{"id":"court_ctb_871_2","court":"CTB","case_no":"22-50073","doc_number":871,"sub_number":2,"doc_type":"EXHIBIT","filed_date":"2022-09-23","title":"EXHIBIT B DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION","summary_zh":null,"summary_en":null,"body_en":"# **EXHIBIT B**\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 2 of\n\n#### 117\n\nDISTRICT OF CONNECTICUT BRIDGEPORT DIVISION\n\nIn Re \\* Case No. 22-50073 (JAM) \\* HO WAN KWOK, \\* Bridgeport, Connecticut \\* July 21, 2022 Debtor. \\* \\*\n\nUNITED STATES BANKRUPTCY COURT\n\nTRANSCRIPT OF STATUS CONFERENCE BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE\n\nAPPEARANCES:\n\nFor the Debtor: DYLAN P. KLETTER, ESQ. Brown Rudnick, LLP 185 Asylum Street Hartford, CT 06103\n\n> ERIC HENZY, ESQ. AARON ROMNEY, ESQ. Zeisler & Zeisler 10 Middle Street, 15th Floor Bridgeport, CT 06604\n\nFor HK International Funds STEPHEN M. KINDSETH, ESQ. Investments (USA) Limited, Zeisler & Zeisler\n\n\\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\* \\*\n\nFor the Creditor, Pacific PETER FRIEDMAN, ESQ. Alliance Asia Opportunity STUART M. SARNOFF, ESQ. Fund, L.P.: O'Melveny & Myers LLP\n\n LLC: 10 Middle Street, 15th Floor Bridgeport, CT 06604\n\n> Times Square Tower 7 Times Square New York, NY 10036\n\nProceedings recorded by electronic sound recording, transcript produced by transcription service.\n\n> **Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992**\n\nAPPEARANCES Cont'd: For the Creditor, Pacific PATRICK M. BIRNEY, ESQ. Asia Alliance Opportunity Robinson & Cole LLP Fund, L.P.: 280 Trumbull Street Hartford, CT 06103 For the Creditors Committee: IRVE GOLDMAN, ESQ. Pullman & Comley 850 Main Street, 8th Floor Bridgeport, CT 06604 For the Creditor, Rui Ma, KRISTEN MAYHEW, ESQ. Zheng Wu and Weican Meng: McElroy Deutsch Mulvaney & Carpenter 30 Jeliff Lane Southport, CT 06890 CAROLLYNN H.G. CALLARI, ESQ. Law firm of Callari Partners One Rockefeller Plaza, 10th Fl. New York, NY 10020 Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings, LLP 200 Park Avenue New York, NY 10166 For the Chapter 11 Trustee: DOUGLAS S. SKALKA, ESQ. PATRICK R. LINSEY, ESQ. Neubert, Pepe & Monteith, P.C. 195 Church Street, 13th Floor New Haven, CT 06510 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\n\n2\n\nHo Wan Kwok - July 21, 2022 3 (Proceedings commenced at 10:06 a.m.) THE COURTROOM DEPUTY: Case No. 22-50073, Ho Wan Kwok. THE COURT: Good morning. If we could have appearances for the record starting with the debtor's counsel, please. MR. HENZY: Your Honor, for Ho Wan Kwok, Eric Henzy, of Zeisler & Zeisler. THE COURT: Hold on just one second. Where's Mr. Baldiga or someone from -- MR. KLETTER: Hi. Good morning. Dylan Kletter, from Brown Rudnick, here to deal with the motion to withdraw as counsel. THE COURT: Okay. Okay. And who else? I'm sorry, sir. Go ahead. MR. ROMNEY: Aaron Romney, Zeisler & Zeisler, also for the debtor, Your Honor. THE COURT: Okay. Thank you. MR. KINDSETH: And Stephen Kindseth for the debtor, Ho Wan Kwok. THE COURT: Okay. Thank you. Go right ahead, Counsel. MR. DESPINS: Good morning, Your Honor. Nice to meet you in person. Luc Despins, Chapter 11 Trustee. THE COURT: Good morning, Mr. Despins. I'm sorry. Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 4 of\n\nHo Wan Kwok - July 21, 2022 4 We only did see each other on Zoom, so I didn't meet you in person before today, so welcome. MR. SKALKA: Good morning, Your Honor. Douglas Skalka, of Newbury, Pepi and Monteith, as proposed local counsel for the Chapter 11 trustee. THE COURTROOM DEPUTY: Attorney Skalka, I cannot hear you. MR. SKALKA: I am sorry. THE COURT: That's okay. If you could say that again, please. MR. SKALKA: Yes, Your Honor. Douglas Skalka, Neubert, Pepe & Monteith, as proposed local counsel for the Chapter 11 trustee. MR. LINSEY: And Patrick Linsey, also Neubert, Pepe & Monteith, local counsel for the trustee, Your Honor. Good morning. THE COURT: Good morning. MR. SKALKA: Good morning. MS. CLAIBORN: Good morning. Holley Claiborn for the U.S. Trustee. THE COURT: Good morning. MR. FRIEDMAN: Good morning, Your Honor. Peter Friedman, from O'Melveny & Meyers, on behalf of Pacific Alliance Group. THE CLERK: I'm sorry, Attorney Friedman, I can't Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 5 of\n\nHo Wan Kwok - July 21, 2022 5 hear you. MR. FRIEDMAN: I'm sorry. THE COURT: It's kind of hard because we only have a few microphones and we have a lot of people. So, I'm sorry. MR. FRIEDMAN: Good morning, Your Honor. It's Peter Friedman, from O'Melveny & Meyers, on behalf of Pacific Asia Alliance. I'm joined by Mr. Sarnoff. THE COURT: Good morning. MR. FRIEDMAN: And Mr. Birney from the Robinson & Cole firm, our Connecticut counsel, is also here. THE COURT: Good morning. MR. GOLDMAN: Good morning, Your Honor. Irve Goldman, Pullman & Comley, representing the creditors committee. THE COURT: Good morning. MS. MAYHEW: Good morning, Your Honor. Kristen Mayhew, McElroy Deutsch Mulvaney & Carpenter, on behalf of creditors Rui Ma, Zheng Wu and Weican Meng. And with me is co-counsel Carollyn Callari. THE COURT: Good morning to both of you. Okay. The Court scheduled a status conference today in accordance with the memorandum of decision denying the motion to dismiss without prejudice and appointing a Chapter 11 trustee. Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 6 of\n\n#### Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 7 of\n\nHo Wan Kwok - July 21, 2022 6 That memorandum of decision indicated that within 14 days of the appointment of a Chapter 11 trustee that a status conference would be held so that the Chapter 11 trustee could report to the Court on where things stand from the Chapter 11 trustee's perspective and to also talk about specific issues that the Chapter 11 trustee may be addressing, reviewing, analyzing and to give the Court some idea of where you think, Mr. Despins, we're heading with regard to this case. I also set the status conference because there was a flurry of papers filed after the appointment that -- the order appointing you, Mr. Despins, about your firm's application -- your application to employ your firm, Paul Hastings, and then also the motion to withdraw attorney filed by Brown Rudnick, which was filed after the order entered appointing Mr. Despins. So I would like to hear from you, Mr. Despins, first about the status of what you've been able to do, what you would -- what you're intending to do, what the next steps might in this case. We will address the application insofar as to discuss at least the application to employ your firm. And then we will discuss the motion to withdraw as counsel -- the debtor's counsel who's been involved in the case since the beginning, Brown Rudnick. Okay?\n\n| | Case 22-50073
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7 |\n| 1 | So, Mr. Despins, if you would proceed, please. |\n| 2 | MR. DESPINS:
Thank you, Your Honor. |\n| 3 | THE COURT:
And if you'd like to come forward. |\n| 4 | And the other thing, Mr. Despins, if you -- if you |\n| 5 | want at any time, if it would be helpful to you at any time, |\n| 6 | for the Court to pull up any pleadings that you need to look |\n| 7 | at, you can just let us know and the courtroom deputy can do |\n| 8 | that for you. |\n| 9 | MR. DESPINS:
Thank you, Your Honor. |\n| 10 | So we have a presentation for the Court. |\n| 11 | THE COURT:
Please. |\n| 12 | MR. DESPINS:
I expect that it would take no more |\n| 13 | than 15 minutes, but we have a visual aid, meaning that -- |\n| 14 | in written form -- |\n| 15 | THE COURT:
Okay. |\n| 16 | MR. DESPINS:
-- that would help the Court in |\n| 17 | following the presentation.
So if we could, distribute -- |\n| 18 | we have copies for everyone in the courtroom and for -- |\n| 19 | THE COURT:
Sure.
That would be great if you |\n| 20 | would do that.
And then we can -- we can mark the |\n| 21 | presentation as Trustee Exhibit 1. |\n| 22 | (Trustee written presentation copy marked Trustee |\n| 23 | Exhibit 1.) |\n| 24 | MR. DESPINS:
Yeah.
I want to be clear, this is |\n| 25 | not evidence.
It's just a work plan -- |\n| | |\n\n| | Case 22-50073
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8 |\n| 1 | THE COURT:
Understood. |\n| 2 | MR. DESPINS:
Okay. |\n| 3 | THE COURT:
It's just demonstrative, but it's |\n| 4 | something that will help the Court, and we can put it in the |\n| 5 | record.
Okay? |\n| 6 | MR. DESPINS:
Absolutely, Your Honor. |\n| 7 | And if -- Your Honor, would you like us to file it |\n| 8 | as well? |\n| 9 | THE COURT:
No.
It's all right. |\n| 10 | MR. DESPINS:
Okay. |\n| 11 | THE COURT:
We can take care of that.
Thank you. |\n| 12 | MR. DESPINS:
Thank you.
Thank you, Your Honor. |\n| 13 | Okay.
So I -- first of all, thank you, Your Honor, for |\n| 14 | hearing from us on this matter. |\n| 15 | So I will start with -- on page 2 with |\n| 16 | administrative matters.
And some of this stuff, Your Honor, |\n| 17 | is fairly routine and boring so I will not spend a lot of |\n| 18 | time on it.
You know it already. |\n| 19 | But just to confirm, we posted the bond for |\n| 20 | \\$25,000.
We opened the bank account, that's item number |\n| 21 | two.
Number three is just a reminder that there were three |\n| 22 | Section 341 meetings on March 21st, on April 6th, but they |\n| 23 | were not completed, so another one needs to be scheduled by |\n| 24 | the U.S. Trustee.
So I wanted you to be aware of that. |\n| 25 | THE COURT:
Thank you. |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 10 of\n\nHo Wan Kwok - July 21, 2022 9 MR. DESPINS: And then still in this list of matters, the monthly operating reports, there are two reports that are still due by the debtor prior to our appointment and, therefore, these need -- I don't know if it goes to the Brown Rudnick motion to be recused or somebody else is going to pick that up, but this needs to be done. And that's listed on page 2.\n\n I just want to point out though at the bottom of page 2 is the monthly operating reports, this is in bold there, reflect that a third party has made disbursements for the benefit of the debtor in amounts that averages approximately 115,000 per month. I think that's an important data point.\n\n Next page, Your Honor, bar date. There was a lot of back and forth on a bar date. And I know you were considering at that time the dismissal of the case so it made no sense to enter an order for a bar date when the case might be dismissed, but at this point the case is not being dismissed and I think the bar date order should be entered.\n\n I think you have the revised -- I'm told that you have a revised version and we would encourage the Court to enter the order because we need to know who's out there, especially in terms of governmental entity, we need to understand that. So that's the bar date order.\n\nUnder item number six, that's the update on the\n\nHo Wan Kwok - July 21, 2022 10 Lady May inspection. So there was an inspection, Your Honor, on July 13th with PAX's expert and an expert I hired to basically oversee PAX's expert. So let me explain this. Obviously, we have no money and the estate has zero dollars. And PAX was doing its own review with a very reputable expert and they're paying for that and we appreciate that. However, given the dynamic of this case, I could not go to the inspection and say I'm relying on PAX's expert alone, even though directionally we're aligned in the same direction in the sense that both we and PAX want to know if this yacht has problems or not. So what I did is I hired Mr. Paul Derecktor, who is a -- I don't know if Your Honor is aware of this -- THE COURT: Yes. MR. DESPINS: -- that company was in -- THE COURT: I am aware. MR. DESPINS: Were you -- THE COURT: I mean, once you said the name. I didn't know you hired that person, but I -- I'm aware of the company. MR. DESPINS: I don't know. Were you the judge on that case? THE COURT: No. MR. DESPINS: Okay. Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 11 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 12 of\n\n| | 117 |\n|----|---------------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
11 |\n| 1 | THE COURT:
No, I was not. |\n| 2 | MR. DESPINS:
Okay.
So he's a -- he has a |\n| 3 | shipyard in the area.
He really knows boats.
But he agreed |\n| 4 | to look over the shoulder of PAX's expert for the sum of |\n| 5 | \\$2,500.
I figured that that was a modest sum to invest just |\n| 6 | to make sure nobody would criticize us relying entirely on |\n| 7 | PAX's expert.
So we've done that. |\n| 8 | There are still discussions that need to happen, |\n| 9 | and let me tell you the nature of these discussions. |\n| 10 | Basically, what Mr. Derecktor has told me is, he, |\n| 11 | said, look, anybody buying a ship of this size would |\n| 12 | actually take it off -- out of the water to inspect the |\n| 13 | hull.
And I said, well, how much does that cost?
Oh, |\n| 14 | \\$400,000.
Forget about that.
We can't do that.
Is there a |\n| 15 | plan B? |\n| 16 | He said, well, you could send divers to go |\n| 17 | underneath and inspect the hull because the ship came back |\n| 18 | from Europe and often in the ocean you hit, you know, all |\n| 19 | sorts of things, potentially.
And that would cost \\$2,500, |\n| 20 | the divers.
So we were having discussions with PAX as to |\n| 21 | does that make sense to do that. |\n| 22 | And the second thing he mentioned is that we |\n| 23 | should really do a sea trial.
And at first I thought we're |\n| 24 | not going to take the ship out at sea.
He said, no, just |\n| 25 | basically it's like -- it's like for a car.
Take it out for |\n| | |\n\n| | Case 22-50073
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12 |\n| 1 | a spin for half an hour just to make sure -- |\n| 2 | THE COURT:
I'm familiar with a sea trial. |\n| 3 | MR. DESPINS:
Okay.
I was not.
And so that's |\n| 4 | still being considered, Your Honor. |\n| 5 | So at this stage we need to get together with |\n| 6 | PAX's expert to combine our common views and go back to the |\n| 7 | entity that's the registered ship owner.
So that's the |\n| 8 | status of the inspection at this time, Your Honor. |\n| 9 | But it was obvious, you know I'm not a ship |\n| 10 | expert, that there's damage to the boat because you could |\n| 11 | see when you just walked by it there's a, you know, a |\n| 12 | portion of the front of the boat that was hit by something. |\n| 13 | But, anyway, we'll -- that's proceeding. |\n| 14 | Still, on the list of matters, you know, page 4, |\n| 15 | automatic stay letters.
I directed my firm to send more |\n| 16 | than 20 letters to various parties that are at the periphery |\n| 17 | of this case. |\n| 18 | So, for example, an entity called Golden Spring |\n| 19 | New York, which Your Honor may recall has been providing |\n| 20 | some of the funding in some situations.
I'm not |\n| 21 | -- I don't want to go into the details, but they're clearly |\n| 22 | within the universe of debtor related companies. |\n| 23 | And then Bravo Luck, that's the entity that |\n| 24 | allegedly has a trust agreement that provides that they own |\n| 25 | the Sherry Netherland apartment. |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 14 of\n\nHo Wan Kwok - July 21, 2022 13 So they're all listed there. Well, some of them are listed there. But we also sent the same thing to Brown Rudnick, which was acknowledged by them, and a firm in Greenwich, Connecticut, Whitman Breed. That was actually very interesting because I received permission from the person who sold the house to the debtor to get access to the closing statements, the wire transfers, et cetera. But when I called Whitman Breed, there's all we can't give that to you because we're representing the debtor on other matters. I said, well, what does that have to do with anything? You didn't represent them in the sale, did you? No. But we're not going to give you any documents. So that means they are representing the debtor on other matters. And obviously we want them to preserve those documents and us to get access to that. So there were a number of these letters that were sent, this is since our appointment, probably 20 of those. Page 5, still (indiscernible) matters. Just so Your Honor knows, reaching out to key parties, obviously, we started with the debtor. So on the first day after the appointment, I called Brown Rudnick and I said -- and by the way, I'm not going to reveal any settlement discussion other than to say\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 15 of\n\n| | 117 |\n|----|------------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
14 |\n| 1 | that my first approach was to reach out to them and say why |\n| 2 | don't we have a meeting to see if there's a global |\n| 3 | settlement that could be done before we get into this very |\n| 4 | expensive and very extensive process, and the next thing I |\n| 5 | heard after that is that they were no longer counsel to Mr. |\n| 6 | -- to the debtor. |\n| 7 | But I want to make sure the approach -- our |\n| 8 | approach is we don't have to spend money on this if we don't |\n| 9 | -- if we don't have to.
I know it's going to be really |\n| 10 | expensive if we have to go to all these jurisdictions |\n| 11 | because there are a bunch of jurisdictions involved. |\n| 12 | But we wanted to see if there was a number at |\n| 13 | which there could be a global settlement and that didn't -- |\n| 14 | at least, to date, has not panned out. |\n| 15 | So we reached out to counsel for the debtor.
We |\n| 16 | reached out obviously to Mr. Goldman, counsel to the |\n| 17 | committee, who has given us very good advice on the case and |\n| 18 | all that.
Same with Pacific Alliance, Mr. Friedman. |\n| 19 | We reached out to counsel to Genever Holdings, |\n| 20 | that's the Chapter 11 entity, Your Honor.
Another |\n| 21 | interesting conversation because I asked him who do you take |\n| 22 | direction from in that case?.
He said, oh, Miles.
I didn't |\n| 23 | know that was the way he used names -- he's known.
So I |\n| 24 | said, who's Miles?
He said, oh, that's the Chapter 11 |\n| 25 | debtor. |\n| | |\n\n#### Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 16 of\n\nHo Wan Kwok - July 21, 2022 15 So he's taking direction in that case from this debtor. So I said, well, I'm the Chapter 11 trustee now. So he said, well, I guess I'm taking directions from you. I said, well, we'll -- you know, to be continued. But, you know, I'll come back to that later, but there's a lot of things to be discussed about that issue. But I'll come back to it in a second. So we reached out to him. We also reached out to former Judge Cyganowski who was the court-appointed sales agent in that case. And I want it to be clear -- and I'll cover that later -- the trustee is not taking the position that the sale should be halted. So that's not part of our game plan. But I wanted to reach out to her to introduce myself and also to get feedback on what's happening with the property. And she did tell me, by the way, that the debtor is occupying that property, the Sherry-Netherland in New York. Then counsel to creditors. Rui Ma and Zheng Wu and, Carollyn Callari, obviously, we reached out to her as one of the important constituency. Since the failed attempt with Brown Rudnick, we've asked new debtor's counsel to have a meeting with the debtor, not necessarily to discuss settlement, but because we need to have a serious discussion with the debtor to make sure the debtor understands the regime he's operating under\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 17 of\n\n| | 117 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
16 |\n| 1 | now.
And we've asked for that last Friday.
We haven't |\n| 2 | heard back a response to date.
Maybe we will soon. |\n| 3 | Next, Your Honor, still on page -- now at page 6, |\n| 4 | still administrative matters, management of pending |\n| 5 | adversary proceedings. |\n| 6 | So there are a number of adversary proceedings, |\n| 7 | Your Honor.
Most of them relate to non-dischargeability. |\n| 8 | And I want to be clear, because we approached the debtor to |\n| 9 | say, hey, we would like to -- I'm not sure -- it's not |\n| 10 | informal intervention, we would like a stay of these |\n| 11 | proceedings.
And the initial reaction, well, it's not your |\n| 12 | business.
This is a fight between the creditors and the |\n| 13 | debtor. |\n| 14 | And generally that's probably right, so maybe |\n| 15 | they'll like that concession, except that from a court |\n| 16 | efficiency and a point of view I think it would be a really |\n| 17 | poor investment of the Court's time, and we would need to be |\n| 18 | involved, and our time to go through now a non |\n| 19 | dischargeability complaint.
Because in order to do that, |\n| 20 | you need to go through the claim.
And essentially you need |\n| 21 | to say I have a claim, a good claim and it's non |\n| 22 | dischargeable.
Well, that would be duplicative of the |\n| 23 | process that could take place later on on claims allowance. |\n| 24 | And my point is why go through that brain damage |\n| 25 | when there's no assets in the estate today, meaning when |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 18 of\n\n| | Ho Wan Kwok - July 21, 2022
17 |\n|----|----------------------------------------------------------------|\n| 1 | there are assets to fight over, then by all means all these |\n| 2 | proceedings should happen.
But to do that today would be, |\n| 3 | you know -- obviously, you are the judge, you will decide |\n| 4 | your calendar, but to us it seems like a really bad use of |\n| 5 | the Court's time and of our time as well because we might be |\n| 6 | in a position where we now need to go through the claims |\n| 7 | allowance process while there are no assets in the estate, |\n| 8 | which, you know, I believe firmly that there will be assets |\n| 9 | in the estate one day, but today there are none.
And I |\n| 10 | think it would be, you know -- anyways.
So that's our view, |\n| 11 | Your Honor.
So I wanted to make sure you understood why we |\n| 12 | filed this motion for a stay. |\n| | |\n\n But we're not going to go and get involved against a particular creditor on the issue of non-dischargeability or for or against the debtor on that. That's not our goal. Our goal is from the case management point of view to make sure that there's a good use of everyone's time including Your Honor's time on these matters.\n\n Page 7, number nine, there's another adversary proceeding, and that's the one by the registered ship owner, HK International. They filed -- and that was the Zeisler firm that represented the plaintiff and now they represent the plaintiff and the defendant -- that's a little joke -- until now I'm going to be substituted as the defendant in that action. And I'll come back to that towards the end,\n\nHo Wan Kwok - July 21, 2022 18 but they gave us a 30-day extension to answer or to otherwise move in that case. Page 8, Your Honor, number ten, intervention appearance and other litigation. The debtor has 25 active lawsuits. I'm not -- and I don't want to be cavalier about this -- I'm not that concerned today about the ones where he's a defendant because the stay, you know, applies. It's the litigation where he's a plaintiff. We need to get our arms around value if any of those claims and we've started reaching out to those people. But I don't mislead, Your Honor. We have not made a lot of progress on that. That is something that we need to do over the next, you know, month or so. So the concept there is to go and talk to counsel for the debtor in -- where the debtor's a plaintiff to see what is the nature of litigation. Is there value there for example? If there is, I want to know sure Your Honor knows this. There's a, I think, a \\$1 billion -- that's the asserted number -- where he's suing UBS in the U.K., and so obviously I reached out to counsel and hopefully we'll have a discussion with them to say what is the litigation about, understanding that, et cetera. So that's one example of those. Next, number eleven, is contact with the Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 19 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 20 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
19 |\n| 1 | Securities and Exchange Commission. |\n| 2 | So I don't know if Your Honor saw this -- you |\n| 3 | probably don't spend your time looking at the claims docket |\n| 4 | -- but there was a claim filed by the SEC and basically -- |\n| 5 | and it's described there -- they are saying they've |\n| 6 | conducted an investigation for, you know, where they may -- |\n| 7 | for violation of securities laws.
And that's not good news, |\n| 8 | not only for -- |\n| 9 | THE COURT:
They didn't assert any dollar amount? |\n| 10 | They said that they're investigating, is that what it says? |\n| 11 | MR. DESPINS:
Yeah.
Well, it's -- we have the |\n| 12 | quote there I think, but, you know, they're investigating, |\n| 13 | and they may actually file a civil action against the debtor |\n| 14 | to seek disgorgement and all that. |\n| 15 | So I've dealt with the SEC before, and I'm saying |\n| 16 | this with all due respect to them, my concern is the diluted |\n| 17 | effect that could have on claims of, you know, Mr. Goldman |\n| 18 | represents for example. |\n| 19 | And so I've reached out to the SEC and we're at a |\n| 20 | very preliminary stage.
There have been no substantive |\n| 21 | discussions, but I want to understand exactly what is their |\n| 22 | issue, what is it related to, and also whether they're aware |\n| 23 | of any assets that we're not aware of.
So that is -- and, |\n| 24 | again, I don't want to mislead you -- that just started this |\n| 25 | week so not a lot of progress on that front.
That's the |\n| | |\n\nHo Wan Kwok - July 21, 2022 20 SEC. THE COURT: Didn't they just -- and this claim that they filed, it was recent, wasn't it? MR. DESPINS: Yes. It was I'm going to say five days ago, six days ago. THE COURT: Right. Okay. MR. DESPINS: Something like that. Yeah. THE COURT: Okay. Thank you. MR. DESPINS: Okay. Moving on to page 9, number twelve, dealing with inbound inquiries. We've received inquiries, Your Honor, from people saying -- basically tips saying this guy is hiding assets here or there. And I want to be clear with Your Honor. I've done a lot of these cases and I would say these often fall into three categories. The first category, what I'll call the crazies. Meaning these types of cases attract all sorts of people, some of them are completely irrational. So that could be door number one. Door number two -- I'm not saying this applies in this case but in that case, the target itself sends these things anonymously just to send us to Africa, for example, to spend money there when there's nothing to be -- to be looked at. Door number three, you can get a real tip, and Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 21 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 22 of\n\nHo Wan Kwok - July 21, 2022 21 that's what we're investigating. Some of them are very specific as to persons holding funds. And as I said, I cannot validate those now. I don't want to mislead the Court and say, oh, well, we have -- we found \\$5 billion here. No, I can't say that.\n\n But it shows that the Chapter 11 trustee process is working because people are coming out of the woodwork to say you should check the following things, things that we would have never found ourselves initially at this stage anyway. As I said, these could be made up so we have to be very careful about that, so I don't want to exaggerate the importance of these.\n\n Next, Your Honor, retention of professionals. Well, you know we filed for the retention of Paul Hastings. And obviously we retained Mr. Skalka and Linsey. And the point there is we're going to try -- and you'll see there's no Paul Hastings lawyer other than myself here -- we're going to rely heavily on them to handle a lot of the -- of the matters before Your Honor. And, you know, obviously you know that firm very well.\n\n Page 10, this is where we get into really more meaty matters, Your Honor. They titled theirs Exercising Corporate Governance Rights. The debtor lists various entities as 100 percent owned by the debtor. And one of these entities is the Genever BVI entity, the British Virgin\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 23 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
22 |\n| 1 | Island entity.
And we've asked the debtor's counsel, all |\n| 2 | three of them, meaning Brown Rudnick, the one in between, |\n| 3 | and now, the Zeisler firm, to produce to us the corporate |\n| 4 | governance documents relating to that entity.
To date, |\n| 5 | nothing. |\n| 6 | But that entity, you'll recall, BVI, owns the |\n| 7 | Genever in the U.S., the Chapter 11 debtor.
And as I told |\n| 8 | you, debtor's counsel believes he's taking instructions from |\n| 9 | the debtor, at least until now. |\n| 10 | And our point is we have -- the trustee jumps into |\n| 11 | the corporate governance rights of the debtor.
That's horn |\n| 12 | book law.
But nevertheless we probably will have to file |\n| 13 | something with the Court to seek a confirmation of that, but |\n| 14 | there are many cases that hold that.
And that means that we |\n| 15 | can participate eventually in the Genever USA Chapter 11 |\n| 16 | case.
Obviously, we would never ask you to grant us relief |\n| 17 | with respect to that.
We would go to Judge Garrity. |\n| 18 | And one of the things we mention here is that we |\n| 19 | will ask for a status conference in front of Judge Garrity |\n| 20 | to say we're here, it's not the same landscape anymore.
We |\n| 21 | need to complete our analysis of the Sherry-Netherland and |\n| 22 | this issue of the trust that was -- for the son's company, |\n| 23 | and we need to finalize that.
But the likelihood is that we |\n| 24 | will appear there and say, Judge, this is a different |\n| 25 | landscape. |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 24 of\n\nHo Wan Kwok - July 21, 2022 23 But as I said at the beginning, we're not trying to change the sale. That's been preordained. There's a sale process. We're not going to try to touch that. But he might say so what could you be doing? Well, as I told you, Judge -- former Judge Cyganowski told me that the debtor is still in that apartment. Well, if I control that entity that owns the apartment, I want rental income from whoever I can get rental income for. So if the debtor doesn't want to pay rental income -- by the way that would be thousands of dollars. It's not like \\$5,000 a month. It would be -- you know, I don't want to exaggerate, but it would be a very large amount. If the debtor wants to occupy the property, he needs to pay the piper. The piper is Genever and that's the company we now control. If the -- and if he doesn't want to pay, then somebody else will rent this property for -- subject to approval by the board of the Sherry-Netherland, et cetera, but this is a property that would pay top dollars to rent, because this -- this apartment is not going to be sold tomorrow. These are very expensive apartments. You need to -- you know, I don't how to say that, but the market for that is a very different market and it could take several\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 25 of\n\nHo Wan Kwok - July 21, 2022 24 months before it's sold. And by several months I mean really several months. So I'm not making a prediction as to when it's going to sell, but it would be incredible for this estate not to enjoy the benefit of rental income of a -- through a subsidiary that we control. So I'm not asking you to comment or to rule on that. I'm sure my friends at Zeisler will have different views of that, but I want to tell you that that's coming. And by the way, Genever is an example, but there are other companies as well. And the issue there is we need to get all the documents to understand exactly what's going on. We need to get bank accounts for these entities. We need to understand all the transfers that were made. And that's, you know, that's something that we certainly started with the corporate governance documents. And we have not received anything at this point, but we intend to pursue that. Page 11, number two, is what I just said. We will seek relief from this court to -- for the Court to confirm that. And on top of that, Your Honor, we would like to be appointed under Section 1505. And this is a bizarre section in the sense that Chapter 15 -- what does this have to do with this? We're not in Chapter 15. But that's a\n\n| | Case 22-50073
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25 |\n| 1 | section -- and I'm embarrassed to say I learned that -- I |\n| 2 | relearned that recently -- that doesn't apply only in |\n| 3 | Chapter 15. |\n| 4 | That basically says, and it's quoted on page 11 |\n| 5 | there, \"That a trustee may be authorized by the Court to act |\n| 6 | in a foreign country on behalf of an estate created under |\n| 7 | Section 541.
And an entity authorized to act under this |\n| 8 | section may act in any way permitted by the applicable |\n| 9 | foreign law.\"
So that would mean us going to the BVI to do |\n| 10 | whatever we have to do there to get control of that entity. |\n| 11 | And obviously we're trying to avoid going to court |\n| 12 | if we have to because, you know, there's no money, but it's |\n| 13 | not limited to the BVI. |\n| 14 | There are other -- and that depends on the |\n| 15 | targets, the tips we've gotten -- there are other potential |\n| 16 | countries where we would seek discovery from parties and, |\n| 17 | therefore, we will seek a broad ruling from the Court |\n| 18 | appointing us under 1505 as the foreign representative, but |\n| 19 | for the sole purpose of either getting documents or |\n| 20 | recovering assets.
Again, that's to come.
I just want to |\n| 21 | give you a heads-up on our plans on that. |\n| 22 | At the bottom of 11, Your Honor, we would also |\n| 23 | mention that it is typical in these cases for the Court, |\n| 24 | meaning Your Honor, to enter a paragraph seeking the |\n| 25 | assistance of foreign courts in getting the relief that a |\n\nHo Wan Kwok - July 21, 2022 26 trustee would seek. And you might say, well, why would -- why do I need to do that? First of all, it's kind of a gratuitous, you know, request because it doesn't bind the Court in anyway. But it's -- in foreign courts, it's hugely important to be able to point to a paragraph to say, look, the Court is asking you or asking for your assistance in proceeding as quicky as possible. So you might say why is that necessary? I'll give you an example. BVI, god bless them, they have a summer recess. August, nothing happens. I'd love to have that system here too, but we don't. So the only exception to that is if we can move on an emergency basis. So I'm not asking -- I'm just telling you that if you ever see that, you'll know why we're asking for that -- because that's the only way to get their attention on an emergency basis during the month of August. And, by the way, you know, August is just around the corner. We may not need that for BVI, but in other countries we might need it. So we'll obviously come back to court on that. Page 12, the request for corporate governance. I've already covered that. We've asked for that. This has not been produced. Page 13, item C, identify and if appropriate seek turn over estate assets. This is important. You know, a Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 27 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 28 of\n\n| | 117 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
27 |\n| 1 | Rule 2004 motion, obviously we'll do that.
But Mr. Goldman |\n| 2 | has already obtained that relief so we are -- we're going to |\n| 3 | try to piggyback off of that to avoid duplication of effort |\n| 4 | because he's already done a lot of that work.
So that's |\n| 5 | certainly directionally what we want to do. |\n| 6 | But the next point is the more important point, |\n| 7 | Your Honor, which is that as part of this, we will seek |\n| 8 | attorney/client privilege and work product of firms like |\n| 9 | Brown Rudnick because the courts are pretty clear on that |\n| 10 | that the trustee controls the privilege, especially for the |\n| 11 | period where the debtor was a debtor in possession. |\n| 12 | So you might say why do you want that? |\n| 13 | Well, for example, the prepared schedules of assets and |\n| 14 | liabilities, there may have been some exchanges there that |\n| 15 | would be interesting to us.
And it's not limited to Brown |\n| 16 | Rudnick. |\n| 17 | By the way, I'm not -- I don't want to point |\n| 18 | fingers at Brown Rudnick.
It's not a -- it's just an |\n| 19 | example.
But certainly the firm in Greenwich, we -- you |\n| 20 | know, they represent the debtor. |\n| 21 | By the way, they didn't say we represent the wife |\n| 22 | of the debtor or that company called Greenwich Land Trust. |\n| 23 | They said they represented the debtor.
We want to |\n| 24 | understand what they're working on and what's the work |\n| 25 | product there because we believe that the trustee controls |\n| | |\n\nHo Wan Kwok - July 21, 2022 28 that. I'm sure that my colleagues will have different views on that, but I want to make sure you know that's coming, because I believe that as part of the investigation that could produce results. Now, page 14, still on identifying assets and seeking turnover of assets for the estate. The Lady May. So I'm not going to read everything that's there, but basically, Your Honor, we're quoting from Judge Ostrager's decision in the New York Supreme Court. And they're pretty -- and I don't want to be -- I'm not here to argument this thing because we're still reviewing this and we will review it one more time, but it appears that there are pretty strong findings there as to the daughter, who of course is the sole shareholder of the registered owner of the ship, and the debtor in terms of control and beneficial ownership of the ship. And what we're saying on page 15 is that subject to finalizing our review, we believe that these findings should be found to be binding by this court on the ship, the registered shipowner company, even though that company itself was not a party to that action. But the daughter was the witness. Her lawyer cross-examined witnesses, et cetera, et cetera, was a full participant in that trial. And the New York Appellate Division had sent back\n\n| | Case 22-50073
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29 |\n| 1 | the case to Judge Ostrager asking that he make finding on |\n| 2 | ownership of the ship.
So they had clear, clear, you know, |\n| 3 | notice that the judge was going to do that.
And, in fact, |\n| 4 | he did. |\n| 5 | And at that point, again, subject to further |\n| 6 | review, we believe that there's collateral estoppel even |\n| 7 | though the company that's the registered owner was not a |\n| 8 | party to the action because there privity.
It's the same |\n| 9 | parties. |\n| 10 | And the fact that -- sorry for my friends at |\n| 11 | Zeisler & Zeisler, but they -- now they represent the |\n| 12 | registered owner and Mr. Kwok that, you know, it's almost |\n| 13 | like -- I'm joking -- almost summary judgment on that point |\n| 14 | -- meaning that, yes, they are the same, they're all |\n| 15 | together in this. |\n| 16 | So in terms of collateral estoppel we believe that |\n| 17 | should be binding.
Again, this is for later, but I wanted |\n| 18 | to give you a heads-up because we don't believe they get to |\n| 19 | do a do-over and like a ten-day trial here to put the same |\n| 20 | people on, et cetera, et cetera, for the same issue. |\n| 21 | Page 16, Your Honor, the Sherry-Netherland, I've |\n| 22 | mentioned.
I told you what the game plan is there.
The |\n| 23 | Greenwich homes.
You know, these are recent, you know, 2020 |\n| 24 | purchases by a company owned 100 percent by the wife of the |\n| 25 | debtor.
Two houses.
And of course we want to know the |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 31 of\n\nHo Wan Kwok - July 21, 2022 30 details of where the money came from. And then point five, other assets. I want to be clear that we're not limiting ourselves to these three buckets. I will come back to the Court and update our work product on that later, but I want to be clear the message is not left that it's only the Sherry-Netherland and the yacht. There are -- there are other assets that need to -- and the Greenwich properties -- there are other assets that need to be -- to be investigated. Page 17, Your Honor, the claims review and allowance process. This is the same thing as I said before. Everyone would like to have their claims allowed tomorrow in the dream world, but it would be so counter productive to go through that at this stage in terms of, you know, no money to do that and to what end if we -- unless -- until we bring money to fight over, let's not fight over that, but that's just our view of the world. So the timing of that, Your Honor, I would say that's months away. I don't want to mislead you and say, oh, we'll get that done next month. No. We're going to try not to focus on that in the coming months because the sole focus is on bringing assets into the estate. The sole, short-term focus. And then the last page is really a Chapter 11 plan. The same thing, Your Honor, we're -- I don't want to\n\n| | Case 22-50073
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31 |\n| 1 | -- you know, I've always been told by my boss when I was a |\n| 2 | young lawyer, you know, under promise and over deliver.
I |\n| 3 | don't want to mislead you. |\n| 4 | This will take -- unless there's a global |\n| 5 | settlement, which we would welcome, this is going to take |\n| 6 | months.
I don't want to mislead the Court on that.
I wish |\n| 7 | that were not the case, but I have a sense of how things are |\n| 8 | going to go and I think that's the way it's going to go |\n| 9 | unfortunately. |\n| 10 | So that completes our presentation, Your Honor. |\n| 11 | I'm happy to answer any questions you may have. |\n| 12 | THE COURT:
Okay.
Well, at the moment, I do have |\n| 13 | a question or two, but I do appreciate very much the |\n| 14 | presentation. |\n| 15 | One of the reasons that in the memorandum of |\n| 16 | decision that there was a status conference to be scheduled |\n| 17 | was to have the trustee do exactly what you've done, which |\n| 18 | is to come in and tell the Court where the trustee believes |\n| 19 | things stand, what issues need to be addressed and what will |\n| 20 | be coming, and what the ultimate goal may be. |\n| 21 | And even if it's not reachable, I understand that, |\n| 22 | you know, we're in Chapter 11, so obviously the ultimate |\n| 23 | goal is some form of a plan if we get to that point.
So I |\n| 24 | appreciate it. |\n| 25 | Given what you've said it seems to me from your |\n| | |\n\nHo Wan Kwok - July 21, 2022 32 perspective one of the most important things you'd like the Court to address is to get an order issued setting a bar date for claims. And that was on hold somewhat during the -- before your appointment because of issues regarding the possible dismissal of the case, as you indicated in your presentation, and because there was also a possibility of conversion of the case. There were other issues that the Court had to consider, and so the bar date issue -- there were two issues with regard to it. There was -- there was an issue that the Court was concerned that it was too short at that point in time because the case was developing. But now the case is five months old. There's a Chapter 11 trustee appointed because of the information and pleadings submitted by various parties in the case and the evidence presented during the case. And the record supported that. So I agree with you that the Court will turn in short order to that setting of a bar date. And my thought on that is the service of that order, who gets served? You know, we can do publication and we might do publication. That might be something that you're interested in. But one of the things that I am concerned about is Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 33 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 34 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
33 |\n| 1 | the schedules and statements of affairs that were filed had |\n| 2 | many qualifications associated with them.
I don't know if |\n| 3 | the -- and I'm not sure you know either, so I'm not |\n| 4 | suggesting that you would -- if the list of people who would |\n| 5 | actually get served with the notice of bar date would be |\n| 6 | sufficient in this matter? |\n| 7 | So I think what we may do, and I'd like to think |\n| 8 | about it, is consider how that order would be served,
and |\n| 9 | whether or not publication is appropriate in addition to |\n| 10 | service and how publication would be accomplished, where |\n| 11 | publication would actually be made? |\n| 12 | And I'd ask you to think about that.
I don't know |\n| 13 | the answer to those questions.
As I sit here right now, I'm |\n| 14 | raising those issues in order for all of us to think about |\n| 15 | the fulsomeness of the notice that would be provided on a |\n| 16 | bar date for filing claims. |\n| 17 | MR. DESPINS:
Your Honor, you raise a very good |\n| 18 | point.
I would like to be able to revert back to the Court |\n| 19 | on that, especially the publication aspect and where, how. |\n| 20 | So I said that it would be important to (indiscernible) |\n| 21 | order, but it's not a matter of days.
You know, but we will |\n| 22 | revert back to the Court on that point. |\n| 23 | THE COURT:
I appreciate that.
And I will think |\n| 24 | about it as well.
You know, there have been cases over the |\n| 25 | years and cases recently issued in different circuits about |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 35 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
34 |\n| 1 | actual notice versus constructive notice and -- on a bar |\n| 2 | date and things of that nature, so I want to make sure that |\n| 3 | we are all thinking -- we're doing the best we can under the |\n| 4 | circumstances as presented so that people have appropriate |\n| 5 | notice with regard to the filing of a proof of claim. |\n| 6 | So with regard to the rest of the information that |\n| 7 | you've submitted, again, I appreciate it very much.
This is |\n| 8 | what the Court was looking for with regard to the -- I |\n| 9 | haven't looked yet, but I see in your report or your |\n| 10 | presentation the adversary proceeding issues. |\n| 11 | So have you filed a motion to stay in every |\n| 12 | adversary proceeding?
There was just an adversary |\n| 13 | proceeding filed yesterday. |\n| 14 | MR. DESPINS:
Yesterday. |\n| 15 | THE COURT:
And the day before. |\n| 16 | MR. DESPINS:
So we filed in three, but we will |\n| 17 | file a supplemental -- |\n| 18 | THE COURT:
Okay. |\n| 19 | MR. DESPINS:
-- motion to stay in the others. |\n| 20 | THE COURT:
And I'll have to look at those |\n| 21 | obviously.
And the way that our motion practice works in |\n| 22 | adversary proceedings under our local rules is that parties |\n| 23 | have 21 days to -- there's a responsive -- there's a |\n| 24 | responsive date of 21 days to object or not object, you |\n| 25 | know, to do whatever they feel is appropriate with regard to |\n| | |\n\nHo Wan Kwok - July 21, 2022 35 a motion and then the Court would determine whether or not there would need to be a hearing. Now, I believe in some of the earlier adversary proceedings that 21-day period might run into a time frame that might present a problem. So I will take a look at those adversary proceedings. And if there's some issue as to waiting for that response period to pass, I could I believe issue some kind of order either extending the response period or extending the periods of time that are already in existence subject to a ruling on the motion to stay the proceeding. Or, of course, if you have the consent of the parties on the staying of the adversary proceeding, then I would not understand -- or I would be surprised as to why I would not grant a stay of those adversary proceedings. MR. DESPINS: Thank you. And to be -- to be fair, we just started with the stay process. But for the life of me, I don't know why the debtor would want to forward with that or why the people seeking the non-dischargeability want a ruling on that today or spend a lot of money on that today. But it's their prerogative, so we will seek the consent. THE COURT: Right. But if you are able -- if the parties in each of the adversary proceedings consent to the stay, then the stay will be granted -- Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 36 of\n\nHo Wan Kwok - July 21, 2022 36 MR. DESPINS: Yeah. THE COURT: -- subject to, you know, further order of the Court and the progress of the case. I agree with you that it is not the goal of the Court to have the party -- all parties, no matter what their issues may be, to spend money needlessly. No one wants that. But we need -- but we need to just make sure that the process is properly followed and that the Federal Rules of Civil Procedure are properly followed. But if you obtain the agreement of the parties in those adversary proceedings to stay the adversary proceedings, then they will be stayed. Okay? MR. DESPINS: Thank you, Your Honor. THE COURT: All right. I'm not sure that there's anything else I have a question about. I understand that there are a lot of things that you're reviewing and different steps that you may be taking in short order and the Court will attempt to address those as quickly as they come before the Court. I'm just looking to make sure that there's nothing else that I have any questions about. I'm just looking at your presentation again. (Pause) THE COURT: I think those were the two issues that stuck out to me, were the bar date order and the stay -- the Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 37 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 38 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
37 |\n| 1 | stay motions in the adversary proceedings.
Because I do |\n| 2 | agree with you that many of the other things that you've |\n| 3 | discussed are developing and that you're addressing them in |\n| 4 | due course, and that you will be seeking relief from the |\n| 5 | Court when it -- you believe it's necessary to do so and |\n| 6 | appropriate to do so. |\n| 7 | So I don't have any other questions at the moment, |\n| 8 | sir.
Thank you very much. |\n| 9 | MR. DESPINS:
Thank you.
Thank you, Your Honor. |\n| 10 | MR. HENZY:
Your Honor, may I be heard? |\n| 11 | THE COURT:
Mr. Henzy, you may be heard, but we |\n| 12 | still have some issues that I -- we need to resolve from the |\n| 13 | Court's perspective and the United States Trustee's Office's |\n| 14 | perspective on the issue of who represents the debtor. |\n| 15 | And right now, Brown Rudnick represents the |\n| 16 | debtor.
Brown Rudnick didn't state any reason in its motion |\n| 17 | to withdraw as to why it's withdrawing its appearance. |\n| 18 | And Brown Rudnick had to go through the process |\n| 19 | that every debtor's counsel has to go through which is to |\n| 20 | file an application to be employed, to submit a |\n| 21 | disinterested affidavit, to comply with Bankruptcy Section |\n| 22 | 327(a) and Rule 2014, and our local Rule 2014.
And there's |\n| 23 | nothing in the order appointing them that says that they can |\n| 24 | file a motion to withdraw as debtor's counsel. |\n| 25 | So while I understand you want to be heard, you |\n| | |\n\nHo Wan Kwok - July 21, 2022 38 are not at this point debtor's counsel. And -- MR. HENZY: No. I am. I absolutely am, Your Honor. THE COURT: Well, you're not in the -- how are you debtor's counsel under the bankruptcy code -- MR. HENZY: The debtor -- the debtor -- THE COURT: -- Mr. Henzy? MR. HENZY: The debtor's now out of possession and does not need to file an application under 327 to -- THE COURT: Where's the case law that says that, Mr. Henzy? THE COURT: It's, Your Honor, 327 itself provides -- 327(a) provides -- THE COURT: So you can be counsel even if you're disinterested and you have a conflict just because the debtor's no longer in possession? MR. HENZY: Absolutely. THE COURT: I'd like to see a case law that says that. MR. HENZY: I'm not going to be able to have case law for you, Your Honor, because 327 -- I think 327(a) makes us the trustee, and in parens, debtor in possession, because debtor in possession has powers of a trustee -- has to -- has to retain counsel pursuant to court order. But there is no requirement -- and, Your Honor, in Chapter 7 cases, Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 39 of\n\nHo Wan Kwok - July 21, 2022 39 debtors are not retained -- THE COURT: We're not in a Chapter 7 case, Mr. Henzy. MR. HENZY: I understand. But this is -- this is now a debtor out of possession. I don't think -- I mean, I don't -- I hate to -- I want to be careful, Your Honor, and with all due respect, you're asking me to give you cases that say 327(a) says what it says, but I'm not aware of any cases -- THE COURT: No. I'm asking you to give me a case where there's a Chapter 11 trustee appointed and debtor's counsel, who was debtor's counsel, can just withdraw and someone else can step in without having to meet any of the requirements of the bankruptcy code -- MR. HENZY: The -- THE COURT: -- let me just finish, please -- of the bankruptcy code and the rules and have a conflict of interest where they represent an entity that's owned by the debtor's daughter who's clearly an insider under the bankruptcy code. MR. HENZY: Your Honor, there are cases -- I don't believe that there are cases that I'm aware of which -- let me put it this way. I'm not aware of any cases that say that a debtor out of possession does not need to file a retention application with respect to its counsel. Because, again, I Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 40 of\n\nHo Wan Kwok - July 21, 2022 40 think the plain language of 327(a), and I don't know if any counsel here would say the contrary, only provides a debtor in possession has to do that. I do know that there are cases, and we can get those to you, dealing with whether a counsel for a debtor post appointment of a Chapter 11 trustee may be paid by the bankruptcy estate. And generally the answer to that question is no. And the basis for that is that debtor's -- counsel for debtor out of possession is not retained pursuant to 327(a) and is not covered by 330 and 331. There are cases where courts haves said that counsel for a debtor out of possession may be paid, but really on a substantial contribution type of basis as opposed to their counsel retained under 327(a) and subject to the requirements of 330 and 331. And I can get you those cases, Your Honor. But I -- that's a little bit different. Those cases are saying that counsel for a debtor out of possession is not 327 counsel and not subject to 333, 330 and 331 in the context of saying usually you can't get paid by the bankruptcy estate. So I will get you those cases. THE COURT: Okay. Is that the Office of the United States Trustee's position? There's no conflict here? Zeisler & Zeisler can represent the debtor because the debtor's no longer a debtor in possession? Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 41 of\n\nHo Wan Kwok - July 21, 2022 41 MS. CLAIBORN: Your Honor, the U.S. Trustee is still evaluating that issue. I do think there's one issue that I want to raise with the Court that I don't think Attorney Henzy would dispute which is that as counsel to a debtor they have an obligation to disclose the compensation agreements or otherwise that they have with the debtor. THE COURT: That's absolutely going to happen, so you don't have to make that argument. MR. HENZY: Yeah. I don't -- I don't -- THE COURT: Mr. Henzy, if you're -- if you're accurate, if you're correct, then whomever pays you could take whatever money that might be available to creditors of the estate and just continue to pay you. MR. HENZY: That's not true. I think that's not correct. THE COURT: How is that not true? MR. HENZY: So I can't -- I a hundred percent agree we need to file our 329 2016(b) statement. My understanding is I have 14 days from the time I filed my appearance to do that and we will do that. I can't -- again, back to the cases that I'm mentioning, I can't get paid from estate assets. THE COURT: Where in 329 does it say you file an application to be employed? Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 42 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 43 of\n\n| | 117 | | |\n|----|--------------------------------------------------------------|--|--|\n| | Ho Wan Kwok - July 21, 2022
42 | | |\n| 1 | MR. HENZY:
Oh, it doesn't, Your Honor. | | |\n| 2 | THE COURT:
Right. | | |\n| 3 | MR. HENZY:
No.
I'm not -- I'm sorry. | | |\n| 4 | THE COURT:
So how is 329 applicable? | | |\n| 5 | MR. HENZY:
Oh, I -- under 329, I believe what | | |\n| 6 | Attorney Claiborn was referring to, I still have to file the | | |\n| 7 | statement required by 329 and Rule 2016(b). | | |\n| 8 | THE COURT:
So if you're a debtor -- let's carry | | |\n| 9 | your thought process out.
If you're no longer a debtor-in | | |\n| 10 | possession and you don't have to be subject to any of the | | |\n| 11 | Court, any of the oversight of the Court that's in the | | |\n| 12 | bankruptcy code or the rules, then why do you have standing | | |\n| 13 | to say anything? | | |\n| 14 | MR. HENZY:
Because I represent the debtor out of | | |\n| 15 | possession.
The debtor out of possession -- | | |\n| 16 | THE COURT:
Okay.
You represent the debtor out of | | |\n| 17 | possession.
In your Chapter 7 cases that you're talking | | |\n| 18 | about, the Chapter 7 debtor has no standing unless and until | | |\n| 19 | it's proven that there be some surplus for the Chapter 7 | | |\n| 20 | debtor. | | |\n| 21 | And at this point, we all know -- everybody knows | | |\n| 22 | -- Mr. Despins knows, he took on this assignment knowing | | |\n| 23 | that there's no money in this estate, so how do you have | | |\n| 24 | standing to argue anything.
If you take your argument to | | |\n| 25 | its fullest extent, you're not subject to disinterestedness, | | |\n| | | | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 44 of\n\nHo Wan Kwok - July 21, 2022 43 you're not subject to conflicts, all you have to do is disclose where your money -- the money you pay -- get came from, then why do you get to say anything? MR. HENZY: I think on certain issues, Your Honor, I don't disagree with you. The debtor may have no standing. And you may tell me to the extent I want to be heard on such issues that you're not going to listen to me. And I would understand that. I think that a debtor out of possession does have standing with respect to certain issues. THE COURT: Which ones? MR. HENZY: Mr. Despins addressed the 523 actions that are pending and his motion for stay with respect to those actions and made certain representations to the Court about the debtor's position on those. Certainly Mr. Kwok has standing in the -- THE COURT: I don't think he made any representations -- MR. HENZY: Oh, he -- THE COURT: -- about the debtor's positions. He said that -- MR. HENZY: I think he did. He did. THE COURT: This is a -- this was a -- this is a -- I didn't say this was evidence, number one. I said it was a demonstrative pleading that I would allow to be admitted on -- in the record as Exhibit 1. That's all. I\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 45 of\n\nHo Wan Kwok - July 21, 2022 44 didn't say I'm going to make any findings or rulings or anything based upon what Mr. Despins provided to us today. MR. HENZY: Understood, Your Honor. I was answering your question. I don't think that you would say that the debtor doesn't have standing in the 523 actions. THE COURT: Okay. But if the actions are stayed, let's -- let me just -- presume the actions are stayed, then there's nothing for the debtor to worry about until they're not stayed, correct? MR. HENZY: I don't agree with that necessarily. But I -- THE COURT: Well, there's no pleadings requirement or anything that the debtor would need to undertake while the actions are stayed, correct? MR. HENZY: If the actions get stayed, that may be correct. I was trying to answer your question, Your Honor, on standing. THE COURT: Okay. MR. HENZY: There may be matters that the debtor does not have standing to be heard on. I don't disagree with you. And there -- I think there will be matters that the debtor does have standing to be heard on. And the example -- because it was in Mr. Despins' presentation -- was talking about the 523 actions. If we're talking about\n\nHo Wan Kwok - July 21, 2022 45 the 523 actions, I don't think that Your Honor would say that the debtor does not have standing. THE COURT: Well, we're not talking about the 523 actions right now, right? You didn't rise to talk to me about the 523 actions. MR. HENZY: Actually, I did. THE COURT: Oh, you did. Okay. MR. HENZY: I did. THE COURT: Then go right ahead. MR. HENZY: Okay. I rose to make a very few points. THE COURT: Okay. Go right ahead. MR. HENZY: Okay. One point, I want to be clear because I have not been involved in this case. I have reviewed some of the record, but my sense is that people are or parties want to make certain characterizations about Mr. Kwok and about his approach to things. On the 523 actions, what the trustee's asked us, the trustee's position to us initially was that upon his appointment he was substituted into the 523 actions. That's just -- I believe that's just incorrect, Your Honor. I don't think that the trustee becomes a defendant -- the defendant in the 523 action. THE COURT: Okay. MR. HENZY: So our response to counsel for the Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 46 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 47 of\n\n| | 117 |\n|----|------------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
46 |\n| 1 | trustee was we think you're -- because we were being asked |\n| 2 | what's -- we want the -- we want a stay, what's your |\n| 3 | position?
And our response -- because we're now the |\n| 4 | defendant in these actions -- and our response was no, |\n| 5 | you're not.
In some sense, we don't -- we don't know what |\n| 6 | you're talking about.
Okay. |\n| 7 | So it's not that -- Mr. Kwok is not refusing to |\n| 8 | answer sort of a basic question like that or trying to be |\n| 9 | difficult just for difficulties' sake.
I think that point |\n| 10 | is important to make.
Again, I think the parties are -- |\n| 11 | have or are going to characterize Mr. Kwok's approach in |\n| 12 | certain ways that I think are not fair. |\n| 13 | Again, with respect to the 523 actions, we were |\n| 14 | asked will you agree to a stay are actions that creditors |\n| 15 | have filed against Mr. Kwok. |\n| 16 | And to your point, Your Honor, if those actions |\n| 17 | are stayed, you said Mr. Kwok would have nothing to worry |\n| 18 | about.
Okay.
I don't know that I necessarily want to agree |\n| 19 | with the trustee that these actions are going to be stayed |\n| 20 | and be criticized by the people who filed them. |\n| 21 | Again, my point here is not to litigate or argue |\n| 22 | whether a stay should enter, or the basis for those 523 |\n| 23 | actions, or what rights the trustee may or may not have in |\n| 24 | those actions.
I just wanted to respond to Mr. Despins' |\n| 25 | presentation on the 523 actions because to the extent |\n| | |\n\n| | Case 22-50073
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47 |\n| 1 | possible I want to avoid an unfair characterization of how |\n| 2 | Mr. Kwok is approaching things. |\n| 3 | We do -- we are counsel for HK International, |\n| 4 | okay, which is the title owner of the Lady May.
And |\n| 5 | notwithstanding that Mr. Despins said he was not going to |\n| 6 | argue, he argued.
I just want to be clear. |\n| 7 | And Your Honor made the point, there's been no |\n| 8 | evidence taken today that the document, that was handed up |\n| 9 | is not in evidence, Mr. Despins' presentation is not |\n| 10 | evidence.
So that's all fine. |\n| 11 | I do want to make the point that we absolutely, HK |\n| 12 | International, absolutely disputes that anything that |\n| 13 | happened in New York is binding in this court. |\n| 14 | You know, the document handed up takes snippets |\n| 15 | out of lengthy proceedings and lengthy rulings by the judge |\n| 16 | there.
The ownership of the Lady May is going to be |\n| 17 | litigated.
So I just want that to be -- |\n| 18 | MR. HENZY:
How are you going to represent both HK |\n| 19 | International and Mr. Kwok in that adversary proceeding that |\n| 20 | HK International filed against Mr. Kwok and the bankruptcy |\n| 21 | estate as to the title to the Lady May?
Isn't that an |\n| 22 | absolute and obvious conflict of interest? |\n| 23 | MR. HENZY:
Here it is not, Your Honor. |\n| 24 | THE COURT:
How is that? |\n| 25 | MR. HENZY:
And one thing I absolutely agree with |\n| | |\n\nHo Wan Kwok - July 21, 2022 48 Mr. Despins on is that upon his appointment he automatically became the defendant in that action and Mr. Kwok is no longer a defendant in that action. THE COURT: But you still represented -- it doesn't matter. You represent HK International and now you represent Mr. Kwok. How is -- whether you're no longer involved in that adversary proceeding doesn't matter. MR. HENZY: No. He's no longer involved. THE COURT: It doesn't matter. MR. HENZY: It does matter. THE COURT: No. It actually doesn't. MR. HENZY: Under the rules of -- THE COURT: It's an actual conflict of interest. You are -- you cannot represent -- you took on the representation of Mr. Kwok when there was an adversary proceeding pending against Mr. Kwok that your firm filed on behalf of HK International. MR. HENZY: We took on the representation of Mr. Kwok after Mr. Despins -- THE COURT: But, see, you want to have it both ways. You want to say, oh, in that adversary proceeding, Mr. Despins is automatically the defendant, but in the 523's, he's not. MR. HENZY: Well, I -- THE COURT: That's what you're arguing, right? Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 49 of\n\nHo Wan Kwok - July 21, 2022 49 MR. HENZY: That is what I'm arguing. And I think that that is black letter law, Your Honor. THE COURT: Where? Really? MR. HENZY: I don't -- THE COURT: I'd like you to show me that black letter law. MR. HENZY: I don't think Mr. Despins is going to tell you that he is a defendant -- THE COURT: I'm not asking Mr. Despins. I'm asking you. MR. HENZY: Your Honor, he is not the defendant in the 523 actions. I think that that is black letter law. THE COURT: Okay. I'd love to see that black letter law, please. MR. HENZY: I don't know if I'm going to find cases that say that because I don't know that -- I don't know that anybody would take the position that a trustee becomes -- is the defendant in a 523 action, Your Honor. I don't -- that doesn't even make any sense to me. Again, with all due respect, Your Honor, that -- I don't know how a trustee could ever be a defendant in a 523 action. THE COURT: Okay. I understand what you said. MR. HENZY: Okay. THE COURT: Go ahead. MR. HENZY: Okay. So I -- Mr. Kwok is no longer Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 50 of\n\nHo Wan Kwok - July 21, 2022 50 the defendant in the Lady May adversary proceeding. I think Mr. Despins' position is that he now is the party that -- THE COURT: All right. Well, let's move on from the 523. There's a stipulation regarding the Lady May in which the debtor and HK are parties to. MR. HENZY: Mm-hmm. THE COURT: Okay. Are you -- so Mr. -- you're saying you're not representing the debtor anymore in connection with that stipulation, that it's Mr. Despins? MR. HENZY: I think the answer is yes and I think that's Mr. Despins' position is that. THE COURT: Okay. So you're saying your conflict of interest is non-existent because Mr. Despins was appointed as a Chapter 11 trustee? MR. HENZY: Yes. THE COURT: And you can, therefore -- okay, that's your argument? MR. HENZY: That's my argument. THE COURT: Okay. MR. HENZY: Under Rule 1.7 in the Rules of Professional Responsibility that -- that is my argument. And I -- THE COURT: I'm not looking at 1.7 in the Rules of Professional Responsibility. I'm looking at the bankruptcy Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 51 of\n\nHo Wan Kwok - July 21, 2022 51 code and the bankruptcy rules. MR. HENZY: I'm not aware of anything in the bankruptcy code and the bankruptcy rules, Your Honor, that would -- that would govern this at this point. I think it is -- THE COURT: So the only place you have standing right now is in a 523 cause of action, isn't that correct? MR. HENZY: I don't -- I'm not prepared, Your Honor, to think about every issue that might come up in this case and tell you the debtor does or doesn't have standing. THE COURT: Well, you've argued that Mr. Despins shouldn't be the Chapter 11 trustee. MR. HENZY: And I think -- I think the debtor does have standing -- THE COURT: Where do you have standing to argue that? MR. HENZY: I don't know how a debtor would not have standing to take a position that a trustee should not be the trustee or that a trustee should be removed. THE COURT: I'd like to see some case law on that because I don't think you're -- I understand your argument, but I don't see support for your argument. You're not persuading me that you have a right -- that the debtor has a right. You had a right to object to the appointment of a Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 52 of\n\nHo Wan Kwok - July 21, 2022 52 Chapter 11 trustee, which Brown Rudnick did. They objected to it. They actually asked that the case be dismissed. I considered all of their arguments. I considered all of the arguments of all the creditors on conversion, appointment of a Chapter 11 trustee, whatever the issue may be. The Court decided, rightfully or wrongfully, to appoint a Chapter 11 trustee. No one appealed that order. Brown Rudnick even made a point of that that they didn't appeal that order. You're now attacking that order after the appeal period has run. And you're saying that you can do that because you don't have to be subject to -- and when I say you, I mean the law firm now supposedly representing the debtor. Which, by the way, Brown Rudnick's motion hasn't been granted, so just understand that, that you don't have to be -- you don't have to submit yourself to the same standards that Brown Rudnick did because the Chapter 11 trustee's been appointed. And the Chapter 11 trustee steps into your shoes in all these other situations, including in the HK adversary versus Mr. Kwok and PAX, but that you have standing to say he can't be the trustee. That's your argument? MR. HENZY: I think, Your Honor -- I think you're Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 53 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 54 of\n\nHo Wan Kwok - July 21, 2022 53 conflating two issues. THE COURT: Okay. Well, tell me how I'm conflating them, please. MR. HENZY: So I don't think the standing issue is about do I have standing or -- THE COURT: No. No. On behalf of Mr. Kwok. MR. HENZY: Okay. THE COURT: I'm not -- MR. HENZY: So does -- THE COURT: But I -- MR. HENZY: -- the -- THE COURT: I'm not sure you're Mr. Kwok's lawyer yet. I'm not sure yet. MR. HENZY: I'm sure I'm Mr. Kwok's lawyer. THE COURT: I know you are. MR. HENZY: I understand you're -- I understand you're not. THE COURT: I know you are, but I'm not sure you are for purposes of this case. You might be for other purposes. MR. HENZY: I believe, Your Honor, that a debtor has standing to challenge the appointment of a trustee. And let me say I understand that the appeal period on the order -- I guess I'll call it granting the trustee motion, okay -- that's passed and no one appealed and Mr.\n\nHo Wan Kwok - July 21, 2022 54 Kwok is not challenging that order in any way, shape or form. There's a separate order that Your Honor entered -- THE COURT: I agree with you. MR. HENZY: Okay. THE COURT: I agree. MR. HENZY: -- approving Mr. Despins' appointment by the U.S. Trustee. And the 60(b) motion was filed. I believe it was within seven days after. THE COURT: No. I agree. MR. HENZY: Okay. THE COURT: I mean, if I -- if I accept your argument, I'm not suggesting your 60(b) motion was untimely. MR. HENZY: Okay. THE COURT: Okay? MR. HENZY: I believe that a debtor has standing to challenge the appointment of a trustee or to seek to remove a trustee. I mean, among other things, there is case law that says that a trustee may not have any bias or prejudice towards any party including a debtor. And if that is correct -- and, again, I think the case law is clear on that -- then I don't know how a debtor couldn't have standing to tell a court I think this trustee has a bias or prejudice Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 55 of\n\nHo Wan Kwok - July 21, 2022 55 against me. And that's a basis to remove a trustee. The U.S. Trustee's handbook on panel trustees -- and I understand Mr. Despins is not a panel trustee -- states that trustees may have no bias or prejudice towards anybody involved in the case. So if there's a -- as debtor, debtor has a right to have a trustee who is not biased or prejudiced against debtor. Where there is a right, there is a remedy. I don't know how a debtor could not have standing to raise that issue with the Court. So I -- THE COURT: Did you -- did you -- why didn't you file a removal of the trustee under section 324 of the code then? MR. HENZY: Your Honor, our judgment was that this was an easier way, a quicker way. I don't think there's anything wrong with -- THE COURT: Well, what happens if I deny it? If I deny your motion, then all you can do is file a notice of appeal at that point. MR. HENZY: Yes. That's right. I think the basis -- the basis for the 60(b) motion, Your Honor, is the same basis that there would be for a 324 motion. If you -- if you said I'm going to deny this -- THE COURT: I'm not sure that's true actually. I Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 56 of\n\n| | Case 22-50073
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56 |\n| 1 | think the standards under those sections are different. |\n| 2 | MR. HENZY:
Actually, I agree with you.
So I |\n| 3 | misspoke. |\n| 4 | And, look -- look, the reason we filed the 60(b) |\n| 5 | motion is because we think that there is information that |\n| 6 | should have been put in front of the Court that was not put |\n| 7 | in front of the Court.
And -- |\n| 8 | THE COURT:
Okay.
I understand that.
And we're |\n| 9 | not having a hearing on ultimately that today.
Okay? |\n| 10 | MR. HENZY:
We're not. |\n| 11 | THE COURT:
So you rose to tell me that you |\n| 12 | believe that the debtor -- you are debtor's counsel |\n| 13 | regardless of the actual conflict of interest that exists -- |\n| 14 | MR. HENZY:
I didn't -- I didn't rise to tell you |\n| 15 | that because I wasn't questioning that. |\n| 16 | THE COURT:
Okay.
I'm sorry. |\n| 17 | MR. HENZY:
But you told me that I might not be. |\n| 18 | THE COURT:
I apologize. |\n| 19 | MR. HENZY:
Yeah. |\n| 20 | THE COURT:
You rose to tell me what then?
That |\n| 21 | you believe that Mr. Despins made arguments that |\n| 22 | characterize Mr. Kwok that you think are unfair? |\n| 23 | MR. HENZY:
That's right. |\n| 24 | THE COURT:
Okay.
And then -- and that your |\n| 25 | client has standing in the -- because I had asked Mr. |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 58 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
57 |\n| 1 | Despins questions about the adversary proceedings and the |\n| 2 | stay issue, that your client has standing in the 523 |\n| 3 | actions, and doesn't -- and you -- and your assertion is |\n| 4 | that Mr. Despins does not automatically become the defendant |\n| 5 | in the 523 actions, but does in the action brought by HK |\n| 6 | International? |\n| 7 | MR. HENZY:
Absolutely. |\n| 8 | THE COURT:
Okay. |\n| 9 | MR. HENZY:
Yeah. |\n| 10 | THE COURT:
And then what else did you want to |\n| 11 | tell me? |\n| 12 | MR. HENZY:
And on behalf of HK International, I |\n| 13 | wanted to tell you, because I think Mr. Despins did make |\n| 14 | argument that, just for the record, that HK International |\n| 15 | agrees with -- sorry -- disagrees with his argument.
That's |\n| 16 | all. |\n| 17 | THE COURT:
Okay. |\n| 18 | MR. HENZY:
Yeah. |\n| 19 | THE COURT:
All right.
Is there anything further |\n| 20 | that you wanted to tell me? |\n| 21 | MR. HENZY:
Not right now, Your Honor. |\n| 22 | THE COURT:
Okay.
Thank you. |\n| 23 | MR. HENZY:
Thank you, Your Honor. |\n| 24 | THE COURT:
Mr. Kindseth? |\n| 25 | MR. KINDSETH:
Your Honor, on behalf of HK |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 59 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
58 |\n| 1 | International, I would just like to just clarify some -- |\n| 2 | with respect to the inspection of the Lady May, I just would |\n| 3 | like to make sure there's no misunderstanding. |\n| 4 | The trustee used the term that the yacht was |\n| 5 | damaged and I think that left a lot open.
And I think it's |\n| 6 | appropriate for Your Honor to hear with respect to the |\n| 7 | particular issues that the yacht was not damaged in the |\n| 8 | crossing.
And we permitted the inspection on a very short |\n| 9 | order. |\n| 10 | Pacific Alliance had three inspectors there.
The |\n| 11 | trustee had one inspector there.
They were allowed |\n| 12 | unfettered access to the entire ship.
Our chief engineer |\n| 13 | and the captain were available.
The chief engineer was with |\n| 14 | all the inspectors continuously answering their questions. |\n| 15 | Additionally, they were permitted unfettered |\n| 16 | access to the books and records of the yacht.
And they went |\n| 17 | through the records and obtained all the information they |\n| 18 | sought. |\n| 19 | And to my knowledge, being present and witnessing |\n| 20 | what transpired, the only known issues with respect to the |\n| 21 | Lady May are first the sea valves, which we've been |\n| 22 | apprising the Court of for quite some time.
We had an |\n| 23 | estimate to do the work in France, but time did not permit |\n| 24 | it.
So we know there's some rusted bolts on some sea valves |\n| 25 | that need to be replaced and we fully intend to reserve for |\n| | |\n\nHo Wan Kwok - July 21, 2022 59 that. Unfortunately, one of the fuel pumps broke outside New York. We disclosed that before the inspection. And we're getting quotes for that and we intend to reserve for that. And, additionally, the boat being damaged was that some paint came off the hull during the crossing. And we're fully intending to have that inspected and an estimate received for the cost of that. So those are the three items. And, again, I was personally there. The inspectors discussed, the chief engineer discussed, there were no other issues. That is the extent of the, quote, \"damage\" that was referred to by the trustee. And in accordance with the stipulation, we're going to come to -- with an estimate. We'll present the estimates to Your Honor and we'll ask Your Honor to order that the -- those amounts be reserved. Thank you, Your Honor. THE COURT: Okay. Thank you. With regard to HK's -- the books and records of HK as a whole, I -- apparently -- I shouldn't say apparently -- none of what's happened today is evidence before the Court obviously. We're hearing different reports, which is what the Court wanted to hear. But HK International is going to Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 60 of\n\n| | 117 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
60 |\n| 1 | be subject to some requirement to turn over those records to |\n| 2 | the trustee. |\n| 3 | MR. SKALKA:
Yes.
My apologies, Your Honor.
And |\n| 4 | I'm sure, you know, Attorney Henzy meant to address this. |\n| 5 | With respect to the corporate books and records |\n| 6 | and so forth, we received the request from the trustee.
We |\n| 7 | fully understand our obligations and the debtor understands |\n| 8 | the debtor's obligations post trustee appointment while the |\n| 9 | debtor is out of possession under the code and the |\n| 10 | bankruptcy rules to cooperate with the trustee.
And we're |\n| 11 | in the process of assembling information and records. |\n| 12 | And HK International, although not a debtor |\n| 13 | entity, it's owed -- it's owned by the daughter. |\n| 14 | As counsel, I understand that the records will |\n| 15 | need to be produced and we fully intend to cooperate with |\n| 16 | the trustee in that process. |\n| 17 | THE COURT:
Okay.
Thank you. |\n| 18 | Now, with regard to the status conference, the |\n| 19 | other matter -- two other matters -- we turn first to Brown |\n| 20 | Rudnick on the motion to withdraw as attorney. |\n| 21 | So, counsel, I'm not sure which of the two of you |\n| 22 | would like to be heard, but there is no -- unless I missed |\n| 23 | something, which is very possible --- I don't see any reason |\n| 24 | set forth in the motion to be -- to withdraw as debtor's |\n| 25 | counsel in the case. |\n\nFiore Reporting and Transcription Service, Inc.\n\n## Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 61 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 62 of\n\nHo Wan Kwok - July 21, 2022 61 So I'd ask you why -- why is it that you believe that you are entitled -- your firm is entitled -- and all the individuals who filed appearances in the case entitled to withdraw as debtor's counsel at this point? MR. KLETTER: Sure. And just to clarify, Mr. Romney is with the Zeisler firm. Again, this is Dylan Kletter. THE COURT: Oh, yes. I'm sorry, Mr. Romney. MR. KLETTER: That's okay. This is Dylan Kletter from Brown Rudnick. You're right. It does not go into detail for why, but I believe the Zeisler firm has accurately described now that he's out of possession it's his prerogative to terminate his counsel and that is what he did. And he has replaced it with substitute counsel of the Zeisler firm, a Mr. Mitchell. And then it is our position that the Zeisler firm, as you can tell, is obviously working the file and we have an unobjected to motion to withdraw as counsel. THE COURT: Well, I don't know that you have an unobjected to motion to withdraw as counsel because it hasn't been set for a hearing and no one's been required to file any response to your motion. And even if you have an unobjected to motion to withdraw as counsel, that doesn't mean that the Court\n\nHo Wan Kwok - July 21, 2022 62 doesn't have an independent duty to determine whether or not that motion should be granted or denied or granted with conditions. Your firm subjected itself to the Court and to the processes of the bankruptcy case. Your firm received a million dollar retainer from some source that I'm not -- I don't recall -- maybe there is evidence in the record about the source, I don't recall -- and I'm sorry at the moment that I don't -- but you also, you know, would need to file a fee application and you'd have to have those fees approved and you'd have to establish that the retainer has not been drawn down on and all of those kinds of things. So while maybe it ultimately will be a motion -- and unopposed motion to withdraw as attorney, it is not at that -- this point in time because it was not brought before the Court properly as far as getting it either through our contested matter procedure or on the calendar for a hearing. That's how our local rules work in Connecticut. So we can -- I'm going to hear from other parties, sir, but there will be a process. And maybe it will be granted. But at the very least, if it is granted, you will -- your firm will be obligated to comply with the requirements of the bankruptcy code and the rules and that would be at the very least filing a fee application which Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 63 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 64 of\n\n| | 117 |\n|----|--------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
63 |\n| 1 | would be subject to objections and further hearing and |\n| 2 | determination by the Court the fees and expenses incurred by |\n| 3 | the firm. Okay? |\n| 4 | MR. SKALKA:
Understood. |\n| 5 | THE COURT:
Mr. Friedman, I see you have risen. |\n| 6 | Go right ahead, please. |\n| 7 | MR. FRIEDMAN:
Thank you, Your Honor. |\n| 8 | Madam Court Reporter Deputy, can you hear me from |\n| 9 | here or do you want me to go -- |\n| 10 | THE COURT:
Maybe it would make sense if you don't |\n| 11 | mind, Mr. Friedman. |\n| 12 | MR. FRIEDMAN:
Good afternoon, Your Honor.
It's |\n| 13 | Peter Friedman from O'Melveny & Myers. |\n| 14 | THE COURT:
Good afternoon. |\n| 15 | MR. FRIEDMAN:
I want to make three quick points |\n| 16 | on things you've heard from -- on so far and then I would |\n| 17 | like to come back to address any issues related to the |\n| 18 | scheduling with respect to the retention motion and the |\n| 19 | 60(b) motion. |\n| 20 | THE COURT:
Go right ahead. |\n| 21 | MR. FRIEDMAN:
First is to answer your question. |\n| 22 | Lamp Capital made a loan -- |\n| 23 | THE COURT:
Thank you. |\n| 24 | MR. FRIEDMAN:
-- which is where the funding came |\n| 25 | from. |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 65 of\n\nHo Wan Kwok - July 21, 2022 64 The second is with respect to 523 and those complaints. My view -- obviously everybody's offered what they think is the right answer -- is we don't even know if this debtor is going to propose, I'm sorry, the trustee is going to propose a plan that has a discharge so it seems to me like a stay is particularly warranted in light of that. Why waste time litigating over an action that may be constitutionally not ripe. I think it's actually to me like a pretty serious question as to ripeness for any of those claims if we don't know if the debtor -- if a discharge is going to be proposed. I have a hard time seeing one being proposed by the trustee unless there's something pretty close to full satisfaction of claims. I don't know what the trustee is going to do on that. But that seems to me an independent reason to consider the parties potentially agreeing to stay those matters. With respect to the HK lawsuit over the boat, you know, PAX is a defendant. I'm hoping that we can stipulate that PAX doesn't need to be a defendant. We never claimed to own the boat. We can't assert the debtor's rights. We can't levy because of the automatic stay which remains in place. So, you know, PAX has had to spend a lot of resources already in this case. It would be great if we\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 66 of\n\n| | 117 |\n|----|--------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
65 |\n| 1 | cannot have to spend resources on a suit where we're not |\n| 2 | really appropriately a defendant given sort of the current |\n| 3 | context of this case. |\n| 4 | So those are the three points I wanted to make. |\n| 5 | I do want to be heard on the retention issues and |\n| 6 | the 60(b) motion because we do have some things to say. |\n| 7 | THE COURT:
Go right ahead. |\n| 8 | MR. FRIEDMAN:
When it's time.
You know.
I don't |\n| 9 | know if you want me to -- |\n| 10 | THE COURT:
Well, you can -- you can tell me what |\n| 11 | you'd like to tell me now.
I mean, we are going to -- you |\n| 12 | go right ahead. |\n| 13 | MR. FRIEDMAN:
Okay.
So, Your Honor, a couple of |\n| 14 | -- a couple of things. |\n| 15 | On the -- on both of them, whether it's with |\n| 16 | respect to Paul Hastings or with respect to Mr. Despins, I |\n| 17 | think our big concern is -- with respect to the issues Mr. |\n| 18 | Kwok has raised in his letters and on his social media |\n| 19 | account, which I don't know if you've had -- maybe it's not |\n| 20 | appropriate for the Court to look at it -- but on those |\n| 21 | things like PAG has committed fraud by colluding with DOJ is |\n| 22 | littered all over his Gettr account. |\n| 23 | I think his most recent Gettr post is, you know, |\n| 24 | Mr. Miles Guo will initiate a series of motions and appeals |\n| 25 | to expose the CCP's infiltration of the U.S. Judiciary and |\n\nHo Wan Kwok - July 21, 2022 66 the black hands of the U.S. Judiciary. There's an accusation that I've colluded with the CCP. I certainly want to say with respect to PAG and with respect to me -- THE COURT: With respect to PAG, P-A-G? MR. FRIEDMAN: Yeah. THE COURT: Okay. MR. FRIEDMAN: -- and all of its affiliates, and me, if there is any repetition of those in a pleading signed by counsel, we will seek Rule 11 sanctions. I just want to put people on notice of that. Okay? As an officer of the Court I will tell you that I'm the only person who spoke -- maybe Mr. Sarnoff did, but our client never spoke to the Department of Justice about the appointment. We actually recommended people other than Mr. Despins. We, for reasons having to do with costs, didn't actually want somebody from a big law firm to be involved in this case as a trustee because of expense. We were very clear that there were people we supported to be trustee. They were not selected. Either of the people who were selected, neither one was selected. We would have been okay with Mr. Whitley. We're not thrilled with Mr. Despins for the cost reasons, for the fact they put in now our client is a former Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 67 of\n\nHo Wan Kwok - July 21, 2022 67 client of ours that I think is, you know, wasn't something that our client thought was so great to be deemed a former client, but it is what it is. But I just want to be really clear that if anybody makes those allegations in a signed pleading it will be Rule 11 sanctionable because it's just not true. More broadly speaking on both though, Your Honor, the Court obviously has control over how it deals with those motions and what it permits to be raised. If it involves subjecting us to discovery, obviously, you know, we think that's extremely unfair and unwise. We think that if it involves frankly forcing people to go down rabbit holes to deal with, you know, Paul Hastings' connection with companies that operate in China on the sort of rabbit hole, crazy theories that are being raised about collusion with the CCP, that the Court should just consider going in a different direction, if it's going to indulge that kind of discovery because it's a -- you know, Paul Hastings, they're going to bill for that -- that eats into creditor recoveries. It distracts us from the intention -- attention to what ought to be done in this case. And I don't think it's right to give Mr. Kwok the ability to do that. That will be -- discovery, et cetera, Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 68 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 69 of\n\n| | 117 |\n|----|-----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
68 |\n| 1 | will all be argued later.
But if the Court's going to -- we |\n| 2 | would rather see the Court go in a different direction with |\n| 3 | the trustee because it's not in the best interest of the |\n| 4 | estate rather than go down those rabbit holes because of the |\n| 5 | expense issue and because of the delay issues. |\n| 6 | Again, I think the allegations are not -- are |\n| 7 | frivolous allegations that could subject counsel and clients |\n| 8 | and anybody who's sort of sponsoring them to real problems. |\n| 9 | But we just, you know -- as you know, PAX has been |\n| 10 | waiting since 2009 to get paid.
Spending more time on a war |\n| 11 | over these issues which really aren't germane to what are |\n| 12 | Mr. Kwok's assets and how can they get into the hands of |\n| 13 | creditors seems just -- you know, can't possibly be in the |\n| 14 | interest of the estate. |\n| 15 | As to cost more broadly -- and, you know, I've |\n| 16 | expressed this to Mr. Despins, you know, we are concerned |\n| 17 | about the rate structure and the expense.
He's obviously |\n| 18 | done a lot of work, which is great, and I think his |\n| 19 | presentation was important, but, you know, we are concerned. |\n| 20 | I think to the extent that we can and we will, you |\n| 21 | know, if we need to, we will file an objection with respect |\n| 22 | to -- if we have to -- with respect to the costs and perhaps |\n| 23 | propose something.
I'm not sure.
But I don't want anybody |\n| 24 | to be surprised about that.
I try not to surprise people, |\n| 25 | you know, particularly other, you know, members of the bar |\n| | |\n\nHo Wan Kwok - July 21, 2022 69 on sensitive -- I understand fees are sensitive issues, rates are sensitive issues, but it is important to PAX as a party with, you know, \\$260 million plus in judgments and the largest creditor. I think that's really all I wanted to say, Your Honor. I appreciate you giving me the opportunity to speak. THE COURT: Okay. Before you step back, I -- as you know, this is a status conference so we are going to be setting some hearings on different matters, specifically on Brown Rudnick's motion to withdraw. And I have to look at -- there's a lot of thing that have been filed since Mr. Despins was appointed as the Chapter 11 trustee that we will look at. Are you asking the Court to do anything different than what the Court is planning on doing or you're just asking that you reserve your rights to be heard on whatever happens? MR. FRIEDMAN: The latter. And the other thing I would just ask is if the Court can -- I would be unavailable I think on August 5th. I think the -- THE COURT: The 5th? MR. FRIEDMAN: -- the Friday, that Friday of that week is -- I'm unavailable. Other than that, I'm available at the Court's disposal. THE COURT: Okay. Thank you. Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 70 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 71 of\n\nHo Wan Kwok - July 21, 2022 70 MR. FRIEDMAN: Thank you, Your Honor. THE COURT: Mr. Goldman? MR. GOLDMAN: Thank you, Your Honor. I'll be -- THE COURT: Would you come up here too, please. MR. GOLDMAN: Yes. Certainly. THE COURT: Just because I think it's easier for the courtroom deputy to pick up your voice. Please. Thank you. MR. GOLDMAN: Just a few brief points, Your Honor. The committee is aligned with PAX in terms of the cross concerns that Mr. Friedman articulated with respect to the trustee and his firm. We want to reserve our rights on that application. We're also aligned in terms of how we view the 9024 motion that the debtor filed, which we view as a complete distraction and without merit. We need to get on to the business of administering this five month old case and we've had enough litigation thus far. These issues that are raised in our view are just not meritorious and we shouldn't be spending a lot of -- a lot of time on that. Just in terms of giving Your Honor an idea of the magnitude of the claims thus far in the case, even though a proof of claim deadline hasn't been set, the claims register\n\nHo Wan Kwok - July 21, 2022 71 shows 80 -- approximately \\$83 million in proofs of claim that have already been filed. That doesn't include PAX's claim of approximately 254 million. The class action 523 complaint that was just filed yesterday states that their claim is in the collective amount of \\$114 million. That relates to I believe the securities, the alleged securities violations, with respect to GTV. That may also be the same claim that the SEC filed a proof for although I'm not completely sure. And so if you include those two claims, which haven't been filed yet, we're up to around \\$450 million in gross amount of claims. And so we really do need to get on with the business of trying to get a recovery for those claims. And I don't want to minimize we have a great deal of confidence in Mr. Despins and what he's done thus far, but there is a correlative concern about the magnitude of the rates and the fees, which of course he will be getting as trustee under section 326 based on what he recovers. And if his firm is hired they'll be getting compensated that way as well. So with -- THE COURT: A question about -- and I meant to ask Mr. Kindseth this as well -- and probably should have asked Mr. Despins this as well -- the stipulation with regard to Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 72 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 73 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
72 |\n| 1 | the Lady May, there are still other obligations that have to |\n| 2 | be met.
There's still \\$37 million being held in escrow. |\n| 3 | There are -- the other stipulation provisions have |\n| 4 | not been met yet that I see.
Only the stipulation provision |\n| 5 | that has been met is the reporting that HK has done, and |\n| 6 | they have done that timely, and the return of the boat, the |\n| 7 | yacht, prior to the date in the stipulation. |\n| 8 | But there are other provisions in that stipulation |\n| 9 | that have not been resolved yet. |\n| 10 | And so when you talk about getting on with the |\n| 11 | administration of the estate, which is what the Court found |\n| 12 | when determining that a Chapter 11 trustee should be |\n| 13 | appointed -- there needs to be some attention to what is |\n| 14 | going to happen here with regard to the yacht and/or the \\$37 |\n| 15 | million.
That money is still subject to the jurisdiction of |\n| 16 | this court. |\n| 17 | And there are -- there are still issues with |\n| 18 | regard to certifications and things that I think need to be |\n| 19 | filed in which there are time frames to object. |\n| 20 | And so it would seem to me that the parties need |\n| 21 | to focus on those issues.
Because the longer those issues |\n| 22 | lay dormant, the longer it's going to take to administer the |\n| 23 | estate. |\n| 24 | MR. GOLDMAN:
Yeah.
We are certainly aligned with |\n| 25 | Your Honor on that. |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 74 of\n\n| | 117 |\n|----|---------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
73 |\n| 1 | THE COURT:
Okay.
All right.
All right.
I |\n| 2 | appreciate what you've said.
And is there anything further |\n| 3 | you'd like to state for the record this afternoon? |\n| 4 | MR. GOLDMAN:
No, Your Honor.
Thank you. |\n| 5 | THE COURT:
Okay.
Thank you. |\n| 6 | Does the Office of the United States Trustee wish |\n| 7 | to be heard? |\n| 8 | MS. CLAIBORN:
Not at this time, Your Honor. |\n| 9 | THE COURT:
Okay.
Well, I am going to ask the |\n| 10 | Office of the United States Trustee to file a brief on why |\n| 11 | -- and I'm going to -- actually, I'm going to have Attorney |\n| 12 | Henzy's firm do the same thing simultaneously -- and anyone |\n| 13 | else that wants to, you may, but you don't have to -- as to |\n| 14 | why the debtor is entitled to retain Attorney Henzy's firm |\n| 15 | without that firm having to comply with the provisions of |\n| 16 | the bankruptcy code 327(a) and 2014. |\n| 17 | And at some point, after this status conference, |\n| 18 | I'm going to schedule a hearing on the motion to withdraw |\n| 19 | filed by Brown Rudnick which will have an objection deadline |\n| 20 | for parties to file an objection, if any, to Brown Rudnick's |\n| 21 | motion. |\n| 22 | And then, Mr. Despins, with regard to the bar date |\n| 23 | issue and the publication issue, you indicated when we |\n| 24 | talked on the record that you'd like to think about those |\n| 25 | issues.
I think it may make sense to schedule a hearing, a |\n| | |\n\nHo Wan Kwok - July 21, 2022 74 further hearing, on that motion so we can finalize it and get that order entered. And I can do that. I would assume I can do that in short order in the next week or two. Would that give you enough time to analyze the issue, Mr. Despins? MR. DESPINS: Yes, Your Honor. THE COURT: Okay. Thank you. With regard to Mr. Despins' application to employ Paul Hastings and to employ Neubert, Pepe & Monteith, I think those have to be set for a hearing as well with an objection deadline. The likelihood is -- but I don't know this until I go back and review everything, that we will have a day set in the future to address all of these matters, which obviously will be a day because there's a lot of matters to address. I agree that we need to move ahead with the administration of this case which is why the Court made a determination about the appointment of a Chapter 11 trustee. I want to look at the calendar for a moment if everyone would bear with me, please, for a moment. MR. DESPINS: And, Your Honor, if I could be heard on timing? THE COURT: Sure. Please. MR. DESPINS: So we had filed -- thank you, Your Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 75 of\n\nHo Wan Kwok - July 21, 2022 75 Honor. We had filed a motion to expedite which obviously has not been granted. Understand that the reason being is that we're going full out right now. And the 30day rule doesn't help us if the Court, you know, in the future says, well -- by the way, I'm making this up as a slight joke -- but if the Court says, well, we think you're a member of the communist party so we're not going to approve the retention -- it's a joke, Your Honor -- so then I'm not protected by the 30 day rule. So there's a real prejudice to the firm in being -- and that's, by the way, that's exactly why the debtor has not scheduled -- has not moved for a hearing on their motion to recuse me or to remove me because they love the uncertainty and to continue that. So for us, you know, we filed our motion on the 12th. Even under regular, non-accelerated days, that would bring us to August 1st or something like that, on the 20-day -- so personally from the 3rd to the 22nd, I'm -- I could not be in court. I mean, I could participate by Zoom. But if there -- if there's a real contested hearing, I could not be there. So we would urge the Court -- you know, PAX had said they were okay with a hearing next Monday. Of course, that's probably too short at this point. But anytime next\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 77 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
76 |\n| 1 | week or August 1st, we would urge the Court, if it's at all |\n| 2 | possible, to schedule it then because that will have been |\n| 3 | plenty of time for these issues to have been figured out. |\n| 4 | Thank you, Your Honor. |\n| 5 | THE COURT:
Thank you. |\n| 6 | MR. HENZY:
Your Honor, may I be heard? |\n| 7 | THE COURT:
Yes. |\n| 8 | MR. HENZY:
Thank you, Your Honor. |\n| 9 | Just to be clear, I will file a motion to expedite |\n| 10 | right away on our 9024 motion.
We're not trying to have |\n| 11 | that float out there.
We think it should be taken up at the |\n| 12 | same time as the Paul Hastings application will be taken up |\n| 13 | because there will be a lot of overlap. |\n| 14 | We do need to take discovery in connection with |\n| 15 | our motion and the Paul Hastings application.
We're |\n| 16 | prepared to serve discovery immediately. |\n| 17 | THE COURT:
I'm not sure you're entitled to |\n| 18 | discovery, Attorney Henzy. |\n| 19 | It's a motion for relief for a judgment order. |\n| 20 | Based upon, again, an issue of whether or not your client |\n| 21 | actually has standing to oppose this person being appointed |\n| 22 | as a Chapter 11 trustee in a case where your client has |\n| 23 | stated under penalty of perjury that they have \\$3,400 and |\n| 24 | some odd dollars as assets. |\n| 25 | So I understand your assertion, but I'm not sure I |\n| | |\n\nHo Wan Kwok - July 21, 2022 77 agree with it at this point. I also -- as I started to say, I'm not sure that you don't have to meet the requirements of debtor -- a debtor's counsel under 327(a). I understand your argument, but no one has put forth anything in front of me to show me why you don't have to meet that requirement. Number one. Number two, even if you didn't have to meet the requirement, there's -- I don't know why it isn't a conflict of interest that you represent both HK International and Mr. Kwok. I don't -- I don't understand that. I'm having difficulty understanding that. And I'm having difficulty understanding that because of many reasons, including the fact that there is an adversary proceeding pending filed by your firm on behalf of HK International claiming that Mr. Kwok has no -- well, asking for a declaratory judgment that it owns the boat. So there's a lot of issues here and we're not going to get derailed on discovery on the presumption that you're entitled to do all these things to begin with. Those issues have to be addressed first. And I'm not going to allow discovery to drag out what was clearly before the debtor and Brown Rudnick as debtor's counsel since the U.S. Trustee filed a motion for the appointment of an examiner or in the alternative a trustee I believe back in February or early March. I can Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 78 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 79 of\n\nHo Wan Kwok - July 21, 2022 78 look at the docket. It won't take me very long to find it. So that's not going to happen in this case. This case -- your client voluntarily submitted himself to the jurisdiction of this court with all the benefits and burdens associated with that and that doesn't mean that your client, who as you have stated now on the record a few times, who's no longer in possession -- can now stall the process by insisting that you need discovery in connection with your allegations that Mr. Despins -- Mr. Despins -- now, we're talking about -- I made this point at the last hearing but you weren't here because you weren't counsel -- even though the trustee had -- the motion to appoint the trustee had been granted, that the difference between a conflict of Mr. Despins acting as the Chapter 11 trustee and Paul Hastings acting as Mr. Despins' counsel are two different things. And no one has put forth any information in this record to show that Mr. Despins has a conflict of interest. No one. And Mr. Despins has stated and sworn under penalty of perjury that he has no conflict, that the issues with regard to Paul Hastings that have been raised by you in your brief in your -- not your brief, but in your motion -- are things he did not know of and was not aware of personally. But, yes, his firm has offices in China. And,\n\nHo Wan Kwok - July 21, 2022 79 yes, they represent parties that somehow are related -- could be related to Mr. Kwok, but not in connection with this case in any way. I'm not going to allow discovery to derail the process of the Chapter 11 trustee appointment and his duties and responsibilities to carry out his affairs in this case. And I'm certainly not going to do that unless and until I determine whether you're correct or not that you can represent the debtor without having to address the disinterestedness issues. Even if you can, I still have no understanding of -- I'm having very -- it's very difficult for me to understand how your firm does not have an actual conflict of interest in the simultaneous representation of HK International and Mr. Kwok. MR. HENZY: Thee's a lot -- THE COURT: There is a lot there. MR. HENZY: -- to unpack there, Your Honor. THE COURT: I agree with you. MR. HENZY: If I could -- if I could -- THE COURT: There is -- this case has a lot. It always has a lot. MR. HENZY: To show that I can joke too, I like it that you refer to Mr. Kwok as, you said, your client. You're not bound by it. But -- Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 80 of\n\nHo Wan Kwok - July 21, 2022 80 THE COURT: Well, that's what you assert. That's what you assert, Mr. Henzy. MR. HENZY: That's what I assert. But, again, to show I can -- I can joke too. There's a lot to unpack there, Your Honor. I mean, in the sense that -- and I understand you're not agreeing with this but, you know, I believe Mr. Kwok does have standing to challenge the appointment of Mr. Despins. And just to be clear -- THE COURT: I didn't -- I didn't even say -- I didn't even argue with you on that -- MR. HENZY: Okay. THE COURT: -- at this point. MR. HENZY: If he -- THE COURT: At this point. All I said is you're not getting discovery. MR. HENZY: Well, but if -- THE COURT: It's not being derailed with discovery. It's not happening. MR. HENZY: But if he -- if he has standing -- the rule 60 motion is a contested matter -- if he has standing to press that motion, and he has standing to object -- THE COURT: It's not a new trial. It's not a new trial. Right? Rule 60 isn't a new trial. MR. HENZY: This is not a new trial. 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81 |\n| 1 | THE COURT:
Rule 60 is you want relief -- |\n| 2 | MR. HENZY:
That's right. |\n| 3 | THE COURT:
-- from a judgment or order. |\n| 4 | MR. HENZY:
That is correct. |\n| 5 | THE COURT:
That's right. |\n| 6 | MR. HENZY:
That's correct. |\n| 7 | THE COURT:
So it's not a new trial.
You're not |\n| 8 | saying there's newly discovered evidence that -- |\n| 9 | MR. HENZY:
But it -- |\n| 10 | THE COURT:
-- the Court didn't consider when |\n| 11 | taking this all into effect -- into account. |\n| 12 | And Mr. Despins has, as you know, as any party |\n| 13 | does, a continuing obligation to disclose issues, which he |\n| 14 | did.
Which he did.
He filed a supplemental affidavit.
He |\n| 15 | filed that. |\n| 16 | And so there is no new -- this isn't -- the |\n| 17 | standard under Rule 60 and the standard under Rule 59 are |\n| 18 | completely different. |\n| 19 | MR. HENZY:
It's a Rule 60(b)(2), Your Honor. |\n| 20 | It's -- |\n| 21 | THE COURT:
I understand what it is. |\n| 22 | MR. HENZY:
It's newly discovered evidence.
And |\n| 23 | this is -- |\n| 24 | THE COURT:
It's not newly discovered evidence. |\n| 25 | MR. HENZY:
How could the debtor -- how could the |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 83 of\n\nHo Wan Kwok - July 21, 2022 82 debtor -- THE COURT: What's the evidence? MR. HENZY: Given -- THE COURT: Tell me what the evidence is. MR. HENZY: Sure. And counsel can say that this is all frivolous, but -- THE COURT: I'm don't want to -- I don't -- I'm not worried about him right now. MR. HENZY: Okay. THE COURT: I'm worried about you. MR. HENZY: Okay. THE COURT: Tell me what the evidence is. MR. HENZY: There is a public record that the government of China, the Communist Party of China, Mr. Kwok is on the wrong side of the government of China. I don't think -- I don't know that anybody would dispute that. Okay? I think that it is now known -- and I don't know that Mr. Kwok knew or could have known this given the time line on Mr. Despins' appointment -- I think there was one day between the U.S. Trustee filing that motion and the hearing taking place that Paul Hastings -- THE COURT: I agree with you. MR. HENZY: -- Paul Hastings has offices as I understand it in China. Paul Hastings represents companies\n\nHo Wan Kwok - July 21, 2022 83 that are affiliated with the Chinese government. That is -- I believe that is true. THE COURT: Okay. MR. HENZY: I also, from reading the newspaper, okay, have an understanding that being a citizen of the world, that China exercises a different degree of influence over entities doing business in China than let's say the United States government exercises over entities doing business in the United States. I think that is a fair statement for me to make. So I don't think it's frivolous or crazy or baseless -- THE COURT: But where's the evidence? What's your evidence? MR. HENZY: I -- THE COURT: That the newspaper says that China exerts control over -- and I'm not trying to be flip, Mr. Henzy, but -- MR. HENZY: Well, do you -- do you disagree with that, Your Honor, that the -- THE COURT: I don't -- I don't have to agree or disagree with anything. MR. HENZY: -- that the government of China -- I mean -- THE COURT: All I have to do is make findings of Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 84 of\n\nHo Wan Kwok - July 21, 2022 84 fact, right? And I made those findings of fact when I appoint -- when I granted the motion for the appointment of a Chapter 11 trustee. I made those findings. Okay? Now, Mr. Despins has stated in the -- on the record, subject to penalty of perjury, that he personally has no conflict, doesn't represent the government of China. Yes, works for an international firm that has offices in China. Yes, the firm has business -- has as a past client, I believe is the exact language -- PAG, P-A-G, which is related to and/or -- Mr. Friedman can correct me -- but I think is the -- may be described as the parent company of PAX. What's the evidence there? How is that -- how is that enough evidence for this court to say he should be -- Mr. Despins should be removed? MR. HENZY: I can't give you the evidence -- THE COURT: Right. MR. HENZY: -- unless I can do discovery. THE COURT: But I'm not going to derail the process -- MR. HENZY: Unless -- THE COURT: -- so you can go make -- do discovery. What discovery? What possible -- what are you going to do? Are you going to depose people from the government of China? MR. HENZY: If Mr. Despins wants to stipulate as to all of Paul Hastings' connections in China, who they -- Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 85 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 86 of\n\nHo Wan Kwok - July 21, 2022 85 how many parties they represent -- THE COURT: Why would he have to do that? MR. HENZY: Your Honor, you can, today, tell me that I'm just wrong, that Paul Hastings -- and Mr. Despins is a partner at Paul Hastings. I don't -- I don't think you just separate him and say if Paul Hastings is not -- is not disinterested, that Mr. -- I don't see how Paul Hastings could be not disinterested and have Mr. Despins not be disinterested. That doesn't make sense to me. Okay? But if you're going to say that notwithstanding these apparent connections that Paul Hastings hasn't -- with the Chinese government, with -- THE COURT: That have nothing to do with Mr. Kwok. Where's the connection? MR. HENZY: The connection is that the Chinese government -- the allegation is that the Chinese government is -- has persecuted Mr. Kwok and has persecuted his family. The allegation is that the Chinese government exercises a great deal of influence over entities that do business in China and that that puts Paul Hastings in a compromised position. And Mr. Despins, as a partner of Paul Hastings, in a compromised position. Your Honor, you can say I don't -- I don't agree\n\n### Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 87 of\n\n| | 117 |\n|----|-----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
86 |\n| 1 | with you that the Chinese government exercises influence |\n| 2 | over entities in China that are doing business in China. |\n| 3 | You could say that.
Okay.
And I -- I'm not going to go do |\n| 4 | discovery on that.
But this raises a significant issue. |\n| 5 | I don't -- I don't know if someone's going to |\n| 6 | stand up and say -- and defend -- in this court and defend |\n| 7 | the way the Chinese government deals with entities that do |\n| 8 | business in China and say, no, that's not true.
The Chinese |\n| 9 | government doesn't exercise any influence over people -- |\n| 10 | THE COURT:
If your client didn't -- if your |\n| 11 | client -- if you're allowed to represent this client in this |\n| 12 | court didn't want to subject himself to the jurisdiction of |\n| 13 | this court then he shouldn't have filed a Chapter 11 case. |\n| 14 | MR. HENZY:
I don't think, Your Honor, that has |\n| 15 | anything to do -- |\n| 16 | THE COURT:
Well, how does it not have anything to |\n| 17 | do with it?
Because you're saying that he -- the Chinese |\n| 18 | government influences everything that happens with regard to |\n| 19 | Mr. Kwok.
That's what you're saying. |\n| 20 | MR. HENZY:
No, I'm not saying that. |\n| 21 | THE COURT:
Then what are you saying? |\n| 22 | MR. HENZY:
What I'm saying is that the Chinese |\n| 23 | government exercises a great deal of influence over anybody |\n| 24 | who does business in China.
I think that's a fair statement |\n| 25 | for me to make. |\n| | |\n\nHo Wan Kwok - July 21, 2022 87 THE COURT: Okay. MR. HENZY: Okay. And Paul -- THE COURT: And how does that result in a conflict of interest that allows that Mr. Despins can't -- can't be the Chapter 11 trustee? MR. HENZY: And Paul Hastings does business in China. THE COURT: Okay. MR. HENZY: Okay. THE COURT: Okay. MR. HENZY: And the Chinese government -- THE COURT: And so what -- what control -- you have no evidence of what control they have. You just make a blanket -- and I'm not saying you just -- but the statement that you just made is the Chinese government has control over people who do business with them. Well, the control might be that they want the company to produce 12 cars as opposed to 20. How does that affect Mr. Kwok and Paul Hastings? MR. HENZY: Your Honor, the argument is that Paul Hastings does business in China. It represents entities connected with the Chinese government, therefore, the Chinese government is going to have influence or control -- THE COURT: So you're saying Mr. Despins is a -- is a puppet of the Chinese government? Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 88 of\n\nHo Wan Kwok - July 21, 2022 88 MR. HENZY: No. That's completely unfair, Your Honor. I didn't say -- THE COURT: Well, then what are you saying? MR. HENZY: I did not say that. THE COURT: Well, then -- but then what are you saying? MR. HENZY: What I'm saying is that there's a disinterestedness issue here and we have a right to explore that issue. THE COURT: Okay. MR. HENZY: Okay. THE COURT: I'm not sure I agree with you. MR. HENZY: Okay. THE COURT: But I understand your point. MR. DESPINS: Your Honor, if I could, could I be heard for two seconds? THE COURT: Certainly. Certainly. MR. DESPINS: This argument is insane. Why? Let's assume he's right. Let's assume he's right on all -- so what's the discussion? So the Chinese communist party comes to our office in China and says what? Go easy on him or go hard on him? I'm going to go -- let me be very clear, I'm going to go and try to get all his assets. That's my job as the trustee. Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 89 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 90 of\n\nHo Wan Kwok - July 21, 2022 89 So what's the conflict? Meaning, first of all, I'm not agreeing for a second that they would do that or that we would be susceptible to that. But let's assume that's the case, let's follow that to its logic. Unless I -- unless his point is that we would somehow work with them to arrest him or to bring him -- that's insane. This is a civil case. My job is not retribution. It's collection. I want to collect -- I want to be clear -- as much as I can for the holders of valid claims. That's the (indiscernible). And Paul Hastings will do the same. So this argument that we're subject to the influence, which way does that cut? Meaning that they would -- one way or another, they would say go harder? I'm going to -- I don't need the CCP to tell me that. I'm going to go hard to get all his assets. That's my job. So I don't understand the influence. I'm sorry. MR. HENZY: Can I -- can I just -- can I respond to that quickly, Your Honor? THE COURT: Yes, you can. MR. HENZY: Okay. And, again, this is public record. THE COURT: Public record where? MR. HENZY: I can give you -- I'll give you citations, Your Honor.\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 91 of\n\n| | 117 |\n|----|--------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
90 |\n| 1 | THE COURT:
But tell me what it is.
Are we |\n| 2 | talking about a social media website? |\n| 3 | MR. HENZY:
Absolutely not, Your Honor.
We're |\n| 4 | talking about statements from the United States Department |\n| 5 | of Justice. |\n| 6 | THE COURT:
Okay. |\n| 7 | MR. HENZY:
Okay. |\n| 8 | THE COURT:
What part of the United States |\n| 9 | Department of Justice? |\n| 10 | MR. HENZY:
Different parts. |\n| 11 | THE COURT:
Okay. |\n| 12 | MR. HENZY:
And I can -- |\n| 13 | THE COURT:
Go ahead. |\n| 14 | MR. HENZY:
And I can tell -- okay. |\n| 15 | Mr. Steven Wynn, who is I think a well-known |\n| 16 | casino/hotel person, has -- the DOJ has filed a civil |\n| 17 | enforcement action against him to compel him to register |\n| 18 | under the Foreign Registration Act as an agent of the |\n| 19 | Peoples Republic of China and a senior official of the PRC's |\n| 20 | Ministry of Public Security, and the citation is -- it's a |\n| 21 | Justice Department -- it's in our motion -- it's a web, ww |\n| 22 | -- I can try to give it to you, but I -- |\n| 23 | THE COURT:
No, it's all right. |\n| 24 | MR. HENZY:
Okay. |\n| 25 | THE COURT:
You don't have to give it to me. |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 92 of\n\nHo Wan Kwok - July 21, 2022 91 MR. HENZY: And -- THE COURT: And how does that impact Mr. Wynn, I mean -- Mr. Wynn, I know how it impacts Mr. Wynn -- MR. HENZY: Okay. I'm -- THE COURT: -- how does it impact Mr. Despins and Paul Hastings? MR. HENZY: I'm responding to Mr. Despins' statement that it's insane to say that the Chinese government would exercise influence over someone doing business in China. THE COURT: That's not what he said. MR. HENZY: Okay. I think it is what he said. THE COURT: No. MR. DESPINS: No. THE COURT: That's actually not what he said. MR. HENZY: Okay. But if I could finish? THE COURT: He said your argument is insane. Because here's what he said. This is at least the way I interpret it. And you can disagree with me. He said your argument is insane because what -- the only two things that could happen is the Chinese government either tells him to go hard and get all of Mr. Kwok's assets or to do nothing and leave him alone. And Mr. Despins said, but I -- my job is to go hard and get all of his assets. So what's the problem?\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 93 of\n\nHo Wan Kwok - July 21, 2022 92 MR. HENZY: So then the argument is that Mr. Despins -- Mr. Despins' interest and the Chinese government's interest are aligned and, therefore, to the extent -- THE COURT: That doesn't mean there's a conflict. MR. HENZY: -- to the extent -- wait -- to the extent that there otherwise would be a disinterestedness issue, there's no issue, because if anything the Chinese government would tell him go hard, go hard, go hard. That's not the analysis though, Your Honor. That's not -- THE COURT: How is he -- how is he not disinterested even if his -- even if his goals are aligned with the Chinese government, how is he not disinterested? MR. HENZY: If there is -- if there is a party that exercises any kind of undue influence over a trustee, then that trustee is not disinterested. THE COURT: How are -- where is the proof that they're exercising undue influence over Mr. Despins? MR. HENZY: I don't have proof today -- THE COURT: Okay. MR. HENZY: -- and I don't know how I could have proof today because -- THE COURT: Well, the bankruptcy code -- MR. HENZY: -- because I have --\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 94 of\n\nHo Wan Kwok - July 21, 2022 93 THE COURT: Here's what happens. The bankruptcy code allows you to bring that issue forth if you believe it to be true and then it will be addressed appropriate. A Rule 60(b) motion is not the appropriate way for that to happen. There is no newly discovered evidence. The only thing that came out is the continuing obligation -- and first of all, we're talking about Mr. Despins. I raised this at the first hearing. Maybe you could argue, but we're not arguing that today, there's a problem with Paul Hastings. Maybe you can argue that. But we're not arguing that. We're talking about Mr. Despins individually acting as a trustee. So your argument is that no matter who was the Chapter 11 trustee, whatever individual, if that individual works for a firm that somehow has business relationships with China, so had a purchase and sale agreement to buy toys from China, that they would be not -- they would disinterested because -- because every single person that does business with the Chinese government is unduly influenced by the Chinese government. That's your argument. MR. HENZY: Depends on facts and circumstances, but potentially, yes. THE COURT: Well, what's the facts and -- well, how are the facts and circumstances of the scenario I just\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 95 of\n\nHo Wan Kwok - July 21, 2022 94 presented to you any different from what Mr. Despins has said in his -- in his disclosures? MR. HENZY: I might say that that party is unduly influenced by the Chinese government. THE COURT: Buying toys? MR. HENZY: Yes. I might -- yes. THE COURT: Okay. MR. HENZY: I might say that. Yeah. THE COURT: Okay. You can say that, but I might disagree with you. MR. HENZY: And you might disagree with me. THE COURT: Okay. MR. HENZY: Yeah. THE COURT: All right. MR. HENZY: Look, I think we're not arguing the 60(b) motion today. I think. I think anyway we're arguing is does Mr. Kwok have a right to take discovery and I think he does. THE COURT: Yes. And I'm finding he does not have the right to take discovery. And you can appeal that if you'd like -- MR. HENZY: Yeah. THE COURT: -- when I rule on the motion, but we're not going to do this. See, here's the problem. There's \\$37 million in\n\nHo Wan Kwok - July 21, 2022 95 an escrow account. And there's a boat, a yacht, somewhere over there, right, that your client stipulated to would come to this jurisdiction. And before the Court didn't acquiesce to the plan of how the professionals were going to be paid \\$8 million in a very short amount of time without establishing the need to pay them and to pay them on a weekly basis outside of the provisions of the bankruptcy code. The boat was going to be pledged as -- to the plan to creditors. Now we're in a situation where your alleged client -- and it may be it may be he may be your client doesn't want anything else to happen. Doesn't want the boat to become part of the estate, but doesn't want the \\$37 million to become part of the estate either. And the way that that's going to be accomplished is to challenge Mr. Despins through a Rule 30(c) -- Rule 60 motion. That's not going to happen. MR. HENZY: I disagree with that, Your Honor. THE COURT: You may disagree. MR. HENZY: I just disagree. THE COURT: But that's not what's going to happen. MR. HENZY: Mr. -- THE COURT: You take your client, your client that you claim is your client, as you find him, correct? And you found him, as did Brown Rudnick, subject to orders of a Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 96 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 97 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
96 |\n| 1 | state court of New York that found after evidentiary |\n| 2 | hearings -- and I'm not saying they have collateral estoppel |\n| 3 | effect, I'm not saying any of that, I'm talking about how |\n| 4 | you found your client -- that found that not only was he -- |\n| 5 | did he take the Fifth -- and the inferences could be drawn |\n| 6 | in favor of the creditors with regard to him taking the |\n| 7 | Fifth -- but that he established and created a network of |\n| 8 | corporations to keep his assets out of the reach of |\n| 9 | creditors, including PAX, who's been fighting with him since |\n| 10 | 2009. |\n| 11 | Then your client decides to file a Chapter 11 case |\n| 12 | at the time that the sanction imposition by Justice Ostrager |\n| 13 | is continuing to accrue.
And the point -- and the argument |\n| 14 | is, well, the accrual, that's stayed.
I filed a Chapter 11, |\n| 15 | the accrual of that is stayed. |\n| 16 | So the argument then becomes that your client in |\n| 17 | some way, shape or form, depending upon the relief sought by |\n| 18 | the creditors, should either have an examiner appointed, a |\n| 19 | Chapter 11 trustee appointed, or there be a conversion of |\n| 20 | the case. |\n| 21 | Then your client says, no, no, we'll agree to |\n| 22 | dismissal.
After coming to this court, negotiating -- being |\n| 23 | part of a negotiation, which allegedly a separate and |\n| 24 | distinct corporate entity owned by his daughter also |\n| 25 | participated in, to bring the boat here, and then says, no, |\n| | |\n\nHo Wan Kwok - July 21, 2022 97 you know what, why don't you just dismiss the case, judge. We'll agree to dismissal. Well, that -- you know, your client made a decision, an informed decision, when he decided to file Chapter 11. That's what he did. He could have addressed all of this through the state court process and could have appealed everything, and did appeal things and lost, got -- it was referred back to Justice Ostrager for Justice Ostrager to make a determination about the ownership of the boat. And then Chapter 11 case gets filed, and HK International, the alleged separate and distinct legal entity that is alleged to be the registered owner of the boat, files an adversary proceeding against your client, Mr. Kwok, saying that it wants a declaratory judgment that HK International owns the boat and it's not property of this debtor's estate. I already addressed all those issues by finding that a Chapter 11 trustee should be appointed. Your argument is that Mr. Despins is disinterested -- is not a disinterested person because his firm, not him, but his firm has offices in China and the Chinese government is out to get -- and by the way, maybe the Chinese government is out to get Mr. Kwok. I don't need to make findings about that, okay. Maybe they are, but that doesn't Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 98 of\n\nHo Wan Kwok - July 21, 2022 98 impact Mr. Despins' role and his responsibilities under the bankruptcy code. And to argue otherwise is to attempt to derail Mr. Despins from carrying out his responsibilities. So I guess what you need from me at some point -- and maybe, you know, as I said, I've got to look at all these thing that were filed since July 8th. I'm going to set hearings on different matters -- the motion to withdraw as attorney -- I want you and the United States Trustee's Office to submit a brief on -- as to why you don't need to comply with 327(a). Maybe you're right, but I -- I don't see anything in front of me that convinces me of that at the moment. And then, we're -- and we'll probably have a hearing on your Rule 60(b) motion. And I think we should have it quickly, because if I'm going to deny it, you need to appeal. You need to appeal. And then you need to figure out how you're going to proceed from there. But this case cannot be stalled any longer. This court has a responsibility, as does Mr. Despins now at this point, to try to protect the interests of creditors in connection the parameters of the bankruptcy code, the bankruptcy rules, the Federal Rules of Civil Procedure, and applicable non-bankruptcy law. And to argue that Mr. Despins is disinterested because the Chinese government influences every party with Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 99 of\n\nHo Wan Kwok - July 21, 2022 99 whom it does business is not persuasive to me at this point. MR. HENZY: I understood. And just a couple points, Your Honor. I wasn't involved in Mr. Kwok's decision to file Chapter 11. THE COURT: I didn't say you were. MR. HENZY: Okay. THE COURT: I said you took your client as you found him. MR. HENZY: I took -- THE COURT: That's what I said. Didn't I start the whole thing off by saying that? MR. HENZY: Yeah. And we are where we are today. But I don't think that Mr. Kwok decided to file Chapter 11. And just to be clear, he didn't appeal your decision on -- that a trustee would be appointed. And I'll state on the record if Mr. Whitley had been the appointed person, he would not have -- we would not be having this discussion, okay, because his understanding is some of the issues that we think exist with Paul Hastings and Mr. Despins do not exist with Mr. Whitley. So this is not -- this is not that Mr. Kwok was going to oppose anybody who got appointed and wants to obstruct a Chapter 11 trustee from doing his or her job. He understands completely that there is going to be a Chapter Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 100 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 101 of\n\n| | 117 |\n|----|----------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
100 |\n| 1 | 11 trustee.
So I think it's not correct to say that he's |\n| 2 | just trying to obstruct -- |\n| 3 | THE COURT:
I didn't say -- I said -- |\n| 4 | MR. HENZY:
-- for those purposes. |\n| 5 | THE COURT:
I didn't say he was trying to |\n| 6 | obstruct.
I said I'm not going to let this be derailed. |\n| 7 | That's what I said.
Those were the words I used. |\n| 8 | MR. HENZY:
I think -- I think if a different |\n| 9 | person had been appointed we wouldn't be having this |\n| 10 | discussion.
And I -- and there are -- |\n| 11 | THE COURT:
Well -- |\n| 12 | MR. HENZY:
Look, you can disagree, Your Honor. |\n| 13 | We think there are bona fide significant issues here. |\n| 14 | I understand you may disagree, but I don't -- it's |\n| 15 | not correct.
I don't think that because Mr. Kwok decided to |\n| 16 | file Chapter 11 that he doesn't have a right to say, wait a |\n| 17 | second, there's been a trustee appointed, understood, but he |\n| 18 | should just have to accept whoever gets appointed even when |\n| 19 | he believes that there are significant conflicts that that |\n| 20 | person has. |\n| 21 | I mean, just because you file Chapter 11 doesn't |\n| 22 | mean -- and subject yourself to the jurisdiction of the |\n| 23 | Court -- doesn't mean that you have to just sort of accept |\n| 24 | any and everything that comes along, even if you believe |\n| 25 | that it is not fair and is prejudicial to you. |\n| | |\n\nHo Wan Kwok - July 21, 2022 101 THE COURT: Okay. Thank you. MR. HENZY: So I guess, Your Honor, are you ruling today -- THE COURT: No, I'm not ruling. MR. HENZY: -- that we cannot take discovery in connection with -- THE COURT: If you take any discovery before I rule on the 60(b) motion, then I will -- I'm not allowing you to take any discovery before I rule on the 60(b) motion. MR. HENZY: And on the Paul Hastings retention application? THE COURT: And on the Paul Hastings retention application. MR. HENZY: Okay. So you're ruling that today. THE COURT: That's correct. MR. HENZY: Okay. THE COURT: There is going to be no discovery. This is not -- these are not matters that are -- we're going to allow to have happen. That's not going to happen. We'll have a hearing. We'll hear your matter. And if we rule against you, then -- if I rule against you, then you'll appeal. MR. HENZY: Your Honor, I would ask that there be at least a docket entry on that so ordering that we do not -- Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 102 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 103 of\n\nHo Wan Kwok - July 21, 2022 102 THE COURT: Well, this is a status conference, so I'm not going to enter a docket entry on that right now. I'm telling you -- MR. HENZY: But if I don't have -- THE COURT: I'm telling you if you seek discovery before I rule on these matters, then I'm not going to make the other side comply. MR. HENZY: Okay. But, Your Honor, I don't want to go through the exercise of -- I don't know -- anybody -- THE COURT: This motion isn't even on the calendar -- MR. HENZY: I understand. THE COURT: -- so it's inappropriate to start discovery with regard to something that's not even -- This is a status conference. This was -- this was specifically scheduled as a status conference in connection with the motion, excuse me, the memorandum of decision and order appointing the Chapter 11 trustee. You filed documents after that -- this status conference was scheduled. None of your documents have been set for a hearing. Okay? So you can do whatever you think is appropriate once those matters are set for a hearing. MR. HENZY: Understood, Your Honor. What I don't want to do is have us serve discovery and put other parties in a position of having to file motions with this court and\n\nHo Wan Kwok - July 21, 2022 103 the Court then ruling on those motions and saying you don't get to take the discovery. I want to, I guess, just end -- THE COURT: You can do whatever you think is appropriate, Mr. Henzy. I am not -- this was not a hearing on which rulings were going to come out of it other than what I told you. I'm going to back and I'm going to issue -- I'm going to schedule hearings indifferent matters. And I'm going to require you in one of those orders to file briefs as to why you can represent this debtor without complying with 327 and when you have -- when you have what appears to be an actual conflict of interest. MR. HENZY: Understood, Your Honor. THE COURT: And when I say you, I mean Zeisler & Zeisler. Okay? MR. HENZY: Understood, Your Honor. On the discovery issue, okay, what I don't -- what I don't want to do -- THE COURT: I understand. MR. HENZY: -- I don't want to serve discovery after you've told me I'm not going to get discovery -- THE COURT: You can serve discovery at your own -- your decision. You do whatever you think, Counsel, but -- MR. HENZY: I thought you were about to say you Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 104 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 105 of\n\nHo Wan Kwok - July 21, 2022 104 can serve discovery at your own peril, but -- THE COURT: I almost did actually. MR. HENZY: -- which I don't -- THE COURT: Yeah. MR. HENZY: -- which, again, I don't want to do that. But I don't think it's fair to tell me I -- I'm not going to let you serve discovery, but go do whatever you're going to do -- THE COURT: Where does it say under Rule 60 that you're entitled to discovery by the way? MR. HENZY: I think the motion is governed by Rule 9014, Your Honor. THE COURT: Right. 9014 means people have an opportunity to respond. And that until that response is filed, why would you be entitled to discovery? MR. HENZY: Your Honor, I'm trying to not delay a hearing on these matters. I'm trying to have this go as fast as it can. Mr. Kwok's goal is not to delay the final appointment of a trustee. It's not to delay final retention of counsel for a trustee. We want to get to the issues as much as everybody else wants to get to the issues. Okay. So I understand that until someone files an objection to my Rule 60 motion, arguably, why am I taking discovery? I've a pretty good\n\nHo Wan Kwok - July 21, 2022 105 idea that there are going to be objections to my Rule 60 motion and I'm trying to move this along as quickly as I possibly can. I don't want to serve discovery and put people in a position of having to file motions with the Court and have the Court potentially have a hearing or not have a hearing and rule on the motion to give me then whatever rights I have with respect to the Court's ruling. Which is why I -- for me, it would be much preferable -- it may be preferable for other parties -- if the Court's going to rule that is to rule that today and get it out of the way. THE COURT: Well, I'll consider that. MR. HENZY: Thank you, Your Honor. THE COURT: Okay. MR. GOLDMAN: Your Honor? THE COURT: Yes. MR. GOLDMAN: May I be heard briefly? THE COURT: Can you -- make sure you can speak into the microphone. MR. GOLDMAN: Yeah. Can you hear me? THE COURT: Yes. Thank you. MR. GOLDMAN: Yeah. One idea I'd like to offer for the Court's consideration as a potential way to resolve this motion -- Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 106 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 107 of\n\n| | 117 |\n|----|-------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
106 |\n| 1 | THE COURT:
What concern? |\n| 2 | MR. GOLDMAN:
-- and concern -- |\n| 3 | THE COURT:
The 60(b) motion? |\n| 4 | MR. GOLDMAN:
Yes.
Yes.
And the concern about |\n| 5 | the Chinese government, not that that's an issue that I |\n| 6 | think -- I don't want to give it credence by proposing a |\n| 7 | solution, but the Court could simply provide that if Mr. |\n| 8 | Despins or Paul Hastings is contacted by the Chinese |\n| 9 | government with a threat of adverse action for purposes of |\n| 10 | influencing in any way the administration of this case that |\n| 11 | they would file a supplemental affidavit with the Court so |\n| 12 | indicating and we could take it from there because we are |\n| 13 | simply dealing with speculation. |\n| 14 | THE COURT:
Mr. Despins already has that |\n| 15 | obligation, Mr. Goldman.
He already has that obligation |\n| 16 | under his disclosure requirements under the code and the |\n| 17 | rules. |\n| 18 | I mean, I understand what you're saying, but I |\n| 19 | think it does give it credence where I haven't ruled on |\n| 20 | anything yet. |\n| 21 | And I'll consider what you said and I appreciate |\n| 22 | the -- raising the issue, but every lawyer, every trustee, |\n| 23 | has a continuing obligation. |\n| 24 | Mr. Despins has already stated under penalty of |\n| 25 | perjury that he doesn't have these connections. |\n| | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 108 of\n\n| | 117 |\n|----|--------------------------------------------------------------|\n| | Ho Wan Kwok - July 21, 2022
107 |\n| 1 | So I appreciate it.
I'm not sure how far that |\n| 2 | will go.
If you all want to talk about it, that would be |\n| 3 | something that would work out for you, that's fine.
I'm |\n| 4 | happy to entertain it if that's something that everybody |\n| 5 | wants to have entertained. |\n| 6 | But I'm not -- we're going to move this case |\n| 7 | forward and it's not going to be held up by matters that |\n| 8 | can't be addressed in other ways under the bankruptcy code |\n| 9 | and rules. |\n| 10 | Mr. Despins and any other person that would serve |\n| 11 | in that role understands the responsibilities of the role, |\n| 12 | understands the disclosures made under penalty of perjury, |\n| 13 | And if someone comes forth with some evidence that |\n| 14 | Mr. Despins is being influenced by the Chinese government, |\n| 15 | then they can bring that evidence forward. |\n| 16 | But to argue that without any evidence in the |\n| 17 | record and then say -- and I want discovery to stop the |\n| 18 | process I find that very unlikely that that will happen. |\n| 19 | MR. GOLDMAN:
Well, I certainly am in agreement |\n| 20 | with Your Honor's position on that.
I was just trying to |\n| 21 | address the Zeisler speculation. |\n| 22 | THE COURT:
No.
I appreciate the offer. |\n| 23 | As I said, you know, it doesn't look like anybody |\n| 24 | wants to go to talk together, right?
I mean, I can take a |\n| 25 | recess if you want to have a discussion. |\n| | |\n\n#### Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 109 of\n\nHo Wan Kwok - July 21, 2022 108 But this is -- we've been here now for almost two and a half hours. We need to let Mr. Despins go do his job. Okay? That's what this is all about. That's why a Chapter 11 trustee was appointed so that this could happen. What is in the record, whether or not it impacts any decision that is made by this court, Mr. Henzy, is what I started off my discussion with you a few minutes ago, which is you took your client as you found him. I'm sure you've read everything that has occurred in the New York State Court. Those are allegations that continue to be made here by the parties that were in that proceeding and by other parties. Your client has to make some decisions. And, you know, this court is here to support parties as much as the Court can, but the Court also has to move things forward if parties aren't moving together down the same path. And I'm not saying you should. I'm not saying that should happen. I'm saying otherwise why am I here? You can all go fight it out outside. Right? I mean, the point is we have to move the case along one way or another. Either your client makes decisions about trying to come up with a way to make this case work or not. And if he doesn't want to, that's fine. That is his prerogative. And\n\nI agree with you on that that that is his right. But he\n\nHo Wan Kwok - July 21, 2022 109 takes those steps with the understanding that the Court may not agree with him. MR. HENZY: Understood, Your Honor. THE COURT: Okay. And that's -- that's where we are. I don't want to spend any more time today -- I mean, I will if you want to talking about it, but I think it's important to understand we have to move forward. MR. HENZY: Your Honor, Mr. Kwok does not disagree with that, but we have -- I think -- I think the Court would agree we have to move forward the right way. THE COURT: I have to give everybody an opportunity to respond to these different motions, right? So what I'm looking at -- and I think I heard Mr. Friedman and Mr. Despins tell me, and everybody else is going to have to make themselves available, that we're going to have a hearing on August 1st. That's a Monday. Okay? That's a week and a day from today, business days. We're going to have a hearing on August 1st and I'm going to rule on these issues if there isn't agreement. With regard to the motion to withdraw as attorney, with regard to Brown Rudnick's, again, whether or not that's going to be allowed, I don't know. But if it is, it's definitely with conditions. And I think the U.S. Trustee should be opining on Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 110 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 111 of\n\n| | 117 | | | | | | | |\n|----|-----------------------------------------------------------------|--|--|--|--|--|--|--|\n| | Ho Wan Kwok - July 21, 2022
110 | | | | | | | |\n| 1 | that.
I don't know how the U.S. Trustee -- the U.S. Trustee | | | | | | | |\n| 2 | has to opine on that.
There's a -- there's a -- that's what | | | | | | | |\n| 3 | the role of the U.S. Trustee is with regard to professionals | | | | | | | |\n| 4 | in a Chapter 11 case.
In every case, but certainly in a | | | | | | | |\n| 5 | Chapter 11 case. | | | | | | | |\n| 6 | With regard to the Rule 60(b) motion, I'm going to | | | | | | | |\n| 7 | give everybody an -- but you all have to understand, you all | | | | | | | |\n| 8 | don't -- I'm not getting pleadings filed on Friday the 29th | | | | | | | |\n| 9 | and you're expecting me to read them and be ready to rule on | | | | | | | |\n| 10 | Monday the 1st.
That's not going to happen.
So you're | | | | | | | |\n| 11 | going to have to address these issues in short order whether | | | | | | | |\n| 12 | you agree with that or not.
That's what's going to happen. | | | | | | | |\n| 13 | Okay? | | | | | | | |\n| 14 | With regard to the application to employ Paul | | | | | | | |\n| 15 | Hastings and Neubert, Pepe, that's going to be set for a | | | | | | | |\n| 16 | hearing as well.
All that's going to be set for hearing. | | | | | | | |\n| 17 | I understand -- I have to look at the stay | | | | | | | |\n| 18 | motions.
I don't remember whether I think those should be | | | | | | | |\n| 19 | set for hearing.
I might be setting 20 things for hearing | | | | | | | |\n| 20 | on August 1st.
Okay?
But we need to move this case along. | | | | | | | |\n| 21 | It's just that simple.
And that's what's going to happen. | | | | | | | |\n| 22 | So if I look at the docket -- and I did try to | | | | | | | |\n| 23 | look at it before we came out today, but we had another | | | | | | | |\n| 24 | hearing -- I mean, we do have other hearings as I know you | | | | | | | |\n| 25 | all know.
And the problem with why I want you to get -- why | | | | | | | |\n| | | | | | | | | |\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 112 of\n\nHo Wan Kwok - July 21, 2022 111 I'm going to make you all respond earlier than the 29th, and probably by the 27th, which is next Wednesday, which isn't a lot of time, we have Chapter 13 day on the 28th. I mean, there are other issues that the Court has to address. Even though this case is extremely important to all of you -- and I completely appreciate that -- we do have other matters that we have to address. Okay? So I see that there are, you know, motions to appear pro hac vice in connection with these pending motions. Motions to appear pro hac vice are routinely granted. But if there's really going to be an objection to -- I'm going to let whoever wants to talk talk. Whether I think you're the lawyer or not, Mr. Henzy, I obviously let you talk today, right? I'm going to let you speak. But we have to make rulings on who represents what and in what context and who's going to appear in this case on a going forward basis. MR. HENZY: Your Honor, just to be clear, there will be no objection to the pro hac motions. I've never objected to a pro hac motion in my career and I don't expect I ever will. THE COURT: Okay. Thank you. MR. HENZY: So those I think probably -- THE COURT: Well, then, maybe we can at least move\n\nHo Wan Kwok - July 21, 2022 112 those along. Okay? MR. HENZY: So, Your Honor, evidence that I want to move this case along, there it is. MR. LINSEY: Those are, Your Honor, 530 -- rather 533 -- THE COURT: I have them. MR. LINSEY: Yes. THE COURT: I have them, Attorney Linsey. Thank you. All right. Is there anything else that anyone would like to state for the record this afternoon? (No audible response.) THE COURT: All right. I don't see anyone. Oh, Mr. Henzy? MR. HENZY: So I just want to be clear -- THE COURT: I didn't -- I didn't leave as fast as I should have I suppose. MR. HENZY: I just want to be clear on what's on the schedule for August 1st. Is it everything? Everything? THE COURT: I don't know yet. MR. HENZY: Okay. THE COURT: That's what I said. Well, I can tell you what's going to be on. MR. HENZY: Okay. THE COURT: What I think is going to be on. The Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 113 of\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 114 of\n\nHo Wan Kwok - July 21, 2022 113 motion to withdraw as attorney, Brown Rudnick. Mr. Despins' application to employ Paul Hastings and Neubert, Pepe. Your Rule 60(b) motion. Anything else, I'm not sure about yet. The stay motions, things like that, I've got to go back. Unless somebody is telling me -- I'm giving you all the opportunity right now to tell me what else should be heard on August 1st. I don't know if I'll agree with you, but I'm giving -- And you, Attorney Henzy, and the U.S. Trustee's Office are going to have to file briefs by -- I think the response date on everything is going to the 27th, on why you can -- you have to convince me of your argument that you don't need to comply with 327 because you're -- because the debtor's no longer a debtor in possession. And why you don't -- and regardless of that, why you don't have an actual conflict of interest in representing HK International and Mr. Kwok simultaneously. MR. HENZY: I just want to be -- when you said you'll let me speak on August 1t, I mean, I wouldn't want to get here -- THE COURT: Yeah. You're going -- I'm going to let you make your argument. MR. HENZY: I wouldn't want to get here on August 1st and have you say I've decided you can't represent Mr. Kwok and then Mr. Kwok is not ready -- he's not --\n\nCase 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 115 of\n\n| | 117 | | | | | | |\n|------------------------------------|------------------------------|------------|-----------------------------------------------------------|--|--|--|--|\n| Ho Wan Kwok - July 21, 2022
114 | | | | | | | |\n| 1 | | THE COURT: | We're not going to do that. | | | | |\n| 2 | | MR. HENZY: | He's not represented. | | | | |\n| 3 | | THE COURT: | It's a hearing on whether or not you | | | | |\n| 4 | can do that. | Okay? | | | | | |\n| 5 | | MR. HENZY: | Okay. | | | | |\n| 6 | | THE COURT: | I'm not going to -- I would never say | | | | |\n| 7 | | | that you were not going to be allowed to speak. | | | | |\n| 8 | | MR. HENZY: | I didn't think you would, Your Honor. | | | | |\n| 9 | | THE COURT: | Okay. | | | | |\n| 10 | | MR. HENZY: | But I just don't want him to be not | | | | |\n| 11 | represented at that hearing. | | | | | | |\n| 12 | | THE COURT: | I understand.
Well, Brown Rudnick's | | | | |\n| 13 | going to be here anyway. | | | | | | |\n| 14 | | MR. HENZY: | I don't think Brown Rudnick is | | | | |\n| 15 | | | intending to prepare for that -- a hearing on August 1st. | | | | |\n| 16 | | THE COURT: | They may not be intending to prepare | | | | |\n| 17 | | | for that hearing, but they're going to have to be here on | | | | |\n| 18 | | | their motion to withdraw as attorney. | | | | |\n| 19 | | MR. HENZY: | Understood. | | | | |\n| 20 | | THE COURT: | Okay. | | | | |\n| 21 | | MR. HENZY: | Understood. | | | | |\n| 22 | | THE COURT: | And so if I don't grant their motion | | | | |\n| 23 | | | to withdraw as attorney, then they're still his attorney. | | | | |\n| 24 | | MR. HENZY: | Okay. | | | | |\n| 25 | | THE COURT: | Okay? | | | | |\n| | | | | | | | |\n\nHo Wan Kwok - July 21, 2022 115 MR. HENZY: Okay. THE COURT: All right. Anything further from anyone? (No audible response.) THE COURT: All right. That concludes the Kwok matter for today. That is the last matter on today's calendar. Court is adjourned. (Proceedings concluded at 1:28 p.m.) I, CHRISTINE FIORE, court-approved transcriber and certified electronic reporter and transcriber, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above-entitled matter. 16 July 25, 2022 17 Christine Fiore, CERT Transcriber Case 22-50073 Doc 871-2 Filed 09/23/22 Entered 09/23/22 14:50:35 Page 116 of\n\n| | Case 22-50073
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117 | Page 117 of |\n|----|----------------------------------------------------------------------------------|-------------|\n| | Ho Wan Kwok - July 21, 2022 | 116 |\n| 1 | | |\n| 2 | I N D E X | |\n| 3 | | PAGE |\n| 4 | EXHIBITS FOR THE TRUSTEE: | |\n| 5 | 1
Trustee written presentation copy | 7 |\n| 6 | | |\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| | | |\n| | | |","body_zh":null,"key_entities":["Kwok","Ho Wan Kwok","Despins","Je","Paul Hastings","CCP","CIPA","GETTR","Guo","Miles Guo","Luc Despins","GTV","Chinese Communist Party"],"ecf_references":[],"word_count":31141,"status":"published","published_at":"2022-09-23 00:00:00","created_at":"2022-09-23","updated_at":"2026-07-07 08:29:58"}