genever Holdings, LLC, Case No. 20-12411-jlg (Bankr. S.D.N.Y.), ECF 141。如以下所述，PAX随后成功依据New York CPLR § 5225申请交付Kwok持有的Genever BVI股份。见下文¶¶ 22–23。\n\n17. 于March 4, 2021，Kwok对Summary Judgment Order提起上诉。53 该上诉已完成书面陈述和辩论，且此前正由New York Appellate Division, First Department（纽约州上诉分庭第一部门）审理，但现因Kwok提交第11章申请而中止。54\n\n判决后追偿工作\n\n18. 2020年9月30日，New York Court（纽约法院）作出临时限制令，禁止Kwok（郭文贵）从事包括“干预其拥有权益的任何财产”在内的行为。55 2020年10月15日，纽约法院永久性地：(i)“限制[郭文贵]直接或间接作出或促成对其拥有权益的任何财产进行任何出售、让与、转让或干预，且不得支付或以其他方式处分目前到期或此后到期应付给他的任何债务……”；以及(ii)具体限制“Kwok先生和/或(1) Sherry-Netherland Hotel（雪莉-尼德兰酒店）的该住宅，以及(2)游艇‘Lady May’……的登记所有人，对该等资产作出或促成任何出售、让与、转让或干预。”56 纽约法院还认定，PAX有权就该住宅、Lady May以及郭文贵直接或间接拥有的任何其他资产进行判决后取证。57\n\n19. 此后，PAX开展了为期一年的工作以执行其判决，58 在此期间，“PAX在识别郭文贵行使控制权的资产方面遇到困难，因为郭文贵这名自称的数十亿美元富翁，已将其资产隐匿于错综复杂的公司实体和家庭成员之中。该方案使郭文贵得以声称其没有任何资产，尽管其\n\n53 Friedman Decl., Ex. 18, Notice of Appeal, PAX v. Kwok., Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 725.\n\n54 参见 Friedman Decl., Ex. 19, Appellant's Br., PAX v. Kwok., Case No. 2021-00740 (N.Y. App. Div.), Dkt. No. 12；Friedman Decl., Ex. 20, Respondent's Br., PAX v. Kwok., Case No. 2021-00740 (N.Y. App. Div.), Dkt. No. 14；\n\nFriedman Decl., Ex. 21, Reply Br., PAX v. Kwok., Case No. 2021-00740 (N.Y. App. Div.), Dkt. No. 16.\n\n55 Friedman Decl., Ex. 22, 动议裁定与命令, PAX v. Kwok., Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 591.\n\n56 Friedman Decl., Ex. 23, 动议裁定与命令, 第1页, PAX v. Kwok, Index No. 652077/2017, (N.Y. Sup. Ct.), Dkt. No. 630.\n\n57 同上，第2页。\n\n58 最终藐视法庭命令，第1页。\n\n奢华的生活方式……”59 PAX的工作还因郭文贵就PAX的判决后取证请求援引其第五修正案权利而进一步受阻。60\n\n20. PAX寻求取证的资金来源之一是Golden Spring (New York) Limited（“GSNY”）。\n\n21. 据称，GSNY由一家香港公司全资拥有，61 而该公司（与郭文贵用以隐匿其资产的其他公司一样）在技术上由郭文贵之子Guo Qiang（郭强）拥有，62 并据称是郭文贵的“家族办公室”。63 郭文贵已承认：(i)其逃离中国时，设立了GSNY并以自己的资金为其注资，64 以及(ii)GSNY支付其全部个人开支并为其诉讼提供资金。65 纽约法院指出，“[GSNY]已出资七位数款项以维持Kwok先生的生活方式，此点毫无争议；Kwok先生过着相当奢靡的生活方式，[尽管]声称自己完全没有任何资产。”66\n\nGenever BVI 交付程序\n\n22. 因为这是郭文贵承认拥有的唯一资产，PAX根据CPLR § 5225申请交付郭文贵在Genever BVI中的股份；Genever BVI是该住宅的最终所有人。67 2021年9月22日，纽约法院批准PAX的动议（“Genever交付命令”），并以BVI法院修改其此前作出的若干限制令为条件（该法院确于2021年12月初作出修改），要求郭文贵“在British Virgin Islands（英属维尔京群岛）采取一切必要步骤，交付与其在Genever Holdings Corporation中100%所有权权益有关的全部股票证书。”68 郭文贵未就Genever交付命令提出上诉。\n\n23. 郭文贵未能启动其股份的交付后，PAX申请另一项民事藐视法庭命令。69 该动议于2022年1月25日完成全部书面陈述。70 郭文贵提起本第11章案件时，PAX根据纽约法院的建议，71 在不妨碍其再次提出的情况下撤回其动议。72\n\nLady May 藐视法庭程序\n\n24. 尽管纽约法院的命令限制郭文贵和/或Lady May的登记所有人将该游艇移出法院管辖范围，郭文贵仍允许Lady May于2021年10月9日前后驶离纽约。73 PAX申请民事藐视法庭命令，纽约法院于2021年3月16日批准PAX的动议，并解释称，“在本纽约法院有关游艇‘Lady May’所在地及所有权的程序中，显然存在令人无法容忍的策略性操作、虚假陈述和欺骗……与其逐一列举被告郭文贵在本应更知分寸的律师协助下从事的众多‘障眼法’，‘自2021年5月15日起，游艇在本法院管辖范围之外的每一日，被告郭文贵将被处以$500,000罚款。’”74\n\n25. 郭文贵就纽约法院2021年3月16日的命令向First Department（第一部门）提出上诉，但其藐视法庭状态持续了268日。75 第一部门于2021年11月4日维持纽约法院的命令，认定“动议法院在认定被告构成民事藐视法庭时行使了其自由裁量权，因为原告以清楚且令人信服的证据证明，被告违反了其知悉的一项合法、明确的法院命令，且该违反行为损害了原告的权利。”76 第一部门认定，“每日$500,000.00的罚款旨在强烈促使[郭文贵]消除其藐视法庭状态；尽管其获准如此做，但其并未显示出任何意愿。”77 第一部门还“指示”纽约法院“进行证据听证，以解决关于该游艇的所有权和控制权的争议。”78\n\n26. 该证据听证于2022年2月2日举行，纽约法院听取了七名证人的证言，包括Lady May的据称所有人、郭文贵的女儿。79 2022年2月9日，纽约法院发布最终民事藐视法庭命令（“游艇藐视法庭命令”）。80 纽约法院认定，“Kwok对[] Lady May行使了支配权和控制权”，81 且“在听证会上由被告方证人亲口作出的证词，以清楚且令人信服的方式证明，Kwok实际受益所有并控制Lady May，且其对本法院及司法程序抱有彻底蔑视。”82\n\n27. 纽约法院根据“截至2022年2月7日”“Lady May一直处于法院管辖范围之外”的“268日”，处以$134 million罚款。83 纽约法院命令郭文贵在五个营业日内向PAX支付该$134 million，并指出法院将“准备行使其依据Judiciary Law § 753的全部权力”，该法为纽约州的民事藐视法庭条款。84\n\n28. 2022年2月14日，郭文贵就游艇藐视法庭命令提交上诉通知，并请求在上诉期间紧急临时中止执行。85 Appellate Division, First Department（上诉分庭第一部门）于次日驳回郭文贵的请求。86\n\n29. 同样在2022年2月14日，郭文贵借入$1 million，并将其用作与本第11章案件相关的聘用费支付给Brown Rudnick（布朗·拉德尼克）——该行为是在破产前最后一次违反纽约法院2020年10月15日限制令的藐视法庭行为。87\n\n81 同上，第2页。\n\n82 同上，第4页。\n\n83 同上，第10页。\n\n84 同上，第10页；另参见 Friedman Decl., Ex. 39, 最终民事藐视法庭命令, PAX v. Kwok, Index No. 652077/2017 (N.Y. Sup. Ct.), Dkt. No. 1182.\n\n85 Friedman Decl., Ex. 40, 上诉通知, PAX v. Kwok, Case No. 2022-00609 (N.Y. App. Div., First Dep't), Dkt. No. 1.\n\n86 参见 Friedman Decl., Ex. 41, 关于加急送达和/或临时救济申请的摘要陈述, PAX v. Wan, Case No. 2022-00609 (App. Div., First Dep't), NYSCEF Doc. No. 5.\n\n87 参见《关于债务人资产和负债明细表及财务状况说明的全球说明和限制声明、方法论及免责声明》，ECF No. 77 第13页（“Lamp向债务人出借$1 million，债务人指示Lamp将贷款所得直接汇付给Brown Rudnick”，作为与本程序相关的聘用费）。另参见同上，第17页（记载Lamp代表郭文贵于2/14/2022和2/15/2022向Brown Rudnick LLP支付两笔各$500,000的款项）。Lamp Capital LLC亦为债务人的内部人士。\n\n郭文贵申请破产\n\n30. 在藐视法庭罚款到期支付的前一天晚上，Kwok（郭文贵）提交了本第11章案件。88 尽管Kwok宣誓陈述其资产仅为\\$50,001至\\$100,000，89——且未列入仍在美国境外、未受任何值得信赖的受托人监督的贵重Lady May（Lady May号游艇）——Kwok并未在PAX（PAX）就其基础违约索赔获得针对他的\\$116 million判决书时申请破产。\n\n31. 2022年3月19日，United States Trustee（美国受托人）提交了《美国受托人关于请求作出命令指示任命审查员的动议，或作为替代方案，请求作出命令指示任命第11章受托人的动议》[ECF No. 102]（下称“审查员/受托人动议”）。\n\n32. 2022年3月20日，债务人提交了《Ho Wan Kwok（郭文贵）先生支持第11章案件及若干动议的声明》[ECF No. 107]（下称“Kwok声明”）。Kwok声明表明，Kwok提起本第11章案件的目的，是重新诉讼此前由New York Court（纽约法院）裁定的问题，包括其个人保证的有效性以及其对Lady May的所有权。91 如下所述，试图重新诉讼这些问题并非对破产制度的正当使用。\n\n88 见自愿第11章破产申请书，ECF No. 1。\n\n89 自愿第11章破产申请书，ECF No. 1，第7页。值得注意的是，该陈述本身与其随后于2022年3月9日提交的资产摘要不一致（ECF No. 78，第1页）；该摘要其后仅将其总资产列为\\$3,850，以及其在代其支付以聘用Brown Rudnick（布朗·拉德尼克）服务的款项中所享有的权益。见《有关债务人资产及负债清单和财务状况说明的限制、方法论及免责声明之全球说明和声明》，ECF 77，第17页（记载Lamp（兰普）代表Kwok于2/14/2022和2/15/2022向Brown Rudnick LLP支付的两笔各\\$500,000款项）。90 Friedman Decl., Ex. 42（截至2022年4月6日Lady May所在地）。\n\n91 例如，见ECF No. 107，Kwok声明，第¶ 41段（陈述Lady May的所有权是一个“将被明确提交本院作出适当裁决”的问题）。\n\n33. 2022年3月22日，债务人提交了《债务人关于作出临时及最终DIP命令的动议：(I) 授权债务人取得无担保、次级的申请后融资；(II) 安排临时及最终听证；以及(III) 给予相关救济》[ECF No. 117]（下称“Kwok DIP动议”）。在Kwok DIP动议中，Kwok延续其欺骗模式，声称拟议的占有中债务人贷款并非来自内部人士，尽管贷款人为Golden Spring（黄金泉）。92\n\nEastern Profit案件\n\n34. 除上述事实外，本院还应考虑Eastern Profit案件中相关的事实认定——该案涉及Kwok的另一家空壳公司。93 该案证实了Kwok的不当行为历史，并进一步对Kwok及其律师向本院作出的陈述产生疑问。例如，尽管Kwok声称自己是一名遭Chinese Communist Party（中国共产党，以下简称“CCP”）迫害的异见人士，94 Eastern Profit法院在听取大量证据后认定，关于Kwok“是CCP的支持者还是反对者”，并无“明确且令人信服的证据”。95\n\n35. 在该案中，Kwok的一家空壳公司Eastern Profit Corporation Limited（东益有限公司，以下简称“Eastern Profit”）对Strategic Vision US LLC（美国战略视觉有限责任公司，以下简称“Strategic Vision”）提出违约索赔。Eastern Profit曾聘请Strategic Vision收集有关中国政府官员的情报。96 在合同谈判期间，Kwok表示，为“保护其保密性和匿名性，他不会签署或成为该协议的一方，但将由一个独立实体签署并成为一方。”97 Kwok后来试图与Eastern Profit撇清关系，但法院认定该公司是“[Kwok]及其家人的空壳”。98 法院推理称：“当时，Eastern登记的地址与[Kwok]在香港的家族办公室地址相同。现在，其登记地址也是[Kwok]女儿的住所地址。”99 法院还指出，尽管该公司在双方订立合同时由第三方持有，但此后已无偿转让给Kwok的女儿。100 此外，法院认定Kwok指示资金转入和转出空壳公司，并让空壳公司代表其作出赠与。101 此处的相似之处不言而喻。\n\n92 见《现金抵押品使用及申请后融资动议和命令核对清单》第§ (6)(e)项，其作为证据C附于《债务人关于作出临时及最终DIP命令的动议：(I) 授权债务人取得无担保、次级的申请后融资；(II) 安排临时及最终听证；以及(III) 给予相关救济》，ECF No. 117。\n\n93 见E. Profit Corp. Ltd. v. Strategic Vision US LLC, No. 18-CV-2185 (LJL), 2021 WL 2554631, at \\*1 (S.D.N.Y. June 22, 2021) (Liman, J.).\n\n94 Kwok声明，第¶ 4段；Friedman Decl., Ex. 3，3月1日听证笔录，第15:20–25页。\n\n95 E. Profit Corp. 2021 WL 2554631, at \\*18..\n\n96 同上，at \\*2。\n\n管辖权\n\n36. 本院依据28 U.S.C. §§ 157 and 1334对本动议具有管辖权。本案依据28 U.S.C. § 157(b)属于核心程序。本案所请求救济的法定依据为《破产法典》第1104条和第1112条。\n\n请求的救济\n\n37. 根据《破产法典》第1112(b)条，PAX请求作出命令驳回上述标题所列第11章案件。作为替代方案，根据《破产法典》第1104(a)条，PAX请求本院任命一名第11章受托人。\n\n论证\n\nI. 本院应以存在事由为由驳回该申请。\n\n38. 根据《破产法典》第1112(b)条，本院可以因“事由”驳回第11章申请。11 U.S.C. § 1112(b)。\n\n97 同上，at \\*7。\n\n98 同上。\n\n99 同上。\n\n100 同上。\n\n101 同上，第1、6、12、28页。\n\n39. 《破产法典》列举了十六项非排他性的事由示例，并赋予本院相当大的酌处权，可因任何“未列举事由”驳回本破产案件。102 四种不同的事由在此直接适用：前两种未被列举，后两种列于第1112(b)(4)条。第一，债务人的破产案件是出于不正当目的而滥用破产制度——其并未给债权人带来任何利益，并且是在本质上与PAX之间的双方争议中采取的拖延诉讼策略。第二，债务人的第11章案件系恶意提出。第三，Kwok自称的\\$3,850破产财产持续减少，而其“重整”的前景并不存在，因此根据《破产法典》第1112(b)(4)(A)条构成驳回事由。第四，Kwok的行为构成《破产法典》第1112(b)(4)(B)条规定的“对破产财产的严重不当管理”。\n\nA. 由于Kwok正在滥用破产制度，本院应以存在事由为由驳回该申请。\n\n40. 滥用《破产法典》构成驳回事由。Wilk Auslander LLP v. Murray (In re Murray), 900 F.3d 53, 60–61 (2d Cir. 2018)（引用In re Head, 223 B.R. 648, 653–54 (Bankr. W.D.N.Y. 1998)（因“未列举事由”予以驳回））；Taberna Preferred Funding IV, Ltd. v. Opportunities II Ltd. (In re Taberna Preferred Funding IV, Ltd.), 594 B.R. 576, 602 (Bankr. S.D.N.Y. 2018)（认定在“本申请未实现任何破产目的”时存在事由，并驳回申请）。本院应驳回本第11章案件，因为根据已确定的控制性判例，Kwok至少出于三项理由滥用破产制度。\n\n102 见In re Murray, 543 B.R. 484, 492 (Bankr. S.D.N.Y. 2016), aff'd, 565 B.R. 527 (S.D.N.Y. 2017), aff'd, 900 F.3d 53 (2d Cir. 2018)；In re AMC Realty Corp., 270 B.R. 132, 147 (Bankr. S.D.N.Y. 2001)（因“非列举事由”驳回第11章案件）；In re Balco Equities Ltd., Inc., 312 B.R. 734, 748–49 (Bankr. S.D.N.Y. 2004)（指出第1112(b)条下的“事由”可基于未列举因素予以认定）。法院有权因未列举事由予以驳回，从而可运用其“衡平权力，以在个案中达成适当结果”。C-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave. P'ship), 113 F.3d 1304, 1311 n.5 (2d Cir. 1997). 另见In re Sapphire Dev., LLC, No. 13-50043, 2015 WL 5579545, at \\*3 (Bankr. D. Conn. June 26, 2015), aff'd sub nom. Sapphire Dev., LLC v. McKay, 549 B.R. 556 (D. Conn. 2016)。\n\n(i) Kwok提起第11章案件的目的不正当\n\n41. 第一，这并非正当的重整。“《破产法典》的一个核心目的，是提供一种程序，使某些无力偿债的债务人能够重新安排其事务，与其债权人达成和解，并在未来努力不受既存债务压力和挫折阻碍的清晰环境中，享有新的生活机会。”Grogan v. Garner, 498 U.S. 279, 286 (1991)。正如Second Circuit（第二巡回上诉法院）所强调的，“破产法的一般目的，是通过使破产人免除几乎所有债务，为其提供全面且迫切需要的债务负担救济。”Falk & Siemer, LLP v. Maddigan (In re Maddigan), 312 F.3d 589, 596 (2d Cir. 2002)。为此，“寻求破产法院保护的债务人必须具有真实债务、真实债权人以及正当的商业目的。”In re Am. Prop. Corp., 44 B.R. 180, 182 (Bankr. M.D. Fla. 1984)。\n\n42. 本案构成对破产程序的典型滥用。在本案中，Kwok对于本第11章案件不具有任何正当商业目的，也并非寻求获得从事任何未来商业活动的新机会。本破产案件所陈述的目的，是“允许对所有相关、可证实的案件事实进行合理审查，且不损害任何债权人的经济权利。”103 Kwok自己的表述证明了应予驳回。如果不损害任何债权人的经济权利，则所有债权人均将获得全额清偿（推定由Kwok或其家庭成员支付）。无需通过第11章案件实现该目的。相反，Kwok真正想要的是获得再次就该诉讼进行争辩的机会——即让本院“审查”Ostrager法官的认定，并阻止Ostrager法官作出新的认定。但是，对事实的审查要么已经发生，要么可以在适用的非破产法院进行。纽约法院基于广泛、历时多年的证据记录，并就Kwok藐视法庭事项进行了现场审判，已经认定Kwok欠付PAX数亿美元。重新诉讼有权机关已认定的事实，并非有效的破产目的，而是如以下所述，旨在拖延和规避判决执行的不当诉讼策略。\n\n103 Ho Wan Kwok先生支持第11章案件及若干动议的声明，ECF No. 107，第¶ 4段。\n\n43. 本第11章案件的另一主要目的——避免监禁或Kwok民事藐视法庭的其他后果——同样与《破产法典》的目的背道而驰。“《破产法典》并未提供免受此类威胁的庇护。”In re Nat'l Rifle Assoc'n of Am. and Sea Girt LLC, No. 21-30085, 2021 WL 1970738, at \\*14 (Bankr. N.D. Tex. May 11, 2021)。\n\n(ii) Kwok的第11章案件未能为债权人保全价值\n\n44. 第二，Kwok（郭文贵）的第11章案件并未向债权人提供任何在破产程序之外会丧失的价值。如特拉华州破产法院所解释，破产案件必须“寻求创造或保全某种原本会在破产程序之外丧失的价值——而非仅仅向不同的利益相关方分配价值。”In re Rent-A-Wreck of America, Inc., 580 B.R. 364, 373 (Bankr. D. Del. 2018)（驳回了一项第11章申请；该申请在对债务人不利的多年诉讼后、藐视法庭命令作出不久即被提出，其“唯一动机”是拒绝一项其未能成功终止的特许经营协议）。第11章程序通常通过“集中处理所有涉及债务人破产财产的争议”来创造价值，而这“是破产程序的核心目的之一”。SEC v. Miller, 808 F.3d 623, 630 (2d Cir. 2015)。但Kwok几乎未作任何此类努力。Kwok明确否认其除少量商务西装和一条狗之外拥有任何有价值的资产——包括他持续声称其对Lady May（“Lady May”号）不享有所有权或控制权。104 此外，尽管他此前陈述其（及/或其空壳公司）拥有该住所，但他现称其对此不享有任何经济权益。105 而且无论如何，Kwok及其家人正试图在Genever NY Bankruptcy Case（Genever NY破产案）（或英属维尔京群岛的一项程序）中，而非在此，解决有关该住所的债权。\n\n45. 尽管Kwok对“相互竞争”的无担保债权人之间“争相向法院起诉”的概念作出了无力的提及，106 但鉴于该第11章案件按债务人自己的说法，是以“明确意图全额清偿其债权人获准债权”而启动，107 这一概念毫无意义；所用资金据称将来自Kwok从其家人或其推测性的诉讼请求中获得的款项。若债权人的债权请求（均源于非破产法）能够在不动用破产财产的情况下获得全额清偿，则该第11章案件毫无作用。除PAX（PAX）诉讼外，针对债务人的约二十四起案件均构成独立的或有债权请求，尽管其最终可能产生针对债务人财产的债权请求，但尚未导致关于Kwok资产的争议。108 这些案件显然不存在共同的核心事实基础或重叠的法律问题。因此，意图以所谓非破产财产资产全额清偿这些债权请求的Kwok，其第11章案件是一次明显的不当择地诉讼尝试。\n\n46. 实际上，PAX诉讼本质上是关于清偿一名现有、非或有债权人的唯一争议——不存在债权人压垮债务人并妨碍其获得平等对待的风险。关于何种财产构成可供判决债权人执行的财产的问题，要么已经诉讼解决，要么最容易在其现有管辖地中进行诉讼。\n\n104 参见，例如，id. at ¶ 41。\n\n105 Id. at ¶ 17（称其“为我儿子以信托方式持有Sherry-Netherland公寓的权益”）。\n\n106 Id. at ¶ 4。\n\n107 Debtor's Motion to Extend Time to File Schedules of Assets and Liabilities and Statements of Financial Affairs, ECF 27, at ¶ 12.\n\n108 Kwok Declaration, at 10–12.\n\n(iii) Kwok的破产申请从根本上说是双方争议中的一种诉讼策略\n\n47. 第三，与此相关的是，法院会在根据《破产法》提出案件申请属于双方争议中的一种“诉讼策略”时驳回破产申请。In re Murray, 900 F.3d at 60–61（裁定此类滥用构成驳回的“事由”，无论其是否被归类为“恶意”）；另见 In re SGL Carbon Corp., 200 F.3d 154, 165 (3d Cir. 1999)（“由于仅为获得战术性诉讼优势而提出第11章申请并不属于‘破产法的正当范围’，法院通常会在此类情形下驳回第11章申请……。”）（引自 Marsch v. Marsch (In re Marsch), 36 F.3d 825, 828 (9th Cir. 1994)）；In re D&G Constr. Dean Gonzalez, LLC, 635 B.R. 232, 240 (Bankr. E.D.N.Y. 2021)（“[M]仅将破产程序作为延迟合法行使州法权利并攻击其他法院终局命令的平台，足以构成驳回理由[……]。”）。 “破产程序依其性质要求集体行动，”Liona Corp., Inc. v. PCH Assocs. (In re PCH Assocs.), 949 F.2d 585, 605 (2d Cir. 1991)，且“破产程序……是一个多方程序，而不只是简单的双方争议。”In re Hostess Brands, Inc., No. 12-22052 (RDD), 2013 WL 82914, at \\*3 (Bankr. S.D.N.Y. Jan. 7, 2013)。这一虚假申请与集体行动或多方当事人毫无关系。它关乎Kwok拼命试图摆脱PAX在针对他的诉讼中获得的违约和民事藐视法庭判决所带来的后果。\n\n48. 破产法院在In re Wally Findlay Galleries (New York) Inc.中的裁决尤其值得强调。36 B.R. 849, 851 (Bankr. S.D.N.Y. Feb. 10, 1984)。该法院驳回了该破产案件，因为与本案一样，(i) 申请是在基础诉讼中作出不利裁决的大致同时提出，试图规避该裁决的后果；并且\n\n(ii) 不存在有效的重组前景：\n\n显然，债务人提出其申请并非为重组，而是作为其与[债权人]争议中的诉讼策略。该申请是在州法院就本票作出判决的同一天提出的……*债务人在此提出申请，是为了规避不利州法院裁决的后果，同时继续进行诉讼。*……在其与[债权人]的诉讼获得解决之前，债务人无法提出有意义的重组计划。因此，显而易见，债务人寻求利用本法院并非为了重组，而是为了重新诉讼。这是对《破产法》第11章的不允许使用。\n\nId.（着重号为原文所加）。\n\n49. 在此，Kwok试图逃避的判决是一项双方争议，即“以某种第11章下的重组为名，将涉及非破产法的争议带入破产法院。”In re The Bridge to Life, Inc., 330 B.R. 351, 357 (Bankr. E.D.N.Y. 2005)（引自 In re HBA E., Inc., 87 B.R. 248, 260 (Bankr. E.D.N.Y. 1988)）。\n\n50. Murray同样具有指导意义。在该案中，一名债权人针对一名个人提出非自愿第7章申请，以执行一项判决；债务人的唯一资产是他与其妻共同拥有的一套公寓。In re Murray, 900 F.3d at 53, 57。该债权人依州法被禁止针对其妻的权益执行该判决，因而寻求能够强制出售整套公寓的破产救济。Id.。法院基于两个主要理由，将该申请作为对破产制度的不当使用而予以驳回：(i) 申请债权人依赖非破产救济并未受到实质性损害；以及(ii) 驳回将促进债务人及整个破产制度的利益。Id. at 61。\n\n51. 本案亦是如此。Kwok最终必须就其近十年前同意担保的债务作出交代，并不会使其受到损害。PAX轻易证明了其违约债权请求，现在已到Kwok偿还之时。若驳回该第11章案件对Kwok造成任何“损害”，唯一的“损害”是他将无法在本法院延续其持续的障眼法，并将不得不回到Justice Ostrager（奥斯特拉格法官）面前；该法官已明确表示，其不会容忍任何进一步的策略性操弄行为。如同Murray案，Kwok仅仅“偏好使用破产救济来解决（或者更准确地说，在此是避免承担）双方争议的后果，不能压倒不存在任何其他破产相关目的这一事实。”Id. at 62。此外，破产制度无意保留本案，因为如上所述，本案不服务于任何破产相关目的。参见 In re Taberna Preferred Funding IV, Ltd., 594 B.R. at 602, 606（遵循Murray案并以未列举事由驳回非自愿第11章申请）。\n\nB. 法院应将该第11章案件作为恶意申请予以驳回。\n\n52. “已有充分确立的法律认为，恶意提出破产申请，构成根据《破产法》第1112(b)条驳回或转换案件的事由。”In re 167 West 133rd St. Hous. Dev. Fund Corp., No. 18-12043 (JLG), 2018 WL 4637460, at \\*8 (Bankr. S.D.N.Y. Sept. 25, 2018)；Baker v. Latham Sparrowbush Assocs. (In re Cohoes Indus. Terminal, Inc.), 931 F.2d 222, 228 (2d Cir. 1991)（“[B]破产申请必须出于善意。”）。并且，“将恶意视为驳回事由的法院，常常把……对[《破产法》]的不当使用归类为恶意的证据。”In re Murray, 900 F.3d at 60。因此，善意要求是一种“监管机制”，以确保寻求破产救济者“仅为实现破产重组理念的宗旨和目标，而非为任何其他目的”行事。In re Syndicom Corp., 268 B.R. 26, 49 (Bankr. S.D.N.Y. 2001)（引自 In re Island Helicopters, Inc., 211 B.R. 453, 462 (Bankr. E.D.N.Y. 1997)）。“破产是一种衡平救济。当其被援引以实现与其衡平目的不一致的结果时，破产法院必须驳回该程序。”Sapphire Dev., LLC v. McKay, 549 B.R. 556, 558 (D. Conn. 2016)。“善意标准通过使破产法院的衡平武器……仅向具有清白行为的债务人和债权人提供，来保护破产法院管辖权的完整性。”In re SGL Carbon Corp., 200 F.3d 154, 161 (3d Cir. 1999)。在此，Kwok的不洁之手排除了其利用本法院进一步拖延并欺诈债权人的可能。\n\n53. 由于欠缺善意不适于作出精确定义，法院“可以考虑任何显示意图滥用司法程序和重组条款宗旨的因素。”In re Syndicom Corp., 268 B.R. at 49。一旦债务人的善意受到质疑，举证责任即转移至债务人，由其证明该申请系出于善意提出。Id.。\n\n54. Kwok长期从事逃避偿还其对PAX债务的错误行为模式和做法。Kwok在面临针对其民事藐视法庭命令后果时，立即提出该第11章案件。他这样做，是为了在不同法庭、不同法官面前获得再次机会。如上所述，将Kwok的第11章申请准确描述为试图就其在Justice Ostrager面前的败诉重新诉讼。此即恶意的本质。参见 In re Briarpatch Film Corp., 281 B.R. 820, 834–35 (Bankr. S.D.N.Y. 2002)（认定在提出破产申请的理由是重新诉讼州法院裁决实体问题时存在恶意）。\n\n55. 如上所述，法院无需审查恶意问题，因为其可以且应当基于Kwok试图滥用破产制度这一独立理由驳回该第11章案件。无论如何，难以想象比本第11章案件更有力的恶意例证；在该案件中，Kwok公然滥用司法程序。\n\n56. 正如第二巡回区内的法院所指出，判断债务人缺乏善意的“关键”标准仍然是：在申请日，债务人是否没有合理可能意图进行重整，以及债务人是否没有合理可能摆脱破产。In re 68 West 127 Street, LLC, 285 B.R. 838, 846 (Bankr. S.D.N.Y. 2002)。因此，缺乏善意要求同时具备：(i) 主观恶意——“旨在确保债务人确实意图利用第11章进行重整……而非仅仅造成困难或拖延”——以及 (ii) 客观徒劳——“重整在现实中是否可能”。In re 167 West 133rd St. Hous. Dev. Fund Corp., No. 18-12043 (JLG), 2018 WL 4637460, at \\*8, 10 (Bankr. S.D.N.Y. Sept. 25, 2018)。PAX 可以在此证明这两个要件。\n\n(i) 主观恶意\n\n57. Kwok（郭文贵）的行为具有恶意，因为他并不打算利用破产进行重整。不言而喻，没有任何可供重整的事项。Kwok 主张，除少数几套商务西装和一条狗外，他没有个人资产（投机性诉讼请求除外），并将依赖家庭成员的“赠与”来全额清偿对其提出的债权。Kwok 实际想要的是阻止藐视法庭制裁，并重新审理其先前败诉的案件，最终目的是阻挠（或至少延迟）PAX 根据其判决收取款项的能力。\n\n法院考虑 C-TC 所列的八项恶意因素：\n\n(1) 债务人仅有一项资产；(2) 债务人仅有少数无担保债权人，其债权相对于有担保债权人的债权数额很小；(3) 债务人的唯一资产因债务拖欠或违约而成为止赎诉讼的标的；(4) 债务人的财务状况实质上是债务人与有担保债权人之间的双方争议，可在待决的州法院止赎诉讼中解决；(5) 债务人申请的时间表明其意图拖延或阻挠债务人的有担保债权人为行使其权利所作出的合法努力；(6) 债务人现金流很少或没有现金流；(7) 债务人无法支付当前费用，包括动产和不动产税款；以及 (8) 债务人没有雇员。\n\nC-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave. P-Ship), 113 F.3d 1304*,* 1311 (2d Cir. 1997)。\n\n58. 法院还考虑 Syndicom 所列的另外四项因素：(1) 该案件是否作为与债务人的州法院争讼有关的“策略性”步骤而提起；(2) 债务人是否受到该双方争议相对方以外债权人造成的财务压力，或因其他债权人的债权而陷入财务困境；(3) 无担保债权人是否不会因债务人的申请而获得任何实质性利益，且不会因解除自动中止而受到任何实质性损害；以及 (4) 该案件是否以为非债务人个人获取利益为目的和效果，而非为债务人获取利益。Syndicom, 268 B.R. at 52–53。\n\n59. 如下所述，几乎所有因素均有利于 PAX：\n\nC-TC 因素 1：\n单一资产 Kwok 声称其仅对微不足道的资产拥有所有权，并仅拥有附条件的诉讼请求（其需要来自家庭成员的债务人持有期间融资资金来推进该等诉讼）。按照他的说法，他将依赖家人的“赠与”来清偿债权人的债权，而不是使用自己的资产。尽管显然有理由怀疑 Kwok 关于其所使用资金并非其自身资金的主张是否真实（PAX 打算在适当时候予以证明），但根据 Kwok 本人所言，该因素对其不利。\n\nC-TC 因素 2：\n少数、相对较小的无担保债权人 该申请与保护有担保债权人或合法无担保债权人毫无关系。恰恰相反，PAX 的债权已经确定，且正接近追及 Kwok 隐藏的资产，却受到本第11章案件的损害。就该因素而言，鉴于 PAX 债权的数额和状态以及不存在任何有担保债权人，PAX 实质上等同于有担保债权人。Kwok 无意使用破产财产资产来保护其其他附条件债权人。\n\nC-TC 因素 3：\n作为止赎标的的资产 于本案之前，PAX 正针对 Lady May，以在纽约部分清偿其判决。该住宅目前受 Genever NY Bankruptcy Case（Genever NY 破产案件）约束。在两种情形下，Kwok 均主张这些资产不属于他（尽管他曾作出大量相反陈述）。\n\nC-TC 因素 4：\n实质上源于双方争议、可在待决州法院诉讼中解决的财务状况 本案应被视为一宗典型的双方争议，该争议始于 2017 年提起的一项诉讼，并最终于 2021 年解决；本案由 Kwok 显然试图逃避一项终局民事藐视法庭命令所带来的严重后果而引发。即使在针对 Kwok 作出 Summary Judgment Order（简易判决命令）后，尽管他主张自己永远无法偿还该债务，他也未寻求破产保护。即使其因藐视法庭而被处以每日 \\$500,000 的罚款，尽管他声称自己永远无法偿还该债务，他也未寻求破产保护。只有在面临严厉的藐视法庭制裁时——即其诉讼抗辩已穷尽之时——Kwok 才仓促提起本第11章案件。\n\nC-TC 因素 5：\n申请时间表明意图拖延或阻挠合法执行 申请的时间清楚表明，本第11章案件是试图规避纽约法院命令，并阻挠 PAX 作为判决债权人为执行其权利所作出的合法努力。该因素极其有力地支持驳回，因为 Kwok 申请的时间动机远比阻挠有担保债权人的权利更为恶劣：本案的提起是为破坏法治，并使 Kwok 得以规避遵守法院命令的制裁。此外，本第11章案件的提起是为使 Lady May 留在美国境外并由 Kwok 的家庭成员持有，而不是使其返回并在本司法辖区内得到保全，以作为清偿债权人债权的资产。\n\nC-TC 因素 6：\n很少或没有现金流 Kwok 声称，除来自家庭的赠与或借款外，其没有任何实质性现金流。\n\nC-TC 因素 7：\n无法支付当前费用 Kwok 声称其根本没有资产（除少数几套商务西装、一条狗及一些投机性诉讼请求外），且没有生活费用。\n\nC-TC 因素 8：\n没有雇员 Kwok 已在宣誓下陈述，其没有企业、雇员或经营活动。\n\nSyndicom 因素 1：\n案件作为州法院争讼中的策略性步骤提起 鉴于申请时间以及申请所述目的——重新审理州法院债权——这显然是 Kwok 与 PAX 争议中的不当“策略性步骤”。\n\nSyndicom 因素 2：\n双方争议以外的财务压力 Kwok 未受到 PAX 以外任何债权人的财务压力。所有其他债权人均为未确定债权、微不足道的债权人或内部人。\n\nSyndicom 因素 3：\n无担保债权人是否因申请或解除自动中止而获益或受损 本第11章案件不会帮助任何合法无担保债权人，却会实质性损害拥有重大债权的最大无担保债权人：PAX 拥有一项可执行的违约判决和一项可执行的藐视法庭判决。Kwok 提起申请的唯一目的，是获得一个新的审理场所，以试图主张其没有资产可用于清偿该等判决——这正是 Ostrager 法官所称必须停止的那种障眼法。\n\nSyndicom 因素 4：\n案件为非债务人而非债权人获取利益而提起 本第11章案件的唯一目的是使 Kwok 及其家人获益。其并非为使任何合法债权人获益而提起。Kwok 正否认其拥有的资产：该等资产要么已被有管辖权的法院认定归其所有（即 Lady May），要么是其曾自称拥有的资产，例如该住宅和 Genever BVI 的股份。\n\nKwok 并未为债权人归集 Lady May，而是在争取使 Lady May 继续由其家人持有。此外，Kwok 所谓依赖家庭成员和其他关联方的支持来为债权人债权提供资金，显然是这些当事人随后就其参与 Ostrager 法官认定旨在损害 PAX 的障眼法而寻求债务人和第三方免责的前兆。而且，其“家族办公室”（GSNY）将就债务人声称价值仅为 \\$3,850 的破产财产提供 \\$8 million 的 DIP 融资——即破产财产中每 \\$1 提供逾 \\$2,000 的融资——这一构想表明，本案被不当用于保护 Golden Spring（以及由 Kwok 家族控制、其资产实际所在的其他实体）。\n\n(ii) 客观徒劳\n\n60. “债务人的行为可能如此恶劣……以至于可能无需审查……债务人在合理期间内确认第11章计划的合理可能性。”In re 68 West 127 Street, LLC, 285 B.R. 838, 847 (Bankr. S.D.N.Y. 2002)。鉴于本第11章案件的申请时间及其目的，Kwok 在此的行为可以很容易被认定为属于该种情形。但即使法院考虑客观徒劳，该标准在此亦已满足，因为 Kwok 所述目标是核算其资产（据称价值 \\$3,850），而该结果同样可以通过州法院诉讼在破产程序之外实现。See In re Murray, 543 B.R. 484, 492 (Bankr. S.D.N.Y. 2016), aff'd, 565 B.R. 527 (S.D.N.Y. 2017), aff'd, 900 F.3d 53 (2d Cir. 2018)（在可获得非破产救济的情况下，不得使用破产程序）。\n\n61. 此外，Kwok 不大可能确认其提出的任何计划。如上所述，债务人的债权人包括：(i) PAX；(ii) 债权尚未确定的附条件诉讼债权人；以及 (iii) 家庭成员内部人，即使其属于“债权人”或“受损”债权人，其对计划的表决也不会根据《破产法典》第 1129(a)(1) 条计入。PAX 以极其显著的优势成为最大债权人（即使仅考虑非内部人债权人，其优势亦更大）——任何成功的计划均须获得其同意。面对 PAX 对整个这场虚假破产程序的反对，该破产案件在客观上徒劳无益。See In re C-TC, 113 F.3d at 1311–12（债务人的“财务问题仅涉及与[单一债权人]之间的双方争议，且可在[一项]待决州法院诉讼中解决”时，债务人“没有任何恢复可能性，并将因[该单一债权人]的反对而无法实施计划”）。\n\nC. 法院应基于事由驳回该申请，因为 Kwok 的破产财产持续减少，且不存在合理的恢复可能性。\n\n62. 第 1112(b)(4)(A) 条规定，在破产财产出现“重大或持续损失”且“不存在合理的恢复可能性”时，应予驳回。关于第一项因素，多家法院认定，当债务人存在负现金流时，即发生重大或持续损失。See, e.g., In re Red Bull Taxi Inc., 2017 Bankr. LEXIS 1209, at \\*6 (Bankr. S.D.N.Y. May 3, 2017) (citing In re AdBrite Corp., 290 B.R. 209, 215–16 (Bankr. S.D.N.Y. 2003) (collecting cases))。\n\n63. 法院还承认，若债务人提出清算性重整，则不存在《破产法典》第 1112(b)(4)(A) 条所称的恢复可能性，因此构成事由的该项依据的第二个要件必然成立。See, e.g., In re BH S & B Holdings, LLC, 439 B.R. 342, 353 (Bankr. S.D.N.Y. 2010)。\n\n64. 法院还曾在以下情形中根据第 1112(b)(4)(A) 条认定存在理由：债务人没有“硬性”资产、没有经营活动、没有雇员，也没有任何正在持续的业务可予以重整，其唯一的潜在资产是诉讼请求权。参见 In re Briggs-Cockerham, L.L.C., No. 10-34222-BJH, 2010 WL 4866874 (Bankr. N.D. Tex., Nov. 23, 2010)。例如，在 In re Sakon 一案中，本院基于持续损失理论认定存在“理由”，鉴于该个人第 11 章债务人没有可予重整的经营业务、没有现金流、没有收入，且在提交并筹措资金支持一项可行且可获确认的计划方面没有取得任何渐进性或实质性进展。617 B.R. 7, 15–18 (Bankr. D. Conn. 2020)。\n\n65. Kwok（郭文贵）声称其没有流动资产或现金流。按照 Kwok 在宣誓后向本院陈述的世界观，进入破产财产的几乎每一分钱现金，都是家庭成员资产提供的赠与或贷款，用于支付管理费用。在没有收入的情况下，这种费用的持续累积，构成第 1112(b)(4)(A) 条第一项下破产财产的“持续损失”。109 而 Kwok 所声称的缺乏任何业务或其他产生价值的活动，意味着在第二项下没有任何可予“重整”的对象。继续进行第 11 章程序，只会推高管理费用，而不会给 Kwok 的债权人带来任何明显利益——其内部人士及其专业人员除外，他们的费用仍在持续累积。驳回 Kwok 的第 11 章案件，是使这辆利益输送列车脱轨的适当且法定规定的补救措施。\n\nD. 本院应当以 Kwok 严重管理不善破产财产为由驳回该申请\n\n66. 为根据《破产法》第 1112(b)(4)(B) 条判断是否存在“严重管理不善破产财产”，判例法要求本院审视债务人针对其债权人的行为。In re Builders Grp. & Dev. Corp., No. 13-04867 (ESL), 2014 Bankr. LEXIS 2092, at *19–20 (Bankr. D.P.R. May 8, 2014)。“占有中的债务人根据《破产法》的规定被赋予重大权力。如通常情形一样，这些权力伴随着某些责任。尤其是，占有中的债务人对其债权人负有信义义务。”In re Gateway Access Solutions. Inc., 374 B.R. 556, 565 (Bankr. M.D. Pa. 2007) (citing In re G-I Holdings, Inc., 385 F. 3d. 313, 319 (3rd Cir. 2004))。另见 In re Sillerman, 605 B.R. 631, 651 (Bankr. S.D.N.Y. 2019)（指出未履行信义义务及利益冲突属于《破产法》第 1112(b)(4)(B) 条下的“严重管理不善”）。\n\n109 实际上，我们对 Kwok 实际资产的真实价值仍然知之甚少；PAX 认为，这些资产以关联实体或家庭成员的名义隐匿于全球各地，也不清楚这些资产实际上可能产生多少收入。鉴于破产财产的受托人并未将这些资产作为破产财产资产处理，我们假定其可供债权人获得的价值也在减少。（Kwok 及其家人在这场障眼法败露、真相揭开之前，完全有动机为自己抽空这些资产的价值。）但就本院在此的目的而言，该假定并无必要。在不损害 PAX 日后就 Kwok 实际破产财产的范围和价值提出异议的权利，并将每一项推论均有利于 Kwok 向本院作出的宣誓陈述的前提下，破产财产仅包含一项可能具有实质价值的资产——即其尚未实现的诉讼请求权——而该项资产至多具有投机性、缺乏流动性，并且基本不受本第 11 章案件影响。根据定义，管理费用和其他义务的持续累积正在减少破产财产。\n\n67. 很难设想有比 Kwok 公开蔑视 Ostrager 法官（奥斯特拉格法官）要求将 Lady May（“五月女士”号）送回美国管辖范围、以清偿对债权人所负债务的命令，更为严重地违反其对债权人的义务。该有价值资产至今仍位于欧洲海岸附近110，因而不在债权人的可及范围内，而且 Kwok 没有采取任何行动将其带回当地水域，这强烈表明 Kwok 背弃了其作为本第 11 章案件中占有中的债务人的义务。\n\n68. 此外，Kwok 继续就其资产误导本院及其债权人。法院曾认定，在其他情形中，债务人未能准确陈述其对财产所享有的权益，其申请破产后行为支持了《破产法》第 1112(b)(4)(B) 条意义上“严重管理不善”的认定。参见 In re Halal 4 U LLC, No. 08–15216, 2010 WL 3810860, at *4 (Bankr. S.D.N.Y. Sept. 24, 2010)。在本案中，对于 Kwok 资产的性质、其被隐匿于何处，或其正在发生何种情况，根本无法相信 Kwok 的说法。如上所述，Kwok 曾无偿向内部人士转移各项资产，并且未作出任何努力予以追回。而且，如有关该住宅的证据所示，Kwok 延续了其一贯模式：在对其有利时声称其拥有有价值资产，但在否认该等资产有利于其家人并损害其债权人时则予以否认。\n\n110 参见 Friedman（弗里德曼）声明，附件 42。（Lady May 于 April 6, 2022 在 France 的所在地。）\n\n69. 根据《破产法》第 1112(b)(2) 条，一旦一方当事人确立存在转换或驳回的理由，债务人或任何反对转换/驳回的一方可通过证明以下事项而击败驳回或转换动议：(1) 存在非常情形，(2) 第 11 章计划有合理可能在及时期限内获得确认，以及 (3) 对构成理由的行为或不作为存在合理正当理由，且该等行为或不作为将在合理期限内得到纠正。111 该规定不能为 Kwok 提供任何庇护。很难设想存在任何非常情形，能够为 Kwok 长期蔑视法庭的行为提供正当理由。Kwok 不会找到支持该主张的任何判例。仅此一点即必须终结审查，因为要适用该例外，债务人必须满足全部三项测试。但是，如上所述，Kwok 也无法证明第 11 章计划有任何获得确认的可能性。此外，Kwok 已将本案的资金提供以其继续控制其破产财产为条件，因此，若无该不可接受的结果，将不会有资金来确认第 11 章计划。112 最后，尽管 Kwok 当然可以改变做法，并在未来停止其对破产财产的严重管理不善，但迄今为止该等行为显然不存在合理正当理由，也没有理由相信今后会有任何不同。因此，Kwok 的严重管理不善构成驳回其第 11 章案件的“理由”。\n\n111 基于重大或持续损失以及不存在合理重整可能性的理由（见上文 I.C. 节）不适用该例外（因此也不适用补救）。\n\n112 Debtor's Motion for Entry of Interim and Final DIP Orders (I) Authorizing the Debtor to Obtain Unsecured, Subordinated Postpetition Financing and (II) Scheduling Interim and Final Hearings, and (III) Granting Related Relief, ECF No. 117, Ex. C (DIP Loan Agreement) at §§ 8.01 (f), (g).\n\nII. 在本案情形下，驳回——而非转换或指定受托人或审查员——是最佳处置方式。\n\n70. 一旦确立根据第 1112(b) 条获得救济的理由，《破产法》要求本院驳回案件、将其转换为第 7 章案件，或指定一名第 11 章受托人或审查员，“以最符合债权人和破产财产利益者为准”。11 U.S.C. § 1112(b)(1)。法院拥有“广泛裁量权，以决定将案件转换为第 7 章案件还是予以驳回”。In re Sapphire Dev., LLC, No. 13-50043, 2015 WL 5579545, at *6 (Bankr. D. Conn. June 26, 2015) (citing In re Babayoff, 445 B.R. 64, 76 (Bankr. E.D.N.Y. 2011)) (internal citations omitted)。在 Sapphire Development 一案中，法院认定申请是恶意提出后命令驳回案件，认为在转换与驳回之间，对所有债权人的结果相同，且动议方明确请求驳回。Id., at *6–7。\n\n71. 在本案中，驳回显然是最适当的救济措施。这正是 PAX 所请求的，并且应允许每一位债权人在州法院追究其无关的请求和救济。PAX 迄今在州法院所作的努力已确保至少披露 Kwok 的部分大量资产；如其成功，其揭开公司面纱请求将为其他债权人就未来判决进行追偿铺平道路。\n\nIII. 作为备选方案，PAX 加入美国受托人关于指定第 11 章受托人的动议。\n\n72. 如本院拒绝驳回案件，则应根据《破产法》第 1104(a) 条指定一名第 11 章受托人，这正是美国受托人在审查员/受托人动议中请求的备选救济。113\n\n113 第 11 章受托人优于转换为第 7 章，因为其允许债权人更多参与受托人程序——PAX 是 Kwok 破产财产中迄今最大的债权人——并且第 11 章为同时追究请求和审议计划提供了额外灵活性。\n\n73. 《破产法》第 1104(a)(1) 条规定，本院“应当基于理由命令指定受托人，包括现任管理层在案件开始前或开始后对债务人事务实施的欺诈、不诚实、无能或严重管理不善”。11 U.S.C. § 1104(a)(1) (emphasis added)。所列举的“构成‘理由’并 warrant 指定受托人的不当行为清单并非穷尽”。In re Ashley River Consulting, LLC, No. 14-13406 (MG), 2015 WL 1540941, at *9 (Bankr. S.D.N.Y. Mar. 31, 2015) (citation omitted)。“任何一项该等理由……均要求指定受托人。”In re V. Savino Oil & Heating Co., Inc., 99 B.R. 518, 527 (Bankr. E.D.N.Y. 1989)。“法院在作出存在指定受托人的‘理由’的判断时，可以考虑现任管理层在申请破产前和申请破产后的不当行为。”In re Ashley River Consulting, 2015 WL 1540941 at *10 (citing Midatlantic Nat'l Bank v. Anchorage Boat Sales, Inc. (In re Anchorage Boat Sales, Inc.), 4 B.R. 635, 644–45 (Bankr. E.D.N.Y. 1980))。“该法条具有强制性，并规定一旦认定存在理由，法院必须指定一名第 11 章受托人。”In re Sillerman, 605 B.R. 631, 642 (Bankr. S.D.N.Y. 2019)。\n\n74. “即使法院未认定根据”第 1104(a)(1) 条存在指定第 11 章受托人的理由，法院仍可根据第 1104(a)(2) 条指定受托人，“如果该指定符合债权人、任何股权证券持有人及破产财产其他利益相关者的利益……”In re Ancona, No. 14-10532, 2016 WL 7868696, at *12 (Bankr. S.D.N.Y. Nov. 30, 2016) (citing 11 U.S.C. § 1104(a)(2))。第 1104(a)(2) 条“确立了灵活标准，即使不存在任何‘理由’也允许指定受托人”。In re Ionosphere Clubs Inc., 113 B.R. 164, 168 (Bankr. S.D.N.Y. 1990)。\n\nA. 存在指定受托人的“理由”。\n\n75. 首先，存在指定受托人的“理由”，因为如上文详述，Kwok 有长期不诚实和欺诈行为的历史。参见，例如，In re Ashley River Consulting, 2015\n\nWL 1540941 at \\*10（根据 § 1104(a)(1) 认定存在事由，其中“债务人的主要负责人……不仅被认定犯有积极欺诈以及严重、恶意和故意的不当行为……而且还被认定为［债务人］的‘另一个自我’，应对转移和混同资金承担责任……”）；In re Bonded Mailings Inc., 20 B.R. 781, 786 (Bankr. E.D.N.Y. 1982)（债务人通过旨在挫败债权人执行其判决书之努力的行为，对其一名债权人实施欺诈，导致两家作为债务人的公司之间发生资产转移，并使其记录陷入无法理清的混乱，在此情形下指定受托人具有正当理由）。\n\n76. Ostrager法官（奥斯特拉格）在州法院诉讼中恰当地认识到了这一点：\n\n本院认为，正如2020年9月15日［简易判决］命令所反映的那样，Kwok先生（郭文贵）曾试图误导本院。本院认为，正如原告所主张，郭文贵正在就其资产玩弄障眼法，并且即使没有违反法院命令的字面规定，也违反了法院命令的精神。……因此，我们不会再容许任何障眼法。114\n\n77. 第二，指定受托人存在“事由”，因为债务人与其关联实体之间存在固有的利益冲突。“根据第1104(a)(1)条，支持指定受托人的因素包括利益冲突。”In re Ancona, 2016 WL 7868696 at \\*9。如上文详述，债务人存在无法消除的利益冲突，必须指定受托人。郭文贵提交申请书的明确目的，是规避藐视法庭制裁，试图避免将其资产带入可用于清偿债权人债权的管辖区，以及再次试图将其资产隐藏在家人及关联方之中。郭文贵拟使用Ostrager法官认定其曾与之合谋并加以滥用、从而损害债权人利益的那些家人及空壳实体的资产，清偿债权人债权。郭文贵从事该等行为亦在Eastern Profit案中得到确认，Liman法官作出事实认定，认为郭文贵利用空壳公司和家人代表其本人作出赠与。\n\n114 Friedman声明，附件43，2020年10月15日听证会记录，PAX v. Kwok et al., Index No. 652077/2017, (N.Y. Sup. Ct.), at 21:14–22:7（着重号为后加）。\n\n郭文贵不可能被期待在其本人所言的提交申请之真正目的与向债权人付款相悖，且唯一现实的追偿来源在于其自身家人及关联方的情况下，作为受托人行事并为债权人利益处理本第11章案件。\n\n78. 因此，郭文贵不可能履行其为包括PAX在内的全体债权人公平归集资产的受托义务——因为其提交本第11章案件的明确目的，正是试图利用破产程序损害PAX利益（并使其自身获益）。在类似情形下，法院已认定该等冲突无法容忍，并构成指定受托人的理由。参见，例如，In re Ancona, 2016 WL 7868696 at \\*9–10（债务人“拒绝……调查由内部人持有的债权，表明本案存在不健康的利益冲突，并突显出有必要指定一名中立受托人，以无偏颇的方式履行债务人的受托义务。”）；In re Hampton Hotel Inv'rs, L.P., 270 B.R. 346, 357 (Bankr. S.D.N.Y. 2001)（“若被允许管理债务人，［债务人的普通合伙人］将继续面临明显的利益冲突：一方面，是最大限度增加可供清偿债权人债权的合伙企业资产；另一方面，是依赖其个人资源清偿该等债权。［债务人的普通合伙人］有充分动机拖延和／或妨碍任何为债务人债权人利益归集其资产的尝试。”）。\n\n79. 例如，在本案中，郭文贵否认其对该住所的所有权，而其此前曾自称为该住所的所有人。他还拒绝交出Lady May（“五月女士”号游艇），推定是为了让其家人能够继续使用和享受该游艇，从而直接违反法院命令。事实上，郭文贵并未采取任何行动，利用其在《破产法典》下的广泛权力寻求返还Lady May。相反，他已表明自己希望为了其家人的利益，再次就其游艇的所有权提起诉讼。115 郭文贵希望这些资产继续由其家人持有，而非用于偿付其债权人。因此，郭文贵的立场无法容忍地与其家人（及其控制的关联实体）一致，而非与其债权人一致。\n\n80. 第三，如上文（第I.D节）详述，指定受托人存在“事由”，因为债务人不能或不愿履行其基本受托义务。参见，例如，In re Futterman, 584 B.R. 609, 619 (Bankr. S.D.N.Y. 2018)（因“确信［债务人］将遵守其应负受托义务”的信心缺失，而根据第1104(a)(1)条认定存在事由，并指出债务人“未获得其主要债权人……的信任”）；另见，In re Ancona, 2016 WL 7868696 at \\*8（根据第1112(b)条认定存在“事由”，包括债务人未能履行作为占有中的债务人的受托义务，故据此根据 § 1104(a) 认定存在事由）。116\n\nB. 指定受托人符合所有当事人的利益。\n\n81. 即使本院认定不存在事由依据（PAX谨此主张，该等依据极为充分），本院仍应根据第(a)(2)款的债权人利益标准指定受托人。根据第1104(a)(2)条指定受托人时应考虑的因素包括：\n\n(i) 债务人的可信赖性；(ii) 占有中的债务人过去及当前的履行情况，以及债务人恢复经营的前景；(iii) 商界及债权人对现任管理层的信任或不信任；以及 (iv) 指定受托人所带来的利益，并与指定成本相权衡。\n\n115 在其反对PAX确认暂缓执行不适用于最终藐视法庭命令之动议的异议中，郭文贵预示了其试图再次就Lady May的所有权问题提起诉讼的意图。郭文贵主张，最终藐视法庭命令系“被错误地向其作出”，且郭文贵对Lady May享有的权益“最终［将］予以确定”。Objection to Lift Stay, ECF No. 83 (Mar. 15, 2022), at ¶¶ 4, 14。\n\n116 除上述指定第11章受托人的依据外，支持根据 § 1112(b) 认定存在“事由”的事实，同样支持根据第1104(a)条认定存在事由，其中包括但不限于报告不足（上文第I.C节第109段）。参见，In re Ancona, 2016 WL 7868696 at \\*8（根据其“根据第1112(b)条对‘事由’的认定”，根据 § 1104(a) 认定存在事由）。\n\nIn re Ridgemour Meyer Props., LLC, 413 B.R. 101, 112 (Bankr. S.D.N.Y. 2008)（引述 In re Ionosphere Clubs Inc., 113 B.R. at 168）。然而，“该标准具有灵活性。”In re Eljamal, No. 17-CV-7870 (KMK), 2018 WL 4735719, at \\*7 (S.D.N.Y. Sept. 28, 2018)（引述 Ridgemour Meyer Props., LLC, 413 B.R. at 112）。\n\n82. 如上文详细阐述，所有这些因素均强烈反对债务人继续占有财产。第一，郭文贵与可信赖性完全相反。第二，郭文贵提起本第11章案件的唯一且不当目的，是拖延并阻挠纽约法院案件中的不利结果及后果；债务人没有恢复经营的前景，因为其要么没有资产，要么拒绝适当披露并向债权人提供其资产。第三，郭文贵的最大债权人PAX有充分理由完全不信任郭文贵对其破产财产的管理和控制，亦不信任其为债权人利益就该破产财产采取任何建设性（或合法）行动的能力。第四，指定受托人的利益远远超过成本。指定受托人不会使任何企业受损、任何雇员失去工作，也不会使任何供应商无法获得服务，因为郭文贵声称其没有需要恢复经营的业务，也没有需要保护的雇员、工作岗位或供应商。一经指定，受托人将立即接管并监督郭文贵的事务，开始为债权人而非与债权人对立地开展工作。而且，如果郭文贵的家人（或者，如PAX所怀疑，更准确地说是郭文贵本人）不愿为已指定受托人的第11章案件提供资金，他们——以及郭文贵——可以承担案件被驳回的后果。\n\n结论\n\n83. 因此，PAX谨此基于上述全部理由请求本院：(i) 驳回本第11章案件；(ii) 或者，指定一名第11章受托人；以及 (iii) 给予本院认为公正且适当的其他及进一步救济。\n\n日期：April 6, 2022\nHartford, Connecticut\nPacific Alliance Asia Opportunity Fund L.P.（太平洋联盟亚洲机会基金有限合伙企业）\n\n签署人：/s/ Patrick M. Birney\n\nPatrick M. Birney（CT No. 19875）\nAnnecca H. Smith（CT No. 31148）\nROBINSON & COLE LLP\n280 Trumbull Street\nHartford, CT 06103\n电话：(860) 275-8275\n传真：(860) 275-8299\n电子邮箱：pbirney@rc.com\nasmith@rc.com\n\n以及\n\nPeter Friedman（经特别许可出庭）\nStuart M. Sarnoff（经特别许可出庭）\nO'MELVENY & MYERS LLP\nSeven Times Square\nNew York, NY 10036\n电话：(212) 326-2000\n传真：(212) 326-2061\n电子邮箱：pfriedman@omm.com\nssarnoff@omm.com\n\n送达证明\n\n本人特此证明，2022年4月6日，上述文件副本已通过本院CM/ECF系统以电子方式提交。通过法院电子提交系统接收通知的所有当事人将通过电子邮件收到本次提交的通知。利害关系方可通过本院CM/ECF系统查阅本次提交。\n\n/s/ Patrick M. Birney\nPatrick M. 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