{"id":"court_ctb_3851_0","court":"CTB","case_no":"22-50073","doc_number":3851,"sub_number":0,"doc_type":"TRANSCRIPT","filed_date":"2024-11-26","title":"1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTIC","summary_zh":null,"summary_en":null,"body_en":"1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION IN RE: . Chapter 11 . Case No. 22-50073 (JAM) HO WAN KWOK, *et al., .* . (Jointly Administered) Debtors. . . . . . . . . . . . . . . . . . . G CLUB OPERATIONS, LLC, . . Movant, . . v. . . Courtroom 123 LUC A. DESPINS, CHAPTER 11 . Brien McMahon Federal Building TRUSTEE FOR THE ESTATE OF . 915 Lafayette Boulevard HO WAN KWOK, . Bridgeport, Connecticut 06604 . Respondent. . Monday, November 18, 2024 . . . . . . . . . . . . . . . 1:05 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE (APPEARANCES CONTINUED) Audio Operator: Electronically recorded Transcription Company: Reliable The Nemours Building 1007 N. Orange Street, Suite 110 Wilmington, Delaware 19801 Telephone: (302)654-8080 Email: gmatthews@reliable-co.com Proceedings recorded by electronic sound recording, transcript produced by transcription service. Case 22-50073 Doc 3851 Filed 11/26/24 Entered 11/26/24 14:11:47 Page 1 of 15\n\n| | Case 22-50073
Doc 3851 | Filed 11/26/24 | Entered 11/26/24 14:11:47 | Page 2 of 15 |\n|----|-------------------------------------------|----------------|---------------------------------------------------------|--------------|\n| | | | | 2 |\n| 1 | APPEARANCES: | | | |\n| 2 | For the Chapter 11 | | | |\n| 3 | Trustee: | | Luc A. Despins, Esquire
Nicholas A. Bassett, Esquire | |\n| 4 | | | PAUL HASTINGS, LLP
200 Park Avenue | |\n| 5 | | | New York, New York 10166 | |\n| 6 | For G Club Operations,
LLC, and G Club | | | |\n| 7 | International, Ltd.: | | Jeffrey M. Sklarz, Esquire
GREEN & SKLARZ, LLC | |\n| 8 | | | One Audubon Street
3rd Floor | |\n| 9 | | | New Haven, Connecticut 06511 | |\n| 10 | For Pacific Alliance | | | |\n| 11 | Asia Opportunity Fund: | | Stuart M. Sarnoff, Esquire
O'MELVENY & MYERS, LLP | |\n| 12 | | | 1301 Avenue of the Americas
Suite 1700 | |\n| 13 | | | New York, New York 10019 | |\n| 14 | | | | |\n| 15 | | | | |\n| 16 | | | | |\n| 17 | | | | |\n| 18 | | | | |\n| 19 | | | | |\n| 20 | | | | |\n| 21 | | | | |\n| 22 | | | | |\n| 23 | | | | |\n| 24 | | | | |\n| 25 | | | | |\n| | | | | |\n| | | | | |\n\n| Case 22-50073 | | Doc 3851 | Filed 11/26/24 | | Entered 11/26/24 14:11:47 | Page 3 of 15 | | |\n|---------------|----------|----------|------------------------------------------------------------------------------|-------|---------------------------|--------------|------|--|\n| | | | | | | | 3 | |\n| 1 | | | | INDEX | | | | |\n| 2 | MOTIONS: | | | | | | PAGE | |\n| 3 | Matter | | | | | | | |\n| 4 | | | No. 3752 Motion to Quash filed by Interested Party G
Club Operations, LLC | | | | | |\n| 5 | | | | | | | | |\n| 6 | | | Court's Ruling: | | | | -- | |\n| 7 | | | | | | | | |\n| 8 | | | Transcriptionist's Certificate | | | | 15 | |\n| 9 | | | | | | | | |\n| 10 | | | | | | | | |\n| 11 | | | | | | | | |\n| 12 | | | | | | | | |\n| 13 | | | | | | | | |\n| 14 | | | | | | | | |\n| 15 | | | | | | | | |\n| 16 | | | | | | | | |\n| 17 | | | | | | | | |\n| 18 | | | | | | | | |\n| 19 | | | | | | | | |\n| 20 | | | | | | | | |\n| 21 | | | | | | | | |\n| 22 | | | | | | | | |\n| 23 | | | | | | | | |\n| 24 | | | | | | | | |\n| 25 | | | | | | | | |\n| | | | | | | | | |\n| | | | | | | | | |\n\n 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Proceedings commenced at 1:05 p.m.) THE COURT: Okay. THE CLERK: Case Number 22-50073, Ho Wan Kwok. THE COURT: If we could have appearances for the record, please? MR. DESPINS: Luc Despins, Chapter 11 Trustee. Good afternoon, Your Honor. THE COURT: Good afternoon. MR. BASSETT: Good afternoon, Your Honor. Nick Bassett from Paul Hastings, counsel for the Chapter 11 Trustee. THE COURT: Good afternoon. MR. SKLARZ: Good afternoon, Your Honor. Jeffrey Sklarz for G Club Operations. THE COURT: Good afternoon. MR. SARNOFF: Good afternoon, Your Honor. Stuart Sarnoff, on behalf of the creditor PAX. THE COURT: Good afternoon. Is that everyone's appearances -- everyone been noted for the record? (No verbal response) THE COURT: I think so. Okay. As we know, this is a continued hearing. We had a hearing a few weeks ago on the motion to quash and I know the parties were discussing some steps towards Case 22-50073 Doc 3851 Filed 11/26/24 Entered 11/26/24 14:11:47 Page 4 of 15\n\n1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 production of documents and things of that nature. And Attorney Sklarz, you were going to submit documents to Attorney Bassett. I don't know where things stand as of today. So if you can let me know where things stand, and then we can proceed in whatever manner we need to proceed, with regard to the motion to quash. MR. SKLARZ: Certainly, Your Honor. We transmitted the documents that we indicated we would within the time frame prescribed, which included all of the applicable corporate authorizations, authorizing FFP to act as the manager of G Club Operations. We also provided a cash receipts ledger to Attorney Bassett for funds that flowed through FFP since they took over last January -- I'm sorry -- last June, a cash receipts journal for G Club Operations from the petition date to that time, and then a list of third-party payments that were made on behalf of G Club Operations. So, Attorney Bassett and I had further conversations by email, as well as on the phone today. I don't think we've reached an agreement that no deposition is necessary. G Club continues to believe that whatever the trustee wants to pursue, it really is corollary to the omnibus alter-ego case, as well as all the other variety of adversary proceedings filed, and discovery should take place under Rule 26 and not -- to the extent that discovery is\n\nCase 22-50073 Doc 3851 Filed 11/26/24 Entered 11/26/24 14:11:47 Page 6 of 15\n\n6\n\n1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 proceeding, G Club believes it should be under Rule 26, not under Rule 2004. THE COURT: Okay. Thank you. Attorney Bassett? MR. BASSETT: Yes, Your Honor. Again, for the record, Nick Bassett from Paul Hastings, on behalf of the Chapter 11 Trustee. I think generally speaking, Attorney Sklarz summarized directly where we stand. He did produce some documents. He produced some corporate resolutions and the like, purporting to show the sort of transition and control of the company from Mr. (Indiscernible), to his client, this FFP entity, and then, additionally, some documentation surrounding cash transfers and the like. I will say it's not a significant volume of materials; it's, you know, a handful of pages of documents purporting to show various transfers, et cetera. And I think most importantly, you know, where we land is that we very much still believe that a deposition here is critical. I think the documents that have been produced only strengthen the need for a deposition. And, Your Honor, I can't emphasize enough, based on the remarks that you heard last time at the initial hearing and then also based on the documents that were received, the central figure surrounding all of this is Mr. He, whom we've heard a lot about. He's\n\nCase 22-50073 Doc 3851 Filed 11/26/24 Entered 11/26/24 14:11:47 Page 7 of 15\n\n7\n\n1 2 3 the individual who was the purported ultimate beneficial owner of G Club and a variety of other entities in Mr. Kwok's orbit.\n\n4 5 6 7 He's the one who purportedly transferred control of G Club to FFP in June 2023. He is also shown on the funding documents that Attorney Sklarz produced as the person who provided some of the funding.\n\n8 9 10 11 12 13 And, Your Honor, he's not just some name that we've seen; he is, to be very clear, on, I guess you could say, the top or near the top of the trustee's most-wanted list in terms of people to talk to and to gain information about. He is the individual who was all over the criminal trial.\n\n14 15 16 17 18 19 20 21 22 23 24 The debtor's top lieutenant referred to Mr. He as, essentially, a close family member of Mr. Kwok. He's been specified to as having been a close friend of (indiscernible) since college. He is the signatory to a number of transfers of loans that were a centerpiece in the criminal trial to facilitate the debtor's money-laundering scheme. He signed loans of millions of dollars from G Club to the debtor's son. He is a nominal owner of a company that facilitated the son's purchase of a \\$4 million Ferrari. He is all over the place. And why do I emphasize this so much, Your Honor? Because this is what we've been concerned about from the\n\nbeginning. This is why we thought this 2004 discovery. We\n\n25\n\n1 2 3 need to understand not who the nominal person in control is here. I believe Attorney Sklarz, based on the documents\n\n4 5 6 7 8 9 10 11 12 13 14 15 he provided and his representations, that FFP and Mr. Chow (phonetic) there, is the nominal current person who is managing G Club. But what we really need to know is who is controlling things behind the scenes. What were the circumstances surrounding the appointment of Mr. Chow. What is really going on with the funding that has been provided? There's all kinds of questions to the documents that Attorney Sklarz provided. There's all kinds of questions they raise about the (indiscernible) new entities, new shell companies that provided funding that we've never heard of, a company called Bulk Trade Ltd., a company called Rorsdale, Ltd. (phonetic).\n\n16 17 18 19 20 There are all kinds of payments that we need to ask a person sitting down under oath about. We need to find out who has Mr. Chow talked to? How often has he talked to Mr. He? What does he -- what types of things is he taking instruction on.\n\n21 22 23 24 25 Your Honor, I don't think this will be a long deposition. We have agreed already to do it remotely by Zoom, but I think it is absolutely critical because we need to ask the kind of questions that you just can't get answered based on documents alone and it's questions that are very,\n\n| | Case 22-50073
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Page 9 of 15 |\n|----|------------------------------------------------------------------------------------------|\n| | 9 |\n| | |\n| 1 | very important to the trustee.
So, Your Honor, that's where |\n| 2 | things stand. |\n| 3 | We still do have a dispute about whether the |\n| 4 | deposition should go forward.
We have still continued to |\n| 5 | block off this Wednesday for the remote deposition.
We have |\n| 6 | lined up a court reporter.
We are ready to go and we believe |\n| 7 | it should go forward. |\n| 8 | And, unfortunately, we still have the dispute with |\n| 9 | Attorney Sklarz, because he appears to be still, you know, |\n| 10 | prepping his motion to quash the deposition, but that's where |\n| 11 | things stand, Your Honor. |\n| 12 | THE COURT:
Okay.
Thank you very much. |\n| 13 | Attorney Sklarz, is there anything else you'd like |\n| 14 | to add? |\n| 15 | MR. SKLARZ:
I think everyone that Attorney |\n| 16 | Bassett said explains why Your Honor should grant this |\n| 17 | motion.
They are looking into all of the aspects of control |\n| 18 | of G Club, which go to the alter-ego arguments and that is |\n| 19 | the litigation in chief.
If they want to speak with Mr. He, |\n| 20 | they should subpoena Mr. He.
He is not my client.
I have no |\n| 21 | access to him.
I don't speak with him.
They need to go find |\n| 22 | him or -- I'm sorry -- not find him, they need to subpoena |\n| 23 | him or go to a location where he can be deposed. |\n| 24 | This information was not produced in a vacuum.
In |\n| 25 | the context of earlier 2004 document requests, G Club has |\n| | |\n\n1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 produced huge amounts of financial records that tie to these ledgers that were specially created following our discussion for a limited time, from the petition date forward. So all of that information, there is behind it, a lot more information that was already produced. I don't know if the trustee has had an opportunity to go through that. But I think if they want to talk to other people, that is their prerogative. But if they want to depose G Club to understand the ownership, control, and structure, that relates directly to the alter-ego claims brought primarily in the omnibus case, but also in all of the other cases. So I think if discovery is going to proceed, it has to proceed more Rule 26 in those cases, not as a Rule 2004 deposition. THE COURT: Okay. Thank you. Attorney Bassett, any reply? MR. BASSETT: Just briefly, Your Honor. I think we largely discussed this particular argument at the last hearing, but just to reiterate, the trustee's position is that there's a very clear difference between what he is seeking through this limited deposition and what is at issue in the broader omnibus alter-ego adversary proceeding involving G Club. Again, through this deposition, we are trying to understand who today, presently, is directing G Club. What\n\n1 2 3 4 5 6 7 8 sources of assets does G Club have? All of that is relevant, Your Honor, not because we want to use it in the omnibus alter-ego litigation against G Club or any other pending litigation, but because it is critical to potentially lead the trustee to other sources of potential estate assets, to identify other individuals and sources of information that could lead down paths that could further the trustee's investigation. That's what we need to know.\n\n9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 What we've been finding out, and we went over this last time, too, Your Honor -- and Judge Dewey recognizes this -- but there is, you know, some maneuvering and I would say, in some cases, clear gamesmanship behind the scenes as to who is controlling the litigants before this and other courts, especially after Mr. Kwok's incarceration. We need to understand that by talking to a representative of the company who should be able to answer these questions so we can figure out what's going on, because we need to understand who's really in charge here, who's making decisions, where they're getting funding, because we believe that there are other assets out there that are property of the estate that we need to recover and we need to continue going down the path of investigating situations like this one to find out where those are.\n\n24 25 THE COURT: All right. Thank you. I appreciate the parties' providing updates, with\n\n| 1 | regard to what has occurred since our last hearing.
I | | | | | | |\n|----|----------------------------------------------------------------|--|--|--|--|--|--|\n| 2 | understand the positions of the parties and I don't have any | | | | | | |\n| 3 | questions with regard to the positions of the parties. | | | | | | |\n| 4 | What I'm going to do is I'm going to review what | | | | | | |\n| 5 | you've just told me in light of what you've told me at the | | | | | | |\n| 6 | last hearing on the motion and I will rule accordingly.
And | | | | | | |\n| 7 | I anticipate that there'll be some form of order by the end | | | | | | |\n| 8 | of today so that both of you can do what you think is | | | | | | |\n| 9 | appropriate under the circumstances. | | | | | | |\n| 10 | I understand, Attorney Bassett, you'd like a | | | | | | |\n| 11 | ruling, because you have a deposition scheduled for -- did | | | | | | |\n| 12 | you say Wednesday? | | | | | | |\n| 13 | MR. BASSETT:
That's correct, Your Honor. | | | | | | |\n| 14 | THE COURT:
Okay. | | | | | | |\n| 15 | MR. BASSETT:
(Indiscernible) the agreement the | | | | | | |\n| 16 | parties had reached previously. | | | | | | |\n| 17 | THE COURT:
Right.
The 20th, right? | | | | | | |\n| 18 | MR. BASSETT:
That's correct. | | | | | | |\n| 19 | THE COURT:
Sorry.
So, in any event, that's what | | | | | | |\n| 20 | I will do is I will go back and consider what you've told me | | | | | | |\n| 21 | today, what -- refresh my recollection as to what you told me | | | | | | |\n| 22 | during the last hearing and an order should enter before the | | | | | | |\n| 23 | close of business today, okay? | | | | | | |\n| 24 | MR. BASSETT:
Thank you, Your Honor. | | | | | | |\n| 25 | MR. SKLARZ:
Thank you, Your Honor. | | | | | | |\n| | | | | | | | |\n\n 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Is there anything else we want to discuss today? MR. DESPINS: The only question, Your Honor, is that are you going to be okay with tomorrow? THE COURT: Are you making me laugh, Trustee Despins? I don't know. I'm feeling pretty bad, as you can probably hear in my voice. MR. DESPINS: Exactly. But should we have -- THE COURT: We're going to do everything remotely tomorrow. MR. DESPINS: Oh, okay. THE COURT: I'm going to do the -- this all just occurred, you know, so I'm going to -- all hearings on tomorrow's calendar in the morning and in the afternoon, are going to be remote, so we can proceed, even though I'm not feeling that great. But I think I -- I mean, unless things get worse, we are going to proceed with the hearing tomorrow remotely. And you'll get a -- you know, the Clerk's Office, the courtroom deputy is already working on changing the entries on each case in which there's a hearing scheduled for tomorrow to say that it will be held remotely, okay? MR. DESPINS: Thank you, Your Honor. THE COURT: All right. So I think that's all we can accomplish today. I will, as I said, go back and look at Case 22-50073 Doc 3851 Filed 11/26/24 Entered 11/26/24 14:11:47 Page 13 of 15\n\n| Case 22-50073 | Doc 3851 | Filed 11/26/24 | | Entered 11/26/24 14:11:47 | Page 14 of 15 | |\n|---------------|-----------------|--------------------------------------------------------------|---------------------|-----------------------------------|---------------|----|\n| | | | | | | 14 |\n| 1 | | everything and anticipate there'll be an order entered later | | | | |\n| 2 | this afternoon. | | | | | |\n| 3 | | MR. DESPINS: | | That would be terrific. | | |\n| 4 | | THE COURT: | All right. | Thank you all. | | |\n| 5 | | MR. DESPINS: | Bye-bye. | | | |\n| 6 | | THE COURT: | | That's the last matter on today's | | |\n| 7 | | calendar, so court is adjourned. | | | | |\n| 8 | | THE CLERK: | Court is adjourned. | | | |\n| 9 | | (Proceedings concluded at 1:20 p.m.) | | | | |\n| 10 | | | | | | |\n| 11 | | | | | | |\n| 12 | | | | | | |\n| 13 | | | | | | |\n| 14 | | | | | | |\n| 15 | | | | | | |\n| 16 | | | | | | |\n| 17 | | | | | | |\n| 18 | | | | | | |\n| 19 | | | | | | |\n| 20 | | | | | | |\n| 21 | | | | | | |\n| 22 | | | | | | |\n| 23 | | | | | | |\n| 24 | | | | | | |\n| 25 | | | | | | |\n| | | | | | | |\n| | | | | | | |\n\n| Case 22-50073 | Doc 3851 | Filed 11/26/24 | Entered 11/26/24 14:11:47 | Page 15 of 15 |\n|---------------|------------------------|----------------------------------|------------------------------------------------------------|-------------------|\n| | | | | 15 |\n| 1 | | | CERTIFICATION | |\n| 2 | | | I certify that the foregoing is a correct | |\n| 3 | | | transcript from the electronic sound recording of the | |\n| 4 | | | proceedings in the above-entitled matter to the best of my | |\n| 5 | knowledge and ability. | | | |\n| 6 | | | | |\n| 7 | /s/ William J. Garling | | | November 23, 2024 |\n| 8 | | William J. Garling, CET-543 | | |\n| 9 | | Certified Court Transcriptionist | | |\n| 10 | For Reliable | | | |\n| 11 | | | | |\n| 12 | | | | |\n| 13 | | | | |\n| 14 | | | | |\n| 15 | | | | |\n| 16 | | | | |\n| 17 | | | | |\n| 18 | | | | |\n| 19 | | | | |\n| 20 | | | | |\n| 21 | | | | |\n| 22 | | | | |\n| 23 | | | | |\n| 24 | | | | |\n| 25 | | | | |\n| | | | | |\n| | | | | |","body_zh":null,"key_entities":["Despins","Kwok","Ho Wan Kwok","Paul Hastings","Je","CIPA","Luc Despins"],"ecf_references":[],"word_count":4181,"status":"published","published_at":"2024-11-26 00:00:00","created_at":"2024-11-26","updated_at":"2026-07-07 08:18:16"}