{"id":"court_ctb_442_0","court":"CTB","case_no":"22-50073","doc_number":442,"sub_number":0,"doc_type":"ORDER","filed_date":"2022-05-27","title":"UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \\* Case No. 22-50073(JAM) \\* HO WAN KWO","summary_zh":null,"summary_en":null,"body_en":"UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \\* Case No. 22-50073(JAM) \\* HO WAN KWOK, \\* Bridgeport, Connecticut \\* May 25, 2022 Debtor. \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* TRANSCRIPT OF MOTION FOR ORDER DIRECTING APPOINTMENT OF AN EXAMINER, OR IN THE ALTERNATIVE MOTION FOR ORDER DIRECTING THE APPOINTMENT OF A CHAPTER 11 TRUSTEE; MOTION TO DISMISS CHAPTER 11 CASE OR IN THE ALTERNATIVE, PARTIAL JOINDER TO U.S. TRUSTEE'S MOTION FOR AN ORDER DIRECTING THE APPOINTMENT OF A CHAPTER 11 TRUSTEE BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Debtor: BENNETT S. SILVERBERG, ESQ. JEFFREY L. JONAS, ESQ. Brown Rudnick, LLP Seven Times Square New York, NY 10036 For the Creditor, Pacific PETER FRIEDMAN, ESQ. Alliance Asia Opportunity LAURA ARONSSON, ESQ. Fund L.P.: O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, NY 10036 PATRICK M. BIRNEY, ESQ. Robinson & Cole LLP 280 Trumbull Street Hartford, CT 06103 Proceedings recorded by electronic sound recording, transcript produced by transcription service. **Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992**\n\n2\n\nAPPEARANCES Cont'd: For the U.S. Trustee: HOLLEY L. CLAIBORN, ESQ. Office of the United States Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT 06510 For the Official Committee IRVE GOLDMAN, ESQ. of Unsecured Creditors: Pullman & Comley 850 Main Street Bridgeport, CT 06601 For Rui Ma, Zheng Wu and KRISTIN MAYHEW, ESQ. Weican Meng, Creditors: McElroy, Deutsch, Mulvaney & Carpenter 30 Jeliff Lane Southport, CT 06890 CAROLLYNN H.G. CALLARI, ESQ. Law firm of Callari Partners One Rockefeller Plaza New York, NY 10020\n\n (Proceedings commenced at 10:05 p.m.) THE CLERK: Case no. 22-50073, Ho Wan Kwok. THE COURT: Okay. Good morning. If we could have appearances for the record starting with the debtor's counsel, please? MR. JONAS: Good morning, Your Honor. Jeff Jonas from Brown Rudnick. With me is Ben Silverberg, and Bill Baldiga is sitting behind me for the debtor this morning. Thank you. THE COURT: Good morning. MR. FRIEDMAN: Good morning, Your Honor. Peter Friedman from O'Melveny & Myers, joined by Laura Aronsson on behalf of Pacific Alliance Group. THE COURT: Good morning. MR. BIRNEY: Good morning, Your Honor. Patrick Birney, also on behalf of PAX. THE COURT: Good morning. MR. GOLDMAN: Good morning, Your Honor. Irve Goldman, Pullman and Comley, representing the creditors committee. THE COURT: Good morning. MS. CLAIBORN: Good morning, Your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good morning. MS. MAYHEW: Good morning, Your Honor. Kristin\n\n Mayhew, McElroy, Deutsch, Mulvaney & Carpenter, on behalf of creditors Rui Ma, Zheng Wu, and Weican Meng. And also with me is Carollynn Callari of Callari Partners. THE COURT: Good morning to both of you. Is there anyone else whose appearances we need to take this morning? Okay. All right. As we all know, this is the hearing today on a motion the dismiss, or in the alternative, for the appointment of a trustee. At our last hearing, heading up to today's hearing, I was told that all the parties have agreed. And you've confirmed this in your papers, that you consent to a finding that cause exists under 1112(b) to do something, to either dismiss the case, convert the case, or appoint a Chapter 11 trustee. I have looked at your list of witnesses and exhibits, and I have looked at your position papers with regard to dismissal, conversion, or the appointment of a Chapter 11 trustee. I don't know if there's anything further the parties want to inform the Court about before we start with evidence? Mr. Jonas? Mr. Friedman? MR. FRIEDMAN: No, Your Honor. I think Ms. Aronsson is going to address what we submit in terms of evidence. I believe Ms. Aronsson and counsel for the committee have agreed on what will be\n\n admissible, and we've withdrawn some things, so I think I would turn it over to Ms. Aronsson, and then Mr. Goldman to walk through what they've -- each party wants admitted. And then I would ask leave to argue after that's concluded. THE COURT: Certainly. Okay. Ms. Aronsson, did you want to start, please? Do you want to proceed? MS. ARONSSON: Sure. Thank you, Your Honor. THE COURT: Before you proceed for one second, I have to ask the courtroom deputy, do we need any kind of issue on technology. You're going to -- are you going to introduce exhibits? MS. ARONSSON: Yes. THE COURT: Okay. MS. ARONSSON: Planning on offering -- THE COURT: Do I need to have this camera on, then, for that? THE CLERK: (Indiscernible.) THE COURT: It's on, but do I need to have it actually -- this turned on and open? THE CLERK: (Indiscernible.) THE COURT: Because I can't see anything here, so I assume, unfortunately, I have to have this open. THE CLERK: Well, she's not (indiscernible). THE COURT: No, but she will be. So I don't want\n\n to, you know, stop the process. MS. ARONSSON: Your Honor, I'm not sure we need to open any evidence right now. THE COURT: Okay. All right. So then we'll take -- when you're ready to do that, will you let me know so I can make sure our technology people -- I'm not doing something wrong, because I probably will be, but I'll try not to. Okay? MS. ARONSSON: Will do. THE COURT: All right. So, Attorney Aronsson, go right ahead. You may proceed. MS. ARONSSON: Thank you, Your Honor. PAX is offering into evidence the exhibits filed on the docket numbered PAX 1 through PAX 31, except for PAX 7, PAX 8, and PAX 30. THE COURT: 7, 8, and 30 are not being admitted? MS. ARONSSON: That's correct. THE COURT: Does anyone have -- have you talked about whether anyone has any oppositions to the introduction of these exhibits? MS. ARONSSON: So we met and conferred with Mr. Goldman yesterday, and I understand our withdrawal represents our good faith meet and confer. I understand there might be one disagreement left -- THE COURT: Okay.\n\n MS. ARONSSON: -- based on our conversation this morning. MR. GOLDMAN: Yes. That's correct, Your Honor. We just -- I think I would expect brief argument on a set of -- a series of transcripts that they seek to introduce from the New York action. So that isolates the dispute. THE COURT: Okay. Now with regard to the -- so does anyone else wish to be heard on the admission of the exhibits? No one? Okay. So, Attorney Aronsson, you are introducing these exhibits in full, correct? MS. ARONSSON: That's correct. THE COURT: All right. Now, I think I may have said this in prior hearings. I have no problem with you moving for the admission in full of these exhibits. That doesn't mean I'm going to read every page of them, and so, you know, during this time, you may want to point me to certain things. But in any event, I've said this. This is something I say to all, counsel. This is not unique to this case. I have no problem and appreciate when the parties work cooperatively with regard to the admission of exhibits, but I'm not -- I just want everyone to know, that does not mean I'm going to read every page. Okay? MS. ARONSSON: Understood. THE COURT: Okay. Go right ahead.\n\n MS. ARONSSON: Would you like to hear argument on the -- THE COURT: Possibly. MS. ARONSSON: Okay. THE COURT: Hold on for one second. So I'm going to then announce on the record that Exhibit -- PAX Exhibit 1 through 31, with the exception of Exhibits -- PAX Exhibits 7, 8, and 30, are admitted as full exhibits. MR. GOLDMAN: May I make a qualification? THE COURT: Yes. MR. GOLDMAN: There are exhibits -- the exhibits that are in question that are in challenge are Exhibits 18 through 22. Those are the hearing transcripts that they're seeking to introduce from hearings in New York Supreme Court. So we -- you know, we would -- Your Honor would need to resolve -- THE COURT: All right. So what's your objection to those -- MR. GOLDMAN: Well, the objection is, they're pure hearsay. Just because they are from a court proceeding does not make them public records. THE COURT: Why are they hearsay? MR. GOLDMAN: Well, they're out-of-court statements. THE COURT: They're not statements. They're a\n\n record of a hearing, right? MR. GOLDMAN: Well, they're certainly statements in the record, made by various parties -- THE COURT: Right. MR. GOLDMAN: -- that counsel and -- THE COURT: And their weight will be given whatever I think is appropriate. But it's a transcript. Are you -- if you're objecting to the transcript itself, somehow saying it's not official or authenticated -- MR. GOLDMAN: No. No. THE COURT: -- then that's a different objection. MR. GOLDMAN: It's not my objection. THE COURT: Okay. MR. GOLDMAN: My objection is, they're clearly hearsay because they are out-of-court statements being submitted for the truth of what's asserted in the statements, and they are not -- they don't come within the public records exception. THE CLERK: I'm sorry, Your Honor. THE COURT: Hold on a second, Attorney Goldman. You can't hear? THE CLERK: I can't hear Attorney Goldman. THE COURT: We can't hear you very well. MR. GOLDMAN: I'm sorry. They are clearly out-of-court statements submitted for the truth of the matters\n\n asserted. THE COURT: Aren't they -- aren't they -- they're admissions of parties. They are the debtor and PAX at a hearing. MR. GOLDMAN: Well -- THE COURT: And they're being admitted for -- what -- anyway. Go ahead, Attorney Goldman. You keep going, but I'm not sure I'm convinced yet. MR. GOLDMAN: Okay. You know, to the extent they're seeking to introduce statements by -- from the debtor, the debtor is not opposing -- THE CLERK: I'm sorry, Your Honor. THE COURT: Hold on a second. We still can't hear you? THE CLERK: Yeah. I'm being told it would be better if Attorney Goldman could come to the lectern. THE COURT: There's something -- they're not picking you up, Attorney Goldman. MR. GOLDMAN: Can I go up there? THE COURT: Yes, please. THE CLERK: The microphone does not have a light on it. THE COURT: It's not working for whatever reason, that microphone. MR. GOLDMAN: Okay. Okay.\n\n|    | 11                                                             |\n|----|----------------------------------------------------------------|\n| 1  | THE CLERK:<br>Something is wrong because --                    |\n| 2  | THE COURT:<br>Okay.<br>All right.<br>Yes, if you could         |\n| 3  | come forward?                                                  |\n| 4  | MR. GOLDMAN:<br>Yeah.                                          |\n| 5  | THE COURT:<br>Thank you.                                       |\n| 6  | MR. GOLDMAN:<br>Sure.<br>Is this better, Your Honor?           |\n| 7  | THE COURT:<br>Yes.<br>Now I -- I believe, right?               |\n| 8  | Everyone can hear Attorney Goldman?                            |\n| 9  | MR. GOLDMAN:<br>Yep.                                           |\n| 10 | THE COURT:<br>Okay.<br>Go ahead.                               |\n| 11 | THE CLERK:<br>Yes.                                             |\n| 12 | MR. GOLDMAN:<br>So to the extent they want to                  |\n| 13 | introduce statements from the debtor's counsel, I don't        |\n| 14 | think the debtor was actually present at any of these          |\n| 15 | hearings.<br>Counsel was present.<br>So the debtor is not an   |\n| 16 | opposing party here.<br>The debtor consents to the relief      |\n| 17 | requested, so in order to be non-hearsay of a party            |\n| 18 | opponent, the statement has to be offered -- it has to be a    |\n| 19 | statement of the opposing party.<br>The only opposing party    |\n| 20 | here is the committee.<br>So it doesn't work as non-hearsay of |\n| 21 | a party opponent.                                              |\n| 22 | The public record exception does not cover court               |\n| 23 | hearing transcripts.<br>It states --                           |\n| 24 | THE COURT:<br>Why?                                             |\n| 25 | MR. GOLDMAN:<br>-- a record or statement of a public           |\n|    |                                                                |\n\n office, if it sets out the office's activities, a matter observed while under a legal duty to report. In a civil case, factual findings from a legally authorized investigation. A court hearing from another court simply doesn't fit within the elements of the public records exception. It's designed to admit into evidence reports of agencies of the state and federal government, or departments. THE COURT: So you're saying a transcript of any hearing ever held that is certified can never be admitted into evidence because every single transcript will be hearsay? MR. GOLDMAN: It's out of -- it's an out-of-court statement. It doesn't come within the public records exception, or any other exception that I am aware of, except to the -- THE COURT: So what's the point of a record, then? MR. GOLDMAN: -- except to the extent that the Court is making factual findings or conclusions of law. THE COURT: Well, maybe the judge did that in those -- during those hearings. MR. GOLDMAN: Well, then, you know, Your Honor -- THE COURT: I think he did, didn't he? MR. GOLDMAN: Well, they -- there are 300 pages of transcripts that --\n\n THE COURT: I understand. MR. GOLDMAN: So I don't know what -- THE COURT: I'm not going to read all of them, but I know that -- MR. GOLDMAN: I don't know what -- THE COURT: -- there are -- there, in those transcripts, I believe I've seen prior in this case, findings by the court about the voracity of testimony, of certain witnesses, about the judge's findings, about the ownership of the boat. Things of those nature, which that was his finding. Those were his findings. MR. GOLDMAN: I concede that that would be admissible. I'm talking about, you know, they're seeking to admit the entire -- THE COURT: And as I said already, I'm not going to read the entire transcript. I -- if counsel wants me to focus on something in the transcript, I will do so. And then you could have the opportunity to object at that time if it's hearsay. But I'm not sure I'm persuaded at this point. I'll let you -- you know, I'll let you make that argument again if and when counsel points to specific portions of that transcript that she -- that they are asking me to look at. And if you, at that time, want to renew your hearsay objection, then you can renew that and then I'll rule\n\n accordingly. MR. GOLDMAN: Yeah. Just so Your Honor is -- so I'm clear, I don't have a problem if there are factual findings made, or conclusions of law made by the Court. It just -- I don't think observations of a court in a transcript would come within the public records exception. That's what I'm saying. THE COURT: Okay. All right. Thank you. MR. GOLDMAN: Okay. Thank you, Your Honor. THE COURT: Counsel, go ahead. MS. ARONSSON: Thank you. So just to clarify, in our conversations with Mr. Goldman yesterday, we do intend to use -- to offer these transcripts for Justice Ostrager's findings contained not any testimony about -- of witness that might fall within hearsay. So I think we're in agreement on that front. THE COURT: All right. So what I'm going to do, then, is I'm going to at this time -- again, we'll have to clarify the record. At this point, PAX Exhibits 1 through 6, 9 through 17, and 23 through 29, and 31 are admitted as full exhibits. 18, 19, 20, 21, and 22 still remain possibly subject to objection to the creditor's committee, which the Court will rule on when and if you direct me to some specific portions of the transcript. Okay? MS. ARONSSON: Thank you, Your Honor.\n\nFiore Reporting and Transcription Service, Inc.\n\n THE COURT: Okay. Thank you. (PAX Exhibit Nos. 1-6, 9-17, 23-29, and 31 admitted in full) THE COURT: Go ahead, Attorney Goldman. MR. GOLDMAN: Yes. If it -- Your Honor, for the committee, we would offer into evidence our Exhibits 1 through 14, and I believe there aren't any objections to that to be -- MR. FRIEDMAN: There are no objections to that, Your Honor. It's Peter Friedman. And we actually also endorse the committee's suggestion that the Court take judicial notice of the record of this case. I think that was a point that I think both the U.S. Trustee and committee counsel made, and we think that that's a fair point to make, and that the full record of these cases should be taken judicial notice of. THE COURT: The -- okay. Thank you. Attorney Goldman, I haven't done a cross-reference, but are any of your exhibits the same as PAX's exhibits? MR. GOLDMAN: I believe there is one, the debtor's declaration. I think we both have that. That's our -- THE COURT: Your Exhibit 2? MR. GOLDMAN: Yes. THE COURT: All right. Hold on a second. And PAX's Exhibit 2. It's the same number, right?\n\n MR. GOLDMAN: Yes. THE COURT: Okay. All right. So you're asking the Court, Attorney Goldman, to admit as full exhibits, the unsecured creditor's committee Exhibits 1 through 14. Is that correct? MR. GOLDMAN: Yes, Your Honor. THE COURT: Okay. Anyone else wish to be heard on the admission of -- Creditor's Committee Exhibits 1 through 14? Okay. Then those exhibits are all admitted as full exhibits. And I say to you, Attorney Goldman, as I said to Attorney Aronsson, I'm not going to read every one of those pages. If there are specific things in those exhibits you want me to focus on, you'll need to focus me on those. Okay? I mean, it's possible I can read them all, but I'm not bound to read them all. Okay? MR. GOLDMAN: No, understood, Your Honor. I will -- THE COURT: Okay. MR. GOLDMAN: I will do that. THE COURT: Okay. (Creditor's Committee Exhibit Nos. 1-14 admitted in full) THE COURT: All right. The creditors's, Rui Ma\n\n and Zheng Wu and Wiecan Meng joinder, so you have nothing further with regard to your -- any exhibits you're standing with the committee, correct? MS. MAYHEW: Correct, Your Honor. THE COURT: Okay. Thank you. And the office of the U.S. Trustee, I think the same is -- well, I think your statement said, Attorney Claiborn, but you should definitely correct me if I'm wrong, that you reserve the right to question about any exhibit and question any witness, but that you weren't introducing any evidence yourself. The office was not introducing any evidence, correct? MS. CLAIBORN: That's correct, Your Honor. THE COURT: Okay. Thank you. Attorney Jonas, I think the same is true of you, except that you basically asked for judicial notice of everything filed in the case, and then any exhibit identified or offered by another party, and any exhibit necessary for rebuttal after impeachment, correct? MR. JONAS: Correct, Your Honor. THE COURT: All right. So you're all set then as well. MR. JONAS: Yes, Your Honor. THE COURT: For now. MR. JONAS: Yes, Your Honor. THE COURT: Understanding your --\n\n MR. JONAS: Thank you. THE COURT: -- your parameters. MR. JONAS: Thank you, Your Honor. THE COURT: Okay. Thank you. I just need one second, please. (Pause) THE COURT: Now we had another party file -- actually, I don't think they filed anything with regard to the list of witnesses and exhibits, so I think they just filed a statement; another creditor that basically joined the committee's -- yeah, they didn't file anything with listed witnesses and exhibits. So, Attorney Aronsson, you can go right ahead. You may proceed. MR. FRIEDMAN: Your Honor, it's Peter Friedman. THE COURT: Okay. Attorney Friedman. MR. FRIEDMAN: I'm going to -- THE COURT: Go ahead. MR. FRIEDMAN: So, Your Honor, it's Peter Friedman from O'Melveny and Myers on behalf of PAX, and I'm going to argue in favor of dismissal of the case. THE COURT: Okay. MR. FRIEDMAN: This case was filed in bad faith, specifically for the purpose of evading a contempt judgment that I know the Court has heard about a lot and we'll get\n\n back to. I believe in effect, in the UCC Exhibit 2, our Exhibit 2, Mr. Kwok's declaration in Paragraphs 3 and 24, he basically acknowledged that -- and in our view, contempt is the alpha of this case, and it should be the omega, because that was the purpose of this case, to evade that, and that's not a proper purpose for filing a bankruptcy. In his consent, the debtor refers to PAX's unrestrained legal warfare against him as being the reason he consents. I think this is ironic, given that, as we point out at Docket No. 50, it was Kwok who stated his intention to start an all-out war with PAX immediately before the bankruptcy. Next thing you know, Kwok files this case on the night before having to face enforcement of Justice Ostrager's contempt sanction. And so what kind of case do we get at that point? A case with no scheduled assets, no business, no employees, no executory contracts to assume, no income, other than a few checks from COVID stimulus. No real bankruptcy purpose, no change in the way Mr. Kwok lives his life. Just one more venue to access, and I think that leads to the conclusion that there's really double-barreled bad faith here to avoid a contempt judgment first, and relitigation of PAX's claims, which neither of which is a proper bankruptcy purpose, and the remedy for that should fit the motivations for filing this.\n\n Your Honor, I want to start by going back to taking the full breadth of Mr. Kwok's gamesmanship in terms of how -- of his efforts to frustrate PAX. And all of this comes from PAX Exhibit 23 at -- starting at Paragraph 2. PAX loaned Mr. Kwok's compoany \\$30,000 in 2008. Kwok personally guaranteed that loan. PAX and Kwok renegotiated the loan in 2011 to consolidate the remaining debt. And again, Kwok executed a personal guarantee. In April 2013, Kwok agreed to settle his debt by transferring PAX the title to certain apartments in Beijing. That settlement hinged on satisfaction of certain conditions precedent, including delivery of clean title. PAX extended the deadline for that settlement on many occasions, with a final deadline set for June 30, 2015. Kwok never filled -- fulfilled his conditions precedent. So Kwok gets sued by PAX in April of 2017 for breach of contract. A suit, by the way, totally unrelated to any other suit brought by any other plaintiff. No common nucleus of facts among the claim holders versus PAX. And I use the term claim holder specifically, because I don't think that these people are -- that a vast majority of people who have asserted proofs of claim are actually creditors. They hold claims, which is different than being a creditor. They don't have judgments. On September 15th, 2020, PAX wins summary judgment\n\n for its breach of contract case. The first warning shot that PAX was going to try to -- that was going to be so badly frustrated is when Geneva New York filed for bankruptcy in SDNY shortly after that, part of Mr. Kwok's pattern of trying to frustrate Kwok. Shortly after that, the New York court restrains the Lady May and other -- and the Sherry Netherlands. Exhibit 23, Docket 183.3, October 15th, Justice Ostrager order. The final judgment is entered in February 2021, a year before the bankruptcy case. At that point, the court enters a judgment of \\$116 million with the statutory interest rate in New York, making it grow to \\$127 million by the date of Mr. Kwok's filings. Then there are all of the antics that go on as PAX work -- PAX works to collect its judgment. As I noted, Justice Ostrager had to seek to -- expressly found, and this is Exhibit -- PAX 18 at page 21. At the October -- at an October 15th hearing, and if Mr. -- you know, if counsel for the committee wishes to object, I just highlight that this one of the things from the hearing transcript that we believe should be in evidence. The Court believes, as reflected in the September 15th, 2020 order, that Mr. Kwok has attempted to mislead the Court. The court believes that Mr. Kwok as the plaintiff --\n\n|    | 22                                                             |\n|----|----------------------------------------------------------------|\n| 1  | is, as the plaintiff contends, playing a shell game.<br>This   |\n| 2  | is going to come to an end.<br>We're not going to have any     |\n| 3  | more shell games.                                              |\n| 4  | Kwok is -- PAX is forced, as a result of these                 |\n| 5  | ongoing shell games, to move for contempt multiple times in    |\n| 6  | the New York State action.                                     |\n| 7  | On March 16th, 2021, as referenced in PAX Exhibit              |\n| 8  | 24, the Court notes, it's clear there's been an intolerable    |\n| 9  | amount of gamesmanship, dismembering, and deceit in            |\n| 10 | proceedings before this Court.<br>Court goes on to say that    |\n| 11 | rather than catalog the many shell games defendant has         |\n| 12 | engaged in, the Court grants the motion for contempt to the    |\n| 13 | following extent.                                              |\n| 14 | For every day the yacht is outside the                         |\n| 15 | jurisdiction of this Court after May 15th, 2021, defendant     |\n| 16 | will be fined -- Kwok will be fined \\$500,000.<br>This doesn't |\n| 17 | force Mr. Kwok to file bankruptcy, he just continues to        |\n| 18 | thumb his nose, this time not just to the judgment, but an     |\n| 19 | order of a state court.                                        |\n| 20 | At a July 2021 hearing -- this is PAX Exhibit 21 -             |\n| 21 | - the Court notes that the Court issued an order directing     |\n| 22 | the boat not be removed from the territorial waters of the     |\n| 23 | United States.<br>That order was disregarded by Mr. Kwok       |\n| 24 | and/or entities that he controls.<br>That is contempt of       |\n| 25 | court.                                                         |\n\n THE COURT: What page are you on, on Exhibit 21 there, counsel? MR. FRIEDMAN: 16 to 17. THE COURT: Thank you. MR. FRIEDMAN: And going further on Page 19, the Court talks about his -- Justice Ostrager talks about his defiance, Kwok's definance of court orders. Kwok appeals the fine. The first department affirms and directs the trial court to hold further evidentiary hearings. In the final evidentiary hearing, as this Court notes, that just -- that precipitated the bankruptcy, the Court talks about the 1,180 docket entries. This is in PAX 25. Almost all of which involve defendant's efforts to avoid and deceive. Talks about the -- PAX encountering difficulties through assets in a maze of corporate entities. And finally, as the Court notes, and I know this Court has heard it before, but if billionaire litigants can simultaneously seek to use the court process in New York and elsewhere, while knowingly and intentionally violating court orders, there is no rule of law. Mr. Kwok attempted to appeal that, sought an emergency stay of the orders, didn't get it. Justice Ostrager noted in his opinion -- an order, that there would be other consequences. I think we -- from what we know in\n\n testimony, what this Court has heard and I think what can be inferred, Mr. Kwok was obviously, not really worried about the money point. He was worried about going to jail for being in defiance of a court order, and that's what motivated him to file for bankruptcy.\n\n So what happens when the bankruptcy is filed? I think what the Court can observe from Mr. Kwok's declarations, from the debtor's response to examiner motions, from the debtor's motion to -- opposition to PAX's motion to lift the stay, from the debtor's effort to remove PAX's litigation from state court to federal court. All of them point to one thing. This case was then -- was commenced for the improper purpose of relitigation the PAX issue, right?\n\n You saw it in declarations that Mr. Kwok maintained that the PAX litigation was founded on forgery, right? That there was something improper about the judgment that had been obtained. There were efforts -- you know, that's in Docket No. 83 at Paragraph 12. Mr. Kwok argues, you know, that the personal guarantee somehow was a forgery. He talks about, I think, wanting to have a reevaluation of what's really his property, which is nothing more than an obvious effort to get the Court to relitigate Justice Ostrager's contempt order.\n\nThe idea of removing one case -- one case was\n\n attempted to be removed, and it's the case that makes no -- the least sense to remove. It's one on which the central issues were already on appeal, but what other purpose would there have been, other than to try to relitigate, and the cases we cite note that that is not a proper purpose for filing a bankruptcy case.\n\n I would note, Your Honor, that the only other case that has even been referenced in these proceedings is the claim of creditor Rui Ma, which there is no effort to remove that here. To the contrary, I believe there was actually a consent stipulation filed to let that case move forward to be adjudicated back in New York State court system.\n\n So I think the Court can draw the inference from everything it's seen. The real purpose of this case was targeted at frustrating PAX and getting a second or third bite at the apple, specifically with respect to PAX.\n\n Your Honor, a moment about PAX, and the Court, I think has observed how unusual this case is given the lack of assets, given the lack of operating business, given the lack of a, you know, ongoing income, business, et cetera. And the nature of this case being so honestly focused on fees for professionals and budgets for professionals as opposed to a traditional meaningful restructuring in any way, is that you have PAX that has a claim that is over 1,300 times larger than the next judgment claim. The second\n\nFiore Reporting and Transcription Service, Inc.\n\n largest actual, I guess theoretically undisputed claim are claims of insiders, which I think the Court can, you know, not pay much attention to in this context.\n\n So given the size of our claim, we want to sort of focus on the aggressive role PAX played, and I think it's really important that it did, in dealing with what happened after this case was filed.\n\n The debtor comes in. The debtor files a plan. I think a plan that was dead on arrival. Seeks to borrow money, \\$8 million. And PAX opposed that. Other people didn't. Other people thought that maybe there was, you know, a pot of gold at the end of the rainbow. We said from the beginning that the DIP was a sham and the rug definitely got pulled out from under people when Golden Spring decided it wasn't going to fund the case anymore.\n\n But just the -- you know, the very nature of trying to pursue a debtor in possession financing, not for the benefit of anybody other than professionals, or to run an investigation, never made sense to us, and nothing about this case ever made sense to us. We thought that the status Kuo, where creditors were entitled to pursue their rights under state law was really the appropriate mechanism for dealing with this kind of debtor.\n\n And we think the cases support that. For example, in *Sapphire Development Company v. McKay*, from the District\n\nFiore Reporting and Transcription Service, Inc.\n\n## Case 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 27 of 118\n\n of Connecticut, the debtor had no business, employees, and was being funded by an affiliate of the debtor's principle that had a history -- and there had been a history of state court judgments, finding the principle had diverted assets, misled courts, et cetera. And the court dismissed the case and specifically noted that unsecured creditors could go after anybody they wanted to in the state court, just like claim holders here can, and that that was an appropriate exercise of discretion. I want to emphasize, the Court does have a wider decree -- you know, the cases make very clear, this Court has tremendous discretion in deciding what to do today.\n\n The size of PAX's claim, I think is important as we cited in the *Acme Cake Company* case from 495 BR 212, that it's appropriate to dismiss a case where a single creditor with a sufficiently large claim takes the position that dismissal is the best outcome. Dismissal is in the best interest of creditors because the -- and the state is not affected by the probable result that the largest creditor will execute its judgment and reach the debtor's assets before other unsecured creditors.\n\n So there's nothing wrong with PAX asserting the fact that it is the largest creditor and it perceives this is the correct outcome. Again, all we're doing here is returning the status Kuo. Whether we'll be able to exercise\n\nFiore Reporting and Transcription Service, Inc.\n\n on our judgment or not, I can't say, but I think returning to the status Kuo is appropriate.\n\n *OptInRealBig.com*, 345 BR 277, from Colorado. The court granted a motion to dismiss where value recoverable for creditors as a whole could be greater outside of bankruptcy, which we think would be the case here, certainly for PAX, as I'll get into later. The Chapter 7 would impose tremendous costs on PAX if it could even be funded.\n\n But the court held there that a creditor -- and here, I would analogize who the court was talking about -- to the claim holders who have contingent unliquidated claims, or even the ones who have very small claims, should not be permitted to prolong or sustain a case merely to take advantage of benefits bankruptcy offers to creditors, and that a case could never be dismissed under the bankruptcy code if I think as our opponent suggests, if guaranteeing the bankruptcy code's priority scheme was a precondition of dismissal.\n\n So if you could only dismiss cases where it was 100 percent certainty that anybody who was at least theoretically similarly situated, you could never dismiss a case. We don't think that any case law stands for that, and we think actually to the contrary, cases like *OptInRealBig* and *Acme Cake Company* say the contrary.\n\nYour Honor, I think in the Region 11*, Evangelical*\n\n *Alliance of Our Church's* bankruptcy from Kansas, you know, the court noted that not withstanding the presence of other creditors, where bankruptcy was essentially an attempt to thwart a creditor's recovery in state court litigation, would be appropriate to let people seek the remedy to which they're entitled to under applicable non-bankruptcy law, without having to litigate the bankruptcy roadblocks that could be erected otherwise.\n\n Your Honor, I think we also cited in our opposition to -- I'm sorry. In our reply brief in support, three cases, *Wally Findlay*, which notes that it's an impermissible use to relitigate bankruptcy cases and where a debtor has taken that position. It is appropriate to dismiss a case. And the *Bridge to Life* case from the Eastern District of New York, a case is dismissed because the debtor was attempting to, you know, inject non- bankruptcy laws issued into a Chapter 11 case. In the *D&G Construction: Dean Gonzalez* case, the court held the use of bankruptcy process as a platform to delay the lawful exercise of state law rights and attack final orders of other courts, warrants dismissal.\n\n Your Honor, there are like, you know, some of those cases are not extensively reasoned. I understand. I think that's true of some of the other cases on the other side, and I'm going to get to their cases, but I think that\n\n there's a thru line, that there's nothing to prevent -- there's no reason to prevent -- not to return to the status Kuo and let people use whatever state court rights they have in a case like this.\n\n And let me say what this case is not. This is not a mass tort case. This is not a case where you can say, okay, a debtor did something bad five years ago, and sure some people were hurt before others, but we know -- we know that there will be people who get -- who necessarily are going to get verdicts in the future in their favor because of doctrines like offensive non-mutual collateral estoppel, and we can even come up with a matrix that says, okay, if you had mesothelioma and you're 45, you'll get X. If you suffered from an opioids injury, you will get Y. Everybody here has very, very different kinds of claims.\n\n So there's -- you know, to the extent that there's a race to the courthouse kind of issue, that's just what state law permits people to do, and PAX has been very, very, very, diligent and vigilant, and that's not improper.\n\n I want to talk about the cases that were cited by the other sides, and the first I think -- and there are a couple of thru lines that come through them I think that show pretty meaningful differences. I think that -- you know, the first is obviously the *Julian* (ph) case. I think there were obviously powerful reasons for dismissal. I\n\nFiore Reporting and Transcription Service, Inc.\n\n|    | 31                                                               |\n|----|------------------------------------------------------------------|\n| 1  | think, you know, severely differentiating factors are the        |\n| 2  | debtor's conduct throughout that case.                           |\n| 3  | Here, this case has been mercifully short, and I                 |\n| 4  | think I probably under this much less well than you do or        |\n| 5  | Mr. Birney does or Mr. Goldman does, but I think that there      |\n| 6  | were some suigeneris facts as related to the debtor's            |\n| 7  | counsel there that, you know, it was probably a pretty good      |\n| 8  | thing that the court maintained supervision over that case       |\n| 9  | ultimately.<br>But I don't -- you know, I think the ultimate     |\n| 10 | outcomes for creditor -- for creditors were not great, and I     |\n| 11 | think whether or not that was an appropriate exercise of         |\n| 12 | discretion there, I don't think informs this case.               |\n| 13 | The SWJ Management<br>case from District of                      |\n| 14 | Connecticut was one where creditors overwhelmingly sought        |\n| 15 | conversion.<br>And I want to make clear, as the Acme Cake        |\n| 16 | Company says, you're not supposed to count noses.<br>You're      |\n| 17 | supposed to really count dollars, because imagine if 100 and     |\n| 18 | -- you know, PAX has \\$260 million in judgments.<br>Imagine if   |\n| 19 | PAX had, you know, sliced its loan up to \\$261 million           |\n| 20 | affiliate funds and each filed their own creditor claims.        |\n| 21 | And each could be running in here and say, 261 creditors         |\n| 22 | favor dismissal.<br>I don't think it's a counting of noses.<br>I |\n| 23 | think it's a counting of dollars, and PAX's -- you know, the     |\n| 24 | value of PAX's dollars are really what's important.              |\n|    |                                                                  |\n\n*Premier Golf Properties* is a case heavily relied\n\n upon. That's 564 BR 710. The Court uses an interesting word there in deciding whether dismissal or conversion is right. It says the operative question -- it actually says the operative question of the case was whether the uncertain value of the underlying asset, which was a golf course, could be maximized through a going concern bankruptcy sale or foreclosure. That is nothing like this case.\n\n The court relied on the fact that the debtor maintained an operating business, had 60 employees, and \\$300,000 a month of revenue. And the dismissal of the case would have resulted in foreclosure and the financial and employment losses that brings. I might be out of a job if you dismiss this case, Your Honor, but I don't think anybody else is going to be. I think that, you know, *Premier Golf Properties* is very, very, very different.\n\n *1121 Pier Village, Team Systems International, West Hampton Coach Works, Spear, Babiaff* (ph), all involve situations where no non-debtor party advocated for dismissal over conversion. And in most cases, dismissal wasn't even discussed unless the debtor preferred that option.\n\n The court in *Team Systems,* which is a very thoughtful opinion by Judge Goldblatt, who is near the Delaware bench, specifically noted on multiple occasions that all participating creditors and the U.S. Trustee argue that conversion is better for creditors and the estate than\n\n dismissal. Under that circumstance, of course it wasn't an abuse of discretion for Judge Goldblatt to conclude that dismissal wouldn't make sense and conversion did. That's just simply not the situation here.\n\n *Fleetstar* is heavily relied upon by the Rui Ma creditors. I think it involves a very, very different situation. That was an effort to have a structured dismissal, which I think is, if not entire verboten, deeply problematic under *Gevic* (ph). This is not a structured dismissal. No one is asking the Court to say, well, you can dismiss the case and get releases if you give some people something and other people nothing, and you know, tough luck.\n\n This is a clean dismissal request. There are some efforts to have people pay fees. I think we've always said, we don't have problems if other people get paid fees. We're not going to insist our own fees get paid, but this is really not a structured dismissal kind of case at all.\n\n The court explained in *Fleetstar*, even if the debtor's proposed dismissal scheme could pass a practicality test, and the court had some real concerns about the way the structured dismissal was intended to take place, it must be denied because it seeks to alter parties' rights without their consent and lacks many of the code's most important safeguards.\n\nFiore Reporting and Transcription Service, Inc.\n\n Here, we're asking to go back to a status Kuo. Nobody is losing a right they have. You know, the debtor's prepetition creditors aren't being asked to sacrifice anything. We simply seek a return to status Kuo.\n\n The committee also cites to the *Capra* case. *Capra* is an interesting matter. I actually think if you sort of give some deep thought to *Capra*, it helps us rather than hurts us. The big factor in *Capra* the court said a bunch of times, was the egregious misconduct that favored conversion, because the debtor had come to the judge's court and sought bankruptcy protection. And what did he do? He failed to -- you know, he -- it's really what he -- some of what he didn't do. He didn't participate meaningfully on the bankruptcy process, and you know, this case hasn't progressed that long, but there certainly have been MORs filed and the debtor has made retention applications. Didn't find -- you know, we don't think what he did made sense, but he did participate in this process.\n\n But the key issue there is, the debtor sold both a Bentley and a Rolls Royce while in bankruptcy without complying with Section 363 of the Bankruptcy Code. That's one of the -- like, on the list of really bad things to do, that's a really bad thing to do. Right? You can't simultaneously say, I want to go into bankruptcy, but then not abide by one of the most important protections.\n\n Obviously, it wasn't ordinary course. He wasn't an auto dealership. He was an individual. And so he violates 363, and the court, on numerous times, talk about how bad that is, and goes on to say, I think like the Gestalt of that case is, the court didn't want to permit dismissal because the debtor wouldn't basically face any consequences for what he did. And so I think the way to think about that case is, if you do something bad before a judge, the judge is going to retain supervision over you. So send this case back to Justice Ostrager.\n\n Right? The really bad things that Kwok did were in front of Justice Ostrager. So I think if -- if *Capra* -- you know, the teaching of *Capra* is, when people do bad things, judges have the right to supervise them. The really bad things done here were done in front of Justice Ostrager. So when this case gets dismissed, you know, we're going to continue to pursue our rights in front of Justice Ostrager, and he can -- he can hold Mr. Kwok accountable for his conduct.\n\n Your Honor, the *Rollicks* (ph) case is cited. It's a very short opinion. I think one way to look at *Rollicks* is the people who have the largest claim should be paid attention to. The other critical differentiation is that *Rollicks*, which went for conversion over dismissal, is about a group of creditors that had received prepetition judgment liens who were seeking to dismiss the case to avoid\n\nFiore Reporting and Transcription Service, Inc.\n\n potential avoidance actions against them. It's just not a factor here. We don't have any -- there's no preference claim that could be asserted against us because we haven't received debtor property.\n\n Your Honor, I just want to take a minute to discuss a couple of other cases that are cited. *Steve and Barry's*, which is also, I think colloquially known as *Steve and Barry's*, that's *BHS and B Holdings LLC case* (ph). Committee cites that to say that, you know, if you have an administrative lien in a solvent case, that should weigh in the favor of conversion.\n\n A, I think the Court was focused on that because of cause. B, that case had been running for years. There was inventory to deal with, there were, you know, liquidated stores. And C, I think if you read the opinion there's no suggestion that anybody even wanted conversion. So I guess the could have -- you know, had to evaluate whether it was appropriate, but nobody wanted it, much less the largest creditor.\n\n You know, *Mitan v. Duval*, you know, it's a Sixth Circuit case. There, the largest creditor didn't favor dismissal, only the debtor did. Those creditors were -- and so, you know, the court wanted to appoint a Chapter 7 trustee in order to conduct investigations. Here, we think every creditor can go forth and do whatever discovery is\n\n important and they believe is necessary. A few other things I wanted to just note about the cases, Your Honor. Your Honor, one other point about the *Capra* case, which is heavily relied upon, is that the parties favoring dismissal, you know, were secured creditors, and the court noted those two creditors are being treated favorably by the debtor and can reasonably expect to keep receiving favorable treatment if the case is dismissed. I don't know what's going to happen between us and the debtor in the future. And the debtor says in his pleadings, they intend on paying creditors. I don't know if that will happen. I assume we'll have to litigate more. I don't know, but there's certainly no -- you know, there's no history of favorable treatment by the parties who are supporting dismissal here. Far from it. We are, to put it lightly, somewhat uncomfortable bedfellows with Kwok in supporting this motion. So I think that's another differentiation point. Your Honor, I want to make a few points about Exhibit 27, which are the -- you know, the -- it's our -- it's the summary of other litigation. THE COURT: And that's been admitted as a full exhibit with no objections, so go right ahead. I'm just making a note --\n\nMR. FRIEDMAN: Okay.\n\n THE COURT: -- about that exhibit, because we still have to -- we still at some point are going to have to address the transcript exhibits. But go right ahead. MR. FRIEDMAN: Your Honor, you know, that talks about the claims that were listed on Schedule F. Now, there -- let me first say, there have been some proofs of claim that have been filed, and I suspect that we might hear, well, if a proof of claim is filed, it's automatically treated as valid until there are an objection. I think the Court can note, in part from the Exhibit 27, but generally, that that -- it's sort of true that there's been no objection, but all those cases are in active litigation, and so it's a little -- it's not quite right to say that the proof of claim is prima facie valid until there's no -- until there's an objection, when you know that those claims have been actively contested in litigation over the years. In any event, one of the things I think is really important about these claim -- litigation claims is, there's\n\n one liquidated claim for I think 300 and maybe \\$96,000. As you go through the chart, there's \\$35,648,868 of claims that have been dismissed. There are \\$37 million in claims that have been idle for two plus years. Or thereabout. I don't want to -- I think it's two plus years. It's certainly -- and you can tell, it's a substantial amount of time. And so, you know, you're really talking a much\n\n smaller potential pool of claims. There's no evidence that any of them have trial dates or had trial dates set, and, you know, we just don't know much about when any of those claims will be heard, and its, we submit, appropriate for the Court to take into account both the qualitative difference, which is we have a judgment and these are all potential future claims that don't have a common nucleus of facts as it relates to our claim.\n\n And additionally, Your Honor, I would -- you know, a few other points to note. Many of the claims are -- at least eight of the claims, as far as we can identify in valve securities violations, which you know, subject to either subordination or disallowance, but you know, I just note that as an issue. And I think what that leads to is both that PAX' views, I think are entitled to a substantial amount of weight here. But also, looking at those claims and noting how many of them are defamation claims, and the Rui Ma claim, which is obviously a personal injury type claim, go to point out some of the reasons why this case is spectacularly unsuited to bankruptcy.\n\n This Court, I don't think, is necessarily the right forum to have to oversee a dozen plus personal -- defamation claims that have no factual relationship in common, that have advanced to some stage in the state court. If the stay is going to be lifted to let them all be\n\nFiore Reporting and Transcription Service, Inc.\n\n liquidated, that defeats the purpose of a centralization of forum, or a singular -- single fact finder. There are frankly open questions, as we've cited, as to whether under 28 USC 157B5, this Court can even hear them, or whether those claims have to be heard in the district court. The Connecticut court has, in *Ice Cream Liquidation*, has taken a broader injury of personal injury tort claims that includes any injury which is an invasion of personal rights. I don't think the Court has to reach a conclusion on any of those, it's not before it, but I think I'm trying to give the Court a taste of why it's problematic and doesn't really serve core bankruptcy functions to have those claims liquidated when there are other options like letting people go back to state court. Obviously, in Chapter 7 -- and to be clear, Your Honor, I understand there's a broader view. We cited the *Gawker Media* case, because I think it's always incumbent on us to recognize when there are cases that say something different than the view we have. But I do think District of Connecticut's *Ice Cream Liquidation, Inc.* case is a helpful one to think about in this context. You know, Your Honor, then you get to what's going to happen with all those cases. Plaintiffs are still going to have -- if they're here. Plaintiffs are still going to have the costs --\n\n THE COURT: What's going to happen with those cases if the case -- if this case is converted? Is that your -- MR. FRIEDMAN: Yes, Your Honor. THE COURT: Yes. Keep going. MR. FRIEDMAN: So a trustee is going to have to defend them. I don't know what the trustee's -- the trustee can't just say, okay, everybody, you know, I'm going to allow your claims. That's obviously deeply prejudicial to creditors with valid claims. Trustee is going to have to get paid to do that somehow. I don't know -- you know, I'll get to that in a moment. But that requires real cash on the barrel head, not -- you know, not necessarily a creed of litigation funding or contingency fees, right? That's going to be somebody who has to really dig into the merits of each of those cases. It may impose a burden on PAX to have to do the same as a party in interest, as the Court knows. Any creditor, particularly in a 7 can object to the claim of any other creditor.\n\n You know, if you don't have a trustee that's really able to defend, that burden will unfairly fall on PAX. You may also have the debtor participating in the case at that aspect. I think it -- you know, you really get something that's not well suited to the bankruptcy court, but is appropriate to let these people go -- you know, these\n\n|    | 42                                                           |\n|----|--------------------------------------------------------------|\n| 1  | claimants go back to their state court remedies and continue |\n| 2  | to pursue whatever cases they've already brought to this     |\n| 3  | point.                                                       |\n| 4  | THE COURT:<br>Well, in addition to your argument             |\n| 5  | about 157(b)(5), what about 157 -- 28 USC 157(b)(2)(B),      |\n| 6  | which says that personal injury claims and wrongful death    |\n| 7  | claims cannot be estimated --                                |\n| 8  | MR. FRIEDMAN:<br>Yes.                                        |\n| 9  | THE COURT:<br>-- or liquidated --                            |\n| 10 | MR. FRIEDMAN:<br>Yes, Your Honor.<br>Against the             |\n| 11 | compendium.                                                  |\n| 12 | THE COURT:<br>-- for purposes of distribution in a           |\n| 13 | case under Title 11?                                         |\n| 14 | MR. FRIEDMAN:<br>That is the parallel point that I           |\n| 15 | anticipated that somebody might argue, oh, well you can      |\n| 16 | estimate these, and, you know, people's distributions won't  |\n| 17 | be held up for ever.<br>But again, you're then going outside |\n| 18 | of this Court to have that done and, you know, you're        |\n| 19 | imposing a substantial burden on the federal court system in |\n| 20 | Connecticut, when these could be dealt with in the state     |\n| 21 | court system.<br>Your Honor, I think -- so I think that --   |\n| 22 | that's a pretty critical point.                              |\n| 23 | So then we get to, you know, the other features of           |\n| 24 | what this case looks like, absent -- given its current       |\n| 25 | posture.<br>There's no funding for this case, and we were    |\n\n always concerned that there was never going to be the kind of funding that you'd need for this case. Right? The only funding was to conduct an investigation, which was, we said from the beginning, was a bridge to nowhere, because what you -- if you were going to do anything, what you needed was a kind of action. And we -- you know, the kinds of actions we were taking outside of bankruptcy court, and that were helpful.\n\n You have here a debtor with no liquid assets, and protracted future disputes. We know that there's a lawsuit, an adversary proceeding initiated in this court already about setting aside what rights Mr. Kwok has, whether somebody else has rights to the yacht.\n\n We know that there is extensive litigation over the Sherry Netherland apartment, which would require a debtor -- the debtor -- the Chapter 7 trustee to participate in a New York bankruptcy. Just to deal with plan issues, et cetera, not even just to get the asset, but objecting to other people's claims that that case is valid that also has British Virgin Island components. You have to pay counsel in the British Virgin Islands, and there's no money for that. Right?\n\n There would also be litigation presumably, because this is a 7, that you would have fights over discharging claims. You know, a trustee would have to deal with that,\n\nFiore Reporting and Transcription Service, Inc.\n\n or individual creditors would have to pick up the burden. And then, you know -- so what do you wind up with? You wind up with a situation that there are no available funds for a trustee. There's no property you can liquidate in short order. There's a couple suits and a dog, but that's it. There's stuff people could go after, but how do you go after that? Well, you could have litigation funding. We haven't seen any evidence of litigation funding available. I think it would come at a steep cost. That cost would be borne largely by PAX, would eat into whatever recoveries PAX was able to obtain. You know -- THE COURT: Any recoveries any creditor is able to retain. MR. FRIEDMAN: Absolutely, Your Honor, and I think that would disproportionately fall on us, as would a contingency counsel. This Court can take, you know, notice from her own experience, contingency counsel is expensive. We know that the committee, prior to dismissal, not only -- you know, the dismissal hearing, filed motions to retain fraud examiners and asset tracers, right? All of which would be, you know, expensive if people are going to take those on the come. I don't even know if they would. Usually, those kind of people I think submit hourly rates, but there's nothing to pay them.\n\n And you know, I think there are certainly cases -- you know, the *Babiaff* case the committee cites, that dismissal is preferred where there are insufficient funds and a trustee would simply add more costs and burden to the estate. THE COURT: What case was that, counsel? MR. FRIEDMAN: The Babiaff, 445 BR 640 -- 64 at Page 82. THE COURT: I just don't recognize that name. The other cases that you cited, I recognize, but it's in the committee's brief, you're saying? MR. FRIEDMAN: I believe so. And that cites in turn, *Midwest Properties v. Sherwano* (ph). And so, you know, look, we think a trustee would add substantial burdens expense wise, and I'm not sure what -- you know, what the benefit is because in particular, we know state law remedies can be pursued, or can pursue veil piercing if appropriate. People can pursue state law fraudulent transfer claims on their own if they want to. People can seek restraining orders. PAX certainly did. And there's nothing preventing people from using what state law remedies they have. You know, the Rui Ma creditor group says that Non PAX creditors will not receive a quality in distributions if the case is dismissed. I don't know if that's true or not.\n\n I don't -- maybe they'll settle their claims. I don't know. Right? There's no guarantees what anybody will get outside of a bankruptcy, but parties should be able to pursue Kwok to their heart's content to recover what they want to.\n\n If there's no there there -- and this is just a sort of a frolic and detour -- if there is a there there, nobody's put a cap on how much there might be. There could well be, potentially, plenty for other people. We don't -- you know, concededly, we don't know, but PAX, I think in particular, given the size of its claim and the effort it's taken so far, shouldn't have been -- shouldn't be prejudiced by this filing, and I think other creditors should be permitted to essentially take advantage of a debtor's bad faith filing.\n\n The other parties sort of say, you know, there is a gamesmanship aspect to Kwok's quality -- Kwok's behavior here, and he shouldn't be rewarded for that. I don't think he is being rewarded. If this case is dismissed, he's gotten no real benefit from this case other than avoiding a couple of months in front of Justice Ostrager, which he's going to have to go right back to. He hasn't gotten a benefit. The only people who have gotten benefits are people who don't have liquidated claims who are stretching PAX out, which has already been stretched out for almost 14 years. I don't think that's equity or fairness, and I don't  think that's in the interest of the \\$261 million of creditor claims that PAX has.\n\n You know, we think it's actually the other parties, the other claim holders, pushing for remaining in bankruptcy that are advocating for unequal treatment. They basically want to use the bankruptcy as a collection device, something that the *In Re: Murray* case says, you know, bankruptcy shouldn't be used as a debt collection remedy that's more potent -- a debt collection remedy that's more potent in bankruptcy than the equivalent right under non- bankruptcy law is not something that we should be doing. The court denounced a creditor's use of bankruptcy as a debt collection remedy more potent than the equivalent right under state -- under non-bankruptcy law.\n\n It would be other people jumping to the front of the line, given where they stand now, to force PAX to share recoveries while imposing millions of dollars in unnecessary costs.\n\n I would note that the debtor makes the point that other creditors are basically hijacking a Chapter 11 case for a pseudo involuntary. I suspect that they amplify it. It would otherwise be unavailable to them as an avenue for relief. I will defer to the committee to further develop that argument. I think it has merit, Your Honor.\n\nYour Honor, the committee cites, and I think we\n\n note that there are factors that *Collier* (ph) talks about. Courts are sort of -- some courts really rely on them, some courts just notice them in passing. I think what I've discussed today really goes over those factors. You know, whether creditors receive preferential payments is a factor. Now there's certainly no reason to believe that PAX received any preferential payment. Would there be a loss of rights granted in the case if it were dismissed rather than converted?\n\n The Rui Ma group suggests that the rights to the \\$37 million escrow would be lost upon dismissal, but the order expressly contemplated what would happen if there is dismissal. That wasn't a mystery. Creditors -- you know, the creditors didn't have any particular right to that, and it was expressly bargained for, what might happen in the context of dismissal. So I don't think anybody is losing a right that they otherwise would have had.\n\n Whether the debtor would simply file a further case upon dismissal. I mean, I guess Kwok could try, having consented to this one and, you know, I don't think that weighs in favor.\n\n The ability of a trustee to reach assets for the benefit of creditors. I think, you know, maybe, but the trustee doesn't have any money to support its efforts right now. What's deemed low hanging fruit -- first of all, it\n\nFiore Reporting and Transcription Service, Inc.\n\n was Kwok that -- you know, it was PAX that built the tree, but more importantly, there's still a lot of wood to chop to get there on that tree. And even assuming if funding was available, it would do so at a great cost to creditors, including, I think, specifically PAX. You know, maximizing the estate's value as an economic enterprise, you know, who really knows what the economic enterprise value of this is. We know it -- I think that mostly comes up in the context of cases like the *Premier Golf* one, where there -- liquidation causes a clear loss -- a crushing loss of value and jobs. Whether the remaining issues would be resolved outside the bankruptcy forum, I think the Court might have already had a colloquy on that issue, and I think the debtor in Rui Ma, for example, we've already said, hey, you've got a case, go back and try to get it dealt with somewhere else. Whether the debtor is engaged in misconduct. I think here the debtor's misconduct is almost entirely prebankruptcy. There are some things around the edges that we obviously -- you know, we don't love about the way the debtors conducted the case, but I think they fall within the bounds of bad ideas, not corruption. And you know, I don't think creditors need a Chapter 7 case to protect their interest. People have their state law remedies fully available to them.\n\nFiore Reporting and Transcription Service, Inc.\n\n| 1  | And then, you know, other factors, single asset                |\n|----|----------------------------------------------------------------|\n| 2  | plan already confirmed, environmental concerns, I think as     |\n| 3  | we learned from the DIP when we went over the proposed         |\n| 4  | order, there are no circular concerns in this case.<br>There's |\n| 5  | no environmental issues.<br>This isn't a Midlantic type of     |\n| 6  | situation.                                                     |\n| 7  | So, Your Honor, those are the reasons we believe               |\n| 8  | dismissal is appropriate, that the case laws support PAX's     |\n| 9  | rationale, and the cases relied upon by other parties really   |\n| 10 | don't get them where they need to be in order for this Court   |\n| 11 | to exercise discretion to convert rather than dismiss.         |\n| 12 | Thank you, Your Honor.                                         |\n| 13 | THE COURT:<br>Thank you.<br>Attorney Jonas?                    |\n| 14 | MR. JONAS:<br>Good morning, Your Honor.<br>Jeff Jonas,         |\n| 15 | Brown Rudnick on behalf of the debtor, Miles Kwok.             |\n| 16 | Before addressing dismissal of the Chapter 11 case             |\n| 17 | particularly, or alternatives, I think it's important to       |\n| 18 | just step back for a minute and review how we got here, to     |\n| 19 | put it in context, because I do think it's important for the   |\n| 20 | Court today to put things in context and focus on the facts,   |\n| 21 | not the many unsupported allegations, innuendo and argument    |\n| 22 | that will be made, have been made, and will be made by         |\n| 23 | lawyers, so you won't hear any rhetoric or vitriol from me     |\n| 24 | this morning.                                                  |\n| 25 | In this case, you've heard live testimony from two             |\n\n witnesses, Craig Jalbert of Verdolino & Lowey, and from Miles Kwok, the debtor.\n\n As Mr. Kwok testified, and as set forth in the declaration he filed, he's an outspoken critic of the Chinese Communist Party or CCP. Hundreds of millions of people watch his broadcasts in connection with his criticism of the CCP. He and family members were jailed and tortured in China. He endured watching his brother being shot and killed. He continues to be pursued and persecuted by the CCP.\n\n This is not fantastical make believe. Senior U.S. Government officials and business leaders have been criminally charged and pled guilty, including with acting as foreign agents for the CCP in connection with illegally seeking to have Mr. Kwok deported to China so he could be jailed or killed. These persons include Elliot Broidy and George Higginbotham.\n\n Your Honor, last week -- I think we mentioned this in our papers, but to make sure you're aware -- last week, the Department of Justice filed suit against Steve Wynn, a billionaire fund-raiser and former finance chair for the Republican National Committee, based on his acting as an unregistered Chinese agent in seeking Mr. Kwok's extradition.\n\nThe Justice Department references President Xi\n\nCase 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 52 of 118\n\n Jinping, Chinese -- China's supreme leader -- raising the U.S. returning Mr. Kwok to China directly with then President Trump. Mr. Wynn, in an effort to gain support from the Chinese government for his casinos in Macao, had contact with senior officials on the National Security Counsel at the White House, the White House Chief of Staff, and then President Trump seeking to have Mr. Kwok placed on the no- fly list, to have Mr. Kwok's U.S. visa not renewed, and have Mr. Kwok returned to China, again likely to face jail or death. Mr. Kwok believes that some, if not all, of the creditor -- the alleged creditor claims against him are part of the CCP's continuing effort to discredit and silence him. Against that backdrop, Mr. Kwok perseveres. Although he has little to no assets and income, he is supported by the largess of his family. While his alleged creditors may not like this, there's nothing illegal, improper or wrong about this. In February, facing a New York State Court judgment and order, which he could not pay, Mr. Kwok filed this bankruptcy case. As he testified, and as set forth in his declaration, he hoped Chapter 11 would help him reach a fair and equitable resolution of alleged creditor claims. His bankruptcy filing and the administration of\n\n this case since it has -- since it was filed, has been nothing but in good faith and completely transparent. There is no evidence to the contrary. I think even Mr. Friedman admitted substantially that. While there may be allegations that Mr. Kwok owns certain assets, whether that be a yacht or a New York City apartment, these allegations remain unproven and undetermined. Since filing this case, Mr. Kwok has filed complete and accurate schedules and statement of affairs. He sat for almost two full days of 341 meetings. He came before the Court and provided live testimony. He arranged and assisted with the return of the yacht, subject of the New York State Court order, the return of which is presently secured by \\$37 million in cash. He obtained \\$9 million of DIP financing which would have been unsecured and subordinated and included a million dollar gift to the estate. And he filed a plan of reorganization. The hope was that bankruptcy would afford a forum and opportunity to have a dialog with creditors and alleged creditors in order to reach a consensual resolution, the exact purpose and point of bankruptcy. This bankruptcy filing was not in bad faith and there has been no bad faith since it has been filed. So, Your Honor, turning to dismissal, cause for\n\n dismissal under Bankruptcy Code Section 1112(b)(1), exists, specifically 1121(b)(4)(A), provides that cause includes substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation. That is the only existing cause that exists. If you do look at -- I appreciate it's not absolutely exhaustive, but if you look at 1112(b)(4) -- and obviously I've referred to (A) as the cause we think is relevant in this case -- if you look at (B), we don't think any of the other causes are applicable, Your Honor. (B) gross mismanagement of the estate, I've addressed that; (C) failure to maintain appropriate insurance; (D) unauthorized use of cash collateral; (E) failure to comply with an order of the Court; (F) unexcused failure to satisfy timely any filing or reporting requirement; (G) failure to attend the meeting of creditors; (H) failure timely to provide information or attend meetings requested by the United States Trustee; (I) failure timely to pay taxes; (J) failure to file a disclosure statement; (K) failure to pay any fees or charges under certain -- chapter 123 of title 28;\n\n|    | 55                                                           |\n|----|--------------------------------------------------------------|\n| 1  | (L) revocation of an order of confirmation;                  |\n| 2  | (M) inability to effectuate substantial                      |\n| 3  | consummation of a confirmed plan;                            |\n| 4  | (N) material default by the debtor with respect to           |\n| 5  | a confirmed plan;                                            |\n| 6  | (O) termination of a confirmed plan;                         |\n| 7  | And lastly, (P) failure of the debtor to pay any             |\n| 8  | domestic support obligations.                                |\n| 9  | So, Your Honor, as I've mentioned, we believe that           |\n| 10 | there is cause.<br>The relevant and applicable cause is      |\n| 11 | 1121(b)(4)(A).                                               |\n| 12 | THE COURT:<br>May I just ask you a question on that?         |\n| 13 | MR. JONAS:<br>Certainly, Your Honor.                         |\n| 14 | THE COURT:<br>I understand -- I understand your              |\n| 15 | recitation of the list, and I understand that you assert     |\n| 16 | that only (4) applies, but are you -- are you contesting the |\n| 17 | case law that interprets cause includes mean -- does not     |\n| 18 | mean that the list -- it can only fit into the list?         |\n| 19 | MR. JONAS:<br>No, Your Honor.                                |\n| 20 | THE COURT:<br>Okay.                                          |\n| 21 | MR. JONAS:<br>Not at all.                                    |\n| 22 | THE COURT:<br>That's all I'm asking.                         |\n| 23 | MR. JONAS:<br>Yes.                                           |\n| 24 | THE COURT:<br>Okay.                                          |\n| 25 | MR. JONAS:<br>And I think I mentioned, Your Honor,           |\n|    |                                                              |\n\n that our view is it's -- I appreciate it's not exhaustive. THE COURT: I thought you said that -- MR. JONAS: Yeah. THE COURT: -- but I just wanted to make sure for the record. MR. JONAS: No. No. No. Absolutely, Your Honor. THE COURT: Okay. MR. JONAS: But I do think there's a reason that there's specified items there -- THE COURT: I understand. MR. JONAS: -- and I thought it was important to review that. THE COURT: No. I think that's helpful. Thank you. MR. JONAS: You're welcome. Your Honor, as for dismissal versus conversion or appointment of a trustee, while a debtor's preference is not dispositive, it should be given some weight. Here, the debtor and its largest creditor support dismissal. Eleven-twelve (b)(1) provides for the Court to examine which of dismissal, conversion or appointment of a trustee is in the best interest of creditors and the estate. In *SWJ Management*, 551 B.R. 93, 2015 case from the district court here in Connecticut, it was described -- this analysis was described as whether dismissal would,\n\n quote/unquote, \"Prejudice creditors.\" In the *Hull* case, 339 B.R. 304, 2006 case from the -- a bankruptcy court case from the Eastern District of New York, the Court addressed what -- in this context what is prejudice to creditors. And it said, quote, \"Creditors are not generally prejudiced by dismissal since they will no longer be stayed from resorting to the state courts to enforce and realize upon their claims. That is, it is the reasonable pre- petition legal expectations and entitlements of a debtor's creditors that should be considered in the context of a debtor's timely motion to dismiss, not the loss of an opportunity to receive a distribution through the bankruptcy process.\" THE COURT: Could you just tell me that case again, Counsel. MR. JONAS: Certainly. THE COURT: I'm sorry. MR. JONAS: It's the *Hull* case. H-U -- THE COURT: *Hull*, H-U-L-L? MR. JONAS: Yes. And it's 339 B.R. 304. It's a 2006 case, Eastern District of New York. A bankruptcy court case. THE COURT: Thank you. Thank you. MR. JONAS: Yes.\n\n THE COURT: I just didn't hear what you had said at the beginning. I apologize. MR. JONAS: Of course, Your Honor. Your Honor, I'll just, for the record, state we don't believe that 1112(b)(2), which would arguably prohibit conversion or dismissal, is applicable for a number of reasons. We don't believe there are unusual circumstances establishing that conversion or dismissal is not in the best interest of creditors and the estate. Another requirement there, which we don't believe is applicable, is that we don't think there's a reasonable likelihood that a plan will be confirmed with a reasonable period of time, which is another requirement to -- under 1112(b)(2). And 1112(b)(2) is not applicable if the grounds for conversion are dismissal is 1112(b)(4)(A), which, again, I'm taking you through our position that the loss or diminution and the no reasonable likelihood of rehabilitation under 1112(b)(4)(A) is the basis for dismissal. Your Honor, I won't further review PAX's allegations of bad faith. I think I've addressed those. I mean, they -- again, just briefly, they've referred I believe in an unsupported manner to -- to misrepresentations in the schedules, to a, quote/unquote, \"Bogus DIP loan,\" to\n\n|    | 59                                                             |\n|----|----------------------------------------------------------------|\n| 1  | the debtor, quote/unquote, \"Pulling the plug on the case.\"     |\n| 2  | I don't think any of those are what happened here.             |\n| 3  | I can tell you the debtor came into this court --              |\n| 4  | as I mentioned earlier -- with the hope that ultimately        |\n| 5  | there would be a reorganization.<br>That didn't happen.<br>But |\n| 6  | nevertheless I think Mr. Friedman said it, he may not have     |\n| 7  | liked it, but he didn't really take issue with the fact that   |\n| 8  | there was bad faith in the case since the case has             |\n| 9  | commenced.                                                     |\n| 10 | And lastly, Your Honor, I'll say, as to the --                 |\n| 11 | somehow the bankruptcy filing being improper because the       |\n| 12 | debtor didn't have an ongoing business, I think you said it    |\n| 13 | best in the Lucarelli case, Your Honor, 517 B.R. 42, where     |\n| 14 | you said or we've heard quoted, \"The plain language of the     |\n| 15 | bankruptcy code permits individual debtors not engaged in      |\n| 16 | business to file for relief under Chapter 11.\"                 |\n| 17 | THE COURT:<br>I think I cited from the supreme court           |\n| 18 | though for that.                                               |\n| 19 | MR. JONAS:<br>You cited a number of cases, Your                |\n| 20 | Honor.                                                         |\n| 21 | THE COURT:<br>I think it was the --                            |\n| 22 | MR. JONAS:<br>I'm giving you credit for it.                    |\n| 23 | THE COURT:<br>I think it was the supreme court.                |\n| 24 | MR. JONAS:<br>I think you're right.                            |\n| 25 | Your Honor, I just -- I do think it should be                  |\n|    |                                                                |\n\n noted briefly that the alleged claims of the creditors committee members that are here today are, in fact, unliquidated and disputed. Those claims as -- again, Mr. Friedman went through this and I'm not repeating a lot of what I might otherwise have said because I think Mr. Friedman covered it -- those claims would be -- would need to be litigated. Continuation of this bankruptcy case in any form will be in the context of an administratively insolvent case with no funding to support what likely could be years of litigation. Your Honor, in closing, Mr. Kwok has asked me to thank you and your staff for the time and the consideration you've given this case. Although it may not have been as successful as he would have liked, it has, at least in part, restored his confidence in the judicial system. And that said, Your Honor, respectfully, it is time to move on. This bankruptcy case should be dismissed. Thank you. THE COURT: Thank you, Attorney Jonas. Attorney Goldman. MR. GOLDMAN: Thank you, Your Honor. Good morning. Irve Goldman representing the creditors committee. Your Honor, I'd like to start with the observation that whether or not this case was filed in bad faith or other cause exists, as we've stipulated, the question before\n\n the Court -- the question before the Court -- is not whether the case was filed in bad faith, but is whether conversion, dismissal, or the appointment of a Chapter 11 trustee is in the best interests of creditors.\n\n So whether the case was filed in bad faith or other cause exists does not change the standard of what is in the best interests of creditors in this case.\n\n And although it would be quite ironic that if the debtor's own bad faith is used to justify a dismissal of this case, it would allow him to avoid the scrutiny of the Chapter 7 process, which would entail a thorough investigation of what PAX claims were his hidden assets, that they were on the cusp of reaching before this case was filed, and he will be rewarded because what will be left will be various creditors that are scattered about in different courts that will be left to their own devices to chase down whatever assets this debtor has after PAX gets done with them as the only judgment creditor in this case.\n\n So they certainly do need the protection of the Chapter 11 -- 7 process.\n\n In terms of what the standard is under 1112, I'd like to start with the plain language of the statute, which the Supreme Court in the Second Circuit have repeatedly instructed lower courts to focus on in interpreting the bankruptcy code.\n\nFiore Reporting and Transcription Service, Inc.\n\n| 1  | Section 1112(b)(1) provides that once cause is               |\n|----|--------------------------------------------------------------|\n| 2  | established, the Court is required to convert or dismiss a   |\n| 3  | case, whichever is in the best interest of creditors and the |\n| 4  | estate, unless the Court determines that the appointment of  |\n| 5  | a Chapter 7 trustee or an examiner is in the best interest   |\n| 6  | of creditors and the estate.                                 |\n| 7  | THE COURT:<br>I think you mean a Chapter 11 trustee,         |\n| 8  | but that's fine.                                             |\n| 9  | MR. GOLDMAN:<br>Yes.<br>Yes.<br>Thank you, Your Honor.       |\n| 10 | THE COURT:<br>That's fine.<br>I understand.<br>I             |\n| 11 | understood what you meant.                                   |\n| 12 | MR. GOLDMAN:<br>What PAX -- the way PAX wants the            |\n| 13 | Court to read that statute is as the best interest of        |\n| 14 | creditors according to the amount -- amounts of their        |\n| 15 | claims.<br>Of course it simply doesn't say that.             |\n| 16 | And I'd like to emphasize that in considering the            |\n| 17 | best interest, the statute uses the plural, creditors, so    |\n| 18 | that the interest of the entire creditor body as a whole     |\n| 19 | have to be considered, not just the interests of a single    |\n| 20 | creditor that has a large claim, and that prior to           |\n| 21 | bankruptcy was on the cusp of reaching -- where all          |\n| 22 | creditors in this case seem to agree are the debtor's known  |\n| 23 | assets right now, and that is the Lady May and the debtor's  |\n| 24 | interest in the Sherry-Netherland apartment.                 |\n| 25 | And the term in determining the creditor body, the           |\n\n| 1  | Court can take judicial notice of the proofs of claim that     |\n|----|----------------------------------------------------------------|\n| 2  | were on file right now as well as the debtor's schedule F.     |\n| 3  | The proofs of claim, as of today, even though                  |\n| 4  | there is no bar date, total \\$71 million, and in some cases    |\n| 5  | are based on allegations of grievous personal harm.            |\n| 6  | For example, the claim of Rui Ma, which is close               |\n| 7  | to the trial stage in the New York Supreme Court, alleges      |\n| 8  | claims of sexual assault, false imprisonment, and              |\n| 9  | intentional affliction of emotion distress over a period of    |\n| 10 | several years.                                                 |\n| 11 | The claim of Bob Fu, based on an action in federal             |\n| 12 | court in Texas, is based on allegations that the debtor        |\n| 13 | promoted acts of violence against Dr. Fu, indeed, encouraged   |\n| 14 | his, quote, \"Comrades,\" end quote, to kill Dr. Fu, and         |\n| 15 | incited harassing protests in front of his house for weeks.    |\n| 16 | The claim of Bruno Wu and Yang Lan is based on a               |\n| 17 | New York Supreme Court action alleging that the debtor used    |\n| 18 | his pervasive social media accounts to personally attack       |\n| 19 | them by claiming, among other things, that Yang Lan had        |\n| 20 | extramarital affairs and used sexual favors to obtain her      |\n| 21 | prominent cultural status in China and was, quote, \"Full of    |\n| 22 | sexually transmitted diseases,\" end quote.<br>Accused Bruno Wu |\n| 23 | on repeated occasions of attempted murder and bribery and      |\n| 24 | has threatened violence on social media against both of        |\n| 25 | those creditors.                                               |\n\n To say that these aren't actual creditors that are deserving of the same consideration of their interests, as PAX is, really an offense to those creditors. And as I mentioned, the proof of claim deadline has not even been set. It is likely based on what was listed on schedule F that we will receive a flood of additional claims so that that \\$71 million will certainly escalate. Getting back to the plain meaning of the statute, in determining the creditors whose interests must be taken into account, under Section 1112(b)(1), I would refer the Court to Section 101(10A) of the bankruptcy code which defines creditor as, quote, \"An entity that has a claim against the debtor,\" end quote, as of the petition date. And the definition of claim under Section 101(5A), which defines a claim to include a right to payment whether or not it is reduced to judgment unliquidated or disputed. So PAX's contention that these creditors aren't actual creditors is contrary to the plain language of the bankruptcy code, because a creditor is one who holds a claim and a claim could be undisputed, unliquidated and contingent. So there are creditors, actual creditors, here. And how could a creditors committee been even appointed by the U.S. Trustee if these weren't actual creditors? And what creditors are they supposed to be\n\n representing if there are no other actual creditors? PAX certainly didn't object to the retention of committee professionals based on the fact that there were no actual creditors to defend. So under a plain statutory analysis, creditors such as those who have filed proofs of claim in this case, but have not yet received judgments, are just as much creditors of this estate as is PAX for purposes of evaluating the best interest test under Section 1112(b). If anything, the interests of those creditors who allege grievous personal harm are entitled to equal, if not greater, consideration under the best interest test than is PAX whose actual money judgment -- which is attached to Mr. Friedman's declaration on the motion to dismiss as exhibit 1 -- is in the principal amount of just \\$46 million. They have \\$70 million of interest at their contractual rate of 15 percent and a \\$134 million contempt fine is not in compensation of any pecuniary loss. The test that many courts, indeed, most, have applied in determining what is in the best interest of creditors under Section 1112(b)(1), is the course of action that provides the best chance for the largest number of creditors to be paid the largest amount of money in the shortest period of time. Here, that is either conversion or the appointment\n\n of a Chapter 11 trustee. Because in the event of a dismissal, the largest number of creditors will suffer at the hands of one single judgment creditor who will be paid the largest amount of money, in the event of dismissal, while all the other creditors will remain mired in litigation with the debtor. As for the boat, we know that under Judge Ostrager's February 9th, 2022 decision and order, which is our exhibit 1, the debtor has already been found by clear and convincing evidence to beneficially own and control the boat. That's at page 4 of his decision. When the boat is back, PAX will simply levy on that beneficial interest and ultimately receive a distribution when it is liquidated. As for the Sherry-Netherland apartment -- of course they're poised to do that on the day of dismissal as they have that proceeding before Judge Ostrager. As for the Sherry-Netherland apartment, they're equally poised to realize on that asset in the event of dismissal. In the debtor's declaration, which is UCC exhibit 2, he acknowledges owning 100 percent of the membership interest in Geneva Holdings Corp., which is the sole member of the title holder of the Sherry-Netherland apartment, Geneva Holdings, LLC.\n\n Geneva Holdings, LLC is a debtor under Chapter 11 in the Southern District of New York and the debtor claims his interests are held in trust or his son's company, Bravo Luck. That's at his declaration at paragraph 33(B). By order entered on October 8th, 2021, which is UCC exhibit 3, Judge Garrity approved a settlement agreement between Geneva Holdings, PAX and Bravo Luck. That settlement agreement, which will appear at UCC exhibit 4, marked ECF 131-1, which is dated September 24th, 2021, granted PAX relief from the automatic stay to continue to prosecute the New York Supreme Court action. That's at paragraph 7(A) of the settlement agreement, page 7 of 12 of the settlement agreement. Since PAX had already received its money judgment on February 3rd, 2021, the only thing left to try in the New\n\n York Supreme Court action are PAX's veil-piercing claims against the Geneva entities. And they are found in count 2 of its first amended complaint, which is UCC exhibit 10. It's page 17 of the complaint.\n\n In addition, PAX is the beneficiary of an order requiring Mr. Kwok to turn over his 100 percent ownership interest in Geneva -- the Geneva -- 100 percent owner of Geneva Holdings to PAX. That's UCC exhibit 6. The order was entered on September 22nd, 2021. And PAX had filed a motion for contempt in a New York dated January 7th, 2022\n\n for Kwok's failure to turn the shares over. That I believe is exhibit 7 of our exhibits. It's expected that that motion will be refiled or resumed on dismissal. PAX has similar veil-piercing type claims relief pending in the courts of the British Virgin Islands. UCC exhibit 11 is PAX's amended statement of claim in that court. In that amended claim, they allege, among other things, that Mr. Kwok used \\$70 million of his own assets to transfer to Bravo Luck -- that's paragraph 29 of exhibit 11 -- that the declaration of trust that Mr. Kwok claims to have with Bravo Luck was a fraud, quote, \"Devised to hold his shares in Geneva BVI in trust for Bravo Bravo.\" Bravo Luck was a fraud -- excuse me -- it was a fraud, quote, \"Devised for the sole purpose of concealing an asset of Mr. Kwok from his creditors.\" That the trust document should be set aside as a, quote, \"Document intended to defraud creditors of Mr. Kwok.\" Creditors, plural. That's paragraph 35. And that Mr. Kwok is the beneficial owner of Bravo Luck and his son is his mere nominee. Under the settlement agreement that Judge Garrity approved, the parties, that is, PAX and Bravo Luck, were also permitted to proceed with the British Virgin Island litigation. So they are very poised to also realize on the\n\n Sherry-Netherland apartment based on those claims that will be resolved in the British Virgin Islands or in the New York State Court. In terms of what's happening with the apartment in the Geneva Holdings case, Melanie Cyganowski was appointed the sales officer to market and sell the property. That's at UCC exhibit 8. And Sotheby's was approved as the broker for the property, UCC exhibit 9, and the property is currently listed on Sotheby's website for \\$38,500,000. So they are -- PAX is very well positioned to realized on the assets on dismissal ahead of other creditors, who, again, will be left with litigating against Mr. Kwok, and thereafter getting judgments, chasing down whatever assets are left. The additional potential assets we contend would be -- potential assets to recover in a Chapter 7 -- are two Greenwich properties that are owned by Greenwich Land, LLC. UCC exhibits 13 and 14. The properties are described in those exhibits. In paragraph 17, in Mr. Kwok's declaration, he claims his Greenwich residence, quote, \"Is owned by my wife through Greenwich Land, LLC.\" That remains to be seen whether that's another one of his concealed assets. Which of course could be investigated in a Chapter 7, which we were in the process of trying to investigate when the debtor\n\nFiore Reporting and Transcription Service, Inc.\n\n filed his consent to dismissal on May 11th. I'd like to turn now to PAX's argument that the touchstone of what is in the best interest of the estate is the preference of creditors, and that the best interest of creditors must reflect PAX's view as the single largest creditor. The touchstone of the best interest of creditors test is not what the creditors prefer. It is the course of action that provides the best hope of recovery for the largest number of creditors, and not the course that will afford the most recovery for the most vocal or the largest creditor. Preliminarily, the case authority that PAX cites for that proposition that a single creditor can -- with a large enough claim can suffice for purposes of the best interest test is completely in opposite I think to this case and otherwise doesn't support PAX's theory. In the *Acme Cake* case, which is the case it's relying on, not a single creditor or even the creditors committee itself objected to a dismissal of the case. It was counsel for the creditors committee that had objected to dismissal on the basis that it should not be granted because administrative expenses, including its fees, were not being paid, and a dismissal would violate the priority scheme of the bankruptcy code by allowing the\n\n creditor requesting dismissal to be paid ahead of administrative claimants. Of course here that is not what the argument is. The creditors committee who represents the interests of all unsecured creditors is objecting to dismissal. We are not making this argument, although I do believe the case should be, if Your Honor was inclined to dismiss, it should be conditioned on payment over the fees. The reason we are objecting is because dismissal is not in the best interest of creditors, and that simply was not an argument that was made in the *Acme Cake* case. And in fact -- THE COURT: Can I just ask you a question about that? MR. GOLDMAN: Yes. THE COURT: You just said that -- obviously I understand that the committee's position is dismissal is not appropriate at conversion or appointment of trustee is, but you also just said that if the Court was to dismiss you'd want it to be conditioned on the payment of the committee's fees. And I just want to understand how that would work from your perspective? How would a court condition dismissal on payment of fees in an estate where there's no money? MR. GOLDMAN: If Mr. Kwok wants a dismissal of the\n\n case so that he does not have to go through the Chapter 7 process and face potential 523 non-dischargeability claims as well as 727 denial of discharge claims, as well as the process of hunting down his hidden assets and collecting them, then just as he found the money to put up to secure the return of the boat, and just as he found the money to propose to fund the case with an \\$8 million DIP loan, he will find the money if the Court conditions dismissal on payment of the fees. THE COURT: Have you -- I haven't seen -- but I may have missed this, okay, so just understand -- have you cited any cases that support the authority of the Court to do that, to do what you're suggesting? MR. GOLDMAN: There's no direct case that I found, Your Honor. THE COURT: Okay. Okay. I'm just asking the question -- MR. GOLDMAN: No. THE COURT: -- and so I make sure that I've read your papers properly. Go ahead. I'm sorry. I just wanted to ask that when you brought that up. MR. GOLDMAN: Thank you, Your Honor. Another critical distinguishing feature of *Acme Cake* case is that in that case the Court found that\n\n converting the case or appointing a Chapter 11 trustee, quote, \"Would result in the unsecured creditors receiving little distribution, if any.\" And that certainly cannot be -- cannot be said here.\n\n They did make the -- they actually quoted a decision in a California bankruptcy case -- from a California bankruptcy case -- in saying that, quote, \"It is not necessary that the interest of every creditor actually favor conversion. There is no specific numerosity requirement inherent in section 1112(b). The interest of a single creditor with a large enough claim will suffice.\" That is a direct quote from a case called *In re Staff Investment*, a California bankruptcy case 146 B.R. 256.\n\n If you take a look at that case, it's completely distinguishable from this case. The single largest unsecured creditor in that case held a deficiency claim of \\$600,000 on a mortgage against the single asset of the estate. That was the deficiency component of the claim. It totaled 95 percent of all unsecured creditors. And there were only other unsecured claims totaling \\$21,000.\n\n So this single quote from a California bankruptcy case, which really is dicta because no one was making the argument that, you know, the dismissing -- the creditor wanted dismissal would run away with all the assets ahead of the other creditors is really much too thin a read upon\n\nFiore Reporting and Transcription Service, Inc.\n\n which to overcome the overwhelming authority that holds that the best interest of creditors under 1112(b) is supposed to consider the interests of the entire creditor body, not a single creditor's parochial interest.\n\n And that means considering whether creditors as a whole will do better in Chapter 7. And that certainly is the case here based on how posed PAX is to recover on what I would call the low-hanging fruit of assets that now exist, that we know at least there are legitimate and very weighty claims to for the estate.\n\n PAX is so emboldened by the amount and status of its claim that it proclaims that, quote, \"Given the size of Pax's already adjudicated judgments, PAX is entitled to recover first.\" That's at its memorandum of Y at 4. This turns the fundamental policy of equality of distribution among creditors on its head and instead adopts the every creditor for itself rule that exists outside of bankruptcy.\n\n But that's not the standard for the best interest of the creditors.\n\n We are in a bankruptcy case. And inherent in that standard is considering what will serve the equality -- what will serve the overriding bankruptcy policy of equality of distribution.\n\n Finally, comparing the committee's preference for conversion to an involuntary bankruptcy because the debtor\n\nFiore Reporting and Transcription Service, Inc.\n\n wants a dismissal is a red herring. First, courts have held that a debtor's preference for dismissal is irrelevant under 1112(b) unless it happens to coincide with the creditors' interests. And section 1112(b)(1) mentions only the best interests of creditors and the estate and does not mention the interests of the debtor, such as is mentioned in section 305 of the bankruptcy code. So the omission of the debtor's interest is intentional in 1112(b)(1). Second, the conversion of the case here is authorized, specifically authorized, under section 1112(b)(1) if it is in the best interest of creditors. This standard has nothing to do with the commencement of an involuntary petition under section 303. They are two completely different standards under entirely different situations, so you cannot analogize what is specifically authorized under 1112(b) with the commencement of an involuntary bankruptcy. The final additional points I'd like to make is that this debtor should not be able to escape the scrutiny of the Chapter 7 process with the prospect of a denial of discharge, particularly under section 727(a)(2), which will provide or which provides grounds for denial of discharge if there is a concealment of assets within the one year of bankruptcy.\n\n And there are many cases that hold that even though an asset might have been transferred outside the one- year period, if the debtor continues to conceal that interest into the one-year period, that concealment will serve as a ground for denial of discharge under section 727(a)(2). If the Court does decide to dismiss the case without conditioning dismissal on the payment of professional fees of the committee, the committee would like to reserve the right to seek a motion to review and disgorge fees of the retainer that was paid to debtor's counsel in the amount of a million dollars. So I would leave the Court with that, with that request. I would like to respond briefly to some points that both Mr. Friedman and Mr. Jonas made at various times during their arguments, and then I'll sit down. Mr. Friedman mentioned the *Sapphire* case in support of dismissal. If Your Honor looks at that case, there were very few unsecured creditors in that case. And, in addition, they had other sources of recovery in the form of a guarantor and other joint -- and/or other joint obligors. We obviously do not have that here. Mr. Friedman stated that all they were really doing here was returning to the status Kuo. But returning to the status Kuo means that they will be first in line to\n\n realize on all the assets, and that's why these creditors need the protection of a Chapter 7 case. Mr. Friedman called into question the personal injury tort claims that exist in this estate. What would happen in a Chapter 7 case is that a trustee would first look and seek to recover assets of the estate. And once that process is concluded, a trustee would then turn to the process of reviewing claims and objecting to them if necessary. So you would first have a marshaling of assets to determine what assets exist. Then there would be a review of the claims. Which is the trustee's duty to do under section 704(5). The trustee wouldn't be retaining special counsel to review those claims, so there would be no costs associated with that review. And parties can object to those claims if the claims are thought better off to be resolved in other courts. A relief from stay could be granted, and the debtor, if the debtor so wished, could defend those claims. It would have no impact on the bankruptcy process itself. It would simply be a process of liquidating those claims in other courts, which is commonly done. If a claim, for example, is on the verge of trial or close to trial, it's not uncommon for the creditor to seek relief from stay in order to liquidate the claim in\n\nFiore Reporting and Transcription Service, Inc.\n\n another court and then come back to the bankruptcy court with the amount of their claim. So that is -- that is a routine process in Chapter 11 -- Chapter 7 cases. As far as funding to litigate the assets that we know do exist, the boat and the apartment, we -- I'm confident that a trustee could get litigation funding. Now, yes, there's no evidence that litigation funding is available today, but this debtor just filed its consent to dismissal on May 11th. You cannot possibly expect the committee or a trustee to chase down litigation funding in a matter of a couple of weeks, which is -- which is all we've had, and present evidence that there's some, you know, binding commitment to provide litigation funding to a party that doesn't even exist yet because the funding would have to be provided to either a Chapter 7 or Chapter 11 trustee. So I think, you know, a trustee should be given an opportunity to do that or to retain special counsel to at least take the litigation on a contingency-fee basis. And, yes, that will involve collecting a percentage of any recovery, but that's the -- that's common in Chapter 7 cases, and it's a negotiable fee. Yes, the boat is worth a lot of money and that will come out of the recovery if special counsel does take it on a contingency-fee basis, but that is no basis to\n\n conclude that the best interests of every other single creditor, other than PAX, would be served by that process, because they would be served by that process. The only creditor that would not be served would be PAX. In terms of using bankruptcy as a debt collection device, I mean, bankruptcy is a collective proceeding where a debtor files for bankruptcy and surrenders his non-exempt assets to creditors in exchange for seeking a discharge. That is what bankruptcy is all about, so it very much is a collective proceeding that is used to marshal and liquidate the assets of the estate for the benefit of all creditors equally, and that I submit is what the Court should do here. And that's all I have, Your Honor, unless you have any questions. THE COURT: I don't have any other questions. Thank you. Attorney Claiborn, do you wish to be heard? I'm sorry. Go ahead, Attorney Callari. She can come up first. And then Attorney Claiborn can if you'd like to be heard after. MS. CALLARI: Good afternoon, Your Honor. Carollynn Callari on behalf of certain of the creditors. Your Honor, I'm just really here to support what Attorney Goldman stated. I think he did a really good job.\n\n It makes my job easier. But I do want to highlight a couple of points. One, just to go to debtor's comments before we get to the actual issue, they tell a very nice story, but they don't complete the story when they give the backdrop that, you know, there's news articles about him, people being investigated for wanting to have him sent back to China. That's not disputed. What's disputed in the back story is why? And he is wanted back in China to face allegations of corruption, rape, kidnaping and bribery. That's why he doesn't want to go back there. So I just wanted to clarify that. With respect to what's really before the Court, it really is, what is in the best interests of the creditors and the estate. And we hear a lot of different stories, but really, when you look at that specific issue, first, on the claims, 101 speaks for itself on the definition of creditors and claims. We have a lot of creditors here. A lot of claims here. The case here is not like the claims -- cases cited by PAX, Your Honor. In those cases, when you're dealing with a large creditor, if you look at them, often it's a secured creditor having 95 to 98 percent of the claims, in a -- you know, in a deficiency type of claim.\n\n Here, if you break it down, Your Honor, PAX's original claim -- let's bring the Court back -- is \\$46 million. My client, Rui Ma's claim, is asserted at 20 million. Not much of a difference. They just got a judgment first. She shouldn't be prejudiced by that. If you look at the schedule claims, the debtor's scheduled -- although he disputes virtually every claim -- he scheduled over approximately \\$120 million in claims. And then he also lists dozens of other creditors in unknown amounts. So if you take PAX's 46 million, he's by far -- they are by far not a very large creditor compared to others. If you add in the interest, it's 116 million. One hundred and sixteen million versus the scheduled -- even though disputed, just because it's disputed doesn't make it a bonafide dispute -- but having said that, 125 to 160 million. We're about 50/50. It's only when you add in all the contempt charges that their claim really balloons to over 250 million. So, first of all, the size that they keep trying to say that they are this large creditor that should have a say and run this case is just not the same as those other cases that they cite. And we are creditors even if we're not liquidated at this time, Your Honor.\n\n Second, PAX can't have it both ways when they say Your Honor there's no assets in this case. It should be dismissed. What kind of case is it? There's no creditors, no assets, no operation. This is an individual Chapter 11. We know there's no operations. But I don't think any creditor sitting on this side of the table genuinely thinks there are no assets in this case even though they only listed *de minimis* assets on their schedules.\n\n And that's why we are here. This case, as Mr. Goldman said, is to marshal those assets. And how could it be more efficient than for one fiduciary to marshal the assets for all creditors, rather than each creditor, dozens of them, having to go and undertake what admittedly PAX's counsel has had undertaken for years.\n\n But each of us having to undertake veil-piercing and all of these other, you know, litigations and loops we have to go through to get those assets when one fiduciary could marshal the assets. That is a purpose of bankruptcy. That's an appropriate purpose. And that's why it should be converted to a 7 to allow that to happen.\n\n As far as funding, what Mr. Goldman alluded to is the issue we would have in the two weeks that we've had to try to find the initial funding is we don't have a counter- party yet. You need to have the Chapter 7 trustee or the Chapter 11 trustee be the counter-party to a funding. And\n\nFiore Reporting and Transcription Service, Inc.\n\n if you just look at the facts here, when you have a low- hanging fruit of a yacht, this is ripe for a contingency type of arrangement. So I don't think the fact that we don't have evidence here today of actual commitment for funding should prevent Your Honor from acknowledging and inferring that funding could be available to a Chapter 7 or a Chapter 11 trustee in this situation. And I know that Mr. Friedman's a much better negotiator than his papers when he's talking about a 20 to 30 percent contingency fee in this case. I think you could do milestones -- which is the conversations I've been having -- which is you have a certain percentage for the yacht. And if it takes longer, the percentage goes up. And then once you get the yacht, maybe that's your funding. Maybe you don't need to have more. You know. You can use those proceeds. So there's ways to have the Chapter 11 -- or in our case we even say a Chapter 7 trustee -- to fund these cases. And we think that the Chapter -- a Chapter 7 should be given a chance for a fiduciary to look at this, try to marshal all the assets for all the benefit of all the creditors. If in a short period of time it couldn't have funding, there's -- without prejudice to having it dismissed\n\nFiore Reporting and Transcription Service, Inc.\n\n then. But to say that our clients should all be prejudiced by the fact that the case should be dismissed now and basically reward the debtor -- he got what he wanted -- he filed this go get a breathing spell -- he got a short breathing spell -- and now he doesn't want to have to face all of the burdens of a Chapter -- of a bankruptcy and he shouldn't be rewarded with that. We should be able to have an investigation, which can be funded, and allow all the creditors to share equally in the distributions, Your Honor, because we are real creditors. If, however, Your Honor, by the way finds that she cannot condition dismissal to make sure that parties are not further prejudiced by the egregious conduct of this debtor,\n\n I think that weighs even more in favor of conversion. I think Your Honor probably can condition it. But if she couldn't, it weighs more in favor of a conversion to 7 rather than dismissal.\n\n Creditors have expended a significant amount of time and expense in this case. And now for it to be pulled out -- the rug pulled out from under us because they pulled the funding, that is very inequitable -- as well as the administrative fees, they should be paid if this case is dismissed -- and we would ask Your Honor to retain\n\n jurisdiction regardless to deal with certain issues as far as -- as Mr. Goldman said -- with respect to retainers and things of that nature if Your Honor does dismiss it. But we do think that conversion to a 7 is viable and it is the -- in the best interest of all the creditors to do that, Your Honor. And we don't think it's prejudicial to PAX because, frankly, if they wanted a say in who the trustee is appointed, they can I think under 702. They can see who the -- you know, have a say in -- THE COURT: They can all (indiscernible) the trustee, right. MS. CALLARI: Yeah. THE COURT: But I have a question or two you. MS. CALLARI: Yes. Please. THE COURT: So assume that I agree with you and I convert this case to a Chapter 7, how is your claim -- your clients' claims going to be liquidated? Because the trustee can't do it. MS. CALLARI: Correct, Your Honor. THE COURT: So then your claim has to still be tried outside this court in the New York Court as do the other personal injury claim claimants' claims. MS. CALLARI: Yeah. So certainly with respect to Rui Ma, Your Honor, has that proposed order -- Your Honor\n\n has had that proposed order and we presumed you were waiting until after this to lift the stay in order to have her proceed in state court. So, yes, for certainly Rui Ma we would anticipate that that would be litigated back in state court. THE COURT: So what's a trustee going to do with that claim? I'm trying to -- MS. CALLARI: No. I understand. THE COURT: I'm trying to -- what is a Chapter 7 trustee going to do with that claim? A Chapter 7 trustee has to wait -- MS. CALLARI: Yeah. THE COURT: -- until that claim is liquidated, right? And then depending upon what you do, which is completely your clients' rights under applicable non- bankruptcy law, there's a trial, whatever the decision is is the decision. Somebody may appeal it. Somebody may not. But let's be honest, it's likely there will be an appeal, so that case could go on for years before that claim is liquidated, correct? MS. CALLARI: It could. THE COURT: Yeah. MS. CALLARI: And it also could be liquidated pretty promptly.\n\n THE COURT: Okay. MS. CALLARI: We don't know. So -- THE COURT: But not in this court. MS. CALLARI: No. Her claim would have to be liquidated in the state court. Or generally personally injury claims, Your Honor -- I do think that when you have personal injury claims sometimes a bankruptcy court can set forth a mediation process and -- THE COURT: Not in a -- not under 28 U.S.C. -- MS. CALLARI: Correct. You can estimate -- THE COURT: -- 156(b)(2)(B) in a Chapter 7 case where the claims are contingent and unliquidated. The statute is very clear that it's not a court proceeding. And so one of the problems that we have in this case is that those are the types of claims that the trustee is going to be met with, right? MS. CALLARI: Correct. THE COURT: So what's -- so my questions is, so what's the trustee supposed to do? MS. CALLARI: The trustee -- THE COURT: Keep the case open for years until -- and then investigate with no funds? I mean, I hear what you're saying about a funding issue, but why couldn't the committee have funding funders right now?\n\n They could have the -- the committee could have litigation funding. Why couldn't they? MS. CALLARI: They couldn't at this point, because within the last two weeks, to try to get that when you knew your were facing a dismissal and the committee would be disbanded, was not practical. THE COURT: Okay. But the dismissal -- I understand what you're saying about the debtor's position on dismissal. But PAX's position on dismissal has been clear for some time. In fact, they agreed to extend the hearing period out because the code required that a hearing be -- happened within 30 days and it didn't. You know, all I'm saying to you is a Chapter 7 case, the Chapter 7 trustee, what's the Chapter 7 trustee got to work with? MS. CALLARI: So there's two things. One, on your point about the committee, until two weeks ago, the committee had funding from the debtor. They pulled the funding so we didn't need to go see -- THE COURT: Well, they didn't have funding. It hadn't been approved yet. Okay? MS. CALLARI: This is true. THE COURT: So no one had funding. MS. CALLARI: But we anticipated there would be some sort of funding, so we --\n\n THE COURT: I understand that. MS. CALLARI: Right. THE COURT: But it hadn't been approved yet. And that's how the process works, right? MS. CALLARI: Yes. THE COURT: Just how -- we have to remember how the process works. So they didn't have funding. There was no funding that was authorized by the Court. The Court took that funding under advisement. And then the debtor decided -- or I shouldn't say the debtor -- the funder, the loan -- the lender decided to withdraw its funding commitment and the debtor withdrew the motion for the DIP financing. So I understand every thing you're saying, but there's a process the Court has to follow, right? I mean, we talk about litigation funding, contingent special counsel. Just because people say that can happen doesn't mean it will happen. The Court still has to approve those applications. And if those applications aren't approved, then there isn't going to be this plan to go down the way that people have, you know, suggested. The problem is there's a lot of different concerns when -- if and when this case converts to a Chapter 7 as opposed to staying -- staying a Chapter 11.\n\n So, again, the Court can deny dismissal, could deny conversion, could deny the appointment of a trustee. That's what I'd have to find. Attorney Goldman is correct. And the issue is what are we going to do? And I think I said that I think a week or so ago when you all stipulated that cause exists. Okay. Great. That's very helpful to the Court. And I appreciate that everybody's stipulating that cause exists, but I have to do one of those things, right? So I have to figure out what is the best thing to do in this case. And the concerns about conversion are many. Handing this to a Chapter 7 trustee to do what? What's the Chapter 7 trustee going to do? The Chapter 7 trustee has no available assets to do anything. You're talking about possibly getting a litigation funding source. Okay. But that has to be approved and it might not be approved. And there has to be a plan. And if the plan -- I don't mean a plan of reorganization, that's not what I mean. I mean -- I don't mean the word plan as used in the bankruptcy code -- there has to be a way to accomplish what you're trying to accomplish. And a Chapter 7 trustee won't have anything to\n\n work with. MS. CALLARI: Thank you, Your Honor. Either a Chapter 11 or a Chapter 7 trustee, Your Honor, we believe will have funding. I know it's not here. But to the point was, is that even though Your Honor had not approved it yet, the committee did not have a need to go look for funding before May 11th. That was the first part. We believed there was funding. THE COURT: That's fair. MS. CALLARI: And now a Chapter 11 or a Chapter 7 trustee, we are asserting, would be able to receive the necessary funding to go after, for instance, the yacht. It shouldn't take that much to proceed with that litigation. And if that actually goes the way we think it will, there would be ample funding for this case. THE COURT: Well, how is a Chapter 7 trustee going to go after the yacht? Explain that to me. MS. CALLARI: It can't marshal -- it can marshal assets the way it does in any other case. THE COURT: But right now there's no finding in this court that the debtor owns the yacht, so how's a Chapter 7 trustee going to marshal the yacht? MS. CALLARI: Eleven or a -- Chapter 11 or a Chapter 7 would have to have a finding May 1st. THE COURT: Well, right now, there's an order for\n\n relief from stay -- MS. CALLARI: Right. THE COURT: -- governing what happens with the yacht, right? MS. CALLARI: Yes. THE COURT: Which is the yacht has to come back into the jurisdiction. And then, if it does in a timely manner, then the \\$37 million goes back to the party that posted the money and then the yacht's there. Where? Either in Connecticut or New York depending upon how things are developed. So how's a Chapter 7 trustee going to marshal the yacht? MS. CALLARI: Just like you would in a Chapter 11. You -- THE COURT: But the debtor doesn't own the yacht in this court. There's been no findings. So he'd have to start some cause of action, wouldn't he? MS. CALLARI: Right. Yes. THE COURT: So who's going to pay to do that? MS. CALLARI: That's where the funding comes in. THE COURT: And who's -- who's going to defend to do that? And then when the trustee does that, then PAX is going to object and say it's already -- it's already been\n\n## Case 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 93 of 118\n\n determined in the New York State Court. So you can't undo the judgment of the New York State Court judge. You can't -- you can't do that. There's going to be collateral estoppel effects, right? 5 There hasn't been an appeal. There's all kinds of issues here, right? So, as I said, my issue with -- there's -- I have issues with every path. Okay? But with regard to the Chapter 7, I don't know what a Chapter 7 trustee is supposed to do or can do. The Chapter 7 trustee could come here and say they're going to do 18 things, but if they don't have the right to do those things or a funding source to do those things, then there's no point in converting the case to a Chapter 7. MS. CALLARI: Yeah. And we -- THE COURT: There's no point. MS. CALLARI: And we believe that the Chapter 7 trustee would -- and, again -- or a Chapter 11 trustee -- but either way -- would have the ability to have funding sufficient to have this court adjudicate that it is property of the estate, and that's what we would expect them to do, and do the marshaling first before they deal with actually adjudicating the claims. Which the other litigations are generally going to be stayed, so that reduces costs. People talk about costs\n\n -- THE COURT: Well, I don't agree with that. You don't want yours stayed, right? And other claimants may come in and seek relief from a stay too -- MS. CALLARI: They may. THE COURT: -- and want their claims adjudicated outside of this court. And so what I'm saying to you is -- I'm just trying to understand -- your client in particular has what is -- apparently no ruling has been made, but what is a personal injury tort claim that under the United States code Congress decided this court can't decide. Okay. And *Stern* supports that, right? And even *Wellness* supports that because no one is consenting to this court adjudicating that claim. Okay? So the -- it can't be adjudicated here. MS. CALLARI: Correct. THE COURT: So all the other claims that we talked about -- and I don't -- I don't have the figures in front fo me right now -- but the claims other than PAX's claims I believe -- and you should all correct me -- but more than half of them are personal injury tort claims. And if they're personal injury tort claims, they cannot be -- estimate -- the statute says -- and I think I can recite it\n\n -- liquidated or estimated for purposes of distribution in a case under title 11. All Congress decided that a bankruptcy court could do as a court proceeding is estimate claims in connection with a plan in a Chapter 11, 12 or 13 case. But it says you cannot -- a bankruptcy court cannot liquidate or estimate personal contingent and unliquidated personal injury tort claims and wrongful death claims for purposes of distribution in a case under title 11. So a trustee can't do that. MS. CALLARI: Right. THE COURT: I mean, the Chapter 7 trustee can't do that. He/she's hands are already tied from the start. So then they have to -- then they're going to try to find assets that -- the debtor's going to fight that. I mean, look at what's going on for the last 15 years or how many years it's been. If you do think the debtor's not going to fight the attempt to have the boat be deemed an asset of the estate, I mean, of course they're going to fight it. And then anything else you do. And then -- so how much money is there going to be to fund this Chapter 7 estate on claims that are at this point -- at this point -- I'm not saying couldn't change -- but at this point they're speculative, right?\n\n So the concern is that a Chapter 7 trustee, from the Court's view of this case at this point, I don't know how the Chapter 7 trustee can carry out the duties of (indiscernible) code under the facts and circumstances of this case. MS. CALLARI: Thank you, Your Honor. We do think the funding is -- could be available and we do think that the trustee could marshal the assets while the claims are being litigated and then brought back here to be distributed, the alternative of having it dismissed, and basically having PAX be able to grab it all and each individual creditor have to then adjudicate individually to go after each -- after each asset. We don't think that's in the best interest of creditors. But I understand Your Honor's concern. But we do think a conversion or a Chapter 11 is certainly better than a dismissal for the creditors, Your Honor. Thank you. THE COURT: Okay. I appreciate that. And I'm just asking you the questions -- MS. CALLARI: Yeah. I appreciate that. THE COURT: -- specifically because of your clients' claims. MS. CALLARI: I appreciate that. Thank you, Your Honor. THE COURT: All right. Thank you.\n\n Attorney Claiborn? MS. CLAIBORN: Good afternoon, Your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon. MS. CLAIBORN: This case has now devolved to a simple, but difficult place. Cause has been found under section 1112(b) and it's now the Court's difficult and heavy duty and burden to make a choice. The debtor has admitted that the relief available under 1112(b)(2) is no longer in play, so that puts the choices for a form of relief to the three that we've discussed briefly today, dismissal, conversion, or a Chapter 11 trustee. And each of them admittedly has its own challenges and impact on the constituencies of this case. The U.S. Trustee has no preference for which form of relief the Court should choose. And with respect to the relief of an examiner that was requested in the U.S. Trustee's motion at ECF 102, that relief, provided the Court makes an immediate decision as to dismissal, conversion, or a Chapter 11 trustee, will become moot. I want to make clear to the Court, Your Honor, that is the U.S. Trustee's job to point out that in this particular case, and consistent with all Chapter 11 cases, that should the Court determine a Chapter 11 trustee is the\n\n most appropriate relief, that such a trustee should have the powers and the rights bestowed by the code in section 1106, and that there is no authority to limit them or prescribe them or control them. If the Court determines today that dismissal is the most appropriate relief, then this case should be dismissed immediately and not conditioned on any event, and nor should the dismissal be in conjunction with any event. Fee applications for retained professionals can be filed and determined after dismissal. And in the end, Your Honor, I think the most important point -- and it's a hard one -- is that this case needs a swift decision. But the Court has before it the facts that would enable the Court to make a choice. And in the end, in urging a swift decision, I want to point out delay negatively affects the creditors and does reward the debtor. Thank you, Your Honor. THE COURT: Thank you. Mr. Friedman? MR. FRIEDMAN: Your Honor, I just want to make some brief rebuttal points. The first is that counsel for the committee and others argue that the debtor would be rewarded by having this case go away. It's just not true. People are going to get the debtor's assets one way or the other.\n\n|    | 99                                                           |\n|----|--------------------------------------------------------------|\n| 1  | The second point -- to the extent they exist.                |\n| 2  | The second point is I didn't fully -- I think                |\n| 3  | there was reference to the fact that Chapter 7 could be      |\n| 4  | useful because maybe the -- Mr. Kwok wouldn't get            |\n| 5  | discharges.<br>Of course, outside of bankruptcy, he doesn't  |\n| 6  | get a discharge either.                                      |\n| 7  | Another point I wanted to make, Your Honor, I'd              |\n| 8  | ask you to look at exhibit 27 we filed because --            |\n| 9  | THE COURT:<br>Of your own exhibits?<br>Of PAX                |\n| 10 | exhibits?                                                    |\n| 11 | MR. FRIEDMAN:<br>Exhibit 27.<br>PAX exhibit 27.              |\n| 12 | THE COURT:<br>Okay.<br>Give me one second, please, and       |\n| 13 | I will try to get there.                                     |\n| 14 | MR. FRIEDMAN:<br>Thank you.                                  |\n| 15 | THE COURT:<br>You'll have to give me a minute.<br>Do         |\n| 16 | you know what page of the document it starts on?<br>It's     |\n| 17 | document 404.<br>Do you know what page exhibit 27 starts on, |\n| 18 | because it's 1500 pages.                                     |\n| 19 | MR. FRIEDMAN:<br>My apologies.                               |\n| 20 | THE COURT:<br>Oh, 1,149.                                     |\n| 21 | MR. FRIEDMAN:<br>Thank you.                                  |\n| 22 | THE COURT:<br>There you go.                                  |\n| 23 | MR. FRIEDMAN:<br>That's amazing.                             |\n| 24 | THE COURT:<br>Staff that is --                               |\n| 25 | MR. FRIEDMAN:<br>That's amazing.                             |\n|    |                                                              |\n\n| Case 22-50073<br>Doc 442<br>Filed 05/27/22<br>Entered 05/27/22 14:00:59<br>Page 100 of<br>118 |                                                                |  |\n|-----------------------------------------------------------------------------------------------|----------------------------------------------------------------|--|\n|                                                                                               | 100                                                            |  |\n| 1                                                                                             | THE COURT:<br>That is amazing.                                 |  |\n| 2                                                                                             | MR. FRIEDMAN:<br>That's amazing.<br>Thank you.                 |  |\n| 3                                                                                             | THE COURT:<br>That is amazing.                                 |  |\n| 4                                                                                             | MR. FRIEDMAN:<br>Your Honor, this is our summary of            |  |\n| 5                                                                                             | claims.                                                        |  |\n| 6                                                                                             | And one of the reasons that Mr. -- counsel for the             |  |\n| 7                                                                                             | committee, Mr. Goldman, in his thoughtful argument said that   |  |\n| 8                                                                                             | the Sapphire case could be distinguished is because there      |  |\n| 9                                                                                             | people had other -- other people that they could pursue.       |  |\n| 10                                                                                            | And I just wanted to observe that when you look at             |  |\n| 11                                                                                            | our summary of cases, which is in evidence, many of the        |  |\n| 12                                                                                            | defendants -- I'm sorry -- many of the plaintiffs also have    |  |\n| 13                                                                                            | other parties that they can go after.                          |  |\n| 14                                                                                            | If you look on page 2, the last claim, the Kay Ye              |  |\n| 15                                                                                            | Zookie Came case (ph), is against GTV, Saraca and Mr. Guo,     |  |\n| 16                                                                                            | Miles Gwok.<br>On the next page, the Zheng Xu Dong case is     |  |\n| 17                                                                                            | against GTV, Saraca and Wayne Guo.<br>The next case is against |  |\n| 18                                                                                            | Voice of Guo and Miles Guo.<br>And on and on.                  |  |\n| 19                                                                                            | And in particular, Your Honor, I would note -- and             |  |\n| 20                                                                                            | like the Rui Ma allegations, I said it before, earlier in      |  |\n| 21                                                                                            | this case, I'm not diminishing at all what happened to her.    |  |\n| 22                                                                                            | I would say, if you look at the Rui Ma case, it's              |  |\n| 23                                                                                            | not just against Mr. Kwok.<br>My understanding is that Golden  |  |\n| 24                                                                                            | Spring New York is also a defendant in that case.<br>We know   |  |\n| 25                                                                                            | that Golden Spring New York had at least \\$8 million to fund   |  |\n\n|    | Case 22-50073<br>Doc 442<br>Filed 05/27/22<br>Entered 05/27/22 14:00:59<br>Page 101 of<br>118 |\n|----|-----------------------------------------------------------------------------------------------|\n|    | 101                                                                                           |\n| 1  | a DIP.<br>So there is a co-defendant that can be pursued in                                   |\n| 2  | that case even if Mr. Kwok doesn't have money.                                                |\n| 3  | So I just note that there are other pockets of                                                |\n| 4  | potential availability -- available recoveries, not just Mr.                                  |\n| 5  | Kwok.                                                                                         |\n| 6  | Your Honor, there are -- also in Rui Ma's                                                     |\n| 7  | counsel's arguments -- I didn't count them, but there are a                                   |\n| 8  | lot of if's and could be's about funding -- there's no                                        |\n| 9  | evidence.                                                                                     |\n| 10 | You know, people were regrettably, you know, taken                                            |\n| 11 | in by the debtor's offer of finance or arrangement of                                         |\n| 12 | potential financing -- which we opposed from the outset --                                    |\n| 13 | and here we are in a case that we thought never should have                                   |\n| 14 | been filed that didn't have -- that still doesn't have                                        |\n| 15 | funding.                                                                                      |\n| 16 | Counsel tried to argue that we're only owed \\$46                                              |\n| 17 | million when we have judgments for more than \\$260 million.                                   |\n| 18 | And while it's true I guess that I don't get to                                               |\n| 19 | call people -- not creditors -- people don't get to also say                                  |\n| 20 | that PAX isn't owed \\$261 million because it is.                                              |\n| 21 | The last point I would make, Your Honor, is simply                                            |\n| 22 | that we stand by our citations in the cases that we cited --                                  |\n| 23 | that we filed on Friday and that we referenced today that                                     |\n| 24 | stand for two propositions:                                                                   |\n| 25 | Fundamentally, it's not necessary that the                                                    |\n|    |                                                                                               |\n\n|    | Case 22-50073<br>Doc 442<br>Filed 05/27/22<br>Entered 05/27/22 14:00:59<br>Page 102 of<br>118 |\n|----|-----------------------------------------------------------------------------------------------|\n|    | 102                                                                                           |\n| 1  | interest of every creditor actually favor conversion.<br>And                                  |\n| 2  | the interest of a single creditor can matter.                                                 |\n| 3  | Where that line is drawn -- let's say, you know,                                              |\n| 4  | one person had 99 percent of the claim, one person had 1,                                     |\n| 5  | there's no hard and fast rule.                                                                |\n| 6  | But I think the Court can clearly take into                                                   |\n| 7  | account from Acme, from Staff, which cited the Goodrich                                       |\n| 8  | Lines cases, is that the Court's discretion -- which is                                       |\n| 9  | substantial in this case -- can take into account the                                         |\n| 10 | disparity in claims and what people are entitled to.                                          |\n| 11 | And, again, I think, you know, we cited a variety                                             |\n| 12 | of cases that do stand for the proposition that it's okay to                                  |\n| 13 | dismiss a case even if one creditor will potentially wind up                                  |\n| 14 | with a better result.                                                                         |\n| 15 | I can't predict the future.                                                                   |\n| 16 | I will say that, with respect to the apartment in                                             |\n| 17 | the Sherry-Netherland, there is an enormous wood -- amount                                    |\n| 18 | of wood to chop with respect to PAX having to take on, you                                    |\n| 19 | know, to continue its undertakings to demonstrate that that                                   |\n| 20 | trust agreement is bogus.<br>It's not right there for the                                     |\n| 21 | picking.<br>We have work to do.                                                               |\n| 22 | And, you know, we don't know what will happen with                                            |\n| 23 | other creditors.<br>Perhaps other creditors will come to                                      |\n| 24 | arrangements with Mr. Kwok.<br>We have to take that risk.                                     |\n| 25 | And so, for those reasons, and the practical                                                  |\n|    |                                                                                               |\n\n|    | Case 22-50073<br>Doc 442<br>Filed 05/27/22<br>Entered 05/27/22 14:00:59<br>Page 103 of<br>118 |\n|----|-----------------------------------------------------------------------------------------------|\n|    | 103                                                                                           |\n| 1  | reasons that we've identified as to why we believe this case                                  |\n| 2  | is not well suited to a Chapter 7 conversion, we, you know,                                   |\n| 3  | we believe that dismissal is the right option.                                                |\n| 4  | I do -- I will say we agree with the U.S. Trustee                                             |\n| 5  | that if the Court were to conclude that the right path is a                                   |\n| 6  | Chapter 11 trustee, obviously we strongly support dismissal,                                  |\n| 7  | but there should be no fetters on any power that a trustee                                    |\n| 8  | has.                                                                                          |\n| 9  | And with that, Your Honor, I have nothing further.                                            |\n| 10 | THE COURT:<br>Thank you.                                                                      |\n| 11 | Mr. Jonas?                                                                                    |\n| 12 | MR. JONAS:<br>Your Honor, Jeff Jonas, Brown Rudnick,                                          |\n| 13 | for the debtor.<br>I will be brief.<br>And I'll say I do stand                                |\n| 14 | on my previous argument supporting dismissal for cause under                                  |\n| 15 | 1112(b)(1) and (4)(A).                                                                        |\n| 16 | I would note in that regard interestingly no one                                              |\n| 17 | opposing dismissal addressed the arguments I made earlier                                     |\n| 18 | with respect to the standard being prejudiced to creditors                                    |\n| 19 | and that prejudice is determined by looking at whether any                                    |\n| 20 | of their -- those creditors' pre-petition legal expectations                                  |\n| 21 | are prejudiced, which in this case they are not.                                              |\n| 22 | I really rise, Your Honor, only to make the record                                            |\n| 23 | clear that the debtor does refute and refutes the many                                        |\n| 24 | disparaging comments that have been made about him.<br>Lawyers                                |\n| 25 | here have made many bald, unsupported statements which are                                    |\n\n| Case 22-50073 | Doc 442 | Filed 05/27/22 | Entered 05/27/22 14:00:59 | Page 104 of |\n|---------------|---------|----------------|---------------------------|-------------|\n|---------------|---------|----------------|---------------------------|-------------|\n\n|    | 118                                                            |\n|----|----------------------------------------------------------------|\n|    | 104                                                            |\n| 1  | not evidence.<br>And they've come in different forms and       |\n| 2  | flavors, Your Honor.                                           |\n| 3  | For example, there was a reference to Greenwich                |\n| 4  | Land owning -- in connection with possibly having certain,     |\n| 5  | quote/unquote, \"Hidden assets.\"<br>Nothing's been proven, Your |\n| 6  | Honor.<br>Nothing's been demonstrated.<br>Just the bald        |\n| 7  | allegation which might as well be that certain neighbors and   |\n| 8  | friends and other family members have assets that are          |\n| 9  | allegedly hidden assets.                                       |\n| 10 | Secondly, Your Honor -- and these are just by way              |\n| 11 | of some quick examples I noted while presentations were        |\n| 12 | being made -- Ms. Callari referred to certain charges that     |\n| 13 | exist in China.<br>Again, no evidence, just the bald           |\n| 14 | statement.<br>It's not evidence.<br>It shouldn't be given any  |\n| 15 | worth or any voracity at all.                                  |\n| 16 | Third, litigation funding.<br>There is zero                    |\n| 17 | evidence.<br>It is utter and complete speculation and          |\n| 18 | conjecture.<br>There's no evidence before the Court.           |\n| 19 | I'll add my own speculation that the committee --              |\n| 20 | and probably Ms. Callari -- have been running around           |\n| 21 | feverishly over the last few weeks looking for some            |\n| 22 | financing so they could come before the Court and present      |\n| 23 | some evidence.<br>They have none.<br>So from that I'll infer   |\n| 24 | that none exists.                                              |\n| 25 | But nevertheless, I don't want to pile on my own               |\n|    |                                                                |\n\n|    | Case 22-50073<br>Doc 442<br>Filed 05/27/22<br>Entered 05/27/22 14:00:59<br>Page 105 of<br>118 |\n|----|-----------------------------------------------------------------------------------------------|\n|    | 105                                                                                           |\n| 1  | speculation.<br>I'll just leave it that there is no evidence                                  |\n| 2  | at all before the Court in that regard.                                                       |\n| 3  | So all of the Court's concerns are -- at least our                                            |\n| 4  | concerns -- and I think Mr. -- as expressed by other parties                                  |\n| 5  | that there won't be funding, that's the only evidence that                                    |\n| 6  | there is.                                                                                     |\n| 7  | Again, Your Honor, we would urge dismissal.<br>Thank                                          |\n| 8  | you, Your Honor.                                                                              |\n| 9  | THE COURT:<br>Thank you.                                                                      |\n| 10 | Mr. Goldman?                                                                                  |\n| 11 | MR. GOLDMAN:<br>Yes.<br>Thank you, Your Honor.<br>Just a                                      |\n| 12 | few brief points, Your Honor.                                                                 |\n| 13 | On this idea of all these claims constituting                                                 |\n| 14 | personal injury or wrongful death claims, which obviously                                     |\n| 15 | under section 128 U.S.C 157 --                                                                |\n| 16 | THE COURT:<br>(b)(2)(B).                                                                      |\n| 17 | MR. GOLDMAN:<br>Thank you.                                                                    |\n| 18 | -- the Court doesn't have jurisdiction.<br>It has to                                          |\n| 19 | be tried in a district court, unless of course relief from                                    |\n| 20 | --                                                                                            |\n| 21 | THE COURT:<br>That's not -- that's not the trial.                                             |\n| 22 | The trial section is (b)(5).<br>(b)(2)(B) talks about the                                     |\n| 23 | estimation or liquidation of contingent --                                                    |\n| 24 | MR. GOLDMAN:<br>Correct.                                                                      |\n| 25 | THE COURT:<br>-- and disputed personal injury                                                 |\n|    |                                                                                               |\n\n| Case 22-50073<br>Doc 442<br>Filed 05/27/22<br>Entered 05/27/22 14:00:59<br>Page 106 of<br>118 |\n|-----------------------------------------------------------------------------------------------|\n| 106                                                                                           |\n| claims.<br>That's different from --                                                           |\n| MR. GOLDMAN:<br>Correct.                                                                      |\n| THE COURT:<br>-- the trial issue under (b)(5).                                                |\n| MR. GOLDMAN:<br>You're quite correct.                                                         |\n| So there can't be estimated as well under 502(c)                                              |\n| except under Chapter 11.                                                                      |\n| THE COURT:<br>Or 12 or 13 in a context of a plan.                                             |\n| MR. GOLDMAN:<br>Or 12 or 13.<br>But certainly that                                            |\n| doesn't prevent them from being liquidated upon relief from                                   |\n| stay in their court of origin.                                                                |\n| And certainly the debtor could defend, especially                                             |\n| since they are potentially non-dischargeable under section                                    |\n| 523(a)(6) as willful and malicious injury.<br>So certainly the                                |\n| debtor would have an interest in doing that.                                                  |\n| I would also point out that I don't think it's a                                              |\n| given that all of these claims, for example, the claims                                       |\n| based on defamation, would constitute personal injury tort                                    |\n| claims of the type that you can't estimate were of the type                                   |\n| that under -- you mentioned (c) --                                                            |\n| THE COURT:<br>(b)(2)(B).                                                                      |\n| MR. GOLDMAN:<br>-- (b)(2)(B), but also (b)(5) --                                              |\n| THE COURT:<br>(b)(5) --                                                                       |\n| MR. GOLDMAN:<br>Yeah.                                                                         |\n| THE COURT:<br>-- is where it says the district --                                             |\n| MR. GOLDMAN:<br>Yeah.                                                                         |\n|                                                                                               |\n\n THE COURT: -- court has to try those claims. MR. GOLDMAN: Exactly. THE COURT: Right. MR. GOLDMAN: I don't think it's a given that the defamation claims are of the type of claim that fit -- THE COURT: There is all kinds of case law about that. MR. GOLDMAN: Yes. THE COURT: And I agree with you. MR. GOLDMAN: So there is a division of authority. And of course the one (indiscernible) immediate goes the other way. So I don't think, unless Your Honor has a definitive opinion on that, you can conclude that, hey, all of these can't be estimated or that, you know, you don't have jurisdiction to preside over a claims objection. You know, as far as how a Chapter 7 trustee would marshal the yacht, here's how I would envision it. There is a pending adversary proceeding right now that squarely presents the issue of whether this yacht is property of the estate or not. A Chapter 7 trustee could certainly replace, or it would be proper to replace the debtor, or substitute himself as a party in that adversary proceeding and get special counsel. I am very confident that we could find special Case 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 107 of\n\n|  | : | . |  |  |\n|--|---|---|--|--|\n|  |   |   |  |  |\n|  |   |   |  |  |\n|  |   |   |  |  |\n|  |   |   |  |  |\n|  |   |   |  |  |\n|  |   |   |  |  |\n|  |   |   |  |  |\n|  |   |   |  |  |\n|  |   |   |  |  |\n\n|    | 118                                                            |\n|----|----------------------------------------------------------------|\n|    | 108                                                            |\n| 1  | counsel that would take this on some sort of contingency       |\n| 2  | fee, which would be negotiable.                                |\n| 3  | The trustee would then move to make a dispositive              |\n| 4  | motion based on the preclusive effect of Judge Ostrager's      |\n| 5  | findings, which we believe do have preclusive effect.<br>Your  |\n| 6  | Honor would then decide whether that does have actual          |\n| 7  | preclusive effect to make the boat property of the estate.     |\n| 8  | That is not an elaborate proceeding and it really -- I would   |\n| 9  | suggest -- has a substantial likelihood of getting done.       |\n| 10 | And if that does happen, we don't even need the                |\n| 11 | litigation funding.                                            |\n| 12 | So that's the -- that is the lowest hanging fruit.             |\n| 13 | I think, Your Honor, there are a couple options                |\n| 14 | that Your Honor could consider here.                           |\n| 15 | Since we've only had a couple of weeks to, for                 |\n| 16 | example, look for litigation funding and no time to look for   |\n| 17 | any contingency counsel, you could convert the case with the   |\n| 18 | idea that we would be given time to locate the funding.<br>And |\n| 19 | if during that time period nothing could be located or we      |\n| 20 | can't locate special counsel, the case could then be           |\n| 21 | dismissed.                                                     |\n| 22 | And I didn't really mention the third option,                  |\n| 23 | which is the Chapter 11 trustee option, which would allow      |\n| 24 | some of these claims to get estimated.                         |\n| 25 | You know, the committee is not adverse to the idea             |\n|    |                                                                |\n\n### Case 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 109 of\n\n of negotiating an equitable division of whatever assets the debtor has with PAX. We are not unmindful of the efforts that PAX has made in chasing this debtor and getting its judgment. And I think the committee would -- let me just say -- be reasonable in negotiating a plan with PAX that gives some recognition to their pre-petition efforts. And certainly a creditors' plan of reorganization is achievable in this case. All it has to provide is the marshaling of the assets. We would even -- maybe PAX's counsel wants to be the special counsel. We would have no problem with that. And the debtor would not retain any interests in property. So a Chapter 11 trustee, where the creditors have an ability to negotiate a plan, I think is also a viable option here. So I would -- THE COURT: Well, you're the first one that said that. MR. GOLDMAN: Well, I do think as opposed -- THE COURT: And so no one else has said that. So if you're -- MR. GOLDMAN: No. THE COURT: So if you're thinking that that's a possibility, then -- MR. GOLDMAN: I would -- THE COURT: -- are you asking that you have an\n\n|    | 110                                                                |\n|----|--------------------------------------------------------------------|\n| 1  | opportunity to talk to parties about that?<br>Is that what         |\n| 2  | you're asking?                                                     |\n| 3  | MR. GOLDMAN:<br>Well, I would love the opportunity                 |\n| 4  | to talk to parties about that, except that I'm not sure the        |\n| 5  | discussions would be productive.<br>Because I think -- I think     |\n| 6  | PAX would prefer Your Honor to rule first on whether               |\n| 7  | dismissal --                                                       |\n| 8  | THE COURT:<br>Well, I have to rule by the way under                |\n| 9  | the code, so I don't have a choice unless you all decide           |\n| 10 | something different.<br>I have a -- I have a -- I have no          |\n| 11 | choice.<br>Once the hearing starts, right, don't I have to         |\n| 12 | rule -- I don't have it in front of me, but I'm sure PAX           |\n| 13 | knows -- I think I have to rule in 15 days or something like       |\n| 14 | that, don't I?<br>At the conclusion of the hearing.                |\n| 15 | I don't have a lot -- as I said, I don't know, two                 |\n| 16 | months ago -- there isn't a big window of opportunity in           |\n| 17 | this case.<br>I tried to make that -- maybe I didn't do a very     |\n| 18 | good job -- but I tried to make that very clear to all             |\n| 19 | parties that this is not a case where the Court has                |\n| 20 | discretion.                                                        |\n| 21 | Congress made the changes to the code, right?                      |\n| 22 | That's what -- I have no choice.<br>I have no                      |\n| 23 | discretion.<br>I don't.<br>Yeah.<br>It says here, Attorney Goldman |\n| 24 | -- I know you probably know this too -- after the -- the           |\n| 25 | Court shall commence the hearing on the motion                     |\n|    |                                                                    |\n\n|    | 118                                                              |\n|----|------------------------------------------------------------------|\n|    | 111                                                              |\n| 1  | (indiscernible) 30 days unless the movant consents to a          |\n| 2  | specific time frame, which the movant did, which is today,       |\n| 3  | right?                                                           |\n| 4  | And then decide the -- and shall -- no discretion,               |\n| 5  | right -- and shall decide the motion not later than 15 days      |\n| 6  | after the commencement of such hearing.                          |\n| 7  | So I am where I am, right?                                       |\n| 8  | There's not a lot I can do unless you all have                   |\n| 9  | some other plan.<br>I don't think you're going to have another   |\n| 10 | plan today.                                                      |\n| 11 | I'm not going to write a decision between today                  |\n| 12 | and tomorrow.<br>That's not going to -- I mean, I just can't.    |\n| 13 | I have other hearings.<br>We have other things.<br>But I have to |\n| 14 | decide within 15 days of today.                                  |\n| 15 | MR. GOLDMAN:<br>Understood, Your Honor.                          |\n| 16 | I think what -- what I think is going to obstruct                |\n| 17 | or not provide for conducive discussions about a Chapter 11      |\n| 18 | trustee is the fact that PAX would rather Your Honor just        |\n| 19 | rule on dismissal.<br>And so I'm not -- I don't think I'm        |\n| 20 | going to be able to engage them in a discussion until that       |\n| 21 | ruling comes down.                                               |\n| 22 | What Your Honor could do though, in ruling on this               |\n| 23 | motion, is to appoint a Chapter 11 trustee and provide an        |\n| 24 | opportunity for a period of time for -- without prejudice --     |\n| 25 | to revisiting that order depending on what happens within        |\n|    |                                                                  |\n\nCase 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 111 of\n\n| Case 22-50073<br>Doc 442 |  | Filed 05/27/22 | Entered 05/27/22 14:00:59 | Page 112 of |\n|--------------------------|--|----------------|---------------------------|-------------|\n|                          |  | 118            |                           |             |\n\n|    | 112                                                          |\n|----|--------------------------------------------------------------|\n| 1  | the first 30 days of the case or so.                         |\n| 2  | In other words, you could still meet your                    |\n| 3  | statutory obligations and come back to this issue within a   |\n| 4  | defined period of time to determine whether the case should  |\n| 5  | be dismissed based on what we are able to accomplish when a  |\n| 6  | Chapter 11 trustee is appointed and that would still satisfy |\n| 7  | the statutory obligation of ruling.                          |\n| 8  | THE COURT:<br>I hope the --                                  |\n| 9  | MR. GOLDMAN:<br>But it keeps options open is the             |\n| 10 | point I'm making.                                            |\n| 11 | THE COURT:<br>I understand your point.                       |\n| 12 | MR. GOLDMAN:<br>That's all.<br>That's all I have, Your       |\n| 13 | Honor.                                                       |\n| 14 | THE COURT:<br>Okay.<br>Thank you.                            |\n| 15 | Does anyone else wish to be heard?                           |\n| 16 | (No audible response.)                                       |\n| 17 | THE COURT:<br>Okay.<br>As I just noted for the record,       |\n| 18 | I have to rule on this decision --                           |\n| 19 | Oh, is there something else you'd like to add?               |\n| 20 | Oh, yes.<br>We have to finish the exhibits, right?           |\n| 21 | The exhibits.<br>The transcripts.                            |\n| 22 | Attorney Goldman, there were some references made            |\n| 23 | to some of the transcripts by Attorney Friedman.             |\n| 24 | MR. GOLDMAN:<br>No.<br>No objection.                         |\n| 25 | THE COURT:<br>No objection.                                  |\n|    |                                                              |\n\n|    | Case 22-50073<br>Doc 442<br>Filed 05/27/22<br>Entered 05/27/22 14:00:59<br>Page 113 of<br>118 |\n|----|-----------------------------------------------------------------------------------------------|\n|    | 113                                                                                           |\n| 1  | All right.<br>So then all of PAX's exhibits are                                               |\n| 2  | admitted in full except for 7, 8 and 31.<br>Was that the other                                |\n| 3  | one?                                                                                          |\n| 4  | MS. ARONSSON:<br>That's right.<br>Thanks, Your Honor.                                         |\n| 5  | And I have some references if it would aid the Court for the                                  |\n| 6  | transcripts.                                                                                  |\n| 7  | THE COURT:<br>Yes.<br>Please.<br>Go ahead.                                                    |\n| 8  | MS. ARONSSON:<br>For PAX 18, we would direct the                                              |\n| 9  | Court to pages 21 to 28.<br>For PAX 20, we direct the Court to                                |\n| 10 | pages 8 to 19.<br>And for PAX 21, we direct the Court to pages                                |\n| 11 | 11 to 20.                                                                                     |\n| 12 | THE COURT:<br>Okay.<br>Thank you.                                                             |\n| 13 | MS. ARONSSON:<br>Thank you.                                                                   |\n| 14 | THE COURT:<br>Attorney Goldman?                                                               |\n| 15 | MR. GOLDMAN:<br>May I make one further point, Your                                            |\n| 16 | Honor?                                                                                        |\n| 17 | THE COURT:<br>Yes.<br>They can't hear you though.                                             |\n| 18 | MR. GOLDMAN:<br>Okay.                                                                         |\n| 19 | THE COURT:<br>Speak into the --                                                               |\n| 20 | MR. GOLDMAN:<br>Okay.                                                                         |\n| 21 | THE COURT:<br>You can speak right next to you to                                              |\n| 22 | Attorney Aronsson.                                                                            |\n| 23 | MR. GOLDMAN:<br>Okay.<br>I know this may not be a                                             |\n| 24 | specific factor under 1112(b), but Your Honor knows from the                                  |\n| 25 | litigation budget that was filed in connection with the DIP                                   |\n\n| Case 22-50073 | Doc 442 | Filed 05/27/22 | Entered 05/27/22 14:00:59 | Page 114 of |\n|---------------|---------|----------------|---------------------------|-------------|\n|---------------|---------|----------------|---------------------------|-------------|\n\n|    | 118                                                            |\n|----|----------------------------------------------------------------|\n|    | 114                                                            |\n| 1  | motion, at the end of April, we had incurred almost \\$200,000  |\n| 2  | in fees.<br>That number has obviously escalated.               |\n| 3  | It just would be I think a travesty to the process             |\n| 4  | that a committee is appointed, they retain counsel on the      |\n| 5  | reliance of the process moving forward -- we did our job for   |\n| 6  | the committee -- and now to just dismiss the case with all     |\n| 7  | those fees being unpaid I think is a disservice to the         |\n| 8  | process.                                                       |\n| 9  | THE COURT:<br>I understand.<br>Thank you.                      |\n| 10 | Does anyone else wish to be heard?                             |\n| 11 | (No audible response.)                                         |\n| 12 | THE COURT:<br>All right.<br>So that the record is              |\n| 13 | clear, on April 6th, 2022, the creditor, Pacific Alliance      |\n| 14 | Asia Opportunity Fund, LP, filed a motion to dismiss the       |\n| 15 | case for cause, or in the alternative, a partial joinder to    |\n| 16 | the U.S. Trustee's motion for an order directing the           |\n| 17 | appointment of a Chapter 11 trustee.                           |\n| 18 | We have had several hearings in the case at which              |\n| 19 | we've talked about the motion to dismiss.<br>And we also had a |\n| 20 | status conference to talk about the motion to dismiss and      |\n| 21 | that status conference was held on April 13, 2022.             |\n| 22 | Following the status conference, and as part of                |\n| 23 | the discussions had at the status conference, the hearing on   |\n| 24 | the motion to dismiss was scheduled to be held today, May      |\n| 25 | 25th, 2022, with the consent of the movant, PAX.               |\n|    |                                                                |\n\n## Case 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 115 of\n\n And we also scheduled a hearing for tomorrow anticipating that we'd have more evidence that might need to be submitted to the Court in connection with the motion to dismiss. At a recent hearing, prior to the hearing on the motion to dismiss, the debtor confirmed through counsel that they were not objecting to the motion to dismiss and consenting to the fact that cause exists under 1112 to dismiss the case. Every other party that has filed a document or a pleading regarding the motion to dismiss has consented to the fact that cause exists. So this court has to make no finding that cause exists. The court only has to make findings with regard to what the cause is and what the ultimate relief will be. And I've stated this on the record before, but I will state it again, that the Court will either dismiss the case, convert the case, or appoint a Chapter 11 trustee, in accordance with the applicable provisions of 1112(b) of the code. I have stated for the record today the exhibits that have been admitted in full in this hearing that have been submitted by PAX and the official committee of unsecured creditors. No other party has submitted evidence,\n\n|    | 118                                                          |\n|----|--------------------------------------------------------------|\n|    | 116                                                          |\n| 1  | but has joined in those -- in that evidence, which is fine   |\n| 2  | with the Court.                                              |\n| 3  | I have reviewed the position papers that were                |\n| 4  | filed by all of the parties on Friday, the 20th, regarding   |\n| 5  | those respective positions with regard to the motion to      |\n| 6  | dismiss.                                                     |\n| 7  | And of course have heard all of the parties today            |\n| 8  | make their arguments with regard to the motion to dismiss.   |\n| 9  | As I also indicated, I'm bound by the statute to             |\n| 10 | rule on this motion within 15 days of the commencement of    |\n| 11 | the hearing.                                                 |\n| 12 | The hearing is concluded today there being no                |\n| 13 | further evidence to be submitted or arguments to be made so, |\n| 14 | therefore, the clock starts to run as far as a decision on   |\n| 15 | this motion to dismiss.                                      |\n| 16 | I have -- I appreciate all of the arguments that             |\n| 17 | have been made by all of the parties.<br>They have been      |\n| 18 | thoughtful and thorough.<br>And you have made your points    |\n| 19 | well.                                                        |\n| 20 | But I do have to make the determination as to                |\n| 21 | which way this case will proceed and I will do so.<br>And    |\n| 22 | obviously I will do so within 15 days of today.              |\n| 23 | Although I suppose under the Federal Rules of                |\n| 24 | Civil Procedure you don't count today, under 9006, at rule   |\n| 25 | 6, you don't count the day -- today -- so I think that's     |\n|    |                                                              |\n\nCase 22-50073 Doc 442 Filed 05/27/22 Entered 05/27/22 14:00:59 Page 116 of\n\n|    | 117                                                           |\n|----|---------------------------------------------------------------|\n| 1  | correct honestly.                                             |\n| 2  | But in any event, if you have any other concerns              |\n| 3  | or questions regarding the motion to dismiss, I am generally  |\n| 4  | available for a conference.<br>But in the meantime, I'm going |\n| 5  | to be ruling on the motion to dismiss.                        |\n| 6  | Okay.<br>Does anyone have any further questions?              |\n| 7  | (No audible response.)                                        |\n| 8  | THE COURT:<br>All right.<br>Well, I appreciate the            |\n| 9  | efforts of all the parties.                                   |\n| 10 | I'm taking the motion to dismiss under advisement             |\n| 11 | and I will rule accordingly.                                  |\n| 12 | And this is the last matter on today's calendar,              |\n| 13 | so court is adjourned.                                        |\n| 14 | (Proceedings adjourned at 12:51 p.m.)                         |\n| 15 | I, CHRISTINE FIORE, court-approved transcriber and            |\n| 16 | certified electronic reporter and transcriber, certify that   |\n| 17 | the foregoing is a correct transcript from the official       |\n| 18 | electronic sound recording of the proceedings in the above    |\n| 19 | entitled matter.                                              |\n| 20 |                                                               |\n| 21 |                                                               |\n| 22 | April 21, 2022                                                |\n| 23 | Christine Fiore, CERT-410                                     |\n| 24 | Transcriber                                                   |\n| 25 |                                                               |\n|    |                                                               |\n\n|    | 118                            |       |\n|----|--------------------------------|-------|\n|    |                                | 118   |\n| 1  | INDEX                          |       |\n| 2  | PAX EXHIBITS:                  | Rec'd |\n| 3  | 1-6, 9-17, 23-29, 31           | 8     |\n| 4  |                                |       |\n| 5  | CREDITOR'S COMMITTEE EXHIBITS: |       |\n| 6  | 1-14                           | 16    |\n| 7  |                                |       |\n| 8  |                                |       |\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|    |                                |       |","body_zh":"美国康涅狄格联邦破产法院 布里奇波特分院\n\n关于                                  *    案号 22-50073(JAM)\n                                      *\nHO WAN KWOK（郭文贵），                 *    Connecticut（康涅狄格州）Bridgeport（布里奇波特）\n                                      *    May 25, 2022\n债务人。                               *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n                                      *\n关于申请命令指定审查员的动议，或备选地，申请命令指定第11章受托人的动议；申请驳回第11章案件的动议，或备选地，部分加入美国受托人申请命令指定第11章受托人的动议的庭审记录\n\n在尊敬的 JULIE A. MANNING（朱莉·A·曼宁）美国联邦破产法官面前\n\n出庭人员：\n\n代表债务人：\nBENNETT S. SILVERBERG, ESQ.（贝内特·S·西尔弗伯格，律师）\nJEFFREY L. JONAS, ESQ.（杰弗里·L·乔纳斯，律师）\nBrown Rudnick, LLP（布朗·拉德尼克律师事务所）\nSeven Times Square\nNew York, NY 10036\n\n代表债权人 Pacific Alliance Asia Opportunity Fund L.P.（太平洋联盟亚洲机会基金有限合伙企业）：\nPETER FRIEDMAN, ESQ.（彼得·弗里德曼，律师）\nLAURA ARONSSON, ESQ.（劳拉·阿伦松，律师）\nO'Melveny & Myers LLP（奥美律师事务所）\nTimes Square Tower\n7 Times Square\nNew York, NY 10036\n\nPATRICK M. BIRNEY, ESQ.（帕特里克·M·伯尼，律师）\nRobinson & Cole LLP（罗宾逊与科尔律师事务所）\n280 Trumbull Street\nHartford, CT 06103\n\n庭审由电子录音记录，记录文本由速记服务机构制作。\nFiore Reporting and Transcription Service, Inc.（菲奥雷记录与速记服务公司）\n4 Research Drive, Suite 402\nShelton, Connecticut 06484\n(203)929-9992\n\n出庭人员（续）：\n\n代表美国受托人：\nHOLLEY L. CLAIBORN, ESQ.（霍莉·L·克莱伯恩，律师）\nOffice of the United States Trustee（美国受托人办公室）\nThe Giaimo Federal Building\n150 Court Street, Room 302\nNew Haven, CT 06510\n\n代表无担保债权人正式委员会：\nIRVE GOLDMAN, ESQ.（欧文·戈德曼，律师）\nPullman & Comley（普尔曼与康利律师事务所）\n850 Main Street\nBridgeport, CT 06601\n\n代表债权人 Rui Ma（马睿）、Zheng Wu（吴铮）及 Weican Meng（孟维灿）：\nKRISTIN MAYHEW, ESQ.（克里斯汀·梅休，律师）\nMcElroy, Deutsch, Mulvaney & Carpenter（麦克尔罗伊、德意志、马尔瓦尼与卡彭特律师事务所）\n30 Jeliff Lane\nSouthport, CT 06890\n\nCAROLLYNN H.G. CALLARI, ESQ.（卡罗琳·H.G.·卡拉里，律师）\nLaw firm of Callari Partners（卡拉里合伙人律师事务所）\nOne Rockefeller Plaza\nNew York, NY 10020\n\n（庭审于10:05 p.m.开始。）\n\n书记员：案号 22-50073，Ho Wan Kwok。\n\n法庭：好的。早上好。请先由债务人的律师为记录出庭，好吗？\n\n乔纳斯律师：早上好，法官阁下。我是来自 Brown Rudnick 的 Jeff Jonas。与我一同出庭的是 Ben Silverberg，Bill Baldiga 今天上午坐在我身后，代表债务人。谢谢。\n\n法庭：早上好。\n\n弗里德曼律师：早上好，法官阁下。我是来自 O'Melveny & Myers 的 Peter Friedman，Laura Aronsson 与我一同代表 Pacific Alliance Group（太平洋联盟集团）。\n\n法庭：早上好。\n\n伯尼律师：早上好，法官阁下。我是 Patrick Birney，同样代表 PAX。\n\n法庭：早上好。\n\n戈德曼律师：早上好，法官阁下。我是 Pullman and Comley 的 Irve Goldman，代表债权人委员会。\n\n法庭：早上好。\n\n克莱伯恩律师：早上好，法官阁下。我是代表美国受托人的 Holley Claiborn。\n\n法庭：早上好。\n\n梅休律师：早上好，法官阁下。我是 McElroy, Deutsch, Mulvaney & Carpenter 的 Kristin Mayhew，代表债权人 Rui Ma、Zheng Wu 和 Weican Meng。与我一同出庭的还有 Callari Partners 的 Carollynn Callari。\n\n法庭：两位早上好。今天上午还有其他人需要登记出庭吗？好的。好。如各方所知，今天就申请驳回的动议，或备选地指定受托人的动议举行听证。在我们上次听证会上，为今天的听证作准备时，我获悉各方均已达成一致。并且你们已在书面文件中确认，各方同意认定，根据 1112(b)，存在理由采取某种措施，即驳回案件、转换案件，或指定第11章受托人。我已经审阅了你们的证人和证物清单，并审阅了你们关于驳回、转换或指定第11章受托人的立场文件。在我们开始举证之前，我不知道各方是否还有任何事项希望向法庭说明？Jonas 律师？Friedman 律师？\n\n弗里德曼律师：没有，法官阁下。我认为 Aronsson 律师将说明我们就证据提出的意见。我相信 Aronsson 律师与委员会的律师已经就哪些证据可予采纳达成一致，我们也撤回了一些材料，因此我想交由 Aronsson 律师，然后由 Goldman 律师说明各方——各方希望采纳哪些证据。之后，我请求准许进行辩论。\n\n法庭：当然可以。好的。Aronsson 律师，您想先开始吗？您想继续吗？\n\n阿伦松律师：好的。谢谢，法官阁下。\n\n法庭：在您开始前，请稍等一下，我必须询问法庭助理，我们的技术方面是否需要处理什么问题。您将要——您将要提交证物吗？\n\n阿伦松律师：是的。\n\n法庭：好的。\n\n阿伦松律师：计划提交——\n\n法庭：那么，我是否需要打开这个摄像头？\n\n书记员：（听不清。）\n\n法庭：它是开着的，但我是否需要实际——把这个打开并启用？\n\n书记员：（听不清。）\n\n法庭：因为我在这里看不到任何东西，所以我想，不幸的是，我必须把它打开。\n\n书记员：嗯，她没有（听不清）。\n\n法庭：没有，但她将会。所以我不想——你知道，中断程序。\n\n阿伦松律师：法官阁下，我不确定我们现在是否需要展示任何证据。\n\n法庭：好的。好。那么，等您准备这样做时，您能否告诉我，以便我能确保我们的技术人员——我没有做错什么，因为我很可能会做错，但我会尽量不出错。好吗？\n\n阿伦松律师：会的。\n\n法庭：好的。那么，Aronsson 律师，请继续。您可以开始。\n\n阿伦松律师：谢谢，法官阁下。PAX 拟将案卷中编号为 PAX 1 至 PAX 31 的证物提交为证据，但 PAX 7、PAX 8 和 PAX 30 除外。\n\n法庭：7、8 和 30 不予提交？\n\n阿伦松律师：正确。\n\n法庭：是否有人——你们是否讨论过，是否有人反对提交这些证物？\n\n阿伦松律师：我们昨天与 Goldman 律师进行了会谈和协商，我理解我们撤回的材料体现了我们善意的会谈和协商。我理解可能还剩一项分歧——\n\n法庭：好的。\n\n阿伦松律师：——根据我们今天上午的谈话。\n\n戈德曼律师：是的。正确，法官阁下。我们只是——我认为，我预计将就他们试图从纽约诉讼中提交的一组——一系列庭审记录进行简短辩论。因此，这就限定了争议范围。\n\n法庭：好的。那么，就——是否还有其他人希望就采纳这些证物发表意见？没有人？好的。那么，Aronsson 律师，您是完整提交这些证物，对吗？\n\n阿伦松律师：正确。\n\n法庭：好的。现在，我想我可能在此前的听证中说过这一点。我不反对你们申请完整采纳这些证物。但这并不意味着我会阅读其中的每一页，因此，你知道，在此期间，你们可能希望向我指出某些内容。但无论如何，我已经说过这一点。这是我对所有律师都会说的。这并非本案所独有。我不反对，并且赞赏各方就采纳证物进行合作，但我不会——我只是想让所有人知道，这并不意味着我会阅读每一页。好吗？\n\n阿伦松律师：明白。\n\n法庭：好的。请继续。\n\n阿伦松律师：您是否希望听取关于——的辩论？\n\n法庭：有可能。\n\n阿伦松律师：好的。\n\n法庭：请稍等一下。那么，我将在记录中宣布，证物——PAX 证物 1 至 31，PAX 证物 7、8 和 30 除外，作为完整证物予以采纳。\n\n戈德曼律师：我可以提出一项保留意见吗？\n\n法庭：可以。\n\n戈德曼律师：有些证物——存在争议并受到质疑的证物是证物 18 至 22。那些是他们试图从纽约州最高法院的听证中提交的庭审记录。因此，我们——您知道，法官阁下需要裁决——\n\n法庭：好的。那么，您对那些证物有什么异议——\n\n戈德曼律师：异议是，它们纯属传闻证据。仅因它们来自法院程序，并不使它们成为公共记录。\n\n法庭：为什么它们是传闻证据？\n\n戈德曼律师：嗯，它们是庭外陈述。\n\n法庭：它们不是陈述。它们是听证记录，对吗？\n\n戈德曼律师：嗯，它们当然是记录中的陈述，由各方作出——\n\n法庭：对。\n\n戈德曼律师：——律师以及——\n\n法庭：而其证明力将按我认为适当的方式予以评定。但这是庭审记录。您是否——如果您反对的是庭审记录本身，称其以某种方式并非正式或未经认证——\n\n戈德曼律师：不。不。\n\n法庭：——那么那是不同的异议。\n\n戈德曼律师：那不是我的异议。\n\n法庭：好的。\n\n戈德曼律师：我的异议是，它们显然是传闻证据，因为它们是为证明其中陈述内容真实性而提交的庭外陈述，而且它们不——不属于公共记录例外。\n\n书记员：抱歉，法官阁下。\n\n法庭：请稍等，Goldman 律师。您听不见吗？\n\n书记员：我听不见 Goldman 律师。\n\n法庭：我们听不太清您说话。Goldman 律师。\n\n戈德曼律师：抱歉。它们显然是为证明所主张事项真实性而提交的庭外陈述。\n\n法庭：它们不是——它们不是——它们是当事人自认。它们是在一次听证中由债务人和 PAX 作出的。\n\n戈德曼律师：嗯——\n\n法庭：而且它们被采纳是为了——什么——无论如何。请继续，Goldman 律师。您继续，但我还不确定我已经被说服了。\n\n戈德曼律师：好的。你知道，就他们试图提交债务人律师作出的陈述而言，债务人并未反对——\n\n书记员：抱歉，法官阁下。\n\n法庭：请稍等。我们还是听不见您？\n\n书记员：是的。有人告诉我，如果 Goldman 律师能到讲台前，效果会更好。\n\n法庭：有些问题——他们收不到您的声音，Goldman 律师。\n\n戈德曼律师：我可以到那边去吗？\n\n法庭：可以，请。\n\n书记员：麦克风的指示灯没有亮。\n\n法庭：不知什么原因，那个麦克风不工作。\n\n戈德曼律师：好的。好的。\n\n1　书记员：\n出了点问题，因为——\n\n2　法庭：\n好的。\n好。\n是的，如果您能\n\n3　走上前来？\n\n4　戈德曼律师：\n好的。\n\n5　法庭：\n谢谢。\n\n6　戈德曼律师：\n当然。这样好一些吗，法官阁下？\n\n7　法庭：\n是的。现在我——我相信，对吗？\n\n8　大家都能听见 Goldman 律师吗？\n\n9　戈德曼律师：\n能。\n\n10　法庭：\n好的。请继续。\n\n11　书记员：\n是的。\n\n12　戈德曼律师：\n因此，就他们希望\n\n13　提交债务人律师作出的陈述而言，我不\n\n14　认为债务人实际上出席了其中任何一次\n\n15　听证。律师出席了。因此，债务人不是\n\n16　本案的对方当事人。债务人同意所\n\n17　请求的救济，所以，要构成对方当事人陈述而非传闻证据，\n\n18　该陈述必须被提出——它必须是\n\n19　对方当事人的陈述。此处唯一的对方当事人\n\n20　是委员会。因此，它不能作为对方当事人陈述而构成非传闻证据。\n\n21　\n\n22　公共记录例外不涵盖法院\n\n23　听证记录。其规定——\n\n24　法庭：\n为什么？\n\n25　戈德曼律师：\n——公共机构的记录或陈述\n\n法院或其办公室的记录，如果载明该办公室的活动，或者载明在依法负有报告义务时观察到的事项。在民事案件中，依法授权的调查所作出的事实认定。另一法院的法庭听证并不符合公共记录例外的要件。该例外旨在准许州和联邦政府机构或部门的报告作为证据。法庭：因此，你的意思是，任何曾经举行的听证的、经认证的庭审记录，均永远不得作为证据采纳，因为每一份庭审记录都会构成传闻证据？戈德曼先生：那是庭外——那是一项庭外陈述。它不属于公共记录例外，也不属于我所知的任何其他例外，除非——法庭：那么记录还有什么意义？戈德曼先生：——除非法庭作出事实认定或法律结论。法庭：嗯，也许法官在那些——在那些听证期间作出了这种认定。戈德曼先生：嗯，那么，法官阁下——法庭：我认为他作出了，不是吗？戈德曼先生：嗯，他们——有300页庭审记录——\n\n法庭：我明白。戈德曼先生：所以我不知道什么——法庭：我不会阅读全部内容，但我知道——戈德曼先生：我不知道什么——法庭：——那些庭审记录中——我相信我先前在本案中看过——有法院就某些证人的证言真实性、法官的认定以及该船舶所有权所作的认定。诸如此类的事项，都是他的认定。那些是他的认定。戈德曼先生：我承认那可以采纳。我说的是，您知道，他们试图采纳整份——法庭：正如我已经说过的，我不会阅读整份庭审记录。如果律师希望我关注庭审记录中的某些内容，我会这样做。届时，如属传闻证据，你可以有机会提出异议。但目前我不确定我是否被说服。若且当律师指出她——他们要求我审阅的该庭审记录的具体部分时，我会让你——您知道——再次提出该论点。如果届时你希望重申你的传闻证据异议，那么你可以重申，我将据此作出裁定。\n\n戈德曼先生：是的。为使法官阁下——使我明确，我并不反对法院作出的事实认定或法律结论。只是——我认为庭审记录中法院的观察意见不属于公共记录例外。这就是我的意思。法庭：好的。好。谢谢。戈德曼先生：好的。谢谢，法官阁下。法庭：律师，请继续。阿隆森女士：谢谢。因此，为澄清起见，在我们昨天与戈德曼先生的沟通中，我们确实打算——为奥斯特拉格法官（Justice Ostrager）的认定而提交这些庭审记录，而不是提交任何可能构成传闻证据的证人证言。因此，我认为我们在这一点上是一致的。法庭：好的。那么，我现在要做的是——再次说明，我们将需要澄清记录。截至目前，PAX（PAX）证物1至6、9至17、23至29以及31，均作为完整证物准予采纳。18、19、20、21和22仍可能受到无担保债权人委员会的异议；如且当你们引导我审阅庭审记录的某些具体部分时，法院将对此作出裁定。好的？阿隆森女士：谢谢，法官阁下。\n\nFiore记录与誊写服务公司（Fiore Reporting and Transcription Service, Inc.）\n\n法庭：好的。谢谢。（PAX证物编号1-6、9-17、23-29及31全部准予采纳）法庭：请继续，戈德曼律师。戈德曼先生：是的。如果——法官阁下，委员会拟提交我们的证物1至14作为证据，我相信对此没有异议——弗里德曼先生：对此没有异议，法官阁下。我是彼得·弗里德曼（Peter Friedman）。而且，我们也支持委员会提出的由法院对本案记录予以司法认知的建议。我认为这是美国受托人（U.S. Trustee）和委员会律师均提出的一点，我们认为这是一个公允的主张，并且应当对这些案件的完整记录予以司法认知。法庭：这个——好的。谢谢。戈德曼律师，我尚未进行交叉核对，但你们的任何证物是否与PAX的证物相同？戈德曼先生：我相信有一份，即债务人的声明。我认为我们双方都有。那是我们的——法庭：你们的证物2？戈德曼先生：是。法庭：好的。请稍等。以及PAX的证物2。编号相同，对吗？\n\n戈德曼先生：是。法庭：好的。好。因此，戈德曼律师，你请求法院将无担保债权人委员会证物1至14作为完整证物准予采纳。是否正确？戈德曼先生：是的，法官阁下。法庭：好的。还有其他人希望就——债权人委员会证物1至14的采纳发表意见吗？好的。那么，这些证物均作为完整证物准予采纳。我对你说，戈德曼律师，正如我对阿隆森律师所说，我不会阅读那些证物中的每一页。如果其中有你希望我关注的具体事项，你需要引导我关注这些事项。好的？我的意思是，我可以阅读全部内容，但我没有义务阅读全部内容。好的？戈德曼先生：不，明白，法官阁下。我会——法庭：好的。戈德曼先生：我会这样做。法庭：好的。（债权人委员会证物编号1-14全部准予采纳）法庭：好的。债权人马瑞（Rui Ma）、吴征（Zheng Wu）和孟维灿（Wiecan Meng）的加入申请，所以，就你们的——任何证物而言，你们没有进一步事项；你们与委员会立场一致，正确吗？梅休女士：正确，法官阁下。法庭：好的。谢谢。至于美国受托人办公室，我认为情况也是如此——嗯，我认为你的陈述是这样说的，克莱伯恩律师（Attorney Claiborn），但如果我错了，你当然应当纠正我：你保留就任何证物进行询问和询问任何证人的权利，但你本人并不提交任何证据。该办公室不提交任何证据，正确吗？克莱伯恩女士：正确，法官阁下。法庭：好的。谢谢。乔纳斯律师（Attorney Jonas），我认为你也是如此，除非你基本上请求对本案中提交的所有文件、任何其他当事人标识或提交的任何证物，以及弹劾后为反驳所必需的任何证物予以司法认知，正确吗？乔纳斯先生：正确，法官阁下。法庭：好的。那么，你那边也都准备妥当了。乔纳斯先生：是的，法官阁下。法庭：目前如此。乔纳斯先生：是的，法官阁下。法庭：在理解你们的——\n\n乔纳斯先生：谢谢。法庭：——你们的范围。乔纳斯先生：谢谢，法官阁下。法庭：好的。谢谢。请给我一秒钟。（暂停）法庭：现在，我们还有另一方当事人提交了——实际上，我认为他们没有提交任何关于证人和证物清单的文件，所以我认为他们只是提交了一份声明；另一名债权人基本上加入了委员会的——是的，他们没有提交列明证人和证物的任何文件。因此，阿隆森律师，你可以直接继续。你可以开始。弗里德曼先生：法官阁下，我是彼得·弗里德曼。法庭：好的。弗里德曼律师。弗里德曼先生：我将——法庭：请继续。弗里德曼先生：那么，法官阁下，我是代表PAX的、来自奥麦利文律师事务所（O'Melveny and Myers）的彼得·弗里德曼，我将主张驳回本案。法庭：好的。弗里德曼先生：本案系恶意提起，具体目的是规避一项藐视法庭判决书；我知道法院已经多次听闻该事项，我们还会回到这一点。\n\n我认为，实际上，在UCC证物2，即我们的证物2中，郭文贵先生（Ho Wan Kwok）的声明第3和第24段中，他基本承认了这一点——在我们看来，藐视法庭是本案的开端，也应是终结，因为本案的目的就是规避该事项，而这并非申请破产的正当目的。在其同意书中，债务人称，PAX针对他的毫无节制的法律战是他同意的理由。我认为这颇具讽刺意味，鉴于正如我们在案卷编号50中指出的那样，郭文贵恰恰是在破产申请之前立即表明了要对PAX发动全面战争的意图。紧接着，郭文贵就在其必须面对执行奥斯特拉格法官藐视法庭制裁的前一晚提起本案。那么，我们此时得到的是怎样的案件？一个没有列明资产、没有业务、没有雇员、没有待承继的未履行合同、没有收入——除少数COVID刺激补助支票外——的案件。没有真正的破产目的，没有改变郭文贵先生的生活方式。只是又一个可以利用的场所；我认为，这导致的结论是，此处确实存在双重恶意：首先是规避一项藐视法庭判决书，其次是重新诉讼PAX的债权，而二者均非正当的破产目的；对此的救济应当与提起本案的动机相适应。\n\n法官阁下，我想首先回顾郭文贵先生为挫败PAX所作努力中的各种策略的全貌。所有这些内容均来自PAX证物23，自第2段开始。PAX于2008年向郭文贵先生的公司贷款\\$30,000。郭文贵亲自为该贷款提供担保。PAX与郭文贵于2011年重新协商该贷款，以整合剩余债务。郭文贵再次签署个人担保。2013年4月，郭文贵同意通过向PAX转让北京若干公寓的产权，以清偿其债务。该和解取决于满足若干先决条件，包括交付无瑕疵产权。PAX曾多次延长该和解的期限，最终期限定为June 30, 2015。郭文贵从未履行其先决条件。因此，PAX于2017年4月就违约起诉郭文贵。顺便说一句，该诉讼与任何其他原告提起的任何其他诉讼完全无关。债权持有人与PAX之间不存在共同的事实核心。我特意使用“债权持有人”这一术语，因为我认为这些人——提出债权证明的绝大多数人——实际上并非债权人。他们持有债权，这与成为债权人不同。他们没有判决书。于September 15th, 2020，PAX获得简易判决\n\n就其违约合同案件而言。PAX（PAX）将会尝试采取的措施将受到如此严重挫败的第一个警示信号，是此后不久 Geneva New York（Geneva New York）在 SDNY（纽约南区）申请破产，这是 Kwok（郭文贵）试图挫败 PAX 的模式的一部分。此后不久，纽约法院限制了 Lady May（“Lady May”号游艇）及其他——以及 Sherry Netherlands（Sherry Netherlands公司）。证据23，案卷183.3，10月15日，Ostrager法官（Justice Ostrager）命令。最终判决于2021年2月作出，在破产案件之前一年。当时，法院作出 $116 million 的判决，并适用纽约法定利率，使其在 Kwok先生提交申请之日增至 $127 million。此后，PAX 为执行其判决而采取行动时，发生了各种花招。如我所述，Ostrager法官不得不寻求——明确认定，且这是证据——PAX 18第21页。在10月——在一次10月15日的听证会上，如果委员会的律师希望提出异议，我仅强调，这是我们认为应当作为证据的听证会记录内容之一。法院认为，如2020年9月15日命令所反映，Kwok先生曾试图误导法院。法院认为，作为原告的Kwok先生——\n1　如原告所主张，正在玩弄腾挪资产的把戏。\n这\n2　将会结束。\n我们不会再容忍任何\n3　腾挪资产的把戏。\n4　由于这些持续的腾挪资产把戏，Kwok——PAX 被迫在\n5　纽约州诉讼中多次提出藐视法庭动议。\n6　\n7　如PAX证据24所述，2021年3月16日，\n8　法院指出，显然，在\n9　本法院进行的诉讼中，存在令人无法容忍的策略操弄、肢解和欺骗。\n10　法院接着称，\n11　法院不再逐一列举被告所从事的诸多腾挪资产把戏，\n12　而是在以下范围内准许藐视法庭动议。\n13　\n14　自2021年5月15日后，游艇在本\n15　法院管辖范围外的每一天，被告\n16　将被罚款——Kwok将被罚款 $500,000。这并未迫使\n17　Kwok先生申请破产；他只是继续蔑视，这次不仅蔑视判决，\n18　而且蔑视州法院的一项\n19　命令。\n20　2021年7月的一次听证会上——这是PAX证据21——\n21　法院指出，法院曾作出命令，要求\n22　不得将该船移出\n23　美国领海。该命令被Kwok先生\n24　和/或其控制的实体无视。这构成\n25　藐视法庭。\n\n法庭：律师，就证据21而言，您在第几页？FRIEDMAN先生：第16至17页。法庭：谢谢。FRIEDMAN先生：再往下看第19页，法院谈到了他的——Ostrager法官谈到了他的抗命，Kwok对法院命令的抗命。Kwok对该罚款提出上诉。第一部门维持原判，并指示审判法院举行进一步的证据听证会。在最终证据听证会上，正如本法院所指出的，那恰恰——促成了破产，法院谈到了1,180项案卷记录。这在PAX 25中。几乎所有记录都涉及被告逃避和欺骗的努力。谈到——PAX因资产被置于错综复杂的公司实体网络中而遇到困难。最后，正如法院指出的，而且我知道本法院此前已听过这一点，但如果亿万富翁诉讼当事人能够同时寻求利用纽约及其他地方的法院程序，同时明知且故意违反法院命令，就不存在法治。Kwok先生试图就此提出上诉，申请对命令的紧急暂缓执行，但未获准。Ostrager法官在其意见——命令中指出，还会有其他后果。我认为，我们——根据我们从证词中所知、本法院所听到的内容以及我认为可以作出的推断，Kwok先生显然并不真正担心金钱问题。他担心因违抗法院命令而入狱，而这正是促使他申请破产的原因。\n\n那么，提交破产申请后发生了什么？我认为，法院可以从Kwok先生的声明、债务人对审查员动议的答复、债务人对PAX要求解除暂缓执行之动议的反对意见、债务人试图将PAX的诉讼从州法院移送至联邦法院的行为中观察到。所有这些都指向一件事。本案随后——是为了不当目的，即重新审理PAX问题而提起的，对吗？\n\n你们在声明中看到，Kwok先生坚持认为PAX诉讼建立在伪造基础之上，对吗？认为已经取得的判决存在某种不当之处。曾有一些努力——这是案卷编号83第12段。Kwok先生主张，个人担保不知何故是伪造的。他谈到，我认为，是希望重新评估究竟哪些是他的财产，这无非是明显试图让法院重新审理Ostrager法官的藐视法庭命令。\n\n移送一个案件的想法——曾试图移送一个案件，而该案是最不应当移送的案件。其中的核心问题已经在上诉中，但除试图重新审理之外，还能有什么其他目的；而我们引用的判例指出，这不是提交破产案件的正当目的。\n\n法官阁下，我想指出，在这些程序中唯一甚至被提及的其他案件，是债权人 Rui Ma（马蕊）的债权案，并未试图将该案移送至此。相反，我相信实际上已提交一项同意约定，允许该案继续在纽约州法院系统中审理和裁决。\n\n因此，我认为法院可以根据其所见的一切作出推断。本案的真正目的，是针对挫败PAX，并且获得第二次或第三次机会，尤其是就PAX而言。\n\n法官阁下，关于PAX再说一点；我认为法院已经注意到，鉴于缺乏资产、缺乏经营业务、缺乏持续收入、业务等，本案是多么不同寻常。本案的性质如此坦率地集中于专业人士的费用和专业人士的预算，而非以任何方式进行传统且有意义的重组，即PAX拥有一项债权，其金额比下一项判决债权大1,300倍以上。第二大实际、我想理论上无争议的债权，是内部人的债权，我认为法院在此情形下无需过多关注。\n\nFiore Reporting and Transcription Service, Inc.\n\n鉴于我方债权的规模，我们希望着重说明PAX所发挥的积极作用；我认为，在处理本案提交后发生的情况时，PAX发挥这种作用确实很重要。\n\n债务人进场。债务人提交一项计划。我认为这是一项一开始就注定失败的计划。寻求借款 $8 million。PAX对此提出反对。其他人没有。其他人认为，也许会有——彩虹尽头的一罐金子。我们从一开始就说，债务人占有期间融资是一场骗局；当 Golden Spring（Golden Spring）决定不再为本案提供资金时，人们的希望显然彻底破灭了。\n\n但是，仅仅——你知道，试图寻求债务人占有期间融资，不是为了任何人而是为了专业人士的利益，或为了开展调查，对我们而言从来就没有意义；本案任何事情对我们而言从来都没有意义。我们认为，维持现状，即债权人有权依州法追索其权利，才是处理此类债务人的适当机制。\n\n而且我们认为判例支持这一点。例如，在来自 District of Connecticut（康涅狄格联邦地区法院）的 Sapphire Development Company v. McKay 一案中，债务人没有业务、没有雇员，其资金由债务人主要负责人的关联方提供；该主要负责人曾有——并且已有州法院判决认定其转移资产、误导法院等。法院驳回该案，并特别指出，无担保债权人可以在州法院向其希望追索的任何人追索，就像本案的债权持有人可以做的一样，而且这属于适当行使自由裁量权。我想强调，法院确实拥有广泛的自由裁量权——判例非常明确，本法院在决定今日应如何处理时拥有极大的自由裁量权。\n\nPAX债权的规模，我认为很重要，正如我们在495 BR 212的 Acme Cake Company（Acme Cake Company）一案中所引用，当一名拥有足够大债权的单一债权人主张驳回案件是最佳结果时，驳回案件是适当的。驳回符合债权人的最佳利益，因为——州并不受以下可能结果的影响：最大债权人将在其他无担保债权人之前执行其判决并取得债务人的资产。\n\n因此，PAX主张其为最大债权人并认为这是正确结果，并无不当。再次强调，我们在此所做的只是恢复现状。我们是否能够执行我们的判决，我无法断言，但我认为恢复现状是适当的。\n\nFiore Reporting and Transcription Service, Inc.\n\n来自 Colorado（科罗拉多州）的 OptInRealBig.com, 345 BR 277。该法院准许驳回动议，理由是债权人整体在破产程序外可收回的价值可能更大；我们认为本案也是如此，当然对PAX而言是如此，正如我稍后将说明的。即使能够获得资金支持，第7章程序也会给PAX造成巨大成本。\n\n但该法院认定，债权人——在此我会将法院所谈论者类比为拥有或有未清算债权的债权持有人，甚至是拥有极小债权者——不应仅为利用破产向债权人提供的利益，而获准延长或维持一个案件；并且，如果如我认为对方所主张的那样，保障《破产法》的优先权顺序是驳回的先决条件，那么一个案件就永远不可能依据《破产法》被驳回。\n\n因此，如果只有在百分之百确定任何至少在理论上处于类似地位的人都得到保障时才能驳回案件，那么就永远无法驳回案件。我们认为没有任何判例支持这一点；我们实际上认为恰恰相反，OptInRealBig 和 Acme Cake Company 等案件得出了相反结论。\n\n法官阁下，我认为，在 Kansas（堪萨斯州）的 Region 11*, Evangelical* Alliance of Our Church 破产案中，法院指出，尽管存在其他债权人，但在破产实质上是试图阻挠一名债权人在州法院诉讼中获得追偿的情况下，应当允许人们依据适用的非破产法寻求其有权获得的救济，而无需应对可能以其他方式设置的破产障碍。\n\n法官阁下，我认为我们还在我们对——抱歉，在支持意见的回复状中引用了三个案件，即 Wally Findlay（Wally Findlay）案，该案指出，重新审理破产案件属于不允许的使用方式，且债务人采取该立场时，驳回案件是适当的。以及来自 Eastern District of New York（纽约东区）的 Bridge to Life（Bridge to Life）案，该案因债务人试图将非破产法问题注入第11章案件而被驳回。在 D&G Construction: Dean Gonzalez（D&G Construction: Dean Gonzalez）案中，法院认定，将破产程序用作拖延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。\n\n法官大人，有些案件的论证并不充分，我明白。我认为对方所援引的一些其他案件也是如此，我会谈到他们的案件，但我认为其中存在一条贯穿始终的主线：没有任何理由阻止——也没有理由不——恢复原状，并让人们在此类案件中行使其在州法院法下享有的任何权利。\n\n并且请允许我说明本案不是什么。本案不是大规模侵权案件。本案不是这样一种案件：你可以说，好吧，一名债务人在五年前做了坏事，当然有些人比其他人更早受到伤害，但我们知道——我们知道——由于诸如进攻性非互惠争点排除之类的法律原则，必然会有人在未来获得有利于他们的裁决；我们甚至可以制定一个矩阵，说，好吧，如果你患有间皮瘤且年龄为45岁，你将获得X。如果你遭受阿片类药物伤害，你将获得Y。这里每个人的请求权类型都非常、非常不同。\n\n因此——您知道，就所谓抢先向法院起诉的问题而言，这正是州法允许人们去做的事，而PAX一直非常、非常、非常勤勉且警觉，这并无不当。\n\n我想谈谈对方所援引的案件。首先，我认为——这些案件中存在几条贯穿始终的主线，我认为这些主线显示出相当有意义的差异。我认为——您知道，首先显然是Julian（音）案。我认为显然存在强有力的驳回理由。我认为，债务人在该案全过程中的行为是极其重要的区别因素。本案所幸历时很短，而且我想，我对本案的了解可能远不如您、Birney先生（伯尼先生）或Goldman先生（戈德曼先生），但我认为，就该案中债务人的律师而言，存在一些独特事实，因此，法院最终维持对该案的监督可能是一件相当好的事。但我不——您知道，我认为债权人——债权人的最终结果并不好；而且我认为，无论那是否是适当行使自由裁量权，并不能为本案提供指引。\n\nFiore Reporting and Transcription Service, Inc.（菲奥雷记录与誊写服务公司）\n\n康涅狄格地区的SWJ Management案中，债权人压倒性地寻求转换程序。\n\n而且我想明确指出，正如Acme Cake Company（艾克米蛋糕公司）案所说，您不应当按人头计数。您真正应当按金额计算，因为设想一下，PAX拥有$260 million的判决。设想PAX将其贷款拆分为$261 million个关联基金，并且每个基金各自提出债权申报。它们每一个都可以来到这里说，261名债权人支持驳回。我认为这不是按人头计数。我认为这是按金额计算，而PAX的——您知道，PAX所代表金额的价值才是真正重要的。\n\nPremier Golf Properties（普瑞米尔高尔夫地产）案被大量援引。该案载于564 BR 710。法院在决定应驳回还是转换程序时使用了一个有趣的词。法院称，实际问题——法院实际上称，该案的实际问题是，作为高尔夫球场的基础资产之不确定价值，能否通过持续经营企业的破产出售或止赎而实现最大化。这与本案毫无相似之处。\n\n法院依据的事实是，债务人维持着一项经营业务，拥有60名员工，并有每月$300,000的收入。驳回该案将导致止赎及其带来的财务和就业损失。法官大人，如果您驳回本案，我可能会失业，但我认为其他任何人都不会。我认为，您知道，Premier Golf Properties案非常、非常、非常不同。\n\n1121 Pier Village案、Team Systems International案、West Hampton Coach Works案、Spear案、Babiaff（音）案，均涉及没有任何非债务人一方主张应驳回而非转换程序的情形。在大多数案件中，除非债务人偏好该选项，否则甚至没有讨论驳回。\n\nTeam Systems案的法院——这是由靠近特拉华州法官席的Goldblatt法官（戈德布拉特法官）作出的一份极具深思熟虑的意见——在多处特别指出，所有参与的债权人和美国受托人均主张，转换程序比驳回对债权人和破产财产更有利。在该等情形下，Goldblatt法官认定驳回没有意义而转换程序有意义，当然不构成滥用自由裁量权。这根本不是本案的情形。\n\nRui Ma（马瑞）债权人大量援引Fleetstar案。我认为该案涉及一种非常、非常不同的情形。那是试图进行结构性驳回；我认为，根据Jevic（音）案，这种做法即便并非完全禁止，也存在严重问题。本案不是结构性驳回。没有人请求法院说，好吧，如果你向某些人给予一些东西、却不给其他人任何东西，并且，您知道，他们只能自认倒霉，那么你就可以驳回案件并取得豁免。\n\n这是一个直接驳回请求。存在一些要求他人支付费用的努力。我认为我们一直都说，如果其他人获得费用支付，我们没有问题。我们不会坚持要求支付我们自己的费用，但本案确实完全不是结构性驳回类型的案件。\n\nFleetstar案的法院解释称，即使债务人提出的驳回方案能够通过实用性测试——而法院对拟进行该结构性驳回的方式存在真实疑虑——该方案仍必须被驳回，因为其试图在未经当事人同意的情况下改变其权利，并且缺乏《破产法典》中许多最重要的保障措施。\n\nFiore Reporting and Transcription Service, Inc.\n\n在这里，我们请求恢复原状。没有人正在失去其享有的权利。您知道，并未要求债务人的申请破产前债权人牺牲任何东西。我们只是寻求恢复原状。\n\n委员会还援引Capra案。Capra案是一个有趣事项。我实际上认为，如果你对Capra案进行深入思考，它帮助我们而非损害我们。Capra案中，法院多次表示，支持转换程序的重要因素是严重不当行为，因为债务人来到法官的法院寻求破产保护。而他做了什么？他未能——您知道，他——实际上是他未做的某些事。他没有实质性参与破产程序；您知道，本案尚未进行那么久，但确实已提交月度经营报告（MORs），债务人也已提出聘任申请。没有发现——您知道，我们不认为他的所作所为合理，但他确实参与了这一程序。\n\n但该案的关键问题在于，债务人在破产期间出售了一辆Bentley（宾利）和一辆Rolls Royce（劳斯莱斯），却未遵守《破产法典》第363条。这是——比如说，在极其糟糕的行为清单中，这是非常糟糕的行为。对吧？你不能一方面说，我要进入破产程序，但另一方面却不遵守最重要的保护措施之一。\n\n显然，这不是日常经营活动。他不是汽车经销商。他是个人。因此，他违反了第363条，而法院多次谈及此事有多么糟糕，并继续表示，我认为该案的整体要旨是，法院不愿允许驳回，因为债务人基本上不会为其所作所为承担任何后果。因此，我认为理解该案的方式是，如果你在法官面前做了坏事，法官将保留对你的监督。因此，把本案送回Ostrager法官（奥斯特拉格法官）那里。\n\n对吧？Kwok（郭文贵）所做的极其糟糕之事是在Ostrager法官面前发生的。因此，我认为，如果——如果Capra案——您知道，Capra案所教导的是，当人们做了坏事时，法官有权监督他们。这里所做的极其糟糕之事是在Ostrager法官面前做的。因此，当本案被驳回时，您知道，我们将继续在Ostrager法官面前追求我们的权利，而他可以——他可以让Kwok先生为其行为承担责任。\n\n法官大人，援引了Rollicks（音）案。这是一份非常简短的意见。我认为看待Rollicks案的一种方式是，应当重视拥有最大债权的人。另一个关键区别是，Rollicks案选择转换程序而非驳回，涉及一组在申请破产前已获得判决留置权的债权人；他们寻求驳回案件以避免针对其可能提起的撤销之诉。这根本不是本案的因素。我们没有任何——不能对我们提出偏颇清偿请求，因为我们没有收到债务人财产。\n\nFiore Reporting and Transcription Service, Inc.\n\n法官大人，我只想花一点时间讨论另外几个被援引的案件。Steve and Barry's案——我认为其俗称也是Steve and Barry's——即BHS and B Holdings LLC（音）案。委员会援引该案以说明，您知道，如果在一个有偿付能力的案件中存在行政留置权，这应当倾向于支持转换程序。\n\n第一，我认为法院是因为存在理由而关注这一点。第二，该案已进行了数年。存在需要处理的存货，存在——您知道，正在清算的商店。第三，我认为，如果您阅读该意见，完全没有任何人甚至希望转换程序的迹象。因此，我想法院可以——您知道，必须评估其是否适当，但没有人希望如此，更不用说最大债权人。\n\n您知道，Mitan v. Duval案——您知道，这是第六巡回法院的案件。在该案中，最大债权人并不支持驳回，只有债务人支持。那些债权人——因此，您知道，法院希望指定一名Chapter 7受托人，以进行调查。在这里，我们认为每一名债权人都可以继续进行其认为重要且必要的任何证据开示。法官大人，关于这些案件，我还想指出几件其他事情。\n\n法官大人，关于被大量援引的Capra案，还有一点是，支持驳回的当事人——您知道，是有担保债权人，而法院指出，这两名债权人受到债务人的有利对待，并且可以合理预期，如果案件被驳回，他们将继续获得有利对待。我不知道未来我们与债务人之间会发生什么。债务人在其书状中称，他们打算偿付债权人。我不知道这是否会发生。我假定我们将不得不进行更多诉讼。我不知道，但肯定不存在——您知道，支持本案驳回的当事人曾获得有利对待的历史。远非如此。轻描淡写地说，在支持这项动议时，我们与Kwok是某种程度上令人不安的同床者。因此，我认为这又是一个区别点。法官大人，我想就证物27提出几点意见，该证物是——您知道，是我们的——是其他诉讼的摘要。\n\n法庭：该证物已作为完整证物获准提交，且无人提出异议，所以请继续。我只是做个记录——\n\nFRIEDMAN先生（弗里德曼先生）：好的。\n\n法庭：——关于那份证物，因为我们仍然必须——我们在某个时候仍将不得不处理庭审记录证物。但请继续。\n\nFRIEDMAN先生（弗里德曼）：法官阁下，您知道，那谈到的是附表F所列的债权。现在，首先我要说的是，已经提交了一些债权申报，我猜想我们可能会听到这样的说法：如果提交了债权申报，那么在有人提出异议之前，它会自动被视为有效。我认为法庭可以注意到，部分可从证物27中看出，但总体而言，情况是——说没有异议在某种程度上是正确的，但所有那些案件都在积极诉讼中，因此，当您知道这些债权多年来一直在诉讼中受到积极争议时，说债权申报在提出异议之前具有表面证据效力，就有点——并不完全正确。无论如何，我认为关于这些债权——诉讼债权，有一点确实很重要，即存在\n\n一项金额已经确定的债权，我想是300万美元，也许是$96,000。您查看该表格时，会看到$35,648,868的债权已被驳回。有$37 million的债权已搁置两年多。大致如此。我不想——我认为是两年多。这当然——而且您可以看出，这是一段相当长的时间。因此，您知道，您实际上谈到的是一个小得多的潜在债权池。没有证据表明其中任何债权设有或曾设有审判日期，而且，您知道，我们对这些债权何时会被审理所知甚少；我们主张，法庭适宜同时考虑质的差异，即我们拥有一份判决书，而这些全都是潜在的未来债权，并且就与我们的债权有关而言，它们没有共同的事实核心。\n\n此外，法官阁下，我还要——您知道，再指出几项情况。许多债权——至少八项债权，据我们所能识别，涉及证券违法行为；您知道，它们可能受制于劣后清偿或不予认可，但您知道，我只是将此作为一个问题指出。我认为，这既意味着PAX（PAX）的观点在此应当获得相当大的重视；也意味着，审视这些债权并注意到其中有多少是诽谤债权，以及Rui Ma（马蕊）债权——这显然是一种人身伤害类型的债权——可以说明为何本案极不适合破产程序。\n\n我认为，本法庭未必是恰当的审理机构，来监督十几项以上彼此没有共同事实关联、且已在州法院推进至某一阶段的人身伤害——诽谤债权。如果中止令将被解除，以便让它们全部被确定金额，那就违背了集中管辖或由单一事实裁判者裁断的目的。坦率地说，正如我们所引用的，存在尚未解决的问题，即根据28 USC 157B5，本法庭是否甚至可以审理它们，还是这些债权必须由地区法院审理。Connecticut court（康涅狄格州法院）在Ice Cream Liquidation（冰淇淋清算案）中，对人身伤害侵权债权采取了较宽泛的界定，包括任何对个人权利的侵犯所造成的伤害。我认为法庭不必对其中任何问题作出结论，因为该问题并未提交至法庭，但我想向法庭说明，为何在存在其他选择、例如让人们返回州法院的情况下，对这些债权确定金额会带来问题，也确实无助于实现破产程序的核心功能。显然，在Chapter 7（破产法第7章）中——并且为明确起见，法官阁下，我理解存在一种更宽泛的观点。我们引用了Gawker Media（高客传媒）案，因为我认为，当存在与我们所持观点不同的判例时，我们始终有义务予以承认。但我确实认为，District of Connecticut（康涅狄格地区法院）的Ice Cream Liquidation, Inc.案在此背景下值得参考。您知道，法官阁下，随后您就会面对所有那些案件将如何处理的问题。如果他们在这里，原告仍将承担——原告仍将承担费用——\n\n法庭：如果案件——如果本案转换程序，那些案件将如何处理？这是您的——\n\nFRIEDMAN先生：是的，法官阁下。\n\n法庭：是。继续。\n\nFRIEDMAN先生：因此，受托人将不得不为它们进行抗辩。我不知道受托人将会——受托人不能只是说，好吧，各位，您知道，我将认可你们的债权。那显然会严重损害拥有有效债权的债权人的利益。受托人必须以某种方式获得报酬来做这件事。我不知道——您知道，我马上会谈到这一点。但这需要实际的现款支付，而不是——您知道，不一定是诉讼融资安排或风险代理费，对吗？那将需要有人真正深入审查每一案件的是非曲直。正如法庭所知，作为利害关系方，这可能也会使PAX承担同样的负担。任何债权人，尤其是在第7章案件中，均可对任何其他债权人的债权提出异议。\n\n您知道，如果没有真正能够进行抗辩的受托人，该负担将不公平地落在PAX身上。债务人也可能在该方面参与案件。我认为——您知道，您实际上得到的是一种并不适合破产法院处理的情形；适宜的做法是让这些人——您知道，让这些债权人返回州法院寻求救济，并继续追诉他们截至目前已提起的任何案件。\n\n法庭：那么，除了您关于157(b)(5)的论点之外，28 USC 157(b)(2)(B)又如何？该条规定，人身伤害债权和非正常死亡债权不得被估算——\n\nFRIEDMAN先生：是。\n\n法庭：——或确定金额——\n\nFRIEDMAN先生：是的，法官阁下。\n\n法庭：——针对破产财产——\n\n法庭：——以便在依据Title 11的案件中进行分配？\n\nFRIEDMAN先生：这正是与我预期可能有人会提出的论点相对应的要点，即，哦，那么你可以估算这些债权，您知道，人们的分配就不会被永远拖延下去。但同样地，您届时仍要到本法庭之外完成该事项，而且，您知道，您会给康涅狄格州联邦法院系统施加重大负担，而这些问题本可以由州法院系统处理。法官阁下，我认为——所以我认为——这是一个相当关键的要点。\n\n然后我们就谈到，您知道，鉴于其目前的状态，若没有——本案会呈现的其他特征。本案没有资金，而我们一直担心，永远不会有本案所需的那种资金。对吗？唯一的资金是为了进行调查，而我们从一开始就说，那是一座通向虚无的桥梁，因为如果您要采取任何行动，您需要的是某种类型的诉讼。而我们——您知道，我们在破产法院外采取的、并且有帮助的那些行动。\n\n这里的债务人没有流动资产，并面临旷日持久的未来争议。我们知道，本法庭已启动一宗诉讼，即一项对抗性程序，涉及撤销Kwok先生（郭文贵）所享有的何种权利，以及是否有其他人对该游艇享有权利。\n\n我们知道，围绕Sherry Netherland（雪莉荷兰人公寓）的公寓存在广泛诉讼，这将要求债务人——即债务人——第7章受托人参与纽约的一宗破产程序。仅为处理计划问题等事项，即使不仅仅是为了取得该资产，还包括对他人的债权提出异议，而该案是有效的，并且还涉及British Virgin Islands（英属维尔京群岛）因素。您必须支付英属维尔京群岛律师的费用，而这没有资金。对吗？\n\n此外，推定还会有诉讼，因为这是第7章案件，您将会围绕债权的免责发生争执。您知道，受托人将不得不处理该问题，\n\nFiore Reporting and Transcription Service, Inc.（菲奥雷速记与转录服务公司）\n\n或者个别债权人将不得不承担该负担。然后，您知道——那么最终会怎样？最终会形成一种情形：没有可供受托人使用的资金。没有可以在短期内清算的财产。有几宗诉讼和一条狗，但仅此而已。存在人们可以追索的东西，但如何追索？那么，您可以获得诉讼融资。我们没有看到任何可用诉讼融资的证据。我认为其成本会很高。该成本将主要由PAX承担，并会侵蚀PAX能够获得的任何回收款。您知道——\n\n法庭：任何债权人能够保留的任何回收款。\n\nFRIEDMAN先生：当然，法官阁下，我认为那将不成比例地落在我们身上，风险代理律师也是如此。本法庭可以根据其自身经验予以注意，风险代理律师费用昂贵。我们知道，在驳回之前，委员会不仅——您知道，在驳回听证会上，提出了聘请欺诈审查员和资产追踪人员的动议，对吗？所有这些都会——您知道，如果人们要在日后取得报酬的条件下承担这些工作，都会很昂贵。我甚至不知道他们是否会这样做。通常，我认为这类人按小时费率报价，但没有任何资金支付他们。\n\n而且，您知道，我认为确有一些判例——您知道，委员会引用的Babiaff案认为，在资金不足且受托人只会给破产财产增加更多成本和负担时，应优先驳回案件。\n\n法庭：律师，那是哪一个案件？\n\nFRIEDMAN先生：Babiaff案，445 BR 640 -- 64 at Page 82。\n\n法庭：我只是认不出那个名字。您引用的其他案件我认得，但您是说它在委员会的书状中？\n\nFRIEDMAN先生：我相信是这样。该案继而引用Midwest Properties v. Sherwano（发音不确定）案。因此，您知道，坦率说，我们认为受托人会在费用方面增加重大负担，而且我不确定——您知道，其益处是什么，尤其是因为我们知道可以寻求州法救济，或者在适当情况下可以寻求刺破公司面纱。人们如果愿意，可以自行追究州法上的欺诈转让债权。人们可以申请限制令。PAX当然这样做了。没有任何事情阻止人们运用其拥有的州法救济。您知道，Rui Ma债权人团体表示，如果本案被驳回，非PAX债权人将无法在分配中获得平等。我不知道这是否属实。\n\n我不知道——也许他们会就其债权达成和解。我不知道。对吗？在破产程序之外，没有人能保证任何人会获得什么，但各方应当能够尽其所愿追索Kwok，以收回他们想要收回的款项。\n\n如果并无实质内容——而这仅仅是一次无目的的偏离——如果确有实质内容，没有人对可能存在的数额设定上限。很可能，潜在地，会有足够多的财产供其他人受偿。我们——您知道，诚然，我们并不知道，但我认为，尤其鉴于PAX债权的金额及其迄今已付出的努力，PAX不应当——也不应因本次申报而受到不利影响；我认为，应允许其他债权人实质上利用债务人的恶意申报。\n\n其他当事人某种程度上说，您知道，Kwok在此的行为具有策略操弄的一面，他不应因此获得奖励。我认为他并未获得奖励。如果本案被驳回，除避免在Ostrager法官（奥斯特拉格）面前进行几个月的程序外，他没有从本案获得任何实际利益，而他将不得不立即回到那里。他没有获得利益。唯一获得利益的人，是那些没有金额已经确定的债权、且正在拖延PAX的人；而PAX已经被拖延了近14年。我认为这既不公平也不公正，并且我不认为这符合PAX所拥有的$261 million债权的利益。\n\n你知道，我们认为，实际上是其他当事人、其他债权申报人正在推动继续留在破产程序中，而他们主张的是不平等对待。他们基本上是想把破产程序用作一种催收工具；正如 In Re: Murray（默里案）所说，破产程序不应被用作一种比非破产法项下同等权利更强有力的债务催收救济——在破产程序中采用一种比非破产法项下同等权利更强有力的债务催收救济，不是我们应当做的事。法院谴责债权人将破产程序用作一种比州法——比非破产法项下同等权利更强有力的债务催收救济。\n\n鉴于他们目前所处的位置，其他人将会插队，迫使 PAX 分担追偿所得，同时施加数百万美元不必要的费用。\n\n我注意到，债务人指出，其他债权人基本上是在劫持第11章案件，以实现一种变相的非自愿破产程序。我怀疑他们对此有所夸大。否则，这将不是他们可获得的一种救济途径。我将留待委员会进一步阐述该论点。我认为该论点有其依据，法官阁下。\n\n法官阁下，委员会援引了，而且我认为我们注意到，Collier（音）所谈及的因素。有些法院相当依赖这些因素，有些法院则只是顺带提及。我认为我今天所讨论的内容确实涵盖了这些因素。例如，债权人是否收到优先付款，是一个因素。现在当然没有理由相信 PAX 收到过任何优先付款。如果案件被驳回而非转换，是否会丧失在本案中获得的权利？\n\nRui Ma group（马睿集团）主张，如被驳回，对该 $37 million 托管款的权利将会丧失，但该命令明确设想了如发生驳回将会如何处理。这并非未知之事。债权人——你知道，债权人对该款项并无任何特定权利，而且在驳回情形下可能发生什么，是经过明确协商的。因此，我不认为任何人正在失去其原本本可享有的权利。\n\n债务人是否会在驳回后再次提交案件。我的意思是，我猜 Kwok（郭文贵）可以尝试，鉴于其已同意本案，而且，我认为这并不支持该因素。\n\n受托人为债权人利益取得资产的能力。我认为，也许可以，但受托人目前没有任何资金来支持其努力。所谓唾手可得的成果——首先，是 Kwok——你知道，是 PAX 种下了这棵树；但更重要的是，要在那棵树上取得那些成果，仍有大量工作要做。即使假定资金可用，这也会给债权人带来巨大成本，包括我认为尤其是 PAX。至于将遗产价值作为经济企业的价值最大化——谁真正知道这项资产的经济企业价值是什么。我们知道——我认为这主要出现在类似 Premier Golf（至尊高尔夫案）的案件背景中，在那些案件中，清算会导致价值和就业机会明显损失——毁灭性损失。剩余问题是否会在破产法院之外得到解决，我认为法院可能已经就该问题进行过讨论；而且我认为，例如，我们已经对债务人和 Rui Ma 说过，嘿，你们有一个案件，回去尝试在其他地方处理。债务人是否存在不当行为。我认为这里债务人的不当行为几乎完全发生在破产前。围绕本案边缘存在一些事情，我们显然——你知道，我们并不喜欢债务人处理本案的方式，但我认为它们仍属不良判断的范围，而非腐败。并且，我不认为债权人需要一宗第7章案件来保护其利益。人们完全可以使用其州法救济。\n\nFiore Reporting and Transcription Service, Inc.（菲奥雷速记和转录服务公司）\n\n然后，你知道，其他因素包括：单一资产、计划已经确认、环境问题；我认为，正如我们在审阅拟议命令时从 DIP 中了解到的，本案不存在循环性问题。不存在环境问题。这不是 Midlantic（米德兰蒂克）类型的情形。\n\n因此，法官阁下，以上就是我们认为驳回适当的理由，即判例法支持 PAX 的理由，而其他当事人所依赖的案例，实际上无法使其达到法院为转换而非驳回行使自由裁量权所需的程度。谢谢您，法官阁下。\n\n法庭：谢谢。Jonas 律师？\n\nJONAS 先生：早上好，法官阁下。我是 Jeff Jonas（杰夫·乔纳斯），代表债务人 Miles Kwok（郭文贵）的 Brown Rudnick（布朗·拉德尼克律师事务所）律师。在具体讨论驳回第11章案件或其他替代方案之前，我认为重要的是先退一步，回顾我们是如何走到今天这一步的，以便将其置于背景中；因为我确实认为，法院今天应当将事情置于背景中，并着眼于事实，而非律师们将会提出、已经提出并将会继续提出的大量毫无依据的指控、影射和论辩，因此，您今天上午不会从我这里听到任何夸张言辞或恶意攻击。\n\n在本案中，您已经听取了两名证人的现场证言，即 Verdolino & Lowey（维尔多利诺和洛伊）的 Craig Jalbert（克雷格·贾尔伯特）和债务人 Miles Kwok 的证言。\n\n如 Kwok 先生所证实，以及如其提交的声明所述，他是中国共产党，即 CCP，的直言不讳的批评者。数亿人观看其与批评 CCP 有关的广播。他及其家人在中国曾遭监禁和酷刑。他亲眼经历其兄弟被枪杀。他仍持续遭到 CCP 的追捕和迫害。\n\n这并非荒诞的虚构。美国政府高级官员和商界领袖已被刑事起诉并作出认罪答辩，其中包括因非法寻求将 Kwok 先生遣返中国、使其可能遭监禁或杀害，而以 CCP 的外国代理人身份行事。这些人包括 Elliot Broidy（艾略特·布罗伊迪）和 George Higginbotham（乔治·希金博瑟姆）。\n\n法官阁下，上周——我认为我们在书面文件中提及过这一点，但为确保您知悉——上周，司法部对 Steve Wynn（史蒂夫·永利）提起诉讼；他是一名亿万富翁筹款人，曾任共和党全国委员会财务主席。诉讼依据是他作为未登记的中国代理人行事，寻求引渡 Kwok 先生。\n\n司法部提到中国——中国最高领导人习近平主席曾直接向时任特朗普总统提出美国将 Kwok 先生遣返中国一事。Wynn 先生为争取中国政府支持其在 Macao（澳门）的赌场，与白宫国家安全委员会高级官员、白宫幕僚长以及时任特朗普总统接触，寻求将 Kwok 先生列入禁飞名单、不续签 Kwok 先生的美国签证，并将 Kwok 先生送回中国，而他再次很可能面临监禁或死亡。Kwok 先生相信，针对他的部分或全部债权人——所谓债权人——债权申报，是 CCP 持续试图诋毁和压制他的努力的一部分。在这一背景下，Kwok 先生坚持不懈。尽管他几乎没有资产和收入，但他得到其家人的慷慨资助。尽管其所谓债权人可能不喜欢这样，但这没有任何违法、不当或错误之处。2月，面对一项其无力支付的纽约州法院判决书和命令，Kwok 先生提交了本破产案件。如他所证实，以及如其声明所述，他希望第11章程序将帮助他就所谓债权人债权达成公平且衡平的解决方案。自本案提交以来，他的破产申请及本案管理一直——自其提交以来，一直完全出于善意并完全透明。没有任何相反证据。我认为，甚至 Friedman 先生也在实质上承认这一点。尽管可能有人指称 Kwok 先生拥有某些资产，无论是一艘游艇还是一套纽约市公寓，这些指称仍未被证明和确定。自提交本案以来，Kwok 先生已提交完整准确的财产清单和事务说明。他参加了近整整两天的 341 会议。他出庭并提供现场证言。他安排并协助返还了纽约州法院命令所涉游艇，该游艇的返还目前由 $37 million 现金担保。他获得了 $9 million 的 DIP 融资；该融资本应为无担保和次级债权，并包括向遗产提供的一笔百万美元赠与。他还提交了一项重整计划。希望是破产程序能够提供一个平台和机会，与债权人及所谓债权人进行对话，以达成协商一致的解决方案，这正是破产程序的确切目的和要点。本破产申请并非出于恶意，自其提交以来也不存在任何恶意。\n\n因此，法官阁下，转向驳回问题，根据《破产法典》第 1112(b)(1) 条存在驳回事由，具体而言，第 1121(b)(4)(A) 条规定，事由包括遗产的重大或持续损失或减损，以及缺乏合理的恢复可能性。这是唯一存在的事由。如果您确实查看——我理解这并非绝对穷尽——但如果您查看 1112(b)(4) 条——显然我已将 (A) 项称为我们认为与本案相关的事由——如果您查看 (B) 项，我们认为其他任何事由均不适用，法官阁下。(B) 项，遗产的严重管理不善，我已经谈过这一点；(C) 项，未维持适当保险；(D) 项，未经授权使用现金担保物；(E) 项，未遵守法院命令；(F) 项，无正当理由未能及时满足任何提交或报告要求；(G) 项，未参加债权人会议；(H) 项，未及时提供美国受托人要求的信息或参加其要求的会议；(I) 项，未及时缴纳税款；(J) 项，未提交披露声明；(K) 项，未支付《美国法典》第 28 编第 123 章项下的任何费用或收费；\n\n(L) 项，撤销确认命令；\n\n(M) 项，无法实现已确认计划的实质性执行；\n\n(N) 项，债务人就已确认计划发生重大违约；\n\n(O) 项，已确认计划终止；\n\n最后，(P) 项，债务人未支付任何家庭扶养义务。\n\n因此，法官阁下，如我所述，我们认为存在事由。相关且适用的事由是 1121(b)(4)(A)。\n\n法庭：我能就此问您一个问题吗？\n\nJONAS 先生：当然可以，法官阁下。\n\n法庭：我理解——我理解您对该清单的陈述，也理解您主张仅有 (4) 项适用，但您是否——您是否对这样解释“事由包括”的判例法提出异议——即其并不意味着只能符合该清单中的事项？\n\nJONAS 先生：不，法官阁下。\n\n法庭：好的。\n\nJONAS 先生：完全不是。\n\n法庭：这就是我所问的。\n\nJONAS 先生：是。\n\n法庭：好的。\n\nJONAS 先生：而且我认为我提到过，法官阁下，\n\n我们的立场是——我理解这并非穷尽无遗。法庭：我以为你说过——乔纳斯先生（Jonas）：是。法庭：——但我只是想确保记录准确。乔纳斯先生：不，不，不。当然，法官阁下。法庭：好的。乔纳斯先生：但我确实认为，列明这些特定事项是有原因的——法庭：我明白。乔纳斯先生：——而且我认为审查这些事项很重要。法庭：不，我认为这很有帮助。谢谢。乔纳斯先生：不客气。法官阁下，关于驳回与转换程序或指定受托人之间的取舍，尽管债务人的偏好并非决定性因素，仍应给予一定权重。在本案中，债务人及其最大债权人支持驳回。1112(b)(1)规定，法庭应审查驳回、转换程序或指定受托人三者中何者最符合债权人及破产财团的最佳利益。在 SWJ Management, 551 B.R. 93，即康涅狄格州本区法院于2015年作出的案件中，该分析被表述为——该分析被表述为驳回是否会，\n\n用引号的话说，“损害债权人”。在 Hull 案（赫尔案），339 B.R. 304，即纽约东区破产法院于2006年作出的案件中，法庭讨论了——在此语境下何为对债权人的损害。该案称，用引号的话说，“债权人通常不会因驳回而受到损害，因为他们不再被禁止诉诸州法院以执行并实现其债权。换言之，在债务人及时提出驳回动议的语境下，应当考虑的是债务人债权人的合理、破产申请前的法律预期和权利，而非失去通过破产程序获得分配的机会。”法庭：律师，你能再告诉我一遍那个案件吗？乔纳斯先生：当然。法庭：抱歉。乔纳斯先生：是 Hull 案。H-U——法庭：Hull，H-U-L-L？乔纳斯先生：是。案号引注为 339 B.R. 304。这是2006年的案件，纽约东区。破产法院案件。法庭：谢谢。谢谢。乔纳斯先生：是。\n\n法庭：我刚才没有听到你开头所说的话。我很抱歉。乔纳斯先生：当然，法官阁下。法官阁下，为记录在案，我想说明，我们认为1112(b)(2)不适用；该条可能禁止转换程序或驳回，原因有若干。我们认为，并不存在表明转换程序或驳回不符合债权人及破产财团最佳利益的异常情形。该条的另一项要求——我们认为同样不适用——是，我们认为不存在在合理期间内确认一项计划的合理可能性，而这也是1112(b)(2)项下的另一项要求。并且，如果转换程序或驳回的依据是1112(b)(4)(A)，则1112(b)(2)不适用；再次说明，我正在向您阐述我们的立场，即1112(b)(4)(A)项下的损失或价值减损，以及不存在合理的复苏可能性，构成驳回的依据。法官阁下，我不会进一步审查 PAX 关于恶意的指控。我认为我已对此作出回应。我的意思是，他们——再次简要地说——我认为，他们无根据地提到了——提到了附表中的虚假陈述，提到了所谓“虚假的 DIP 贷款”，提到了\n债务人所谓“中止本案”。\n我认为这些都不是本案中发生的情况。\n我可以告诉您，债务人来到本法庭时——\n正如我先前提到的——希望最终\n能够实现重整。\n这并未发生。但是\n尽管如此，我认为弗里德曼先生（Friedman）说过，他可能不喜欢这样，但他实际上并未对自本案开始以来本案存在恶意这一事实提出异议。\n最后，法官阁下，我想说，关于——\n因债务人没有持续经营的业务而认为破产申请不当一事，我认为您在 Lucarelli 案（卢卡雷利案）中说得最好，法官阁下，517 B.R. 42，其中您说过，或者我们曾听到引述：“《破产法典》的明确文字允许未从事经营活动的个人债务人根据 Chapter 11 申请救济。”\n法庭：不过，我认为我为此援引的是最高法院的判例。\n乔纳斯先生：您援引了若干案件，法官阁下。\n法庭：我认为是——\n乔纳斯先生：我把这归功于您。\n法庭：我认为是最高法院。\n乔纳斯先生：我认为您是对的。\n法官阁下，我只是——我确实认为应当简要指出，今天在场的债权人委员会成员所主张的债权事实上均未经清算且存在争议。这些债权——再次说明，弗里德曼先生已经谈过这一点，我不重复许多我本来会说的话，因为我认为弗里德曼先生已经涵盖了——这些债权将会——需要通过诉讼解决。无论以何种形式继续本破产案件，都将在一个行政上无清偿能力、且没有资金支持可能长达数年的诉讼的案件背景下进行。法官阁下，最后，郭文贵（Ho Wan Kwok）请我感谢您和您的工作人员为本案投入的时间和给予的审慎考虑。尽管结果可能不如他所希望的那样成功，但至少在一定程度上，本案恢复了他对司法制度的信心。话虽如此，法官阁下，恭敬地说，现在是继续前行的时候了。本破产案件应予驳回。谢谢。法庭：谢谢你，乔纳斯律师。戈德曼律师。戈德曼先生（GOLDMAN）：谢谢，法官阁下。早上好。我是代表债权人委员会的欧文·戈德曼（Irve Goldman）。法官阁下，我想先指出，无论本案是否系出于恶意提出，或者是否存在其他事由，正如我们已约定的，法庭面前的问题——法庭面前的问题——并非本案是否系出于恶意提出，而是转换程序、驳回，或者指定一名 Chapter 11 受托人，是否最符合债权人的最佳利益。\n\n因此，本案是否系出于恶意提出，或者是否存在其他事由，并不改变本案中何为债权人最佳利益的标准。\n\n尽管若债务人自身的恶意被用来为驳回本案辩护，将会颇具讽刺意味，因为这将使其避开 Chapter 7 程序的审查；该程序将对 PAX 所称的其隐藏资产进行彻底调查，即 PAX 在本案提出前即将取得的资产；而他将因此得到奖赏，因为在本案中，PAX 作为唯一的判决债权人处置完这些资产后，剩下的将是分散在不同法院的各债权人，只能自行设法追查该债务人拥有的任何资产。\n\n因此，他们确实需要 Chapter 7 程序的保护。\n\n关于1112项下的标准，我想先从法条的明确文字开始；最高法院和 Second Circuit（第二巡回区）已多次指示下级法院在解释《破产法典》时应重点关注该文字。\n\nFiore Reporting and Transcription Service, Inc.（菲奥雷记录与誊写服务公司）\n\n1112(b)(1)条规定，一旦事由成立，法庭必须将案件转换程序或驳回，以其中最符合债权人及破产财团最佳利益者为准，除非法庭认定指定一名 Chapter 7 受托人或一名审查员最符合债权人及破产财团的最佳利益。\n法庭：我认为你的意思是 Chapter 11 受托人，不过没关系。\n戈德曼先生：是。是。谢谢，法官阁下。\n法庭：没关系。我明白。我明白你的意思。\n戈德曼先生：PAX——PAX 希望法庭解读该法条的方式，是根据债权人债权金额——数额来判断债权人的最佳利益。当然，该条文根本不是这样规定的。\n我想强调，在考虑最佳利益时，该法条使用复数形式的“债权人”，因此必须考虑全体债权人整体的利益，而不仅仅是一名拥有大额债权、并且在破产前即将取得——本案所有债权人似乎均同意为债务人目前已知资产——即 Lady May（“美好女士”号）以及债务人在 Sherry-Netherland（雪莉-荷兰人）公寓中的权益——的债权人的利益。\n并且，在确定债权人群体时，法庭可以对目前已提交的债权证明以及债务人的附表 F 予以司法认知。\n截至今日，尽管尚未确定申报债权截止日期，债权证明合计为 \\$71 million，且在某些情况下基于严重人身伤害的指控。\n例如，马蕊（Rui Ma）的债权目前已接近纽约最高法院的审判阶段，其主张在数年期间遭受性侵害、非法拘禁以及故意造成情绪困扰。\n傅希秋（Bob Fu）的债权基于得克萨斯州联邦法院的一项诉讼，所依据的指控是债务人煽动针对傅博士（Dr. Fu）的暴力行为，事实上，曾鼓励其所谓“同志”杀害傅博士，并煽动在其住宅前持续数周的骚扰性抗议活动。\n吴征（Bruno Wu）和杨澜（Yang Lan）的债权基于纽约最高法院的一项诉讼，该诉讼指称债务人利用其无处不在的社交媒体账户对二人实施人身攻击，其中包括声称杨澜有婚外情，并利用性关系取得其在中国显赫的文化地位，且所谓“满身性传播疾病”。其还多次指控吴征企图谋杀和行贿，并在社交媒体上威胁对这两名债权人实施暴力。\n\n说这些人并非实际债权人，不应像 PAX 一样得到对其利益的同等考量，确实是对这些债权人的冒犯。正如我所提到的，提交债权证明的截止日期甚至尚未确定。根据附表 F 所列内容，我们很可能会收到大量额外债权，因此该 \\$71 million 必将增加。回到法条的明确含义，在确定根据1112(b)(1)条必须予以考虑其利益的债权人时，我请法庭参照《破产法典》101(10A)条；该条将债权人定义为，截至破产申请日，所谓“对债务人享有债权的实体”。而101(5A)条中的债权定义，将债权界定为包括无论是否已化为判决书、未经清算或存在争议的付款请求权。因此，PAX 关于这些债权人并非实际债权人的主张，与《破产法典》的明确文字相悖，因为债权人是持有债权的人，而债权可以是无争议、未经清算和附条件的。因此，这里存在债权人，实际债权人。如果这些并非实际债权人，美国受托人又怎会指定债权人委员会？他们本应是哪些债权人\n\n如果不存在其他实际债权人，那么 PAX（PAX）又是在代表谁？PAX当然并未基于不存在需要维护的实际债权人这一事实，而反对聘任委员会专业人员。因此，根据直接的法条分析，就《破产法》第1112(b)条项下评估最高利益标准而言，诸如本案中已提交债权申报但尚未获得判决的债权人，与PAX一样，均为该债务人财产的债权人。退一步说，那些主张遭受严重人身损害的债权人的利益，根据最高利益标准，应当获得与PAX同等、甚至更大的考量；PAX的实际金钱判决——作为附件1附于弗里德曼先生（Mr. Friedman）就驳回动议所作的声明——本金金额仅为 $46 million。他们有按其合同利率 15 percent 计算的 $70 million 利息，而 $134 million 的藐视法庭罚款并非用于赔偿任何金钱损失。许多法院，实际上是大多数法院，在确定第1112(b)(1)条项下何者最符合债权人最高利益时所适用的标准，是何种方案能使最大数量的债权人在最短时间内获得最大金额的清偿。在此，答案是转换程序，或者任命一名第11章受托人。\n\n在驳回案件的情况下，最大数量的债权人将受制于一名单一已获判决债权人；该债权人在案件被驳回时将获得最大金额的清偿，而所有其他债权人仍将陷于与债务人的诉讼之中。至于该船，我们知道，根据奥斯特拉格法官（Judge Ostrager）于 February 9th, 2022 作出的裁决及命令——即我方附件1——已经以明确且令人信服的证据认定债务人受益所有并控制该船。这一点载于其裁决第4页。该船返还后，PAX将仅对该受益所有权利益采取执行措施，并在该船变现时最终获得分配。至于雪莉-内瑟兰公寓（Sherry-Netherland apartment）——当然，他们已准备在案件被驳回之日采取该等措施，因为他们在奥斯特拉格法官面前已有该程序在审。至于雪莉-内瑟兰公寓，在案件被驳回的情况下，他们同样已准备就该资产实现价值。在债务人的声明，即UCC附件2中，他承认拥有日内瓦控股公司（Geneva Holdings Corp.）100 percent 的成员权益；该公司是雪莉-内瑟兰公寓登记所有人日内瓦控股有限责任公司（Geneva Holdings, LLC）的唯一成员。\n\n日内瓦控股有限责任公司是纽约南区（Southern District of New York）第11章程序中的债务人，而债务人主张其权益由信托或其儿子的公司博拉沃·勒克（Bravo Luck）持有。这载于其声明第33(B)段。根据于 October 8th, 2021 登记的命令，即UCC附件3，加里蒂法官（Judge Garrity）批准了日内瓦控股、PAX与博拉沃·勒克之间的和解协议。该和解协议将载于UCC附件4，标注为ECF 131-1，日期为 September 24th, 2021；该协议准许PAX解除自动中止，以继续推进纽约州最高法院（New York Supreme Court）诉讼。这载于和解协议第7(A)段，即和解协议12页中的第7页。由于PAX已于 February 3rd, 2021 获得其金钱判决，纽约州最高法院诉讼中唯一尚待审理的事项是PAX针对日内瓦实体提出的揭开公司面纱请求。\n\n该等请求载于其第一次修订起诉状中的第2项罪名项，即UCC附件10。见起诉状第17页。\n\n此外，PAX还是一项命令的受益人，该命令要求郭文贵先生（Mr. Kwok）向PAX移交其对日内瓦——日内瓦控股的100 percent 所有人——所持100 percent 所有权权益。这是UCC附件6。该命令于 September 22nd, 2021 登记。PAX已于 January 7th, 2022 在纽约提出藐视法庭动议，\n\n理由是郭文贵未移交该等股份。我相信那是我方附件中的附件7。预计该动议将在案件被驳回后重新提交或恢复审理。PAX在英属维尔京群岛法院亦有类似揭开公司面纱类型的救济请求待决。UCC附件11是PAX在该法院提交的经修订诉讼请求书。在该经修订请求中，他们主张，除其他事项外，郭文贵先生使用其自身资产中的 $70 million 转移给博拉沃·勒克——见附件11第29段——郭文贵先生声称与博拉沃·勒克订立的信托声明属于欺诈，引述：“旨在为 Bravo Bravo 信托持有其在 Geneva BVI 的股份。”博拉沃·勒克是一项欺诈——抱歉——它是一项欺诈，引述：“其唯一目的在于向郭文贵先生的债权人隐匿郭文贵先生的一项资产。”该信托文件应被撤销，因为它是一份引述：“意图欺诈郭文贵先生债权人的文件。”债权人，是复数形式。这是第35段。并且，郭文贵先生是博拉沃·勒克的受益所有人，而其儿子仅是其名义持有人。根据加里蒂法官批准的和解协议，各方，即PAX和博拉沃·勒克，也获准继续进行英属维尔京群岛诉讼。因此，他们也已准备基于将在英属维尔京群岛或纽约州法院解决的该等请求，就雪莉-内瑟兰公寓实现价值。\n\n就日内瓦控股案件中有关该公寓的进展而言，梅拉妮·西加诺夫斯基（Melanie Cyganowski）被任命为出售专员，负责营销和出售该物业。这载于UCC附件8。苏富比（Sotheby's）获准担任该物业的经纪商，见UCC附件9；该物业目前在苏富比网站上以 $38,500,000 挂牌出售。因此，PAX在案件被驳回后，较其他债权人而言处于极为有利的位置，可以就该等资产实现价值；其他债权人将再次只能与郭文贵先生进行诉讼，随后取得判决，并追查剩余的任何资产。我们主张在第7章中可追回的其他潜在资产是由格林尼治土地有限责任公司（Greenwich Land, LLC）拥有的两处格林尼治（Greenwich）物业。UCC附件13和14。该等物业载于该等附件中。在郭文贵先生声明第17段中，他主张其格林尼治住所，引述：“由我的妻子通过 Greenwich Land, LLC 所有。”这是否又是其另一项被隐匿的资产，仍有待查明。当然，这可以在第7章程序中调查；而当债务人\n\nFiore Reporting and Transcription Service, Inc.（Fiore记录与转录服务公司）\n\n于 May 11th 提交其同意驳回案件的文件时，我们正试图进行该项调查。现在我想转向PAX的论点，即何者最符合债务人财产最高利益的核心标准是债权人的偏好，并且债权人的最高利益必须反映PAX作为最大单一债权人的观点。债权人最高利益标准的核心并非债权人偏好什么，而是何种方案能为最大数量的债权人提供最大程度的追偿希望，而不是给予最积极发声的或最大债权人最多追偿的方案。初步而言，PAX为以下命题所援引的判例，即单一债权人只要其债权数额足够大即可满足最高利益标准的要求，我认为完全与本案相反，并且在其他方面也不支持PAX的理论。在阿克米蛋糕案（Acme Cake）中，即其所依赖的案件，没有任何单一债权人，甚至债权人委员会本身，反对驳回该案件。反对驳回案件的是债权人委员会的律师，其理由是，由于行政费用包括其费用尚未获得支付，故不应准许驳回；并且，驳回将因允许\n\n请求驳回案件的债权人先于行政债权人获得支付，而违反《破产法》的优先顺位制度。当然，在本案中，这并非所提出的论点。代表全体无担保债权人利益的债权人委员会正在反对驳回。我们并未提出这一论点，尽管我确实认为，如果法官阁下倾向于驳回案件，则应以支付费用为条件。我们反对的原因是，驳回不符合债权人的最高利益，而这根本不是阿克米蛋糕案中提出的论点。实际上——法庭：我能就此问您一个问题吗？高盛先生（MR. GOLDMAN）：可以。法庭：您刚才说——显然，我理解委员会的立场是驳回并不适当，而转换程序或任命受托人是适当的；但您刚才也说，如果法院驳回，您希望以支付委员会费用为条件。我只是想从您的角度理解，这将如何运作？在债务人财产没有资金的情况下，法院如何以支付费用为条件驳回案件？高盛先生：如果郭文贵先生希望驳回该\n\n案件，从而无需经历第7章程序，并面对潜在的第523条不可免责请求以及第727条拒绝免责请求，亦无需经历追查其隐匿资产并予以收集的程序，那么，正如他曾筹得资金以担保该船返还，也正如他曾筹得资金提出以 $8 million 的DIP贷款为案件提供资金一样，如果法院以支付费用为驳回条件，他就会筹得资金。法庭：您是否——我没有看到——但可能是我遗漏了，好吗，所以请理解——您是否援引过任何支持法院有权如此做、即作出您所建议之举的案件？高盛先生：法官阁下，我没有找到直接相关的案件。法庭：好的。好的。我只是提出这个问题——高盛先生：不。法庭：——以确保我已正确阅读您的书面文件。请继续。抱歉。在您提出该问题时，我只是想问一下。高盛先生：谢谢您，法官阁下。阿克米蛋糕案的另一个关键区别是，在该案中，法院认定\n\n转换案件或任命一名第11章受托人，引述：“将导致无担保债权人获得很少的分配，即使有分配的话。”而本案当然不能——不能如此断言。\n\n他们确实作出了——实际上，他们援引了一项加利福尼亚州破产案件的裁决——一项加利福尼亚州破产案件的裁决——并称，引述：“并非每一位债权人的利益均须实际上支持转换。第1112(b)条并无内在的特定人数要求。单一债权人的债权数额只要足够大即可满足要求。”这是加利福尼亚州破产案件 Staff Investment 案（In re Staff Investment, 146 B.R. 256）中的直接引述。\n\n如果您审阅该案，就会发现它与本案完全不同。该案中最大的单一无担保债权人，就针对债务人财产唯一资产的抵押贷款持有 $600,000 的不足额债权。那是该债权中不足额的部分。其占全部无担保债权的 95 percent。其他无担保债权合计仅为 $21,000。\n\n因此，这一来自加利福尼亚州破产案件的单一引述，实际上只是附带意见，因为没有人提出如下论点：即请求驳回案件的债权人会先于其他债权人攫取全部资产；这一引述实在过于单薄，不足以\n\nFiore Reporting and Transcription Service, Inc.\n\n推翻压倒性的判例权威；该等权威认为，第1112(b)条项下债权人的最高利益应考虑全体债权人的利益，而非单一债权人的狭隘利益。\n\n这意味着应考虑作为整体的债权人在第7章程序中是否会获得更好的结果。鉴于PAX已准备就现有的、我称之为唾手可得的资产实现追偿，而我们知道，至少就这些资产而言，债务人财产拥有合法且极具分量的请求权，本案显然正是如此。\n\nPAX（PAX）因其债权的金额和地位而变得如此有恃无恐，以至于其宣称，引用原文，“鉴于Pax已经裁判确定的判决金额，PAX有权优先获得清偿。”见其法律备忘录第4页。这颠倒了债权人之间平等分配这一基本政策，反而采纳了破产程序之外存在的“每个债权人各顾自己”的规则。\n\n但这并非债权人最佳利益的标准。\n\n我们处于破产案件中。该标准所固有的是，应考虑何者将有利于平等——何者将服务于平等分配这一压倒性的破产政策。\n\n最后，将委员会倾向于转换程序与非自愿破产相比较，理由是债务人希望驳回案件，这是一种转移视线。首先，法院已裁定，除非债务人对驳回的偏好恰好与债权人的利益一致，否则根据1112(b)，该偏好并无关联。1112(b)(1)条仅提及债权人和破产财产的最佳利益，并未提及债务人的利益，而《破产法典》第305条则提及了债务人的利益。因此，1112(b)(1)条未纳入债务人利益是有意为之。其次，如符合债权人的最佳利益，本案的转换根据1112(b)(1)条获得授权，而且是明确获得授权。该标准与根据第303条提出非自愿破产申请毫无关系。这是在完全不同情形下适用的两项完全不同的标准，因此，不能将1112(b)条明确授权的事项类推为启动非自愿破产。最后，我想补充指出的是，本债务人不应能够逃避第7章程序的审查以及可能被拒绝免除债务的前景，尤其是根据727(a)(2)条；如在破产前一年内存在隐匿资产，该条将提供或确实提供拒绝免除债务的理由。\n\nFiore Reporting and Transcription Service, Inc.（菲奥雷记录与誊写服务公司）\n\n并且，有许多案例认为，即使某项资产是在一年期限之外转让的，如债务人在该一年期限内继续隐匿该权益，该隐匿行为将构成根据727(a)(2)条拒绝免除债务的理由。如果法院决定驳回本案，但不以支付委员会专业人员费用作为驳回条件，委员会希望保留提出动议的权利，以审查并追缴向债务人律师支付的100万美元预付律师费。因此，我向法院提出该请求。我想简要回应弗里德曼先生（Mr. Friedman）和乔纳斯先生（Mr. Jonas）在其辩论中不同时间提出的若干观点，然后我就结束。弗里德曼先生援引Sapphire案支持驳回。如果法官阁下审阅该案，该案中无担保债权人极少。此外，他们还有以保证人及其他连带——和/或其他共同债务人为形式的其他追偿来源。显然，本案不存在这种情况。弗里德曼先生称，他们在此所做的一切实际上只是恢复原状。但恢复原状意味着他们将排在第一位，以\n\n实现所有资产的价值，这正是这些债权人需要第7章案件保护的原因。弗里德曼先生对本破产财产中存在的人身伤害侵权债权提出质疑。在第7章案件中，将发生的是，受托人首先会审查并寻求收回破产财产资产。一旦该程序结束，受托人随后将转而审查债权，并在必要时对其提出异议。因此，首先会归集资产，以确定存在哪些资产。随后将审查债权。这是受托人根据704(5)条应履行的职责。受托人不会聘请特别律师审查这些债权，因此不会产生与该审查相关的费用。如果认为这些债权更适合在其他法院解决，当事人可以对其提出异议。可以准许解除自动中止，债务人如愿意，可以对这些债权进行抗辩。这不会对破产程序本身产生任何影响。这仅仅是在其他法院对这些债权进行清算的程序，而这很常见。例如，如果某项债权即将审判或接近审判，债权人为在\n\nFiore Reporting and Transcription Service, Inc.（菲奥雷记录与誊写服务公司）\n\n另一法院清算该债权而寻求解除自动中止，然后携其债权金额返回破产法院，并不罕见。因此，这——这是第11章——第7章案件中的常规程序。至于为就我们已知确实存在的资产，即船只和公寓，进行诉讼而提供资金，我确信受托人能够获得诉讼融资。诚然，目前没有证据表明诉讼融资可以获得，但本债务人直到5月11日才提交其同意驳回的文件。你不可能指望委员会或受托人在短短几周内——而这正是我们所拥有的全部时间——四处寻求诉讼融资，并提交证据表明存在某种有约束力的承诺，为一个尚不存在的当事人提供诉讼融资，因为该融资必须提供给第7章或第11章受托人。因此，我认为，应给予受托人机会这样做，或至少聘请特别律师以风险代理费方式承接该诉讼。是的，这将涉及从任何追偿中收取一定比例，但这——这在第7章案件中很常见，而且费用可以协商。是的，该船价值很高，如特别律师以风险代理费方式承接案件，该费用将从追偿中支付，但这并不是\n\n得出结论认为，除PAX以外每一名其他债权人的最佳利益将不受该程序服务的依据，因为该程序会服务于他们。唯一不会从中受益的债权人将是PAX。至于将破产用作追债工具，我的意思是，破产是一项集体程序，在该程序中，债务人申请破产，并将其非豁免资产交由债权人处置，以换取寻求免除债务。这正是破产的全部意义所在，因此，它确实是一项集体程序，用于归集和清算破产财产资产，以平等地惠及所有债权人；我谨陈述，这正是法院在本案中应当做的事情。法官阁下，除非法院还有任何问题，否则我的陈述完毕。\n\n法院：我没有其他问题。谢谢。克莱伯恩律师（Attorney Claiborn），您希望发言吗？抱歉。卡拉里律师（Attorney Callari），请继续。她可以先上来。然后，如果您希望在之后发言，克莱伯恩律师可以发言。\n\n卡拉里女士（MS. CALLARI）：下午好，法官阁下。我是卡罗琳·卡拉里（Carollynn Callari），代表部分债权人。法官阁下，我确实只是来支持戈德曼律师（Attorney Goldman）所作的陈述。我认为他做得非常好。\n\n这使我的工作更容易。但我确实想强调几点。第一，在讨论实际争议问题之前，先谈谈债务人的陈述：他们讲述了一个很好的故事，但在提供背景时并未讲完这个故事，即，有新闻报道说他，有人正被调查，因为他们想把他送回中国。这一点没有争议。有争议的是背景故事中的原因。人们希望他回到中国，是让他面对腐败、强奸、绑架和贿赂的指控。这就是他不想回去的原因。因此，我只是想澄清这一点。就真正提交法院审理的事项而言，真正的问题是，何者符合债权人和破产财产的最佳利益。我们听到了许多不同的说法，但实际上，当您审视该具体问题时，首先，101条关于债权人和债权定义的规定已不言自明。这里有许多债权人，也有许多债权。本案不同于PAX援引的债权——案例，法官阁下。在那些案件中，当涉及一名大额债权人时，如果审视这些案件，通常是一名担保债权人拥有95%至98%的债权，属于——您知道的——不足额债权类型。\n\n在这里，如果加以分解，法官阁下，PAX最初的债权——让我们提醒法院——是$46 million。我的当事人马睿（Rui Ma）的债权主张为20 million。差别不大。他们只是先取得了判决。她不应因此受到不利影响。如果查看列明的债权，债务人列明——尽管他对几乎所有债权均提出争议——约有超过$120 million的债权。此外，他还列出了数十名金额不明的其他债权人。因此，如果采用PAX的46 million，与其他债权人相比，他绝非——他们绝非一名非常大的债权人。如果加上利息，则为116 million。116 million对列明的——即使存在争议，仅仅因为存在争议并不意味着存在善意争议——但话虽如此，125至160 million。大约是50/50。只有在加上所有藐视法庭指控后，他们的债权才真正膨胀至超过250 million。因此，首先，他们不断试图表明自己是应当有发言权并主导本案的大额债权人，这一规模与他们援引的其他案件并不相同。即使我们目前尚未清算，我们也是债权人，法官阁下。\n\n第二，当PAX称，法官阁下，本案没有资产，应予驳回时，PAX不能两面兼顾。这是什么类型的案件？没有债权人、没有资产、没有经营活动。这是个人第11章案件。我们知道不存在经营活动。但是，我认为坐在这边的任何债权人都不会真诚地认为本案没有资产，尽管他们在资产清单中只列出了微不足道的资产。\n\n这正是我们来到这里的原因。正如戈德曼先生所言，本案是为了归集这些资产。与其让每一名债权人——数十名债权人——分别采取PAX律师承认其多年来一直采取的行动，何以能比由一名受托人代表所有债权人归集资产更有效率？\n\n但我们每个人都必须采取揭开公司面纱及其他一切——您知道的——为取得这些资产而必须经历的诉讼和周折，而一名受托人可以归集这些资产。这是破产的目的。这是适当的目的。这就是本案应当转换为第7章以使此事得以发生的原因。\n\n至于融资，戈德曼先生提到的是，我们在过去两周内试图寻找初始融资时所面临的问题，是我们尚无相对方。您需要第7章受托人或第11章受托人成为融资的相对方。而且\n\nFiore Reporting and Transcription Service, Inc.（菲奥雷记录与誊写服务公司）\n\n如果仅看这里的事实，当你有一艘这样唾手可得的游艇时，这就适合采用风险代理式的安排。因此，我认为，今天我们没有实际资金承诺的证据这一事实，不应妨碍法官阁下确认并推断，在这种情况下，第7章或第11章受托人可以获得资金。而且，我知道 Friedman 先生（弗里德曼）在本案中谈到20%至30%的风险代理费时，比其书面文件中表现得更善于谈判。我认为可以设置阶段性安排——这正是我一直在进行的讨论——即为游艇设定一定比例。如果耗时更长，比例就提高。然后一旦获得游艇，也许那就是你们的资金来源。也许不需要更多资金。您知道，可以使用那些收益。因此，有办法为第11章——或者在我们的案件中，我们甚至说第7章受托人——提供资金，以推进这些案件。我们认为，应当给予第7章一个机会，让受托人审查此事，尝试为全体债权人的共同利益归集所有资产。如果在短时间内无法获得资金——\n\nFiore Reporting and Transcription Service, Inc.（Fiore 记录与誊录服务公司）\n\n——则不妨届时将其驳回。但是，说我们的客户都应因现在应驳回本案而受到不利影响，且实际上奖励债务人——他得到了他想要的——他提交本案以获得喘息之机——他获得了短暂的喘息之机——而现在他不想面对破产案件的所有负担，他不应因此得到奖励。我们应当能够进行调查，该调查可以获得资金支持，并允许所有债权人平等分享分配，法官阁下，因为我们是真实的债权人。然而，法官阁下，如果她认定无法对驳回附加条件，以确保当事人不会因该债务人的恶劣行为而进一步受到不利影响，\n\n我认为这就更支持转换。我认为法官阁下可能可以附加条件。但如果她不能，这就更支持转换为第7章，而不是驳回。\n\n债权人在本案中已投入大量时间和费用。现在，仅仅因为他们撤回了资金，就要把我们脚下的地毯抽走，这是极不公平的——行政费用也是如此，如果本案被驳回，这些费用应当得到支付——我们请求法官阁下无论如何均保留管辖权，以处理某些问题，正如 Goldman 先生（戈德曼）所说，涉及预付聘金及此类事项的问题，如果法官阁下确实驳回本案。但我们确实认为，转换为第7章是可行的，而且这样做符合全体债权人的最佳利益，法官阁下。我们也不认为这会对 PAX（PAX）造成不利影响，因为坦率地说，如果他们希望对受托人的任命人选发表意见，我认为根据702，他们可以。他们可以了解谁是——您知道，对此发表意见——法庭：他们都可以（听不清）受托人，对吧。Callari 女士（卡拉里）：是的。法庭：但我有一两个问题要问你。Callari 女士：好的。请讲。法庭：那么，假定我同意你的观点，并将本案转换为第7章，你的债权——你客户的债权——将如何清算？因为受托人不能这样做。Callari 女士：是的，法官阁下。法庭：那么，你的债权仍须在本庭之外的纽约法院审理，其他人身伤害债权主张人的债权也是如此。Callari 女士：是的。因此，当然，就 Rui Ma（马蕊）而言，法官阁下已有那份拟议命令——法官阁下已有该拟议命令，我们推定您是在等待本次程序结束后解除自动中止，以便她可在州法院继续进行。因此，是的，当然，对于马蕊，我们预计该事项将在州法院重新进行诉讼。法庭：那么受托人要如何处理该债权？我想要——Callari 女士：不，我明白。法庭：我想要——第7章受托人将如何处理该债权？第7章受托人必须等待——Callari 女士：是的。法庭：——直至该债权清算，对吧？然后，取决于你们的做法，而这完全是你们客户在适用非破产法下的权利，将会进行审判，无论裁决是什么，就是裁决。有人可能上诉，也可能不上诉。但坦率地说，很可能会有上诉，因此该案件可能持续数年，直至该债权被清算，正确吗？Callari 女士：有可能。法庭：是。Callari 女士：而且也可能很快得到清算。\n\n法庭：好的。Callari 女士：我们不知道。所以——法庭：但不在本庭。Callari 女士：不。她的债权必须在州法院清算。或者一般而言，人身伤害债权，法官阁下——我确实认为，当存在人身伤害债权时，有时破产法院可以设定调解程序，并且——法庭：不在——不根据28 U.S.C.——Callari 女士：正确。您可以估算——法庭：——第7章案件中的156(b)(2)(B)，其中债权是或有且未经清算的。该法条非常明确，这不是法院程序。因此，我们在本案中面临的问题之一是，这些正是受托人将要面对的债权类型，对吧？Callari 女士：正确。法庭：那么——所以我的问题是，受托人应当做什么？Callari 女士：受托人——法庭：让案件保持开放数年，直至——然后在没有资金的情况下调查？我是说，我听到了你关于资金问题的说法，但为什么委员会现在不能有资金提供方？\n\n他们可以——委员会可以获得诉讼资金。为什么不能？Callari 女士：在这个阶段他们不能，因为在过去两周内，当你知道你面临驳回且委员会将被解散时，尝试取得该资金并不现实。法庭：好的。但是驳回——我明白你关于债务人对驳回立场的说法。但 PAX 对驳回的立场已经明确了一段时间。事实上，他们同意延长听证期限，因为法典要求在30天内举行听证，而实际并未举行。您知道，我只是想说，第7章案件中，第7章受托人有什么可以着手处理？Callari 女士：因此有两点。第一，关于您对委员会的观点，直到两周前，委员会一直有来自债务人的资金。他们撤回了资金，所以我们不需要去寻找——法庭：嗯，他们并没有资金。资金尚未获批准。好吗？Callari 女士：这是真的。法庭：所以没有人有资金。Callari 女士：但我们预计会有某种形式的资金，所以我们——\n\n法庭：我明白。Callari 女士：对。法庭：但它尚未获批准。这就是程序的运作方式，对吧？Callari 女士：是。法庭：只是——我们必须记住程序如何运作。所以他们没有资金。没有任何资金获法院授权。法院将该资金问题留待裁定。随后债务人决定——或者我不该说债务人——资金提供方、贷款人决定撤回其资金承诺，而债务人撤回了关于 DIP 融资的动议。因此，我明白你所说的一切，但法院必须遵循一个程序，对吧？我是说，我们谈论诉讼资金、风险代理特别律师。仅仅因为人们说这可能发生，并不意味着它一定会发生。法院仍须批准那些申请。如果那些申请未获批准，那么该计划就不会按照人们所建议的方式进行。问题在于，当——如果及当本案转换为第7章，而非维持——维持为第11章时，存在许多不同的关切。\n\n因此，再次说明，法院可以拒绝驳回，可以拒绝转换，可以拒绝任命受托人。这就是我必须作出的认定。Goldman 律师是正确的。问题是我们要做什么？我想我大约一周前已经说过，当你们都约定事由存在时。好的。很好。这对法院非常有帮助。我感谢每个人都约定事由存在，但我必须采取其中一项措施，对吧？所以我必须确定，在本案中最好的做法是什么。对于转换的担忧很多。把本案交给第7章受托人做什么？第7章受托人将做什么？第7章受托人没有可用资产来做任何事。你们谈到可能获得诉讼资金来源。好的。但这必须获得批准，也可能不会获批准。而且必须有一个计划。我所说的计划——并非重整计划，这不是我的意思。我指的是——我并非按破产法典中使用的含义使用“计划”一词——必须有一种办法来完成你们试图完成的事情。而第7章受托人将没有任何可\n\n处理的东西。Callari 女士：谢谢，法官阁下。我们相信，无论是第11章还是第7章受托人，法官阁下，都会有资金。我知道现在没有。但重点是，即使法官阁下当时尚未批准，委员会在5月11日之前并无必要去寻找资金。这是第一点。我们相信有资金。法庭：这很公平。Callari 女士：而现在，第11章或第7章受托人，我们主张，将能够取得必要资金，以追索例如该游艇。继续该诉讼不应需要太多资金。如果这确实按照我们认为的方式发展，本案将有充足资金。法庭：那么，第7章受托人将如何追索该游艇？向我解释一下。Callari 女士：它不能归集——它可以像在任何其他案件中那样归集资产。法庭：但目前本庭尚未认定债务人拥有该游艇，那么第7章受托人如何归集该游艇？Callari 女士：第11章或——第11章或第7章必须在5月1日作出认定。法庭：嗯，目前有一项关于\n\n解除自动中止的命令——Callari 女士：对。法庭：——规定了游艇将如何处理，对吧？Callari 女士：是。法庭：即游艇必须回到本管辖区。然后，如果其及时返回，则$37 million返还给缴纳该笔款项的一方，而游艇在那里。在哪里？在 Connecticut（康涅狄格州）或 New York（纽约州），取决于事态如何发展。那么第7章受托人将如何归集该游艇？Callari 女士：就像你在第11章中所做的一样。你——法庭：但债务人在本庭并不拥有该游艇。尚未作出任何认定。因此，他必须提起某项诉讼请求，不是吗？Callari 女士：对。是的。法庭：那么谁来支付费用？Callari 女士：这就是资金发挥作用的地方。法庭：而谁——谁将为此进行抗辩？然后当受托人这样做时，PAX 将提出异议并称这已经——这已经——\n\n案件 22-50073 文件 442 于 05/27/22 提交，于 05/27/22 14:00:59 登记，第 93 页，共 118 页\n\n该事项已由 New York State Court（纽约州法院）裁定。因此，你不能推翻纽约州法院法官作出的判决。你不能——你不能这么做。这将产生争点排除效力，对吧？尚未提起上诉。这里有各种各样的问题，对吧？所以，如我所说，我的问题在于——有——我对每一种路径都有问题。明白吗？但就第7章而言，我不知道第7章受托人应当做什么或能够做什么。第7章受托人可以到这里来，说他们将做18项事项，但如果他们无权做这些事情，或者没有做这些事情的资金来源，那么将案件转换为第7章就没有意义。CALLARI 女士：是的。我们——法庭：没有意义。CALLARI 女士：我们认为第7章受托人将会——再次说明——或者第11章受托人——但无论哪一种——都将有能力获得足够资金，以使本院裁判该财产属于破产财产，并且这正是我们预计其会做的；并且，在实际裁判请求权之前，先行归集资产。其他诉讼通常将被中止，因此这会降低成本。人们谈论成本——\n\n法庭：嗯，我不同意。你不希望你的案件被中止，对吧？其他请求人也可能到庭寻求解除中止——CALLARI 女士：他们可能会。法庭：——并希望其请求权在本院之外得到裁判。因此，我要对你说的是——我只是试图理解——特别是你的当事人显然有一项尚未作出裁定的、人身损害侵权请求，而 United States Code（美国法典）中 Congress（国会）已决定本院不能裁判该请求。明白吗？Stern 案支持这一点，对吧？即使 Wellness 案也支持这一点，因为没有人同意由本院裁判该请求。明白吗？因此，该请求不能在这里得到裁判。CALLARI 女士：正确。法庭：所以我们谈到的所有其他请求权——我现在手头没有数字——但除 PAX（PAX）请求权之外的请求权，我相信——你们都应当纠正我——其中超过一半是人身损害侵权请求。如果它们是人身损害侵权请求，则不能——估算——法条规定——而且我想我可以复述——\n\n——为根据第11编进行分配之目的予以清算或估算。国会所决定的破产法院作为司法程序所能做的，只是在第11章、第12章或第13章案件中，就与计划有关的请求权进行估算。但该条规定，你不能——破产法院不能为根据第11编进行分配之目的，对或有或未清算的人身损害侵权请求及非正常死亡请求进行清算或估算。因此，受托人不能这么做。CALLARI 女士：对。法庭：我的意思是，第7章受托人不能这么做。他或她从一开始就受到束缚。那么他们必须——然后他们将试图寻找资产，而债务人将对此抗争。我的意思是，看看过去15年，或者已经过去多少年，所发生的事情。如果你认为债务人不会抗争将该船认定为破产财产的尝试，我的意思是，当然他们会抗争。此后你所做的任何其他事情也是如此。然后——那么，将有多少资金为这一第7章破产财产提供资金，以应对目前——目前——我并不是说不能改变——但目前仍属推测性的请求权，对吧？\n\n因此，本院从目前对本案的看法出发所担忧的是，在本案的事实和情形下，我不知道第7章受托人如何能够履行（听不清）法典所规定的职责。CALLARI 女士：谢谢，法官阁下。我们确实认为资金可能可得，而且我们确实认为，受托人可以在请求权正在诉讼期间归集资产，然后将其带回这里进行分配；另一种选择是驳回案件，基本上让 PAX 能够全部攫取，而每一位个别债权人随后都必须分别裁判，以追索每一项——每一项资产。我们不认为这符合债权人的最佳利益。但我理解法官阁下的担忧。不过，我们确实认为，转换为第7章或设立第11章的安排，对债权人而言肯定优于驳回。法官阁下，谢谢。法庭：好的。我理解这一点。我只是向你提出这些问题——CALLARI 女士：是的。我理解。法庭：——具体是因为你当事人的请求权。CALLARI 女士：我理解。谢谢，法官阁下。法庭：好的。谢谢。\n\nClaiborn 律师？CLAIBORN 女士：下午好，法官阁下。Holley Claiborn（霍利·克莱伯恩）代表 U.S. Trustee（美国受托人）。法庭：下午好。CLAIBORN 女士：本案现已演变至一个简单但困难的境地。根据第1112(b)条，事由已经成立，现在本院负有作出选择这一艰巨而沉重的职责和负担。债务人已承认，第1112(b)(2)条项下可获得的救济已不再适用，因此可供选择的救济形式就是我们今天简要讨论的三种：驳回、转换，或指定第11章受托人。不可否认，它们各自都对本案的利益相关各方带来挑战和影响。美国受托人对本院应选择何种救济形式没有偏好。至于美国受托人在 ECF 102 提交的动议中所请求的审查人救济，如果本院立即作出关于驳回、转换或指定第11章受托人的决定，该救济将成为无实际意义。我希望向本院明确说明，法官阁下，美国受托人的职责是指出，在本案中，并且与所有第11章案件一致，如本院认定第11章受托人是——\n\n——最适当的救济，则该受托人应享有法典第1106条所赋予的权力和权利，且不存在限制、规定或控制这些权力和权利的授权。如果本院今日认定驳回是最适当的救济，则本案应立即被驳回，不应以任何事件为条件，驳回也不应与任何事件相结合。受聘专业人士的费用申请可以在驳回后提交并裁定。最后，法官阁下，我认为最重要的一点——而且这是一个艰难的问题——是本案需要迅速作出决定。但摆在本院面前的事实足以使本院作出选择。最后，在敦促迅速作出决定时，我想指出，拖延会对债权人产生不利影响，并会使债务人获益。谢谢，法官阁下。法庭：谢谢。Friedman 先生？FRIEDMAN 先生：法官阁下，我只想作出几项简短的反驳。第一，委员会律师和其他人主张，若让本案消失，债务人将从中获益。这并不属实。无论以何种方式，人们都会取得债务人的资产——在该等资产存在的范围内。第二点是，我没有完全——我认为有人提到，第7章可能有用，因为也许——Kwok（郭文贵）先生无法获得债务免责。当然，在破产程序之外，他也不会获得债务免责。法官阁下，我还想指出一点，我请您查阅我们提交的证物27，因为——法庭：你们自己的证物？PAX 的证物？FRIEDMAN 先生：证物27。PAX 证物27。法庭：好的。请给我一秒钟，我会尽力找到它。FRIEDMAN 先生：谢谢。法庭：你得给我一点时间。你知道该文件从哪一页开始吗？是文件404。你知道证物27从哪一页开始吗，因为它有1500页。FRIEDMAN 先生：抱歉。法庭：哦，1,149。FRIEDMAN 先生：谢谢。法庭：找到了。FRIEDMAN 先生：真令人惊叹。法庭：工作人员真是——FRIEDMAN 先生：真令人惊叹。\n\n案号 22-50073\n文件 442\n提交日期 05/27/22\n登记日期 05/27/22 14:00:59\n\n法庭：确实令人惊叹。FRIEDMAN 先生：真令人惊叹。谢谢。法庭：确实令人惊叹。FRIEDMAN 先生：法官阁下，这是我们对请求权的汇总。委员会律师 Goldman（戈德曼）先生在其周详的陈述中称 Sapphire 案可以区分的原因之一，是因为该案中的人还有其他人可以追索。我只想指出，当您查看作为证据的我们的案件汇总时，许多被告——抱歉——许多原告也有其他当事人可以追索。如果您看第2页，最后一项请求权，Kay Ye Zookie Came 案（按发音），是以 GTV（GTV）、Saraca（萨拉卡）和 Guo, Miles Gwok（郭文贵）先生为被告。下一页的 Zheng Xu Dong（郑旭东）案，是以 GTV、Saraca 和 Wayne Guo（韦恩·郭）为被告。下一案是以 Voice of Guo（郭之声）和 Miles Guo（郭文贵）为被告。诸如此类。特别是，法官阁下，我想指出——如同 Rui Ma（马蕊）的指控，我此前已在本案早些时候说过，我绝没有贬低发生在她身上的事情。如果您看 Rui Ma 案，该案并非只针对 Kwok 先生。据我了解，Golden Spring New York（纽约金泉）也是该案被告。我们知道 Golden Spring New York 至少有 $8 million 用于资助一笔 DIP 融资。\n\n案号 22-50073\n文件 442\n提交日期 05/27/22\n登记日期 05/27/22 14:00:59\n\n因此，即使 Kwok 先生没有钱，在该案中也有一名共同被告可以被追索。所以我只是指出，存在其他潜在可得的资金来源——可获得的追偿，而不仅仅是 Kwok 先生。法官阁下，在 Rui Ma 律师的论述中也有——我没有数过，但有很多关于资金的“如果”和“可能”——没有证据。你知道，令人遗憾的是，人们被债务人提出的融资要约或潜在融资安排所误导——我们从一开始就反对——而我们如今处于一个我们认为本不应被提交、没有——至今仍没有——资金的案件中。律师试图主张，我们仅被欠付 $46 million，而我们拥有金额超过 $260 million 的判决书。尽管我想，诚然，我不能说人们不是债权人；人们也不能说 PAX 未被欠付 $261 million，因为它确实被欠付该金额。法官阁下，我最后要说的一点很简单：我们坚持我们在周五提交并在今天援引的案件中的引文；这些案件支持两项主张：根本而言，并非必须由——\n\n每一位债权人的利益实际上都倾向于转换。\n\n而且，单一债权人的利益也可能具有重要意义。\n\n这条界线划在哪里——比如说，一人持有99 percent的债权，一人持有1——并无一成不变的规则。\n\n但我认为，法庭可以明确考虑Acme（艾克米）案、Staff（斯塔夫）案以及所援引的Goodrich Lines（古德里奇航运）系列案件所表明的一点，即法庭的自由裁量权——在本案中该裁量权相当广泛——可以考虑债权数额的差异以及各方有权获得的利益。\n\n而且，重申一下，我认为，我们援引了多项确实支持以下命题的判例：即使一名债权人最终可能获得较好结果，驳回案件也是可以的。\n\n我无法预知未来。\n\n我要说的是，就Sherry-Netherland（谢里-内瑟兰）公寓而言，PAX（派克斯）必须承担大量工作，以继续其证明该信托协议系虚假的工作。这并非唾手可得。我们还有工作要做。\n\n而且，我们不知道其他债权人会如何行事。或许其他债权人会与Kwok先生（郭文贵）达成安排。我们必须承担这一风险。\n\n因此，基于这些理由，以及我们所指出的、认为本案不适宜转换为第7章程序的实际理由，我们认为驳回是正确的选择。\n\nCase 22-50073\nDoc 442\nFiled 05/27/22\nEntered 05/27/22 14:00:59\n\n我确实——我要说，我们同意美国受托人的意见，即如果法庭认定正确路径是指定第11章受托人，显然我们强烈支持驳回，但不应限制受托人所拥有的任何权力。\n\n法官阁下，以上便是我的全部陈述。\n\n法庭：谢谢。\n\nJonas先生？\n\nJONAS先生：法官阁下，我是代表债务人的Brown Rudnick（布朗·拉德尼克）律师事务所律师Jeff Jonas（杰夫·乔纳斯）。我将简要陈述。我仍坚持我先前支持依据1112(b)(1)和(4)(A)有正当理由驳回的论证。\n\n我想指出，有趣的是，没有任何反对驳回的人回应我先前就标准所作的论证，即该标准是债权人是否受到损害，而这种损害应通过审视这些债权人的破产申请前合法预期是否受到损害来确定；本案中，他们并未受到损害。\n\n法官阁下，我起身发言只是为了明确记录：债务人确实反驳并否认针对他的诸多贬损性评论。这里的律师作出了许多毫无依据的陈述，这些陈述并非证据。\n\nCase 22-50073\nDoc 442\nFiled 05/27/22\nEntered 05/27/22 14:00:59\nPage 104 of\n\n这些陈述以不同的形式和说法出现，法官阁下。\n\n例如，有人提到Greenwich Land（格林尼治置地）持有——涉及可能拥有某些所谓的“隐藏资产”。法官阁下，没有任何事情得到证明。没有任何事情得到展示。仅仅是毫无依据的指控，这与声称某些邻居、朋友及其他家庭成员拥有所谓隐藏资产无异。\n\n其次，法官阁下——这只是我在陈述进行期间注意到的一些简要例子——Callari女士（卡拉里）提到中国存在某些指控。再次强调，没有证据，只有毫无依据的陈述。这不是证据。根本不应赋予其任何价值或真实性。\n\n第三，诉讼融资。没有任何证据。这完全是推测和臆断。法庭面前没有证据。\n\n我再加上我自己的推测：委员会——可能还有Callari女士——在过去几周一直焦急地四处寻找某种融资，以便能够到法庭面前提交一些证据。他们没有任何证据。因此，我将据此推断不存在这种证据。\n\n但尽管如此，我不想再堆砌自己的推测。\n\nCase 22-50073\nDoc 442\nFiled 05/27/22\nEntered 05/27/22 14:00:59\n\n我只想说，法庭面前就此完全没有任何证据。\n\n因此，法庭的所有关切——至少是我们的关切——以及我认为其他当事方所表达的、不会有融资的关切，是现有的唯一证据。\n\n再次，法官阁下，我们敦促驳回。谢谢，法官阁下。\n\n法庭：谢谢。\n\nGoldman先生？\n\nGOLDMAN先生：是的。谢谢，法官阁下。仅提出几点简要意见，法官阁下。\n\n关于所有这些请求均构成人身伤害或非正常死亡请求这一观点，根据128 U.S.C 157，法庭显然——\n\n法庭：(b)(2)(B)。\n\nGOLDMAN先生：谢谢。\n\n——法庭没有管辖权。除非当然获得解除——\n\n法庭：那不是——那不是审判。审判条款是(b)(5)。(b)(2)(B)讨论的是对附条件的——\n\nGOLDMAN先生：正确。\n\n法庭：——以及有争议的人身伤害请求进行估算或清算。这不同于——\n\nCase 22-50073\nDoc 442\nFiled 05/27/22\nEntered 05/27/22 14:00:59\n\n人身伤害请求。\n\nGOLDMAN先生：正确。\n\n法庭：——(b)(5)项下的审判问题。\n\nGOLDMAN先生：您完全正确。因此，除第11章程序外，亦不能根据502(c)进行估算。\n\n法庭：或者在计划背景下的第12章或第13章程序。\n\nGOLDMAN先生：或者第12章或第13章程序。但这当然不妨碍其在原审法院解除自动中止后得到清算。而且，债务人当然可以进行抗辩，特别是因为根据523(a)(6)，这些请求可能属于故意和恶意伤害而不可免责。因此，债务人当然会有这样做的利益。\n\n我还想指出，我不认为当然可以认定所有这些请求——例如基于诽谤的请求——均构成不能估算的人身伤害侵权请求，或属于您提及(c)项下的那类请求——\n\n法庭：(b)(2)(B)。\n\nGOLDMAN先生：——(b)(2)(B)，但也包括(b)(5)——\n\n法庭：(b)(5)——\n\nGOLDMAN先生：是的。\n\n法庭：——该条规定地区——\n\nGOLDMAN先生：是的。\n\n法庭：——法院必须审理这些请求。\n\nGOLDMAN先生：正是如此。\n\n法庭：对。\n\nGOLDMAN先生：我不认为当然可以认定诽谤请求属于符合以下条件的请求类型——\n\n法庭：关于这个问题有各种各样的判例法。\n\nGOLDMAN先生：是的。\n\n法庭：而且我同意你的意见。\n\nGOLDMAN先生：因此，存在权威分歧。当然，那一项无法辨认的即时判决采取相反立场。因此，我认为，除非法官阁下对此有明确意见，否则不能断定，所有这些请求都不能被估算，或者您对主持债权异议程序没有管辖权。\n\n至于第7章受托人将如何归集该游艇，我设想如下。目前有一项待决的对抗性程序，直接提出了该游艇是否属于破产财产的问题。第7章受托人当然可以替代债务人，或者由其本人作为该对抗性程序的一方取代债务人，并聘请特别律师。我非常有信心，我们可以找到愿意按某种可协商的风险代理费方式承接此事的特别律师。\n\nCase 22-50073\nDoc 442\nFiled 05/27/22\nEntered 05/27/22 14:00:59\nPage 107 of\n\n特别律师将根据Ostrager法官（奥斯特拉格）的裁定所具有的排除效力提出终局性动议，我们认为该等裁定确有排除效力。随后，法官阁下将决定其是否确有实际排除效力，从而使该游艇成为破产财产。\n\n这不是复杂的程序，而且我认为——我要建议——其完成的可能性很大。\n\n而且，如果确实如此，我们甚至不需要诉讼融资。\n\n所以，这是最容易取得的成果。\n\n法官阁下，我认为您可以考虑几个选项。\n\n例如，由于我们只有几周时间寻找诉讼融资，也没有时间寻找任何风险代理律师，您可以将案件转换，并允许我们有时间寻找融资。如果在该期间内找不到融资，或我们无法找到特别律师，届时可驳回案件。\n\n我实际上还没有提到第三个选项，即第11章受托人选项，该选项可使其中一些请求得到估算。\n\n您知道，委员会并不反对与PAX协商公平分配债务人所拥有任何资产的想法。我们并未忽视PAX在追索该债务人并取得其判决书方面所作出的努力。我认为，委员会——让我这样说——会合理地与PAX协商一项计划，以对其破产申请前的努力给予一定认可。\n\n而且，债权人重整计划在本案中当然可以实现。它所需做的只是归集资产。我们甚至会——也许PAX的律师希望担任特别律师。我们对此不会有任何问题。而且，债务人不会保留对财产的任何权益。因此，在债权人有能力协商计划的情况下，第11章受托人我认为也是本案中一个可行的选项。所以我会——\n\nCase 22-50073\nDoc 442\nFiled 05/27/22\nEntered 05/27/22 14:00:59\nPage 109 of\n\n法庭：嗯，你是第一个这样说的人。\n\nGOLDMAN先生：嗯，我确实认为，与其——\n\n法庭：而且没有其他人这样说。因此，如果你——\n\nGOLDMAN先生：没有。\n\n法庭：因此，如果你认为那是一种可能性，那么——\n\nGOLDMAN先生：我会——\n\n法庭：——你是否请求获得与各方讨论此事的机会？这就是你的请求吗？\n\nGOLDMAN先生：嗯，我很希望有机会与各方讨论此事，只是我不确定讨论是否会有成果。因为我认为——我认为PAX会希望法官阁下首先就驳回是否——作出裁定。\n\n法庭：嗯，顺便说一下，根据法典，我必须作出裁定，所以除非你们大家决定采取不同做法，否则我别无选择。我——我——我别无选择。一旦听证开始，对吧，我是否必须作出裁定——我手头没有相关条文，但我确信PAX知道——我想我必须在15 days或类似期限内作出裁定，对吗？在听证结束时。\n\n我没有太多——如我所说，我不知道，两个月前——本案并不存在很大的机会窗口。我试图向所有当事方非常明确地说明这一点——也许我做得不太好——但我试图非常明确地说明：这不是法庭拥有自由裁量权的案件。\n\n国会修改了法典，对吧？就是这样——我别无选择。我没有自由裁量权。我没有。是的。这里写着，Goldman律师——我知道你可能也知道——在——法庭应开始审理该动议之后\n\n1　（无法辨识）30日，除非动议方同意某一\n2　具体期限；动议方确已同意，即为今日，\n3　对吗？\n4　然后作出裁决——并且应当——没有自由裁量权，\n5　对吗——并且应当在该听证开始后不迟于15日内\n6　对该动议作出裁决。\n7　所以我目前的处境就是如此，对吗？\n8　除非各位另有\n9　其他方案，否则我没有太多可做的。\n我不认为你们今天会有另一\n10　个方案。\n11　我不会在今天和明天之间写出一份裁决。\n12　这不会——我的意思是，我实在做不到。\n13　我还有其他听证事项。\n我们还有其他事务。\n但我必须\n14　在今天起15日内作出裁决。\n15　戈德曼先生：\n明白，法官阁下。\n16　我认为——我认为将会妨碍\n17　或者不利于就第11章受托人进行讨论的因素，\n18　是PAX宁愿法官阁下直接\n19　就驳回作出裁决。因此，我并不——我认为在\n20　该裁决作出之前，我将无法与其展开讨论。\n21　\n22　不过，法官阁下可以在就本\n23　动议作出裁决时指定一名第11章受托人，并提供一段期间，\n24　以便——不影响权利——根据该期间内发生的情况重新审议\n25　该命令。\n\n案件 22-50073　文档 442　提交 05/27/22　录入 05/27/22 14:00:59　第111页，共\n\n案件 22-50073\n文档 442　提交 05/27/22　录入 05/27/22 14:00:59　第112页，共\n\n1　案件最初30日左右内发生的情况。\n2　换言之，您仍可履行您的\n3　法定义务，并在确定的期限内重新审议该问题，\n4　以确定案件是否应当根据\n5　在指定第11章受托人后我们能够完成的事项\n6　予以驳回，而这仍将满足\n7　作出裁决的法定义务。\n8　法庭：\n我希望——\n9　戈德曼先生：\n但我要指出的是，这保留了各种\n10　选择。\n11　法庭：\n我明白你的意思。\n12　戈德曼先生：\n就是这些。这就是我所要说的，\n13　法官阁下。\n14　法庭：\n好的。谢谢。\n15　还有其他人希望陈述意见吗？\n16　（无可听见的回应。）\n17　法庭：\n好的。正如我刚才为记录所述，\n18　我必须就该裁决作出裁定——\n19　哦，您还有其他内容想补充吗？\n20　哦，是的。我们必须完成证据材料，对吗？\n21　证据材料。笔录。\n22　戈德曼律师，弗里德曼律师曾\n23　提及若干笔录。\n24　戈德曼先生：\n没有。没有异议。\n25　法庭：\n没有异议。\n\n案件 22-50073\n文档 442\n提交 05/27/22\n录入 05/27/22 14:00:59\n\n1　好的。因此，PAX的全部证据材料\n2　均完整准予采纳，但第7、8和31号除外。是另\n3　一项吗？\n4　阿伦松女士：\n是的。谢谢，法官阁下。\n5　如有助于法庭，我可以就\n6　笔录提供若干引述。\n7　法庭：\n可以。请继续。\n8　阿伦松女士：\n关于PAX 18，我们请法庭\n9　参阅第21至28页。关于PAX 20，我们请法庭参阅\n10　第8至19页。关于PAX 21，我们请法庭参阅第\n11　11至20页。\n12　法庭：\n好的。谢谢。\n13　阿伦松女士：\n谢谢。\n14　法庭：\n戈德曼律师？\n15　戈德曼先生：\n法官阁下，我可以再提出一点\n16　吗？\n17　法庭：\n可以。不过他们听不见你。\n18　戈德曼先生：\n好的。\n19　法庭：\n请对着——\n20　戈德曼先生：\n好的。\n21　法庭：\n你可以就在你旁边对着\n22　阿伦松律师说。\n23　戈德曼先生：\n好的。我知道这可能不是\n24　1112(b)项下的具体因素，但法官阁下从就DIP\n25　动议提交的诉讼预算中得知，\n\n案件 22-50073　文档 442　提交 05/27/22　录入 05/27/22 14:00:59　第114页，共\n\n1　截至4月底，我们已产生近 \\$200,000\n2　的费用。该数额显然已经增加。\n3　我认为，如果指定一个委员会，其聘请律师系\n4　依赖程序继续推进——我们为该委员会完成了我们的工作——\n5　而现在仅仅驳回案件，导致所有\n6　这些费用未获支付，我认为这将是对\n7　程序的不利影响。\n8　\n9　法庭：\n我明白。谢谢。\n10　还有其他人希望陈述意见吗？\n11　（无可听见的回应。）\n12　法庭：\n好的。为使记录\n13　清楚起见，2022年4月6日，债权人Pacific Alliance\n14　Asia Opportunity Fund, LP（太平洋联盟亚洲机会基金，有限合伙）提交了一项以事由为由驳回\n15　本案的动议，或作为替代请求，部分加入\n16　美国受托人提出的请求作出命令、指示\n17　指定一名第11章受托人的动议。\n18　我们已在本案中举行若干次听证，会上\n19　讨论了驳回动议。我们还举行了一次\n20　状态会议，以讨论驳回动议；该\n21　状态会议于2022年4月13日举行。\n22　在状态会议之后，并作为\n23　状态会议讨论的一部分，驳回动议的听证\n24　被安排于今日，即2022年5月\n25　25日举行，并经动议方PAX同意。\n\n案件 22-50073　文档 442　提交 05/27/22　录入 05/27/22 14:00:59　第115页，共\n\n我们还安排于明日举行听证，预计可能会有更多证据需要就驳回动议提交法庭。在近期一次听证中，即驳回动议听证之前，债务人通过律师确认，其不反对驳回动议，并同意根据1112条存在驳回本案的事由。就驳回动议提交过文件或书状的每一其他当事人，均同意存在事由。因此，本法庭无需认定存在事由。法庭只需就事由为何以及最终救济为何作出认定。我此前已在记录中说明，但我将再次说明，法庭将依照《破产法》1112(b)的适用规定，驳回本案、将本案转换为其他程序，或指定一名第11章受托人。我今日已为记录说明，在本次听证中已完整准予采纳的、由PAX和无担保债权人官方委员会提交的证据材料。没有其他当事人提交证据，\n\n1　但其加入了该等——该证据，这对\n2　法庭而言没有问题。\n3　我已审阅所有当事人于20日星期五\n4　就各自在驳回\n5　动议方面的立场提交的立场文件。\n6　\n7　当然，我也听取了今日所有当事人\n8　就驳回动议提出的论点。\n9　如我同样指出，我受法规约束，必须在\n10　听证开始后15日内\n11　对该动议作出裁定。\n12　今日听证已经结束，因无进一步\n13　证据需要提交或论点需要提出；因此，\n14　就该驳回动议作出裁决的\n15　期限开始计算。\n16　我——我感谢所有当事人提出的\n17　全部论点。这些论点\n18　审慎而周详。各位已充分陈述了你们的观点。\n19　\n20　但我必须就\n21　本案将以何种方式继续作出决定，我将这样做。而且\n22　显然，我将在今日起15日内作出决定。\n23　不过，我想根据《联邦民事诉讼规则》，\n24　依9006条第6项，今日不计入——今日——因此我认为这\n\n案件 22-50073　文档 442　提交 05/27/22　录入 05/27/22 14:00:59　第116页，共\n\n1　确实是正确的，坦率地说。\n2　但无论如何，如果各位对\n3　驳回动议还有任何其他疑虑或问题，我通常\n4　可以安排会议。不过与此同时，我将\n5　就驳回动议作出裁定。\n6　好的。有人还有其他问题吗？\n7　（无可听见的回应。）\n8　法庭：\n好的。我感谢所有\n9　当事人的努力。\n10　我对驳回动议保留裁定，并将相应作出裁决。\n11　\n12　这是今日日程中的最后一项事项，\n13　因此休庭。\n14　（程序于下午12:51休庭。）\n15　本人，CHRISTINE FIORE（克里斯汀·菲奥雷），经法院批准的速记员及\n16　认证电子记录员兼速记员，特此证明，\n17　上述内容系对上述\n18　案由事项程序的官方电子录音所作的正确笔录。\n19　\n\n22　2022年4月21日\n23　Christine Fiore（克里斯汀·菲奥雷），CERT-410\n24　速记员\n\n1　索引\n2　PAX证据材料：　收讫\n3　1-6、9-17、23-29、31　8\n\n5　债权人委员会证据材料：\n6　1-14　16","key_entities":["Kwok","Je","CIPA","CCP","Guo","Ho Wan Kwok","GTV","Saraca","Miles Guo","Murray","Chinese Communist Party"],"ecf_references":[{"doc_number":102,"court":"CTB"},{"doc_number":131,"court":"CTB"},{"doc_number":404,"court":"CTB"}],"word_count":27848,"status":"published","published_at":"2022-05-27 00:00:00","created_at":"2022-05-27","updated_at":"2026-08-23 22:22:24"}