郭文贵破产案 · MOTION · ECF #1059

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \* Case No. 22-50073 (JAM) \* HO WAN KWOK, \* \* Debtor. \* \* \* HK INTERNATIONAL FUNDS \* Adv. Proc. No. 22-05003 INVESTMENT (USA) LIMITED, \* \* Plaintiff, \* \* Bridgeport, Connecticut v. \* October 25, 2022 \* LUC A. DESPINS, \* Chapter 11 Trustee, \* \* Defendant. \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* TRANSCRIPT OF MOTION TO QUASH and CONTINUED PRETRIAL CONFERENCE BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Debtor: ERIC A. HENZY, ESQ. Zeisler & Zeisler, P.C. 10 Middle Street, 15th Floor Bridgeport, CT 06604 For the Creditor, Pacific ANNECCA SMITH, ESQ. Alliance Asia Opportunity Robinson & Cole Fund L.P.: 28 Trumbull Street Hartford, CT 06103 Proceedings recorded by electronic sound recording, transcript produced by transcription service. **Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992**

APPEARANCES: (Cont'd) For the Chapter 11 PATRICK R. LINSEY, ESQ. Trustee: Neubert Pepe & Monteith, PC 195 Church Street New Haven, CT 06510 For the Chapter 11 Trustee: NICHOLAS A. BASSETT, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 For Baker Hostetler, KELLIANNE BARANOWSKY, ESQ. Interested Party: Green & Sklarz, LLC One Audubon Street New Haven, CT 06511 ANDREW V. LAYDEN, ESQ. Baker Hostetler 200 South Orange Avenue Suite 2300 Orlando, FL 32801 For Williams & Connolly, JAMES J. HEALY, ESQ. Interested Party: Cowdery & Murphy, LLC 280 Trumbull Street Hartford, CT 06103 ERICA S. SIMPSON, ESQ. Williams & Connolly, LLP 680 Maine Avenue, SW Washington, DC 20024

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Ho Wan Kwok - October 25, 2022 3 (Proceedings commenced at 1:07 p.m.) THE COURTROOM DEPUTY: Case No. 22-50073, Ho Wan Kwok, and Adversary No. 22-5003, HK International Funds Investments (USA) Limited versus Trustee Luc Despins. THE COURT: Okay. Good afternoon. If we could have appearances for the record starting with the Chapter 11 Trustee, please. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. THE COURT: Good afternoon. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey, Connecticut counsel for the trustee. THE COURT: Good afternoon. MR. BASSETT: Good afternoon, Your Honor. Nick Bassett, from Paul Hastings, on behalf of the Chapter 11 Trustee. THE COURT: Good afternoon. Attorney Henzy? All the rest of you can come to the table. Go right ahead, please. MR. HENZY: Eric Henzy, of Zeisler & Zeisler, for the debtor, Ho Wan Kwok. THE COURT: Good afternoon. MR. HENZY: Good afternoon. MS. SMITH: Annecca Smith, Robinson & Cole, for

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Ho Wan Kwok - October 25, 2022 4 PAX. THE COURT: Good afternoon. THE COURTROOM DEPUTY: Sorry, I didn't hear your name. MS. SMITH: Annecca Smith. THE COURTROOM DEPUTY: Thank you. MS. BARANOWSKY: Good afternoon. Kellianne Baranowsky, with Green & Sklarz, local counsel to Baker Hostetler. THE COURT: Good afternoon. MS. BARANOWSKY: Good afternoon. MR. LAYDEN: Good afternoon, Your Honor. Andrew Layden, from Baker Hostetler, on behalf of Baker Hostetler. THE COURT: Good afternoon. MR. LAYDEN: Thank you. MR. HEALY: Good afternoon, Your Honor. James Healy, from Cowdery & Murphy, in Hartford. We've appeared on behalf of Williams & Connolly. I have here Attorney Erica Simpson, who is the client representative of Williams & Connolly, who has come up for this hearing. THE COURT: Good afternoon. THE COURTROOM DEPUTY: I'm sorry. I didn't make out your name. I'm sorry. MR. HEALY: My name is James Healy, H-E-A-L-Y. THE COURTROOM DEPUTY: Thank you.

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Ho Wan Kwok - October 25, 2022 5 MR. HEALY: I filed an appearance I believe yesterday. THE COURT: Thank you. And you are? MS. SIMPSON: Erica Simpson on behalf of Williams & Connolly. Thank you. THE COURT: Good afternoon. MS. SIMPSON: Good afternoon. THE COURT: All right. Everyone have a seat. We have a few matters to address. First and foremost, I wanted to just ask the Chapter 11 Trustee and Mr. Henzy a follow-up question that I asked you both yesterday afternoon about the pretrial conference in the adversary proceeding. MR. DESPINS: Yes, Your Honor. We do not need to go forward with the conference, status conference, today in the adversary proceeding. THE COURT: Okay. Thank you. Attorney Henzy, you agree with that? MR. HENZY: I agree with that, Your Honor. THE COURT: Okay. What I'm going to -- thank you, both. What I'm going to say, have the docket indicate, was that the pretrial conference was not held and no further pretrial conferences will be scheduled at this time.

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| | Ho Wan Kwok - October 25, 2022<br>6 | |----|---------------------------------------------------------------| | 1 | Now, that doesn't -- that means either one of you | | 2 | or anyone in the adversary can always ask for a pretrial | | 3 | conference.<br>Or if the Court thinks there's one necessary, | | 4 | we'll enter a new order scheduling one.<br>But at this point, | | 5 | I don't think that it is necessary, given what we talked | | 6 | about yesterday, to schedule any further pretrial | | 7 | conferences at this time.<br>Okay? | | 8 | MR. HENZY:<br>Thank you, Your Honor. | | 9 | MR. DESPINS:<br>Thank you, Your Honor. | | 10 | THE COURT:<br>Okay.<br>All right.<br>Then we'll move to | | 11 | the matters that are in the main case on the -- that are on | | 12 | the calendar today. | | 13 | The first matter is the motion from Baker | | 14 | Hostetler for process with regard to the subpoenas.<br>I have | | 15 | a feeling, given what I've seen, that there might be some | | 16 | agreement with regard to the Baker Hostetler motion or am I | | 17 | incorrect? | | 18 | MR. LAYDEN:<br>I believe so, Your Honor. | | 19 | THE COURT:<br>Okay. | | 20 | MR. LAYDEN:<br>If I may, I can give a brief overview | | 21 | -- | | 22 | THE COURT:<br>Please. | | 23 | MR. LAYDEN:<br>-- and what I believe is the | | 24 | agreement. | | 25 | THE COURT:<br>Thank you.<br>Go right ahead. | | | |

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Ho Wan Kwok - October 25, 2022 7 MR. LAYDEN: Thank you, Judge. Baker & Hostetler represented Mr. Kwok in six matters before the bankruptcy case. Those matters were all stayed by the filing of the bankruptcy case. Baker Hostetler was one of the parties that received a 2004 subpoena from the Chapter 11 Trustee. We, with the consent of the Chapter 11 Trustee, received an extension to respond to the subpoena until October 10th and then timely responded to the subpoena. And we also had an agreement to extend our production date to October 21. We worked extensively with both the trustee's counsel and the debtor's counsel to negotiate the process for identifying the personal harm documents under the privileges consent order and that ultimately led to the four or five bullet points, essentially, that are the main part of the motion. And those are that Baker Hostetler would review the documents that were responsive to the agreedupon search terms that we had with the Chapter 11 Trustee's counsel and we would produce the documents that were not identified as potentially personal harm documents to the trustee. We would make a preliminary tag of documents that could constitute personal harm and give those to the debtor's counsel. And then the debtor's counsel would be responsible

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Ho Wan Kwok - October 25, 2022 8 under the privileges consent order for that ten-day period that the order contemplates from the production date to make the final decision on if a document constituted a personal harm document and create a log of those documents. Then the final two bullet points or so are basically just reservations of rights that all parties, you know, retain the right to seek to claw back documents under the Federal Rules of Civil Procedure, under the protective order, so basically a reservation of rights for everybody. This is essentially just a procedural motion to handle how we hand off the documents to make the determination. We spent a lot time negotiating those four or five bullet points. We filed a motion within an hour or two of having signed off on the language. And we appreciate the Court setting it for an expedited motion -- for an expedited hearing on this. What we've done, Judge, is very, very quickly reviewed the documents. There were about 60,000 documents that were reviewed. Baker Hostetler had a team of more than 50 lawyers reviewing the documents. The search terms were agreed upon at the end of September. Documents were put into a relativity database, which is a review platform for reviewing and tagging documents, on October 12th. And the review -- they have to do some tech things to make that all

Ho Wan Kwok - October 25, 2022 9 work, but the review started October 17th with a team of between 50 and 65 lawyers working on it. The productions to the trustee started three days later on October 20th. There's been to date three productions to the trustee of, my understanding, 10,701 documents, which is a little over 63,000 pages that have gone to the trustee. The debtor has received 2,177 documents under the potential personal harm category, which is about a little over 18,000 pages. And so we've been essentially acting in accordance with the -- with the procedure that we're proposing today, Judge, and we would request that the Court grant the order. It was filed as unopposed, consented to by the debtor. I understand the trustee filed a consent after that a few days afterwards. So I believe the order is consensual at this point and that's my understanding. THE COURT: Okay. Thank you very much. MR. LAYDEN: Thank you. THE COURT: Attorney Bassett, I assume you're handling this matter on behalf of the trustee? MR. BASSETT: Yes, Your Honor. Thank you, Your Honor. Good afternoon, again. Nick Bassett from Paul Case 22-50073 Doc 1059 Filed 11/02/22 Entered 11/02/22 13:08:01 Page 9 of 44

Hastings on behalf of the trustee.

Mr. Layden is correct that we did, of course,

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Ho Wan Kwok - October 25, 2022 10 submit a reservation of rights in response to Baker Hosteller's motion. We, as we said in what we submitted, do consent to the entry of the order. We don't have any objection to the procedure that Baker Hostetler has proposed. As we stated in our paper, we, you know, came to that conclusion and got comfortable with the proposed order based in part on the representation that Baker Hostetler had made to the trustee about the progress that they have made in reviewing documents, the fact that the lion's share of the documents have already been reviewed and produced. And to the extent that there are remaining categories, those, you know, should not take too long. It should not prevent Baker Hostetler from complying with the procedures that they have laid out. One issue that did arise that I wanted to raise with the Court is, as I understand from Baker Hostetler, there are some documents, potentially a substantial number, that are in Baker Hostetler's files and responsive to our subpoena that were produced in the PAX state court litigation. And one of the responses that we have received from them is that those documents, you know, would not be produced to the trustee or that the trustee should get them from another source.

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Ho Wan Kwok - October 25, 2022 11 And I think the two issues we had heard is that there are confidentiality concerns because those documents were produced pursuant to a protective order in the PAX litigation, and/or some of those documents, according to what we've heard, would need to be reviewed for potential personal harm privileges belonging to the debtor. I just wanted to, you know, briefly state our position on those two issues, the first of which is that the trustee has signed the protective order in the PAX litigation at the request of the debtor. We also now have a protective order in this case. So there should be no issue with the trustee receiving documents marked confidential just because they were produced in the PAX litigation. The second issue is that if a document was produced in discovery in the PAX litigation, there's no way that document could be privileged on a personal harm basis because it's already been made available to adversaries in a litigation. So our position is that all of those documents should just be made available to the trustee. And I raise that now because I don't want this, you know, sort of bucket of documents in the PAX litigation to, you know, somehow create an issue that would bring us back before the Court, notwithstanding the fact that we otherwise have an agreement Case 22-50073 Doc 1059 Filed 11/02/22 Entered 11/02/22 13:08:01 Page 12 of 44

Ho Wan Kwok - October 25, 2022 12 on a procedure that was laid out in the motion. Thank you. THE COURT: Okay. Thank you. Attorney Layden? MR. LAYDEN: Sure. The issue with the documents in the PAX litigation is that the state court in the PAX litigation entered an order that said if a receiving party receives a subpoena for documents, or is otherwise compelled to produce documents that are subject to the protective order, then the protective order either has to be amended or there has to be ten business days notice to the producing party to give them an opportunity to object and then the document can be produced. And so I understand that there may be an agreement with the Zeisler firm, but some of those documents are third-party productions, so they're not documents that came from Zeisler, for example, or came from the debtor's side. They're documents that came from third parties under what appear to be third-party subpoenas to them. And so -- THE COURT: That PAX had served on the third parties is you're saying? Or who served the -- MR. LAYDEN: I don't know who served the subpoenas. THE COURT: Okay. MR. LINSEY: The way that they're reflected in what we have is it's they're called third-party production

Ho Wan Kwok - October 25, 2022 13 and there's about ten parties listed with documents under there. And so I'm happy to work with the trustee's counsel. But what we think is appropriate is that we send a letter to each of the parties that produced documents and provide ten business days notice, which is what's required under that order, and then produce them. Because I'm not -- my reading of the protective order is that even if the debtor and PAX were to agree it can be produced, that the non-parties that produced documents have rights under that order and the Court says what is supposed to happen. And so my understanding is that what should happen is we should send a letter to give the ten days notice. If for some reason that's not necessary, we'll produce them, but we believe that that's necessary to comply with the state court order. THE COURT: Okay. But the third-party documents that you're talking about, third-party produced documents, they're not privileged. They're not subject to a privilege. And how are they subject to a protective order? MR. LAYDEN: The protective order, by its terms, apply to documents -- as I understand the state court protective order applies to documents produced in that litigation even if it's not privileged. So a third party Case 22-50073 Doc 1059 Filed 11/02/22 Entered 11/02/22 13:08:01 Page 13 of 44

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Ho Wan Kwok - October 25, 2022 14 that was producing documents under a subpoena I think it could be covered by the protective order even though it's not privileged, Your Honor. THE COURT: Well, I'll let you both try to figure that out. But it sounds -- I don't know. I haven't looked at the protective order that was issued in the state court litigation so I don't know. But if there are documents that have already been produced and the debtor is not opposing the production to the trustee, then I guess I'm somewhat not understanding the issue. But that doesn't mean -- I haven't read it. MR. LAYDEN: Understood. THE COURT: So I haven't read it. Attorney Bassett, is there -- you know, you and Attorney Layden are going to talk about this or are you concerned that this is going to raise some other issue that the Court needs to address right now? MR. BASSETT: Your Honor, I guess what I'd say is, you know, I'm always hoping to avoid having to come back to the Court. So while obviously we can go talk to Attorney Layden about it, you know, to the extent that there was an ability for us to make progress during this hearing before Your Honor, that would be great. But the one thing I would mention is that we had not understood, based on our conversations with Attorney

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Ho Wan Kwok - October 25, 2022 15 Layden prior to the hearing today, that their concern was that these documents in the PAX litigation were produced by third parties subject to the protective order. But even that being the case, my reaction is twofold. One, the trustee has stepped into the shoes of the debtor, who of course was a party to the protective order in the PAX litigation and, therefore, I don't see any reason why we would not have not access to those documents. Two, out of an abundance of caution, we have already agreed to be bound by that protective order. So, again, I don't see the issue. I think all parties who have a concern regarding confidentiality should be protected. But I do appreciate the fact that Your Honor does not have the protective order from that case before you. You have not reviewed it. I am happy to go back to try to work this out with Attorney Layden. But, again, it is, to be clear, it is a circumstance where we don't really think there should be an issue at all. THE COURT: Anything further, Attorney Layden? MR. LAYDEN: Just briefly, Judge. Our intent is to get them the documents that they're entitled too. We've gone to great lengths to try to produce as quickly as we can. This one was kind of a late arriving issue that

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Ho Wan Kwok - October 25, 2022 16 maybe we first talked about Friday afternoon late. I feel confident that we can work it out with the trustee's counsel. And our goal is to get them the documents they're entitled to. I just want to be careful that I don't violate the state court order in doing so. THE COURT: Okay. I understand your position. Thank you. With regard to the proposed order, Attorney Bassett, that Baker Hostetler attached to its motion, it's a two-page proposed order. I've looked at it. Are you saying that you have no changes or additions or edits to the order? I mean, we need to add the date of the hearing and the ECF number of the motion, but other than that, is there anything in this order that you are not consenting to or wish to change? MR. BASSETT: No, Your Honor. That's correct. We do not have an objection to the entry of the proposed order as drafted. THE COURT: Okay. All right. Well, then what will happen is the motion will be granted, your proposed order will enter with -- we can enter the hearing date and the ECF number, that's the only thing we need to enter besides putting a -- putting the signature on the order. Okay? And then I know you will continue to work with

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Ho Wan Kwok - October 25, 2022 17 Attorney Bassett to try to resolve this remaining issue that you addressed today. And I'm confident, as you are, that you will be able to resolve that issue. Okay? MR. LAYDEN: Thank you, Judge. THE COURT: So the motion is granted and the proposed order with the minor additions noted on the record will enter. MR. LAYDEN: Thank you, Your Honor. THE COURT: Okay. MR. LAYDEN: I intend to stay in the courtroom for as long as I can, but I have a flight, so can I otherwise be excused? This is the only matter I believe I'm involved in. THE COURT: You can do whatever you think is appropriate. You don't need to stay but you're welcome to stay. MR. LAYDEN: Thank you very much. THE COURT: Okay. Thank you. MS. BARANOWSKY: Thank you, Your Honor. THE COURT: Thank you. All right. If everyone will just give me one moment until we go to the next matter, please. (Pause) THE COURT: All right. Then the remaining matter in the Kwok case on today's calendar is the motion to quash filed by -- on behalf of Williams & Connolly. And I saw

Ho Wan Kwok - October 25, 2022 18 that the Chapter 11 Trustee's counsel filed a response I think last night. Have the parties had an opportunity to discuss this or are we proceeding? Would you like to make argument on your motion or would you just like to report on the status? MR. HEALY: I'm happy to proceed however the Court would prefer. THE COURT: Well, have you made any progress with regard to the issues in your motion to quash? MR. LINSEY: I mean, if it's their motion, I'll say we have engaged in telephone conferences regarding the issues in the motion including yesterday. The last one was prior to the response that the trustee filed yesterday evening. However, it was -- I think it's fair to say it ended with an agree to disagree and we'll present the issues to the Court. THE COURT: That's fine. That's fine. Go right ahead, counsel, then. MR. HEALY: Okay. Thank you, Your Honor. We did file the motion, you know, to seek the Court's guidance on this issue and some I think bedrock principles to keep in mind here. Williams & Connolly has not represented this debtor for almost five years, that Williams & Connolly also

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Ho Wan Kwok - October 25, 2022 19 provided the debtor's current counsel the entire client file coming up on two years ago now. And in our view there's no reason that the very same information that's being requested of Williams & Connolly couldn't be gathered from a party in this case. And that's the case law that we briefed in our motion, Your Honor, that, whereas here, the same information, the documentation, can be obtained from a party, courts generally will not impose that more serious and unfair burden on a third-party law firm, which is what we have here. What we did provide the Court was the cover correspondence that accompanied Williams & Connolly providing that client file to the debtor's counsel so the Court can, in fact, now have some confidence that that file was provided to the debtor. You know, if there's to be another production of the client file to the debtor in order for the debtor to then make the privilege calls, you know, we'll leave that to the Court. But, you know, our concern here is that there -- is that Williams & Connolly would be taking on the burden of doing a review not only for responsiveness but also for privilege. And in this context, under the consent order that

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Ho Wan Kwok - October 25, 2022 20 governs in this case, we don't believe that the privilege determinations will be an easy decision. We think there will be some difficult calls. You know, for example, in determining whether something falls within an investigative topic, which is the debtor's privilege he retains versus something that is the trustee's privilege, you know, the matters that William & Connolly represented the debtor for, those are difficult decisions. You know, some of these are employment matters involving, you know, negotiating agreements or setting up payroll, which side that falls on I think could be a difficult call. You know, one can imagine the tax planning or corporate entity formation too could involve difficult decisions in terms of which side that it falls on. And in our view the better course is for the debtor, the person who may, in fact, hold that privilege to be the one who in the first instance makes that determination. And if there's a disagreement between the debtor and the trustee, they can of course bring that to the Court or work it out as the case may be. So our view is that in this case given the circumstance Williams & Connolly is in, have not represented the debtor for quite some time, and has taken concrete steps

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| | Ho Wan Kwok - October 25, 2022<br>21 | |----|----------------------------------------------------------------| | 1 | to ensure that the entire client file was, in fact, provided | | 2 | to the debtor, that the better course of action would be, in | | 3 | fact, to request those documents from the debtor in the | | 4 | first instance and to proceed in that fashion. | | 5 | THE COURT:<br>Okay.<br>Thank you. | | 6 | And when you say the file was -- the entire file | | 7 | was given to the debtor's counsel, which counsel? | | 8 | MR. HEALY:<br>So the motion, Your Honor -- | | 9 | THE COURT:<br>I know you said it in the motion, but | | 10 | I don't have it open in front of me unfortunately at the | | 11 | moment. | | 12 | MR. HEALY:<br>No, not a problem.<br>Let me -- | | 13 | THE COURT:<br>Although I could open it. | | 14 | MR. HEALY:<br>No problem.<br>So it's Exhibit 2 to the | | 15 | motion is a cover letter to Aaron Mitchell of Lawall & | | 16 | Mitchell dated January 28th, 2021. | | 17 | THE COURT:<br>Okay.<br>Attorney Mitchell has filed an | | 18 | appearance in this case but hasn't really done anything in | | 19 | this case.<br>The Zeisler firm has been the debtor's counsel. | | 20 | So I understand what you're saying now.<br>Okay.<br>That's why | | 21 | it didn't ring a bell immediately with me, but I understand | | 22 | now.<br>Thank you. | | 23 | All right.<br>Is there anything else you want to | | 24 | add?<br>I'm going to hear from the trustee's counsel and I'll | | 25 | give you an -- | | | |

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Ho Wan Kwok - October 25, 2022 22 MR. HEALY: Of course. I'm happy to answer questions either -- THE COURT: -- I'll give you an opportunity to respond after the Chapter 11 Trustee's counsel addresses the issue. MR. HEALY: Thank you, Your Honor. THE COURT: Thank you. Attorney Linsey? MR. LINSEY: Thank you, Your Honor. I guess before I get into the specifics, I just wanted to start by noting the contrast. We've been here now with Brown Rudnick and with Baker Hostetler and now with Williams & Connolly. Obviously, there's subpoena discovery under Rule 2004 going on with other law firms and advisors behind the scenes. But just taking, for example, what you heard from Baker Hostetler today, that they have 50 different lawyers, you know, looking over documents and preparing production, Williams & Connolly's position, as has been articulated, and as it appears in the motion, is that they don't want to be bothered and that the production should be obtained from the debtor and only from the debtor and that's simply untenable and I'll discuss why. The trustee served Williams & Connolly with a subpoena under the Court's Rule 2004 order on September

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| | Ho Wan Kwok - October 25, 2022<br>23 | |----|----------------------------------------------------------------| | 1 | 22nd.<br>The deadline to file responses and objections was 14 | | 2 | days later.<br>That deadline passed without objections or | | 3 | responses being served on the trustee. | | 4 | The deadline for production to have been made | | 5 | responsive to the subpoena was yesterday.<br>That deadline | | 6 | passed as well without any production having been made.<br>The | | 7 | motion to quash was filed I believe last Thursday. | | 8 | Williams & Connolly has not filed any motions to | | 9 | extend its time or request any extensions of time with | | 10 | respect to these deadlines. | | 11 | Now, for background, the trustee understands from | | 12 | information that's been made available to the trustee from | | 13 | other sources that Williams & Connolly represented the | | 14 | individual debtor. | | 15 | And given that we have jointly administered cases, | | 16 | when I say the individual debtor, I mean Ho Wan Kwok as | | 17 | opposed to the Genever BVI debtor, that Williams & Connolly | | 18 | represented the individual debtor with respect to the | | 19 | formation of the Genever BVI debtor, as well as Genever | | 20 | U.S., that subsidiary that ultimately owns the penthouse | | 21 | apartment in Manhattan. | | 22 | The trustee believes that Williams & Connolly may | | 23 | have represented the individual debtor and related persons | | 24 | and entities as to other matters.<br>And from the presentation | | 25 | today by Williams & Connolly it certainly sounds like that's | | | |

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Ho Wan Kwok - October 25, 2022 24 the case. Unfortunately, in the meet and confers that we've had the trustee has asked for a list of matters as to which Williams & Connolly has represented the individual debtor and related persons and entities and Williams & Connolly has declined to provide that. So, for example, tax advice. That's the first the trustee is hearing that is this hearing. The notion that there was payroll advice, I don't believe that we've heard that prior to this hearing. So that's put us in a position to inhibit obviously any kind of cooperative efforts that could occur to target discovery. Of course, Williams & Connolly is essentially taking the position that with most discovery that they're not going to comply at all, that rather, the sole source of that discovery should be from the individual debtor. And I want to clarify a few things. With respect to Williams & Connolly's contention that it provided the client file to the individual debtor's counsel, that is alleged to have occurred in January of 2021, nearly 20 months ago by my math, and more than a year prior to the petition date in this case. Whatever file was provided, it was provided to Mr. Mitchell, not to Zeisler & Zeisler, the individual debtor's current bankruptcy counsel in this case.

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| | Ho Wan Kwok - October 25, 2022<br>25 | |----|--------------------------------------------------------------| | 1 | And the trustee has had numerous meet and confers | | 2 | with individual debtor's counsel where the individual debtor | | 3 | has taken the position, really ad nauseam, that he doesn't | | 4 | have any documents, that there are no available documents, | | 5 | and that the only place that the trustee is going to be able | | 6 | to get documents is from the individual debtor's former | | 7 | counsel. | | 8 | Now, the trustee doesn't agree with that position. | | 9 | But in order to move the trustee's investigation forward, | | 10 | we're proceeding on multiple tracks.<br>And really, even | | 11 | without respect to that position, we would be subpoenaing | | 12 | further law firms -- former law firms and related entities. | | 13 | Williams & Connolly, based on a telephone | | 14 | conference that we had yesterday, I think would admit that | | 15 | there are documents responsive to the subpoena that are | | 16 | applicable to the disputed requests, that are not covered in | | 17 | whatever client file that was given.<br>And, again, that | | 18 | client file that was supposedly given to someone else has | | 19 | not been made available to the trustee. | | 20 | Now, there are procedures under the Federal Rules | | 21 | of Civil Procedure for parties to assert privilege.<br>There | | 22 | are special issues in this case because much of the | | 23 | privilege has passed to the Chapter 11 Trustee.<br>And we've | | 24 | dealt with those by creating procedures on a consensual | | 25 | basis that Your Honor ordered in the form of that consent | | | |

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Ho Wan Kwok - October 25, 2022 26 order. So there are procedures for all this to work out. It's -- we're working it out with other parties, but Williams & Connolly, like other advisory firms, in realizing it's not pleasant, must play by the rules of the game and produce responsive discovery so that the trustee's investigation is not delayed. A rough analogy, I think back to when I was -- when I was a kid there was one game I always hated and that was Monkey in the Middle. And there have been several times, I think Your Honor's heard some of them, in the context of discovery in this case where it's been, you know, the individual debtor on one side, it's been someone else on the other, and everyone's pointing fingers, there's a game of ping-pong back and forth, get it from here, get from there. The fact is parties, including third parties, have obligations under discovery. Subpoenas have been served. Deadlines exist. And now there needs to be production. So in addition to the objection to the motion to quash, there has been a cross-motion to compel, and the trustee requests that the Court deny the motion to quash and enter an order that production be made within seven days. And if you have any questions, I'd be happy to answer them, Your Honor.

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Ho Wan Kwok - October 25, 2022 27 THE COURT: I don't have any questions at the moment but I might. Okay. MR. LINSEY: Thank you. Okay. THE COURT: I would ask counsel for Williams & Connolly, I have a question about your -- I just was able to look at the exhibit that you referred to. I did see it the other day, but I didn't have it in front of me. MR. HEALY: Yes, Your Honor. THE COURT: And if I'm reading Exhibit 2 properly, it's a letter to Aaron Mitchell that says enclosed is the final tranche of the Kwok file returned. So how many times did Williams & Connolly turn over documents to Attorney Mitchell? MR. HEALY: If I could have the client representative address that directly, Your Honor? THE COURT: Sure. Yes, please. MS. SIMPSON: We submitted three tranches of documents. This was during COVID. And just as a rolling basis. Our office was closed and I was actually the one that did it so we separated them into three individual deliveries. So we just sent you the last letter -- THE COURT: Okay. MS. SIMPSON: -- to signify that the client file had been delivered. THE COURT: And did Mr. Mitchell ask you to -- ask

Ho Wan Kwok - October 25, 2022 28 the firm to turn over the client file? MS. SIMPSON: That's right. Yes, he did. THE COURT: Okay. And did he tell you why? MS. SIMPSON: He did not tell us why and we did not ask him if the -- we confirmed with the client that the client wished for that to happen. THE COURT: Okay. With regard to the encrypted drive that's referred to in the letter, the January 28, 2021 letter, is that -- MS. SIMPSON: Yes. THE COURT: -- does Williams & Connolly still have that -- a copy of that encrypted drive in your records? MS. SIMPSON: Yes, Your Honor, we do. THE COURT: Okay. MS. SIMPSON: Your Honor, if I may? THE COURT: Sure. MS. SIMPSON: What we did not do at the time obviously we were delivering the client file pursuant to the D.C. Rules, which are as you may know quite broad, so we did not do any sort of, you know, we didn't review them for -- this was long before the bankruptcy so we weren't reviewing them for any specific reason or pulling anything out. THE COURT: And did you -- did Williams & Connolly retain a copy of everything that they turned over to Attorney Mitchell? Case 22-50073 Doc 1059 Filed 11/02/22 Entered 11/02/22 13:08:01 Page 28 of 44

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| | Ho Wan Kwok - October 25, 2022<br>29 | |----|---------------------------------------------------------------| | 1 | MS. SIMPSON:<br>That's right.<br>Yes, we did. | | 2 | THE COURT:<br>Okay.<br>All right.<br>That's helpful to | | 3 | know.<br>Thank you. | | 4 | MS. SIMPSON:<br>Yeah. | | 5 | MR. DESPINS:<br>And, Your Honor, if I may? | | 6 | THE COURT:<br>Yes. | | 7 | MR. DESPINS:<br>I apologize for interrupting, but | | 8 | it's more in the form of a question, which is what does it | | 9 | mean a client file?<br>Does that include internal emails? | | 10 | Because typically it doesn't.<br>And of course we're seeking | | 11 | those, so I want to make sure that issue is before the | | 12 | Court. | | 13 | MS. SIMPSON:<br>Your Honor, if I may? | | 14 | One point of clarification.<br>I think distinction | | 15 | between Williams & Connolly and Baker Hostetler, who I had | | 16 | the privilege to listen to, we did not handle one litigation | | 17 | matter or even two concise litigation matters.<br>We handled | | 18 | myriad matters. | | 19 | And so, yes, the client file did include emails, | | 20 | but it wasn't as easy as taking a litigation filing and | | 21 | collecting that.<br>That -- this was over myriad matters from | | 22 | many time keepers.<br>But, yes, the client file did include | | 23 | internal emails. | | 24 | THE COURT:<br>But did it include all of the internal | | 25 | communications?<br>I think that's the question. | | | |

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Ho Wan Kwok - October 25, 2022 30 MS. SIMPSON: Yes. THE COURT: You know, I don't know if it did or it didn't, but I think the question is did Williams & Connolly retain any documents, internal communications, that it didn't turn over to Attorney Mitchell? MS. SIMPSON: We did. THE COURT: You did. Okay. MS. SIMPSON: Yes. THE COURT: Okay. MS. SIMPSON: I can give you the reasons for that if you'd like. THE COURT: Sure. Go right ahead. MS. SIMPSON: Privilege, internal privilege materials that where we were just talking with our general counsel for example. We also withheld bills. We typically don't consider that part of the client file, and we can address that today as well. Non-responsive, off-topic. For example, one of our partners might send, Bob Barnett, I don't know if you've heard of him, he's very prone to seeing things in the news and he'll flip a news letter or news clipping to another lawyer. We did not consider that part of the client file. THE COURT: Okay. MS. SIMPSON: So those are examples. THE COURT: Thank you.

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| | Ho Wan Kwok - October 25, 2022<br>31 | |----|--------------------------------------------------------------| | 1 | MS. SIMPSON:<br>Yeah. | | 2 | THE COURT:<br>I appreciate that. | | 3 | MS. SIMPSON:<br>Yes, Your Honor. | | 4 | THE COURT:<br>Attorney Linsey? | | 5 | MR. LINSEY:<br>We start to get a -- when we parsed | | 6 | very deeply into the facts, you know, we kind of lose the | | 7 | forest for the trees, but suffice to say my understanding | | 8 | from the call that we had yesterday is that the client file | | 9 | is not contemporaneous, fully contemporaneous, with all | | 10 | discovery in Williams & Connolly's possession with all | | 11 | documents and information in their possession responsive to | | 12 | the subpoena.<br>And that's, you know, there are several | | 13 | reasons why we take issue with the motion to quash. | | 14 | Even if we had had the entire client file turned | | 15 | over, you know, allegedly by Mr. Mitchell, we would be, you | | 16 | know, working with Williams & Connolly to obtain discovery | | 17 | to ensure that we have everything from the individual debtor | | 18 | that we're supposed to have.<br>But right now we don't have | | 19 | anything. | | 20 | And my understanding, and Williams & Connolly can | | 21 | correct me if I'm wrong, but, you know, there are documents | | 22 | that are responsive to the subpoena that are not contained | | 23 | within the individual client file. | | 24 | As far as privileges that might be asserted by | | 25 | Williams & Connolly, there is a procedure to assert those |

Ho Wan Kwok - October 25, 2022 32 privileges, you know, to the extent they exist, under the Federal Rules of Civil Procedure. But the fact that it's onerous to participate in discovery because there needs to be, you know, privilege asserted or a privilege logs served, does not prevent the functioning of discovery or the functioning of subpoenas. If it did, then there could never be discovery. MR. HEALY: And, Your Honor, if I may? Our motion to quash was not directed to the entirety of the subpoena. We directed it to the particular paragraphs that would be responsive to the entire client file as we've indicated to Mr. Lindsey in the meet and confers. For example, bills, those were not included in the client file. They are called for in a subpoena. We have indicated we will produce those, obviously, in collaboration Case 22-50073 Doc 1059 Filed 11/02/22 Entered 11/02/22 13:08:01 Page 32 of 44

But our motion to quash is based on the point that an entire client file, that as you heard a moment ago, includes the relevant internal communications that it should not be on a third-party law firm to undertake the very seriously burdensome procedure of reviewing that entire file for responsiveness and for a privilege that belongs to the debtor. It does not belong to the law firm. That's why we undertook this motion.

with ensuring there's no privilege claim.

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Ho Wan Kwok - October 25, 2022 33 THE COURT: I understand. So I wanted to ask you before, and I forgot, you had talked about investigative topics, and you said that something that I thought was -- might not be accurate. Did you -- did you review, I'm sure you did, but the definition of investigative topics really goes to -- in the consent order goes to the trustee's investigation into the assets known or unknown of the debtor and what other causes of action might be available to the debtor or might be available for the estate. So when you're talking about billing records and things of that nature, I don't see how that is an investigative topic. And I do think that there are -- there are -- when you say -- and I understand, that you talk about specific paragraphs with regard to the motion to quash then what is the plan to produce the documents that aren't -- that you are not seeking to quash? You're not going to produce them? You're going to still ask the -- I'm just asking the question, I just want to make sure I understand -- you're still going to ask the trustee's counsel to get them from the attorney? MR. HEALY: No. What we have indicated to Mr. Linsey before -- THE COURT: Okay.

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| | Ho Wan Kwok - October 25, 2022<br>34 | |----|------------------------------------------------------------------| | 1 | MR. HEALY:<br>-- is what we do not have to do is go | | 2 | through the client file and be responsible for making those | | 3 | calls that Your Honor just explained.<br>That our client file | | 4 | does not include bills.<br>We've indicated to Mr. Linsey we | | 5 | will make -- | | 6 | THE COURT:<br>Well, I think the investigative -- | | 7 | MR. HEALY:<br>-- arrangements to provide those. | | 8 | They were not in the client file.<br>They can be provided by | | 9 | us.<br>That's what we were trying to do, Your Honor.<br>If there | | 10 | are things specific to Williams & Connolly not in the client | | 11 | file, that's the conversation we're prepared to have as part | | 12 | of our burden -- | | 13 | THE COURT:<br>Okay.<br>Well, the investigation topics, | | 14 | and believe me I've see a lot of things, so I could be | | 15 | confusing things, so please correct me if I'm wrong. | | 16 | But wasn't one of the issues why the trustee | | 17 | sought the information from Williams & Connolly was that | | 18 | Williams & Connolly -- and now, I could be wrong, so correct | | 19 | me -- represented the debtor in the formation of some of the | | 20 | entities in the British Virgin Islands, including the entity | | 21 | that owns the hotel in -- I mean, not the hotel, but that | | 22 | owns the apartment in the Sherry-Netherland Hotel? | | 23 | MS. SIMPSON:<br>Your Honor, that is correct. | | 24 | THE COURT:<br>Okay. | | 25 | MS. SIMPSON:<br>Williams & Connolly did assist with | | | |

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Ho Wan Kwok - October 25, 2022 35 some of those transactions. THE COURT: Okay. So why is that not -- why is that information not being produced? MS. SIMPSON: Again, that was part -- we returned all of that to Mr. Kwok's counsel, Mr. Mitchell. We considered that all part of the client file. There was a tremendous volume of transactional materials that we returned to the debtor. And, again, I think is -- our counsel is stating we're here for your guidance on the best way to handle that. We think that the debtor is in the best position to determine very close privilege calls. It's -- THE COURT: Well, the privilege actually, if you -- and I'm not saying you've had the opportunity to review all this extensively, okay -- MS. SIMPSON: Yeah. THE COURT: -- but we've had a lot of hearings about the privilege issue. MS. SIMPSON: Right. THE COURT: We've had a lot of hearings about the governance issues. We've had a lot of hearings about the protective order. And the -- what the trustee is seeking, at least from what I can see, is information that would relate to the assets of the bankruptcy estate. Now, the cases that you've cited in your motion to

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Ho Wan Kwok - October 25, 2022 36 quash, many of which are important cases, but don't necessarily address the trustee's investigative duties in a Chapter 11 case when the debtor has been removed from possession, that means not able to continue to administer the estate, and a third party has been ordered by the Court to go in and conduct that investigation and that is what has happened in this case. And that ruling appointing the trustee was not appealed and, therefore, it's a final order.

The issue with regard to the entities that your firm represented the debtor in I think is subject to discovery by your firm, even if you turned over the documents to this attorney, who at some point filed an appearance in this case when Brown Rudnick was withdrawing its appearance, but before or very close to the time that Zeisler & Zeisler came in to represent the debtor, and that attorney has never done anything in this case other than file an appearance. He's never been in the court. He's never been on any kind of remote hearings we've had. So I have no way to gauge what he has or doesn't have, right?

All I have -- I mean, I do given what you've said, but up to this point -- and now the trustee's saying to me, look, I need that information. I need that information.

There's a protective order in place. There's a consent order with regard to privileges. You've filed a motion to quash.

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Ho Wan Kwok - October 25, 2022 37 I think that I -- what I'm going to -- I am going to order the two of you to do is to have a further conversation about what you're going to produce, if anything, and if you're not, then I want to know that specifically and then I'll have to rule. But I think that, you know, there is a lot of different information in this case that you could assert is privileged. However, there is an order that says the privileges have passed to the trustee subject only to paragraph 7 which talks about the personal harm. The formation of an entity in the British Virgin Islands, a corporate entity that the debtor has some ownership interest in, or whatever interest he has, whatever it be, legal, beneficial, whatever, it would be hard for the Court to find at this moment that would be somehow personal harm to the debtor. There was -- that issue was negotiated and argued about extensively in this court. And the trustee has to try to fulfill his duties and that's what he's trying to do. Okay. And I understand -- I do understand the argument about it's a burden, and I understand that. Unfortunately, that may be a burden that you have to undertake. This is a Chapter 11 case in which a trustee has been appointed. That's an unusual situation. The reason

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Ho Wan Kwok - October 25, 2022 38 that that happened was because of many reasons including the fact that the debtor's counsel, prior debtor's counsel, agreed that cause existed to appoint a Chapter 11 Trustee, convert the case or dismiss the case. Cause includes many things. And it's not a defined term as I'm sure you know. But in this case there has been assertions from the minute the debtor filed this case that the debtor was not being honest about his assets. Whether that's true or not, that hasn't been tried. That's the assertions that have been made and the trustee is attempting to investigate those assertions and find out whether they're true or not. And the trustee definitely, you know, has a lot of work to do. But as far as I can see has been following the Federal Rules of Civil Procedure with regard to that investigation and the Federal Rules of Bankruptcy Procedure. So what I'm going to do with regard to your motion to quash is I'm going to order the parties to continue to discuss this issue. And I'm going to continue this hearing on both your motion to quash and the cross-claim for a motion to compel until Thursday and I want to see where things stand on Thursday. I will allow you -- because it will be the only issue, I will allow you all to appear via Zoom. You don't

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Ho Wan Kwok - October 25, 2022 39 have to come to the court. Okay? MS. SIMPSON: Thank you. THE COURT: It will be -- but I want to know where things stand. I want the conversations to continue. And I believe the focus should be narrowed. And if there is a disagreement, I think the disagreement should be narrowed. MR. LINSEY: Your Honor. THE COURT: That's what I would say. MR. LINSEY: I respect the Court's instruction and will certainly comply with that. There was one thing I just want to put a finer point on and that is going to get to this Monkey in the Middle thing and it's with Williams & Connolly's complaint that they don't want to be in the position of asserting a privilege. My understanding is that Williams & Connolly was at one point willing to make documents that could be produced to the trustee available to the individual debtor for the individual debtor to assert that it retained a privilege, that personal harm exception, if it wished, that the individual debtor does not wish to do that and believes that Williams & Connolly should review and assert the privilege. So when I say the Monkey in the Middle thing, I mean, each side is saying the other side should do it and it

Ho Wan Kwok - October 25, 2022 40 seems to me that's one of the fundamental disconnects here. The trustee's -- THE COURT: Well, haven't we already worked that out with prior firms? MR. LINSEY: We have by the -- what we just saw with the Baker & Hostetler order is that Baker & Hostetler is affording the individual debtor the opportunity to make determinations. And the trustee has indicated to Williams & Connolly that it was prepared to do that with Williams & Connolly. My understanding is that that was at least not immediately acceptable to Williams & Connolly and they wanted to continue with their motion to quash. THE COURT: Well, I'm going to let you all talk about that and you're going to all figure that out before Thursday. And then if you don't, then I will order what everybody needs to do. MR. LINSEY: Understood, Your Honor. THE COURT: Okay. So we're going to continue the hearing on the motion to quash and the cross-motion to compel to Thursday, October 27th at 2:00 p.m. It will be a remote hearing, so you'll have to contact the courtroom deputy email box and they'll get you the information for the remote hearing. Okay? MS. SIMPSON: Thank you, Your Honor. Case 22-50073 Doc 1059 Filed 11/02/22 Entered 11/02/22 13:08:01 Page 40 of 44

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Ho Wan Kwok - October 25, 2022 41 THE COURT: All right. Thank you. MS. SIMPSON: Yeah. MR. LINSEY: Before we adjourn, Your Honor, may I raise one housekeeping matter, please? THE COURT: Yes. MR. LINSEY: The trustee filed yesterday evening a motion for a further stay of certain adversary proceedings. It's not on the calendar today. THE COURT: I know. And I looked at it briefly. You have two parties' consent. Did you get the other party's consent? MR. LINSEY: So that is what I wanted to address. I neglected to indicate that PAX had also consented. They, in fact, consented prior to the filing of the motion. That's on me. No other party that has responded indicated any objection. It doesn't seem like a controversial motion. It was just part -- THE COURT: Let me just ask you a question. When's the deadline run out? MR. LINSEY: The existing stay expired on Friday, which is why we sought a bridge order. 22 THE COURT: Right. MR. LINSEY: Again, it has not in the past been controversial. I don't expect it to be here. THE COURT: Well, this is what I'll do.

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Ho Wan Kwok - October 25, 2022 42 MR. LINSEY: Yes, Your Honor. THE COURT: I'll grant the motion. You don't have to have a hearing on it. Relate it back to the 21st. And if the parties who haven't affirmatively consented object, then I'm going to give them a time to object and I'll deal with it at that point in time. MR. LINSEY: I think that is perfectly fine, Your Honor. And, in fact, our position in the motion was that the stay should go into effect and then any party could seek to end it at any time. It's functionally doing the same thing that Your Honor said. THE COURT: Okay. Then maybe I don't need to do what I just said. If I read the proposed order, maybe it does what I need it to do. MR. LINSEY: Either way, Your Honor. But we certainly agree. THE COURT: So the only parties -- so there are still a few parties who haven't responded? MR. LINSEY: Correct, Your Honor. THE COURT: So we've got three parties who've consented and I think three parties who haven't responded? MR. LINSEY: If I were to be a stickler, I'd say three sets of parties because I believe that Mr. Sansone represents the plaintiff collective. THE COURT: Sets of parties, correct.

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Ho Wan Kwok - October 25, 2022 43 MR. LINSEY: Correct, Your Honor. THE COURT: Okay. All right. I'll take a look at that later today or tomorrow at the latest. MR. LINSEY: Thank you, Your Honor. THE COURT: Okay. But I did see it. I just -- I didn't see a need for a hearing. MR. LINSEY: Yeah. Look, nothing's -- the barn's not on fire. Nothing's happening in these adversary proceedings, but we would like formal process to be followed. THE COURT: Well, I think you need an order. MR. LINSEY: Yes, Your Honor. THE COURT: Yes. I agree with that. Okay. So is there anything further that we need to address in the Kwok case this afternoon? MR. DESPINS: No, Your Honor. THE COURT: Okay. MR. DESPINS: Thank you. THE COURT: Then we'll have a continued hearing on the motion to quash, ECF 1002, on Thursday afternoon at 2:00 p.m. via Zoom and we'll see you all then. ALL COUNSEL: Thank you, Your Honor. THE COURT: Thank you. (Proceedings adjourned at 1:57 p.m.)

| | Ho Wan Kwok - October 25, 2022<br>44 | |----|------------------------------------------------------------| | 1 | I, CHRISTINE FIORE, Certified Electronic Court Reporter | | 2 | and Transcriber, certify that the foregoing is a correct | | 3 | transcript from the official electronic sound recording of | | 4 | the proceedings in the above-entitled matter. | | 5 | | | 6 | | | 7 | November 1, 2022 | | 8 | Christine Fiore, CERT | | 9 | | | 10 | | | 11 | | | 12 | | | 13 | | | 14 | | | 15 | | | 16 | | | 17 | | | 18 | | | 19 | | | 20 | | | 21 | | | 22 | | | 23 | | | 24 | | | 25 | | | | |