{"id":"court_ctb_3973_0","court":"CTB","case_no":"22-50073","doc_number":3973,"sub_number":0,"doc_type":"TRANSCRIPT","filed_date":"2025-01-16","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. . . . . . . . . . . . . . . . . . . LUC A. DESPINS, CHAPTER 11 . Adversary Proceeding TRUSTEE, . No. 24-05042 (JAM) . Plaintiff, . . v. . . RESTORATION HARDWARE, INC., . et al., . . Defendants. . . . . . . . . . . . . . . . . . . LUC A. DESPINS, CHAPTER 11 . Adversary Proceeding TRUSTEE, . No. 24-05182 (JAM) . Plaintiff, . . v. . . Courtroom 123 MAX KRASNER, . Brien McMahon Federal Building . 915 Lafayette Boulevard Defendant. . Bridgeport, Connecticut 06604 . . Tuesday, January 7, 2025 . . . . . . . . . . . . . . . 1:08 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 1 of 29\n\n 2 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 APPEARANCES: For the Chapter 11 Trustee: Patrick R. Linsey, Esquire NEUBERT PEPE & MONTEITH, P.C. 195 Church Street 13th Floor New Haven, Connecticut 06510 -and- Luc A. Despins, Esquire PAUL HASTINGS, LLP 200 Park Avenue New York, New York 10166 For Max Krasner: Ronald I. Chorches, Esquire LAW OFFICES OF RONALD I. CHORCHES 82 Wolcott Hill Road 2nd Floor, Suite 2 Wethersfield, Connecticut 06109 For the U.S. Trustee: Holley L. Claiborn, Esquire OFFICE OF THE UNITED STATES TRUSTEE The Giaimo Federal Building 150 Court Street Room 302 New Haven, Connecticut 06510 For Pacific Alliance Asia Opportunity Fund: Annecca H. Smith, Esquire ROBINSON & COLE, LLP 280 Trumbull Street Hartford, Connecticut 06103 (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 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 2 of 29\n\n| Page 3 of 29 |\n|--------------|\n| 3 |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\n| |\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 INDEX MOTIONS: PAGE In re: Ho Wan Kwok, et al., Debtors. Case no. 22-50073 (JAM) Matter No. 3884 Motion to Amend Order Granting Retention and Employment of Pallas Partners LLP as Solicitors in United Kingdom Filed by Georg Alexander Bongartz on behalf of Luc A. Despins, Chapter 11 Trustee 12 Court's Ruling: 13 Matter No. 3911 Application to Employ Kobre & Kim (GCC) LLP as Special Counsel in United Arab Emirates Filed by Luc A. Despins on behalf of Luc A. Despins, Chapter 11 Trustee 8 Court's Ruling: 12 In re: Luc A. Despins, Chapter 11 Trustee v Restoration Hardware, Inc., et al. Adversary Proceeding no. 24-05042 (JAM) Matter No. 41 Motion to Withdraw Appearance Filed by Ronald Ian Chorches on behalf of Max Krasner, Defendant 19 Court's Ruling: 28 Matter No. 45 Order Setting Status Conference 19 Court's Ruling: 28 Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 4 of 29\n\n INDEX MOTIONS: PAGE In re: Luc A. Despins, Chapter 11 Trustee v Max Krasner Adversary Proceeding no. 24-05182 (JAM) Matter No. 20 Motion to Withdraw Appearance Filed by Ronald Ian Chorches on behalf of Max Krasner, Defendant Court's Ruling: 28 Matter No. 24 Order Setting Status Conference 19 Court's Ruling: 28 Transcriptionist's Certificate 29 Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 5 of 29\n\n 6 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 1:08 p.m.) THE COURT: We have matters on the calendar at 1:00 p.m., so I ask the courtroom deputy to please call the calendar. THE DEPUTY: 22-50073, Ho Wan Kwok; adversary -- THE COURT: Good afternoon -- oh, go ahead. I'm sorry, you're right. Please go ahead. I apologize. THE DEPUTY: Adversary 24-05042, Despins v Restoration Hardware, Inc., et al., and 24-05182, Despins v Krasner. THE COURT: Okay. Good afternoon. If we could have appearances for the record, starting with the Chapter 11 Trustee, please. MR. DESPINS: Good afternoon, Your Honor, and happy new year. Luc Despins, Chapter 11 Trustee. THE COURT: Good afternoon, and happy new year to all of you. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey, Neubert, Pepe & Monteith, counsel for the Chapter 11 Trustee. THE COURT: Good afternoon. MR. CHORCHES: Good afternoon, Your Honor, and happy new year. I'm Ronald Chorches. I represent the Defendant in the adversary proceedings that are before the Court today. I represent Max Krasner, the Defendant. Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 6 of 29\n\n 7 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: Good afternoon. MR. JONES: Good morning -- good afternoon, Your Honor. Roland Jones. I also represent Max Krasner. THE COURT: Attorney Jones, do you have an appearance on file? MR. JONES: No, Your Honor. I just wanted to state my name for the record, but I don't expect to be talking or making argument. THE COURT: Well, you can't represent a party unless you have an appearance on file, Attorney Jones. So, I mean, you can listen to this hearing, but our Local Rules and the District Court Local Rules all, and the Federal Rules of Civil Procedure, you need to file an appearance if you're going to be representing any party. So if you're not filing an appearance, then you're not representing any party, okay? MR. JONES: I understand. Very good, Your Honor. THE COURT: Thank you. MS. CLAIBORN: Good afternoon, and happy new year, Your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon and happy new year to you, as well. MS. SMITH: Good afternoon, Your Honor. Annecca Smith, Connecticut counsel for creditor PAX. I just plan to observe today. Thank you. THE COURT: Thank you and good afternoon. Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 7 of 29\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 All right. So Trustee Despins, on the calendar in the main Chapter 11 jointly administered cases are two matters: a motion to amend an order and an application to employ. How would you like to proceed? MR. DESPINS: As to those two matters, Your Honor, to proceed, I would start with the Kobre & Kim retention, which is Docket 3911. THE COURT: Go right ahead. MR. DESPINS: Thank you, Your Honor. So, we filed an application to retain the law firm of Kobre & Kim as special counsel, with respect to UAE, United Arab Emirates matters. As we explained on the application, we're retaining the branch of Kobre & Kim - although Kobre & Kim is an American-based firm, we're retaining their UAE branch to advise us with respect to potential recovery actions or other related actions in the UAE. As Your Honor may or may not know, it's public record that William Che (phonetic) who was one of the codefendants in the criminal trial and was, you know, was not tried, but was charged, but did not appear and was not arrested, he is located in the UAE. As well, we understand that the debtor's son spent a substantial amount of time in the UAE. And there are other potentially-related companies that are based or operating in the UAE and we don't have the\n\n1 2 3 expertise to determine what type of claims or actions could be prosecuted there and that's why we filed a motion to retain Kobre & Kim.\n\n4 5 6 7 8 9 10 11 12 13 14 15 No creditor has objected to the relief sought in the application, Your Honor. The U.S. Trustee filed a statement raising three concerns. We addressed two of those through the filing at Docket 3936 of a revised order and there's a mark to show a changed version at pages 11 - starting at page 11 of 15 of that filing, Docket 3936, to show the two changes that we made to address the U.S. Trustee's concern and those related to the overhead expenses and also to make clear that this Court has exclusive and sole jurisdiction to deal with compensation disputes, if any, that would ever arise with Kobre & Kim. So I believe that those two issues are resolved.\n\n16 17 18 19 20 21 22 23 24 25 The third issue raised by the U.S. Trustee is the issue of the liability cap, which is set in the engagement letter at five million per instance or per originating cause. And let me be very clear, if we were retaining Kobre & Kim in the U.S., we would never have that. You know, law firms in the U.S. have not been successful at trying to cap their liability, but in Europe and around the world, it is very common and, actually, you dealt with this in the retention of our Swiss counsel and they also have a liability cap of five million. That's at Docket 3034. That cap, obviously, does\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 not apply to claims based on fraud, fraudulent misrepresentation, personal injury, or things like that. And, Your Honor, our view is based on the circumstances, do we like the cap? No. But, practically, it is a standard provision in Europe and around the world now. We negotiated the \\$5 million cap based on what we were able to obtain and approve by Your Honor in the Swiss law firm case and, therefore, we would ask Your Honor to overrule the trustee's objection on that point. And I believe that that's -- I hope that the two other points with the U.S. Trustee were resolved, but -- I think that's the case, but counsel for the U.S. Trustee can confirm that. So that's all I have on Kobre & Kim, Your Honor. THE COURT: Okay. Thank you. Attorney Claiborn? MS. CLAIBORN: Thank you, Your Honor. Trustee Despins articulated correctly that the revised order resolved two of the three issues raised by the U.S. Trustee. The remaining issue is the one that Trustee Despins just covered, with respect to paragraph 13 of the standard terms of engagement provisions that are attached to the application and those limit the liability of Kobre & Kim to \\$5 million. The U.S. Trustee is opposed to any limit on\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 liability as not being appropriate for any professional who's representing the trustee and the estate. We've had this argument, as the trustee noted, before, in connection with other retention applications and the U.S. Trustee is consistent with this position, it opposed it then and opposes it now. While it might be standard outside the United States, it's certainly not standard inside the United States and it puts the risk of problems on the estate, which is inappropriate and the U.S. Trustee would ask the Court to overrule that request and to strike that provision from the agreement. THE COURT: Okay. And the revised proposed order doesn't address it specifically because it just says the agreement is in place, but you're saying, Attorney Claiborn, that you would like the Court to strike that provision from the agreement, correct? MS. CLAIBORN: Yes, Your Honor. THE COURT: Okay. Trustee Despins, do you have any response? MR. DESPINS: Yes, very briefly. If Kobre & Kim does not get retained, I'm going to have to go to another firm and setting us back, because they've already started working, and the same issues will arise. So, as I said, I prefer to not have a cap, but the\n\n| 1 | problem is that the precedence are against me in that.
In |\n|----|-----------------------------------------------------------------|\n| 2 | Europe, the law firms have been successful imposing these |\n| 3 | caps.
Most of the times, the caps were much lower than that |\n| 4 | and that's why we ask the Court to overrule the U.S. |\n| 5 | Trustee's objection. |\n| 6 | It's not something that's within our control to |\n| 7 | impose a no-cap agreement on them.
They will not do the work |\n| 8 | without that cap and that's kind of the market in Europe. |\n| 9 | So, that's, unfortunately, where we are. |\n| 10 | THE COURT:
Okay.
Attorney Claiborn, anything |\n| 11 | further? |\n| 12 | MS. CLAIBORN:
No, Your Honor. |\n| 13 | THE COURT:
All right.
I'm going to have to go |\n| 14 | back and look at that because when I saw the notice of filing |\n| 15 | of revised proposed order, I thought the issues were |\n| 16 | resolved.
I, obviously, just need to go back and look at |\n| 17 | that.
I'll take that under advisement, but I anticipate that |\n| 18 | I will rule very shortly on that application, okay? |\n| 19 | MR. DESPINS:
Thank you, Your Honor. |\n| 20 | THE COURT:
Thank you. |\n| 21 | MR. DESPINS:
So, we would move now to the |\n| 22 | amendment, the motion to amend the retention of Pallas |\n| 23 | Partners, our UK counsel, and the motion was filed |\n| 24 | December 12th, at Docket 3884. |\n| 25 | It's fairly simple.
They pointed out to us that |\n\n| we retained them, with respect to the UBS matter because all |\n|-----------------------------------------------------------------|\n| (indiscernible), that's true and we recently expanded their |\n| retention to deal with the, I call it a \"bankruptcy |\n| proceeding,\" but it's called an \"administration proceeding\" |\n| of the company called Hamilton Capital Holdings Ltd. in the |\n| U.K.
And they said, Well, look, we need to get a court order |\n| because we're not covered by the UBS retention for that and |\n| they're absolutely right.
So it doesn't change the terms at |\n| all, Your Honor, of their retention; it just makes clear that |\n| they're also authorized to act on our behalf, with respect to |\n| the Hamilton Capital Holdings insolvency matter pending in |\n| the U.K. |\n| I believe that U.S. Trustee had filed a statement |\n| of no objection at 3933 and, therefore, would ask Your Honor |\n| to approve the modifications to their retention. |\n| THE COURT:
Thank you. |\n| Attorney Claiborn? |\n| MS. CLAIBORN:
I have nothing to contribute, Your |\n| Honor. |\n| THE COURT:
Okay.
Thank you. |\n| I just wanted to -- again, I have it in front of |\n| me -- I did review the proposed order, but I want to do that |\n| again just to make sure that I had no changes other than the |\n| courtroom deputy -- the proposed order amending -- the order |\n| amending order granting application to approve and retain |\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 Pallas Partners is at ECF 3884, page 8 of 14 is where it starts. And what we'll need to do is just at the beginning -- at the bottom of the first page of the order, we'll have to take out the word \"proposed\" and add today's hearing date in the blank that there was. And, otherwise, I have no changes to that order and the order can enter, so that motion is granted. MR. DESPINS: Thank you, Your Honor. THE COURT: Thank you. MR. DESPINS: And I have nothing further, except to mention that we are preparing a proposed agenda for the hearing tomorrow, which you'll be free to disregard if you so choose, but to try to organize the hearing because there are so many people who want to participate, so many things that will be discussed tomorrow. This is the hearing -- a status conference, I should call it, with respect to the hearing that's scheduled for January 15th. So I just want to alert Your Honor that we're in the process of finalizing a proposed agenda that we will be filing with the Court. THE COURT: When you say, \"so many people want to talk,\" how many people are we talking about? MR. DESPINS: Well, there's the, what I call the \"joint Defendants\" and they will -- now, we're talking about the February 15th -- the January 15th hearing?\n\n 15 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: Yep. MR. DESPINS: They've designated three speakers, so that's not a problem, but -- THE COURT: Well, it might be from the Court's perspective, but we'll see about that. MR. DESPINS: Well, clearly, it is up to (indiscernible) to try to (indiscernible) them, so that group wants to have three speakers, but -- and that will all be addressed tomorrow. But, also, there's a number of other parties that have, like, for example, the Zeisler firm and others -- THE COURT: No, I understand. I understand. MR. DESPINS: -- that also are scheduled for that day and those issues are not perfectly -- THE COURT: I understand. MR. DESPINS: -- aligned. Okay. Fine. So that's what we need to address. THE COURT: But I would definitely appreciate the agenda and that's definitely appreciated, but I will say that those parties -- first of all, the joint brief parties already have spoken through one person. So whether or not they're going to speak through three people, I'll determine. And with regard to the Defendants in the other adversary proceedings that are not mediation avoidance procedure adversary proceedings, those motions to dismiss Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 15 of 29\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 that are on the calendar, there are several that are represented by the same lawyer and then I think there's only one or two where there's only one other lawyer. Those parties all argued that they wanted to be heard at the time of the hearing on the joint brief. And if their issues are not in alignment, I will address those in the manner in which I think is appropriate, given that I heard them listen and say that they wanted to be heard and so, I will do what I think is appropriate under the circumstances. But I think the agenda would be very helpful, so thank you. MR. DESPINS: Thank you, Your Honor. And I may have misspoken, because I said they're not alignment -- that's not what I meant -- what I meant is that some of them raised different issues. For example, they have say the trustee didn't (indiscernible) actually fraud -- THE COURT: And I will address that. MR. DESPINS: -- sufficiently. THE COURT: And I will address that -- MR. DESPINS: So that has nothing to do with (indiscernible) -- THE COURT: And I will address all of those things because the hearing is on -- MR. DESPINS: Okay. THE COURT: -- a joint brief and the four issues\n\n| 1 | in the joint brief and that's what -- and all the parties |\n|----|-----------------------------------------------------------------|\n| 2 | that wanted their motions to dismiss to be heard at the same |\n| 3 | time, that's what they argued, that they also had those -- |\n| 4 | some, if not all of those issues raised in their motions to |\n| 5 | dismiss and I will address those appropriately, as part of |\n| 6 | the case management of this, of these adversary proceedings. |\n| 7 | But, again, I appreciate what you're saying, I |\n| 8 | just want to be very clear.
This is not -- we are not -- |\n| 9 | MR. DESPINS:
Thank you, Your Honor. |\n| 10 | THE COURT:
-- going to spend hours and hours on |\n| 11 | this.
The issues are what they are.
They've been briefed |\n| 12 | and I will hear things from parties, number one. |\n| 13 | Number two, one of the things that we'll talk |\n| 14 | about tomorrow is that I'm not going to spend an hour taking |\n| 15 | appearances, either, because all the parties that have signed |\n| 16 | on to the joint brief have signed on to the joint brief.
All |\n| 17 | the parties that have filed their motions to dismiss, those |\n| 18 | are already in -- they've already filed their appearances and |\n| 19 | it's already in the record.
The courtroom deputy will take |\n| 20 | care of putting all that together because we're not going to |\n| 21 | spend an enormous amount of time doing that on the record. |\n| 22 | And we'll go from there.
It'll all be fine. |\n| 23 | MR. DESPINS:
Thank you, Your Honor. |\n| 24 | THE COURT:
But I just have one thing before we |\n| 25 | turn -- I don't know what happened to Attorney Chorches and, |\n\n| Case 22-50073 | Doc 3973
Filed 01/16/25
Entered 01/16/25 09:39:19
Page 18 of 29 |\n|---------------|--------------------------------------------------------------------------|\n| | 18 |\n| 1 | I think it was Attorney Jones who was on the call, but |\n| | |\n| 2 | they -- I don't know where they are because those are the |\n| 3 | next matters. |\n| 4 | There's Attorney Chorches.
Okay.
So, Attorney |\n| 5 | Chorches, where's Attorney Jones? |\n| 6 | MR. CHORCHES:
I believe he's still on the call. |\n| 7 | THE COURT:
Okay.
All right.
Good. |\n| 8 | Then we just need one more minute and then we're |\n| 9 | going to turn to your issue in the adversaries. |\n| 10 | MR. CHORCHES:
Okay. |\n| 11 | THE COURT:
So, Trustee Despins, I have one |\n| 12 | question for you, which you don't need to answer right now, |\n| 13 | necessarily, but at some point you will.
There was a new |\n| 14 | adversary proceeding filed right before the holidays that is |\n| 15 | Despins v AA Global Venture Ltd. and it has several |\n| 16 | Defendants, numerous Defendants, many of which are outside of |\n| 17 | the United States.
And in the past, we issued a subpoena or |\n| 18 | the Clerk's Office issued a subpoena that gave everyone, all |\n| 19 | Defendants, 60 days to respond, regardless of whether they |\n| 20 | were in the United States or not. |\n| 21 | And you had raised -- someone had raised a |\n| 22 | question about whether that was an appropriate subpoena.
I'm |\n| 23 | prepared to do -- have the Clerk's Office do that, unless you |\n| 24 | think there's some other -- there should be two time frames. |\n| 25 | But we've done that in the past in other adversaries, so I'm |\n| | |\n\n 19 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 not -- I just want to avoid having one summons issue and then having an issue be raised where some other kind of summons should issue. MR. DESPINS: Understood, Your Honor. And we will revert to the Court through the courtroom deputy email address if we can on that. THE COURT: Okay. Thank you. MR. DESPINS: Thank you, Your Honor. THE COURT: All right. That's very helpful. So, then, as far as today's calendar is concerned, then we're turning to the two adversary proceedings: 24- 05042 and 24-05182. And Attorney Chorches, your motion to withdraw the appearance on behalf of the Defendant Krasner, and then the Court setting a status conference on those two matters, in which you filed an appearance, and which you filed the same motion to withdraw the appearance. The reason the Court is setting a status conference is because it's not clear -- well, it is clear, actually, from what you wrote in your motion to withdraw appearance, that you have no contact with the client and that the only contact you have, the client that you represent, and the only contact you have is with Attorney Jones. And you said that you were going to move for your admission, the admission of Attorney Jones pro hac vice and that hasn't Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 19 of 29\n\n1 happened yet.\n\n2 3 4 5 6 7 8 And then I asked Attorney Jones today whether he's going to appear and he said no. So, I'm not going to grant your motion. I know you've withdrawn it, but I don't understand what's going on here. How can you represent a client that you don't have any direct contact with and then Attorney Jones doesn't have any obligations to the Court by filing an appearance?\n\n9 10 11 12 13 14 15 16 17 18 19 20 MR. CHORCHES: I understand the Court's concern, Your Honor, and let me explain. When I first became involved in the case, though I didn't have client contact, I did have -- I worked with Attorney Jones really up to the time when (indiscernible) motion that Your Honor referenced was filed. I was very familiar with the case a lot more than Attorney Jones because I already represented multiple Defendants in different adversary proceedings had participated. I had calls with trustee's counsel. I drafted the answer Attorney Jones that would state that I made a mistake at that time by including his signature on it because I had not yet filed the motion for pro hac vice.\n\n21 22 23 24 25 It's at a point in time where Attorney Jones wanted out of the case due to billing concerns and I had conversations with Mr. Krasner at that point after the - after my motion was filed and with his counsel several times about me continuing to represent Mr. Krasner in both these\n\n 21 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 adversary proceedings. THE COURT: All right. Let me stop you right there. You just said you had conversations with Mr. Krasner and his counsel. Who's his counsel? MR. CHORCHES: I apologize. He had, like, a general counsel who -- THE COURT: Well, who is that? MR. CHORCHES: His first -- I don't have it in front of me -- his first name is Louis. I'd have to -- I apologize, I don't have his last name, but I can find it and provide it. Louis Freeman. His name is Louis Freeman and he is out of New York and -- THE COURT: And he's Mr. Krasner's general counsel; that's what he represented to you? MR. CHORCHES: I believe he represents him in a - well, counsel regarding a criminal matter. THE COURT: Okay. Well, you need to know, right? You have an obligation to this Court; you filed a notice of appearance. You need to know how you have authority to act and through whom you are acting. Apparently, when you filed the notice of appearance, you had no authority from Mr. Krasner directly to file a notice of appearance on his behalf; is that correct? MR. CHORCHES: There was the intent at that time Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 21 of 29\n\n 22 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 that I would be filing a motion pro hac vice for Attorney Jones' office. THE COURT: Okay. So why haven't you done that? MR. CHORCHES: The reason is, first of all, I should have done that earlier and there were conversations in an attempt to quickly resolve both adversary proceedings, to settle them for dollar amounts that the trustee would, we thought -- THE COURT: I don't want to hear anything about settlement, Attorney Chorches. I asked you a very specific question. So, you had no direct communication with Mr. Krasner when you filed the notice of appearance on his behalf; is that correct? That's the question I asked you. MR. CHORCHES: That is correct, but I did have the intent at that point, for filing a motion for pro hac vice. THE COURT: So, how has your -- why is your intent changed? You just filed a motion to withdraw an appearance on behalf of the Defendant that you admitted you had no direct contact with until, I guess, recently. I don't understand what's going on. You either represent the Defendant or you don't. And if you already do and you have an appearance, you have Rule 11 issues. I mean, we're not going to do this. MR. CHORCHES: Your Honor -- Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 22 of 29\n\n| 1 | THE COURT:
This isn't going to be, in the |\n|----|------------------------------------------------------------------|\n| 2 | beginning, you file an appearance for somebody and then you |\n| 3 | leave.
I mean, these are serious matters.
This person is a |\n| 4 | Defendant.
You have filed a notice of appearance on his |\n| 5 | behalf and you've stated in the record under Rule 11 that |\n| 6 | you're going to file a motion for pro hac vice for Attorney |\n| 7 | Jones and now Attorney Jones is here today and he's saying, |\n| 8 | No, no, no, well, he represents Max Krasner, he's not going |\n| 9 | to file a notice of appearance. |\n| 10 | Well, that's not how it works. |\n| 11 | MR. CHORCHES:
Your Honor, I don't know that I |\n| 12 | finished, but Mr. Krasner wants me to continue representing |\n| 13 | him in this proceeding. |\n| 14 | THE COURT:
You had a direct communication with |\n| 15 | him that authorized you to contact on his behalf? |\n| 16 | MR. CHORCHES:
Yes, Your Honor. |\n| 17 | THE COURT:
Have you met Mr. Krasner in person? |\n| 18 | MR. CHORCHES:
I had a phone conversation -- |\n| 19 | THE COURT:
So you don't even know what he looks |\n| 20 | like? |\n| 21 | MR. CHORCHES:
I haven't met him, Your Honor. |\n| 22 | THE COURT:
Do you know what he looks like, |\n| 23 | Attorney Chorches?
Could you pick him out if he was standing |\n| 24 | here in the courtroom? |\n| 25 | MR. CHORCHES:
I could not pick him out, Your |\n| | |\n\n| | 24 |\n|----|-----------------------------------------------------------------|\n| 1 | Honor. |\n| 2 | I did not have a Zoom conference with him, but I |\n| 3 | can tell you that I am intimately familiar with this case.
I |\n| 4 | have been since the beginning.
I don't think that it's -- I |\n| 5 | believe that appearances are often filed or not always filed |\n| 6 | before the pro hac vice motion is filed and I would not |\n| 7 | have -- again, I was very, very familiar with the defenses, |\n| 8 | came up with numerous defenses. |\n| 9 | THE COURT:
You filed an answer to the complaint, |\n| 10 | Attorney Chorches, you didn't just file an appearance.
You |\n| 11 | filed an answer. |\n| 12 | MR. CHORCHES:
That is correct, Your Honor. |\n| 13 | THE COURT:
That is correct. |\n| 14 | So you have Rule 11 issues.
You've now made |\n| 15 | representations to the Court and to all the parties that you |\n| 16 | signed on behalf of this Defendant. |\n| 17 | I'm not suggesting you can't stay in, but you |\n| 18 | can't come in and say -- first of all, you come in and you |\n| 19 | say -- you file a notice of appearance.
You say you're going |\n| 20 | to file a motion pro hac.
You never do it.
You file an |\n| 21 | answer, an answer back in May of last year, and then you file |\n| 22 | a motion to withdraw the appearance saying, Well, I can't |\n| 23 | appear anymore because I was contacted by Attorney Jones and |\n| 24 | attorney -- I've known Attorney Jones for many years, but you |\n| 25 | don't even know the Defendant and you haven't gotten any |\n\nCase 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 25 of 29\n\n25\n\n1 2 3 4 authority directly from the Defendant. That's your motion that was filed on December 10th, doesn't say anything about having any communications with Mr. Krasner, none, other than sending a notice to him.\n\n5 6 MR. CHORCHES: At that time, I did not -- it was my intent to be local counsel.\n\n7 8 9 10 11 12 13 14 THE COURT: Attorney Chorches, you filed an answer in May of 2024, an answer, and then you come in seven months later and say, Oh, I want to withdraw because Mr. Jones - you didn't even say anything about -- you say, subsequent to the filing, you were contacted by Attorney Jones to serve as local counsel. The movant has known Attorney Jones for many years, okay, and has a long history of serving as local counsel.\n\n15 16 17 18 19 20 21 22 So, then, what's the problem? Where's the pro hac vice motion? Maybe there isn't going to be one. That's fine, you're Defendant's counsel, but now you've represented on the record and to the Court and to all parties that you've had direct communications where Mr. Krasner and you're taking direction from him, even though you've never met him and you couldn't pick him out if he was standing here in the courtroom.\n\n23 24 25 MR. CHORCHES: I'm going to continue representing him in this case, Your Honor, and I'll have direct communication with Mr. Krasner throughout. And I've also --\n\n 26 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 I've had -- if Your Honor (indiscernible) knew nothing about this case, I probably knew more about the case than Attorney Jones. THE COURT: That's not the -- Attorney Chorches, you keep going back to knowing about the case. That's not the issue. The issue is, you, as an officer of the Court, have filed a notice of appearance and an answer. You then, move to withdraw that appearance saying that you needed to withdraw the appearance. This is what it says, that Attorney Jones contacted the movant and notified him that the attorney-client relationship between Mr. Jones has been irretrievably broken down. Well, Mr. Jones is here today and he just told me that he represents Mr. Krasner. Even though he's not going to file a notice of appearance, he just told me he's going to represent Mr. Krasner, or he does -- excuse me -- we can go back and listen to the recording. So, I don't know what you're doing here, but I'm not going to see another motion to withdraw an appearance in this case in these adversaries. You're in and you're not getting out. MR. CHORCHES: I understand that. And through the motion -- THE COURT: And you filed an answer, and if Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 26 of 29\n\n| 1 | anything else goes on in this case that doesn't make sense, | | | | | | | |\n|----|----------------------------------------------------------------|--|--|--|--|--|--|--|\n| 2 | then, you know, somebody is going to bring some cause of | | | | | | | |\n| 3 | action.
This is not a game. | | | | | | | |\n| 4 | MR. CHORCHES:
Your Honor, it's my -- I understand | | | | | | | |\n| 5 | that and it's my intent to represent Mr. Krasner zealously in | | | | | | | |\n| 6 | both of these adversary proceedings to the end. | | | | | | | |\n| 7 | THE COURT:
Okay.
Then that's fine. | | | | | | | |\n| 8 | But I don't know why Mr. Jones is here if he's not | | | | | | | |\n| 9 | representing Mr. Krasner, but he is, actually, so you're | | | | | | | |\n| 10 | going to be working with Mr. Jones, apparently? | | | | | | | |\n| 11 | MR. CHORCHES:
No, Your Honor.
No, Your Honor. | | | | | | | |\n| 12 | I'm going to be working directly with Mr. Krasner. | | | | | | | |\n| 13 | THE COURT:
Well, maybe you should meet him, so if | | | | | | | |\n| 14 | you have to -- you know, you don't want to meet your client | | | | | | | |\n| 15 | in the courtroom, right.
Maybe you should meet him and make | | | | | | | |\n| 16 | sure you have the direct authority to act, because at this | | | | | | | |\n| 17 | point, you haven't even met him. | | | | | | | |\n| 18 | MR. CHORCHES:
I will have to -- I'm forwarding | | | | | | | |\n| 19 | him retainer agreements and I will obviously have | | | | | | | |\n| 20 | communication with my client, as required, under the Rules of | | | | | | | |\n| 21 | Professional Responsibility. | | | | | | | |\n| 22 | THE COURT:
And the Federal Rules of Civil | | | | | | | |\n| 23 | Procedure, the Local District Court Rules, and the Local | | | | | | | |\n| 24 | Bankruptcy Court Rules. | | | | | | | |\n| 25 | MR. CHORCHES:
I understand that, Your Honor, and | | | | | | | |\n| | | | | | | | | |\n\n 28 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 that is the main reason why the motion was withdrawn. THE COURT: What was the main reason that the motion was withdrawn? MR. CHORCHES: Well, because I want to continue to represent him. THE COURT: Okay. I'm not going to entertain any other motions to withdraw. I just want that to be very clear. That will not happen. You can file them and they will be denied. You are in -- MR. CHORCHES: I understand. THE COURT: -- you filed a notice of appearance and you filed an answer, and that's how these adversaries are going to proceed. I have nothing further, with regard to this status conference and these adversaries. Does anyone else wish to be heard? MR. DESPINS: Nothing from the trustee, Your Honor. Thank you. THE COURT: Okay. Then, that concludes the status conferences in these adversaries. No further status conferences will be scheduled at this time. That concludes all the matters on today's calendar. So, thank you, all. Court is adjourned. (Proceedings concluded at 1:40 p.m.) Case 22-50073 Doc 3973 Filed 01/16/25 Entered 01/16/25 09:39:19 Page 28 of 29\n\n| Case 22-50073 | | Doc 3973 | Filed 01/16/25 | Entered 01/16/25 09:39:19 | | Page 29 of 29 | | |\n|---------------|------------------------------------------------------------|------------------------|----------------------------------|---------------------------|--|------------------|--|--|\n| | | | | | | 29 | | |\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 | | | | January 13, 2025 | | |\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
22 | | | | | | | | |\n| 23 | | | | | | | | |\n| 24 | | | | | | | | |\n| 25 | | | | | | | | |\n| | | | | | | | | |\n| | | | | | | | | |\n| | | | | | | | | |","body_zh":null,"key_entities":["Despins","Je","Kwok","Ho Wan Kwok","CIPA","Luc Despins","Paul Hastings"],"ecf_references":[{"doc_number":3884,"court":"CTB"}],"word_count":7338,"status":"published","published_at":"2025-01-16 00:00:00","created_at":"2025-01-16","updated_at":"2026-07-07 08:19:05"}