{"id":"court_ctb_1978_0","court":"CTB","case_no":"22-50073","doc_number":1978,"sub_number":0,"doc_type":"TRANSCRIPT","filed_date":"2023-07-05","title":"UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In re Chapter 11","summary_zh":null,"summary_en":null,"body_en":"# **UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION**\n\n**In re Chapter 11**\n\n**a/k/a WENGUI GUO a/k/a MILES GUO,**\n\n**HO WAN KWOK Case No. 22-50073 (JAM)**\n\n**Debtor. Re: ECF 1936**\n\n# **UNITED STATES TRUSTEE'S LIMITED OBJECTION TO CHAPTER 11 TRUSTEE'S MOTION REGARDING SETTLEMENT WITH HCHK ENTITIES UNDER NEW YORK ASSIGNMENT PROCEEDINGS**\n\nWilliam K. Harrington, the United States Trustee for Region 2 (\"United States Trustee\"), submits this limited objection to the motion of Chapter 11 Trustee Luc A. Despins (\"Trustee\") seeking approval of a settlement agreement (\"Settlement Agreement\") with the HCHK Entities[1](#page-0-0) (ECF 1936) (\"Settlement Motion\"). As discussed herein, the United States Trustee objects to the proposed channeling injunction and exculpation provision in the Settlement Agreement that protect certain non-debtor third parties, specifically the assignee Brian Hofmeister and his various professionals, because the protected parties are not fiduciaries to the chapter 11 estate and the required criteria of the Second Circuit's recent decision *In re Purdue Pharma, L.P.,* 2023 WL 3700458, \\*68 (2nd Cir. May 30, 2023) has not been satisfied. The United States Trustee also believes that the Trustee's use of certain monies under the Settlement Motion, and the proposed Settlement Agreement, should be modified to increase transparency and impose reasonable safeguards.\n\n<span id=\"page-0-0\"></span><sup>1</sup> Term is defined in ECF 1963 at fn 3.\n\n#### **FACTS**\n\n1. On June 23, 2023, the Trustee filed the Settlement Motion seeking approval of a settlement agreement with the HCHK Entities and certain individuals. ECF 1963. The Settlement Motion was also filed in the pending adversary proceeding known as *Despins v. HCHK Technologies, Inc., et al*, Adv. Proc. 23-5013 (\"Adversary Proceeding\") at ECF 25.\n\n2. The Settlement Motion sets forth a resolution of limited issues with the HCHK Entities and assignee Brian Hofmeister and his various professionals (collectively, \"Assignee\"). The Settlement Motion describes a three-stage process with certain milestones and results and describes actions to be taken both in this chapter 11 case, as well as in assignment proceedings pending in New York that involve the HCHK Entities and the Assignee.\n\n3. In pertinent part, the Settlement Motion asks this Court to approve protections for the Assignee in the form of (a) a channeling injunction (*see* paragraph 13 of the proposed order) and (b) an exculpation provision (*see* paragraph 14 of the proposed order), both of which becomes effective when the Trustee is successful on a dispositive motion in the Adversary Proceeding. As stated in paragraph 21 of the Settlement Motion:\n\nA key terms of the Settlement Agreement are (1) an injunction (the \"Channeling Injunction\") under which, in the event the Court issues a Dispositive Ruling in favor of the Trustee, all creditors and/or equity holders of the HCHK Entities will be barred and enjoined and restrained from commencing, prosecuting or asserting any request, claim, or cause of action, including but not limited to, causes of action for contribution or indemnification, however denominated, against the Assignee, and specifically precluding any claims against the Assignee with respect to any matter relating to the Settlement Agreement or Proposed Order, except as raised through the appropriate pleading filed in this Court; and (2) the exculpation (the \"Exculpation\") of the Assignee with respect to any liability to any person or entity for any act taken or omitted to be taken in connection with, relating to, or arising out of, (a) the Assignment Proceedings; (b) this Adversary Proceeding; (c) the Settlement Agreement; and (d) formulating, negotiating, preparing, disseminating, implementing, or effecting consummation of this Motion and the Proposed Order (other than an act in contravention of this Motion or the implementation of the Proposed Order) or any contract, instrument, release, agreement or document created or entered into, or any other act taken or omitted to be taken in good faith, in connection with the Assignment Proceedings, this Adversary Proceeding, the Settlement Agreement, this Motion, and the Proposed Order; *provided*, *however*, that the foregoing will not affect the liability of any person or entity that otherwise would result from any such act or omission to the extent such act or omission is determined by a final order to have constituted fraud, willful misconduct or gross negligence.\n\n4. Other pertinent relief sought in paragraph 18 of the Settlement Motion and\n\nparagraph 9 of the proposed order, is the use of certain monies by the Trustee to pay expenses relating to the windup of the HCHK Entities without prior approval and disclosure to the Court.\n\n### **OBJECTION**\n\n#### *(a) Channeling injunction and exculpation provision*\n\nThe United States Trustee objects to the channeling injunction and the exculpation provision in the Settlement Agreement as they are the functional equivalent of inappropriate, nonconsensual, non-debtor third-party releases.\n\nA release of claims held by non-debtors against other non-debtors is \"a dramatic measure to be used cautiously\" and \"is only proper in rare cases.\" *In re Metromedia*, 416 F.3d 136, 142- 43 (2d Cir. 2005) (internal citation omitted). Further, the Second Circuit's recent decision *In re Purdue Pharma, L.P.,* 2023 WL 3700458, \\*68 (2nd Cir. May 30, 2023) regarding releases for non-debtor third parties is instructive to the Court's consideration of the Settlement Agreement. According to *Purdue Pharma,* given the potential for abuse, third-party releases must be imposed against a backdrop of equity, and courts should exercise particular care when evaluating a non-debtor release. *Id*. at \\* 79. In evaluating releases, courts must consider the following seven factors to determine if a non-consensual non-debtor release is appropriate:\n\nFirst, is there an identity of interest between the debtor and the released third parties?\n\nSecond, are the claims against the debtor and non-debtor factually and legally intertwined?\n\nThird, is the scope of the release appropriate?\n\nFourth, is the release essential to the reorganization?\n\nFifth, has the non-debtor contributed substantial assets to the reorganization?\n\nSixth, did the impacted creditors overwhelmingly vote in support of the plan? and\n\nSeventh, does the plan provide fair payment of enjoined claims?\n\n#### *Id.* at \\*\\*78 & 79.\n\nThe Second Circuit requires \"consideration of each factor\" but also cautions that \"there may even be cases in which all factors are present, but the inclusion of third-party releases in a plan of reorganization should not be approved.\" *Id*. at \\* 79. The Second Circuit also required the bankruptcy court to \"support each of these factors with specific and detailed findings.\" *Id.* In considering the Settlement Agreement, the Court must follow the guidance of the Second Circuit. In their current form, the Settlement Motion and proposed order provide protections to non-debtor third-parties who are not fiduciaries to this chapter 11 estate. The protections are not permissible as they do not satisfy *Purdue*.\n\nEven if, however, the third-party channeling injunction and exculpation could satisfy the *Purdue* factors, approval of the channeling injunction and the exculpation provision is a non-core proceeding under *Stern v. Marshall*, 564 U.S. 462 (2011), and the Court lacks constitutional authority to finally approve the channeling injunction and the exculpation provisions of the Settlement Agreement. Accordingly, should this Court approve the channeling injunction and/or the exculpation provision in the Settlement Agreement, its decision would only constitute findings of fact and conclusions of law for the District Court's *de novo* review.\n\n#### *(b) Use of settlement funds without oversight*\n\nParagraph 9 of the proposed order provides for use of certain monies by the Trustee to pay expenses relating to the windup of the HCHK Entities without prior approval and disclosure to the Court. Use of monies should be transparent and subject to reasonable safeguards. The\n\nUnited States Trustee asks that the Trustee be required to file a list of expenses on a monthly basis. Additionally, for any expense that is more than \\$25,000.00, the Trustee should be required to provide three days' advance notice to the United States Trustee and to the Official Committee of Unsecured Creditors (\"Committee\") to provide an opportunity for the United States Trustee and/or the Committee for input and, if needed, to raise concerns with the Court.\n\n**WHEREFORE** for the foregoing reasons, the United States Trustee opposes the approval of the Settlement Motion and the Settlement Agreement in their current form.\n\nDated: July 5, 2023 Respectfully submitted,\n\nNew Haven, Connecticut WILLIAM K. HARRINGTON UNITED STATES TRUSTEE FOR REGION 2\n\n> By: /s/ Holley L. Claiborn Holley L. Claiborn Trial Attorney Office of the United States Trustee Giaimo Federal Building, Room 302 150 Court Street New Haven, CT 06510 Holley.L.Claiborn@usdoj.gov Federal Bar No.: ct17216 (Connecticut) (203) 773-2210\n\nCase 22-50073 Doc 1978 Filed 07/05/23 Entered 07/05/23 16:59:08 Page 6 of 6\n\n### **CERTIFICATE OF SERVICE**\n\nThe undersigned certifies that the foregoing was served on all appearing parties via the Court's CM/ECF filing system.\n\n> By: /s/ Holley L. Claiborn Holley L. Claiborn","body_zh":"UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION（美国康涅狄格区联邦破产法院布里奇波特分院）\n\n关于 第11章\n\n又名 WENGUI GUO（郭文贵） 又名 MILES GUO，\n\nHO WAN KWOK（郭文贵） 案号 22-50073 (JAM)\n\n债务人。 涉及：ECF 1936\n美国联邦受托人对第11章受托人关于根据纽约州转让程序与HCHK实体达成和解的动议的有限异议\n\nRegion 2（第二区）United States Trustee（美国联邦受托人）William K. Harrington（威廉·K·哈灵顿，以下简称“美国联邦受托人”），对Chapter 11 Trustee（第11章受托人）Luc A. Despins（卢克·A·德斯平斯，以下简称“受托人”）提起的请求批准与 HCHK Entities（HCHK实体）[1] 达成和解协议（以下简称“《和解协议》”）的动议（ECF 1936）（以下简称“《和解动议》”）提交本有限异议。如本文所述，美国联邦受托人对《和解协议》中拟议的保护某些非债务人第三方的引导禁令及免责条款提出异议，具体为受让人 Brian Hofmeister（布莱恩·霍夫迈斯特）及其聘请的各类专业人士，因为受保护方并非第11章破产财产的信义受托人，且不符合Second Circuit（第二巡回上诉法院）近期判例 In re Purdue Pharma, L.P., 2023 WL 3700458, *68 (2nd Cir. May 30, 2023) 所规定的必要标准。美国联邦受托人亦认为，受托人根据《和解动议》及拟议《和解协议》对某些资金的使用应当予以修改，以增加透明度并施加合理的保障措施。\n\n1 该术语定义于 ECF 1963 脚注 3。\n事实\n\n1. 2023年6月23日，受托人提交了《和解动议》，请求批准与HCHK实体及特定个人达成的和解协议。ECF 1963。该《和解动议》亦已提交于名为 Despins v. HCHK Technologies, Inc., et al, Adv. Proc. 23-5013（以下简称“对抗性诉讼”）的待决对抗性诉讼中，见 ECF 25。\n\n2. 《和解动议》阐明了与HCHK实体及受让人布莱恩·霍夫迈斯特及其聘请的各类专业人士（统称为“受让人”）之间有限争议的解决方式。《和解动议》描述了一个具有特定里程碑及结果的三阶段程序，并说明了将在本第11章案件以及涉及HCHK实体与受让人的纽约州待决转让程序中采取的行动。\n\n3. 在相关要点中，《和解动议》请求本法院以以下形式批准对受让人的保护：(a) 引导禁令（见拟议裁定第13段）以及 (b) 免责条款（见拟议裁定第14段），两项均在受托人于对抗性诉讼中获得终局性动议胜诉时生效。如《和解动议》第21段所述：\n\n《和解协议》的关键条款包括：(1) 一项禁令（以下简称“《引导禁令》”），据此，在本法院作出有利于受托人的终局性裁决的情况下，HCHK实体的所有债权人和/或股权持有人将被禁止、受禁制并不准针对受让人提起、起诉或主张任何请求、权利主张或诉由，包括但不限于分摊或弥偿请求权（无论何种称谓），并具体排除就与《和解协议》或拟议裁定相关的任何事项针对受让人提出的任何主张，除非通过向本法院提交的适当诉状提出；以及 (2) 免除受让人对任何个人或实体就因以下事项采取或未采取的任何行为所承担的任何责任：(a) 转让程序；(b) 本对抗性诉讼；(c) 《和解协议》；以及 (d) 拟定、谈判、准备、分发、实施或完成本动议及拟议裁定（违反本动议或拟议裁定实施的行为除外），或与转让程序、本对抗性诉讼、《和解协议》、本动议及拟议裁定相关的善意制定或订立的任何合同、文书、免责文件、协议或文件，或采取或未采取的任何其他行为；但前提是，前述规定不影响任何个人或实体在最终命令认定该等行为或不作为构成欺诈、故意不当行为或重大过失的范围内由此产生的责任。\n\n4. 《和解动议》第18段和拟议裁定第9段所寻求的其他相关救济为：受托人使用某些资金支付与HCHK实体清算有关的费用，而无需事先获得法院批准并向法院披露。\n异议\n(a) 引导禁令及免责条款\n\n美国联邦受托人对《和解协议》中的引导禁令及免责条款提出异议，因为它们在实质上等同于不恰当的、非自愿的非债务人第三方免责。\n\n非债务人针对其他非债务人所持主张的免责是“一项应谨慎使用的剧烈措施”，且“仅在极少数案件中才属正当”。In re Metromedia, 416 F.3d 136, 142- 43 (2d Cir. 2005)（内部引证略）。此外，第二巡回上诉法院近期就非债务人第三方免责作出的判决 In re Purdue Pharma, L.P., 2023 WL 3700458, *68 (2nd Cir. May 30, 2023)，对法院审理《和解协议》具有指导意义。根据 Purdue Pharma 案，鉴于存在滥用可能，第三方免责必须在衡平法背景下施加，且法院在评估非债务人免责时应格外审慎。出处同上，第 *79 页。在评估免责时，法院必须考量以下七项因素，以确定非自愿非债务人免责是否适当：\n\n第一，债务人与获得免责的第三方之间是否存在利益同一性？\n\n第二，针对债务人与非债务人的主张在事实上和法律上是否相互交织？\n\n第三，免责的范围是否适当？\n\n第四，该免责对重整是否至关重要？\n\n第五，非债务人是否为重整贡献了巨额资产？\n\n第六，受影响的债权人是否以压倒性多数投票支持该计划？以及\n\n第七，该计划是否为受禁制的主张提供了公平的清偿？\n出处同上，第 **78 及 79 页。\n\n第二巡回上诉法院要求“对每一项因素进行考量”，但同时也警告称“甚至可能存在所有因素均具备、但在重整计划中纳入第三方免责仍不应获得批准的情形”。出处同上，第 *79 页。第二巡回上诉法院还要求破产法院“就每一项因素提供具体而详尽的调查认定支持”。出处同上。在审议《和解协议》时，法院必须遵循第二巡回上诉法院的指引。就目前的表述形式而言，《和解动议》和拟议裁定为并非本第11章破产财产信义受托人的非债务人第三方提供了保护。这些保护是不允许的，因为它们不符合 Purdue 案的标准。\n\n然而，即便第三方的引导禁令及免责能够满足 Purdue 案的考量因素，根据 Stern v. Marshall, 564 U.S. 462 (2011) 案，批准引导禁令及免责条款属于非核心程序，本法院缺乏宪法授权对《和解协议》的引导禁令及免责条款作出最终批准。因此，即使本法院批准《和解协议》中的引导禁令及/或免责条款，其裁决也仅构成供District Court（地方法院）进行全面实质审查（de novo review）的事实认定及法律结论。\n(b) 缺乏监督使用和解资金\n\n拟议裁定第9段规定受托人可使用某些资金支付与HCHK实体清算有关的费用，而无需事先获得法院批准并向法院披露。资金的使用应当保持透明并受到合理保障措施的约束。\n\n美国联邦受托人请求责令受托人按月提交一份费用清单。此外，对于超过 $25,000.00 的任何费用，应要求受托人提前三天向美国联邦受托人和Official Committee of Unsecured Creditors（无担保债权人官方委员会，以下简称“委员会”）发出通知，以便为美国联邦受托人和/或委员会提供提出意见的机会，并在必要时向法院提出关切。\n\n综上所述，基于前述理由，美国联邦受托人反对按目前形式批准《和解动议》及《和解协议》。\n\n日期：2023年7月5日 谨此提交，\n\n康涅狄格州纽黑文 WILLIAM K. HARRINGTON（威廉·K·哈灵顿）\n第二区美国联邦受托人\n\n签署人：/s/ Holley L. Claiborn\nHolley L. Claiborn（霍莉·L·克莱伯恩）\n出庭律师\n美国联邦受托人办公室\nGiaimo Federal Building, Room 302\n150 Court Street\nNew Haven, CT 06510\nHolley.L.Claiborn@usdoj.gov\n联邦律师执业证号：ct17216（康涅狄格州）\n(203) 773-2210\n\nCase 22-50073 Doc 1978 Filed 07/05/23 Entered 07/05/23 16:59:08 Page 6 of 6\n送达证明书\n\n下签人特此证明，前述文件已通过法院的 CM/ECF 归档系统送达至所有出庭当事人。\n\n签署人：/s/ Holley L. Claiborn\nHolley L. Claiborn（霍莉·L·克莱伯恩）","key_entities":["HCHK","Je","Guo","Despins","Kwok","Miles Guo","Ho Wan Kwok"],"ecf_references":[{"doc_number":25,"court":"CTB"},{"doc_number":1936,"court":"CTB"},{"doc_number":1963,"court":"CTB"}],"word_count":1437,"status":"published","published_at":"2023-07-05 00:00:00","created_at":"2023-07-05","updated_at":"2026-08-23 12:53:39"}