郭文贵破产案 · ECF #1980

元数据

当事人: 郭文贵 (Guo Wengui / Miles Guo / Ho Wan Kwok)
法院: CTB
案号: 22-50073
ECF #: 1980
类型: UNKNOWN
立案日: 2023-07-05

原始法庭文件为英文，下方为英文全文。

全文

| | UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION | | | |---------|----------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | In Re | | * | Case No. 22-50073 (JAM) | | | HO WAN KWOK and GENEVER | * * | | | | HOLDINGS CORPORATION, | * | | | | | * | | | | Debtor. | * | | | | U.S. BANK NATIONAL | * | Adv. Proc No. 23-05012 | | | ASSOCIATION, as escrow | * | | | agent, | | * | | | | | * | | | v. | Plaintiff, | * * | | | | | * | Bridgeport, Connecticut | | | HK INTERNATIONAL FUNDS | * | June 27, 2023 | | | INVESTMENTS (USA) LIMITED, | * | | | | | * | | | | Defendant. | * * | | | | * * * * * * * * * * * * * * * * | | | | #1805 | UNITED STATES BANKRUPTCY JUDGE | | SECOND OMNIBUS MOTION TO COMPEL COMPLIANT WITH | | | RULE 2004 SUBPOENAS | | | | #1912 | | | MOTION TO QUASH SUBPOENAS BY HK PARTIES TO TRUSTEE | | | | | AND TRUSTEE'S BROKER RE LADY MAY SALE MOTION | | # 19 | | | MOTION TO DEPOSIT FUNDS INTO THE REGISTRY OF | | | COURT AND TO DISCHARGE PLAINTIFF FROM INTERPLEADER ACTION | | | | #1858 | GRANTING RELATED RELIEF | | TRUSTEE'S MOTION, PURSUANT TO BANKR. CODE SEC. 105 and 363, BANKR. RULES 2002, 6004(c) and 9014 AND LOCAL RULES 6004-1 and 6004-2 SEEKING ENTRY OF ORDER (I) AUTHORIZING AND APPROVING SALE OF THE LADY MAY FREE AND CLEAR OF LIENS, CLAIMS, INTERESTS and ENCUMBRANCES, (II) AUTHORIZING AND APPROVING PURCHASE AND SALE AGREEMENT and (III) | | | 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: Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings 200 Park Avenue New York, NY 10166 For the Chapter 11 Trustee: NICHOLAS A. BASSETT, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 PATRICK R. LINSEY, ESQ. Neubert Pepe & Monteith, PC 195 Church Street New Haven, CT 06510 For HK International Funds STEPHEN M. KINDSETH, ESQ. Investments, LLC and Zeisler & Zeisler, P.C. Mei Guo: 10 Middle Street, 15th Floor Bridgeport, CT 06604 For the Creditors Committee: KRISTEN MAYHEW, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For the U.S. Trustee: HOLLEY L. CLAIBORN, ESQ. Office of the U.S. Trustee 150 Court Street New Haven, CT 06510 For U.S. Bank National Assn., LATONIA C. WILLIAMS, ESQ. as escrow agent: Shipman & Goodwin, LLP One Constitution Plaza Hartford, CT 06103 For G Clubs Operations, LLC: JEFFREY M. SKLARZ, ESQ. Green & Sklarz, LLC One Audubon Street New Haven, CT 06511 CAROLINA FORNOS, ESQ. Pillsbury Winthrop Shaw Pittman 31 West 52nd Street New York, NY 10019

APPEARANCES: (Cont'd) For the Creditor, Pacific STUART SARNOFF, ESQ. Alliance Asia Opportunity O'Melveny & Myers LLP Fund L.P.: Times Square Tower 7 Times Square New York, NY 10036 For the buyer: ROBBIE BOONE, ESQ. Alley, Maass, Rogers & Lindsay, P.A. 340 Royal Poinciana Plaza Palm Beach, FL 33480

Ho Wan Kwok - June 27, 2023 4

| 1 | (Proceedings commenced at 12:06 p.m.) | |----|--------------------------------------------------------------| | 2 | THE COURTROOM DEPUTY: 22-50073, Ho Wan Kwok and | | 3 | Genever Holdings, LLC; adversary proceeding 23-05012, U.S. | | 4 | Bank National Association as escrow agent versus HK | | 5 | International Funds Investments (USA) Limited. | | 6 | THE COURT: Okay. Good afternoon. If we could | | 7 | have appearances for the record starting with the Chapter 11 | | 8 | Trustee please. | | 9 | MR. DESPINS: Good afternoon, Your Honor. Luc | | 10 | Despins, Chapter 11 Trustee. | | 11 | MR. BASSETT: Good afternoon, Your Honor. Nick | | 12 | Bassett from Paul Hastings on behalf of the Chapter 11 | | 13 | Trustee. | | 14 | MR. LINSEY: Good afternoon, Your Honor. Patrick | | 15 | Linsey, Connecticut counsel for the Trustee. | | 16 | MS. CLAIBORN: Good afternoon, Your Honor. Holley | | 17 | Claiborn for the U.S. Trustee. | | 18 | MS. MAYHEW: Good afternoon, Your Honor. Kristen | | 19 | Mayhew on behalf of the Creditors Committee. | | 20 | MR. SKLARZ: Good afternoon, Your Honor. Jeffrey | | 21 | Sklarz of Green & Sklarz for G Club Operations, LLC. I'm | | 22 | joined by our lead counsel, who's admitted pro hac vice, | | 23 | Carolina Fornos, of Pillsbury Winthrop. | | 24 | MS. FORNOS: Good afternoon, Your Honor. | | 25 | THE COURT: Good afternoon. |

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Ho Wan Kwok - June 27, 2023 5 MS. WILLIAMS: Good afternoon, Your Honor. Latonia Williams of Shipman & Goodwin, LLP on behalf of the escrow agent, U.S. Bank National Association. THE COURT: Good afternoon. All right. So, Trustee Despins, we have a few discovery matters on the calendar, as well as the interpleader adversary, and then of course the motion to sell, which was scheduled for noon. Are we going to take the 11 o'clock matters first? MR. DESPINS: Well, just by way of update, Your Honor, the interpleader action, I believe that for this intermediate stage that we will have a consensual order. It's being processed right now, that we're trying to file it with the Court so you'll have it. So that's good that we can adjourn that, but that should be very short once we have the final order on the docket, or final, proposed order on the docket. THE COURT: And who are the parties to the consent order? MR. DESPINS: Well, Mr. Kindseth representing Mei Guo and HK, the Trustee, and the escrow agent. THE COURT: Okay. Thank you. MR. DESPINS: So that's the first. And then on the sale we're also working on the consensual order. There would still be evidence required,

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| | Ho Wan Kwok - June 27, 2023 6 | |----|--------------------------------------------------------------| | 1 | but the sale motion would go forward on a much more | | 2 | collapsed, you know, process that resolves the HK issues | | 3 | basically. But that's being drafted as well. | | 4 | So I think that at this point it would make sense | | 5 | to deal with the discovery dispute involving G Club. | | 6 | THE COURT: So that's fine, obviously. | | 7 | So the motion to quash the subpoenas -- | | 8 | MR. DESPINS: That also should be adjourned, Your | | 9 | Honor. | | 10 | THE COURT: -- that's going to be part of the | | 11 | resolution? Okay. | | 12 | MR. DESPINS: Yes, Your Honor. | | 13 | THE COURT: All right. So then what you'd like | | 14 | the Court to address is the second omnibus motion with | | 15 | regard to the 2004 discovery issues, and specifically | | 16 | related to the G Club entity that I have to get the right | | 17 | name of because there are several G Club Operations, LLC. | | 18 | Correct, Counsel? | | 19 | MS. FORNOS: Yes, Your Honor. | | 20 | THE COURT: Okay. Thank you. | | 21 | All right. So how are we proceeding with that | | 22 | today? | | 23 | We were here last, we talked about some possible | | 24 | discussions between the parties. I set this hearing. I | | 25 | believe I set a time frame to file a response, right? So | | | |

Ho Wan Kwok - June 27, 2023 7 where -- where do things stand as of today? MR. BASSETT: So, Your Honor, I'm happy to address that. I think the current state of play has been summarized by the filing by G Club. I don't have the date, I apologize, or the ECF reference in front of me. I guess it was, sorry, docket 1924. And then the Trustee filed a reply to that, docket number 1934. And essentially the dispute remains unresolved. G Club is asking for a 60-day extension of time to continue producing documents. They have produced some documents. I guess approximately 300 in response to our subpoena thus far. They continue to take issue with the breadth of the subpoena and have objected to many of the requests, but we still are at a impasse in terms of -- certainly the biggest ticket item from our perspective is the, well, two things: 19 One, the time within which G Club will have to continue complying or to finish complying with the subpoena. I won't belabor my colleague, Mr. Luft's, lengthy recitation of the history here at the last hearing, but we've been at this for six months plus. And suffice it to say the Trustee is absolutely not willing to let this linger for another 60 days.

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Ho Wan Kwok - June 27, 2023 8 The other issue that we have is some of the fundamental objections G Club has raised with respect to what they believe to be the permissible scope of discovery. I think these are issues that the Court has already covered. These are issues concerning, you know, whether or not they need to provide documents related to, you know, assets and operations of G Club, or whether we first need to prove a connection between G Club and the debtor through a final order of this court. We think that has it totally backwards. There's tons of allegations that I'm happy to run through, both in this case, findings of this court, allegations in the criminal case which are described in detail, and the reply that we filed that are very, very, very, very troubling. I'm happy to go through all of that in as much detail as the Court would like, but for all those reasons we think that the subpoena that we served is well within the scope of 2004 and we think there's no basis at all to let this linger on for another 60 days. THE COURT: Okay. Thank you. Counsel? MS. FORNOS: Good afternoon, Your Honor. First of all, I want to underscore that we have started that production.

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Ho Wan Kwok - June 27, 2023 9 When I last appeared before the Court I represented to the Court that we had an independent manager, that we were working diligently, and we indeed produced documents. To be clear, those documents are corporate organization documents, loan documents, transfer documents, documents regarding assets, that they specifically requested. We're not sitting on this. We are moving to produce. And all I am asking for is the 60 days. And, Your Honor, I've discussed this with the independent manager. They're working as fast as they can to deal with the day-to-day operations, preserve data, understand assets. That 60 days is what they're asking for to continue to respond at least on a minimal weekly basis to continue to supplement the production that has already been made. On this note, Your Honor, I'd like to address and give the Court more transparency on the independent manager, as well as the Trustee, because the filings made it indicate there were some aspersions caught, alleged with respect to the independent manager. The independent manager is an organization. It's FFP. It is known to step in when a corporation loses its management, which is what we have here. And I have

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Ho Wan Kwok - June 27, 2023 10 documentation I can provide to the Court and to the Trustee providing more information on FFP and its experiences. They're essentially acting like an independent fiduciary. And I can represent to the Court that I've been in daily contact with them trying to deal with this, trying to address a number of issues that are facing the company when all of their managers and directors left in March. So we're working to produce documents. I agree with the Trustee. He is entitled, to be clear, to the documents he's requested regarding the debtor. We've produced those. He is entitled -- THE COURT: I just want to make sure I get everything you say accurate. MS. FORNOS: Sure. THE COURT: So all the documents that you believe that your client has regarding the debtor have been produced? MS. FORNOS: That is what we have turned over, the immediate stuff that relates to -- I don't -- we don't believe that we have extensive information of the debtor because the debtor was our consultant and our spokesperson. We have produced that agreement. We of course, to the extent there's more, we're searching for that. We're looking for that. We have no objection to provide every document that relates to the

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Ho Wan Kwok - June 27, 2023 11 debtor. As the Court knows, one of the issues that we have flagged from the beginning with the Trustee is that there is an overbreadth in these Rule 2004. And candidly we understand why they're overly broad. Because it was the same Rule 2004 that was issued to over 100 parties. It wasn't tailored to any specific company. But the way it reads is they basically want every single document in our possession. And this is -- you know, the issue for today that we're asking is just for a reasonable amount of time so that FFP can continue to produce documents. And we're also happy to facilitate a discussion between the Trustee and FFP so that they can have more transparency on what they're actually doing and what we're trying to do to supplement the productions. The Trustee wants this in seven days. We're asking for 60. We need a reasonable time because of the amount of things that the independent manager is dealing with. Last, a separate issue, which I see slightly separate than today's issue for the Court, which is the time frame, is the scope. And at the last hearing I raised this issue. And our issue is they want, and they have requested, every

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| | Ho Wan Kwok - June 27, 2023 12 | |----|--------------------------------------------------------------| | 1 | single document relating to the source of funding of G Club. | | 2 | To be clear, the source of funding of G Club, Your | | 3 | Honor, is thousands of member information that contains | | 4 | personal identifying information, banking records of third | | 5 | parties, of members. | | 6 | Our position is we'd like to have the time to give | | 7 | them the documents related to associated entities, to the | | 8 | associated individuals. | | 9 | The ask is that we address the issue of | | 10 | memberships, membership information and source of funds, | | 11 | which is contained in the banking records, to a later date | | 12 | because that is an objection that we have put forth to the | | 13 | Trustee. | | 14 | We probably need to have more discussions on this. | | 15 | And maybe having some discussions with the independent | | 16 | manager will facilitate this. | | 17 | But, Your Honor, and I don't want to get ahead of | | 18 | the Trustee or the Court's docket, but I want to also alert | | 19 | the Court now that this issue of membership and membership | | 20 | data is likely going to be an issue in the proposed | | 21 | settlement that was filed on Friday by the Trustee regarding | | 22 | HCHK. | | 23 | HCHK Technologies has and is in possession of G | | 24 | Club membership data, that is, third-party data that does | | 25 | not belong to HCHK. | | | |

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Ho Wan Kwok - June 27, 2023 13 THE COURT: How are you aware of that fact? MS. FORNOS: Because we have a contract with HCHK, which we have turned over the Trustee so he is aware of that contract. And HCHK had a contract -- we're a customer of HCHK because they hosted our data on iCloud. So I don't want to get too far ahead on this issue because it's an issue for the HCHK, which we just don't want to surprise the Court, but it's an issue that is present in the Rule 2004 because we have objected to producing our member data. I'm sure that there are ways that we can structure a more narrow production to address the concerns that the Trustee has. And, again, I understand what the Trustee is seeking, but what we want is more time. And respectfully, Your Honor, those are -- those are the issues that are present at the moment. THE COURT: Have you had discussions about a protective order, confidentiality agreement? MS. FORNOS: Your Honor -- THE COURT: Because there are already existing orders in this case. MS. FORNOS: Understood, Your Honor. And I have signed that order. And the Trustee was kind enough to provide me a copy of that, so I had signed it and sent it over to them. But I still have concerns over producing

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Ho Wan Kwok - June 27, 2023 14 thousands -- we're talking more than 8,000 member information and personal identifying information. That is the -- that is the crux of the objection. And we simply ask -- we can address it today, or this could be an issue for a separate day, or we could have more conversations with the Trustee so that we could figure out a way around it. THE COURT: Well, why wouldn't the confidentiality agreement address your concerns? MS. FORNOS: Your Honor, it's one thing to have a confidentiality agreement, but another thing is to produce the personal identifying information of members who don't -- have not consented to the release of that information. I have very serious concerns. THE COURT: You got information from members who didn't -- who signed a document with your client that said that their information couldn't be released to third parties? MS. FORNOS: Your Honor, I'd have to look at all of the underlying agreements. I don't know the answer to that question. I would have to double-check. That's an excellent point the Court's making. I apologize. I should have checked that earlier. But we do have -- every member signs a membership agreement. And --

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| | Ho Wan Kwok - June 27, 2023 15 | |----|----------------------------------------------------------------| | 1 | THE COURT: And does the membership agreement have | | 2 | a provision that says that their information can't be | | 3 | disclosed? | | 4 | MS. FORNOS: I think it has a provision -- I need | | 5 | to double-check. I don't want to state anything that I'm | | 6 | not clear on. | | 7 | THE COURT: No. I understand. But I think you do | | 8 | need to check, right, because that's relevant. | | 9 | MS. FORNOS: Of course, Your Honor. | | 10 | But the issue that is before the Court right now, | | 11 | and I appreciate the Trustee's frustration, I truly do, but | | 12 | we zeroed in on documents, we have produced them. We are -- | | 13 | we have more to produce, documents that we don't object to. | | 14 | And it's the bulk of the relationship that they're seeking | | 15 | between our entity and other entities because that's what | | 16 | they're trying to understand. | | 17 | So we're happy to continue to do that production. | | 18 | Again, we just need more time. | | 19 | As to the scope, we can address it today. We can | | 20 | try to meet and confer. We can save it for another day. | | 21 | THE COURT: Well, you've met and conferred on a | | 22 | number of occasions. I mean, that's the representations | | 23 | that have been made to the Court on several occasions. Not | | 24 | just in court, but in documents, right, in pleadings. | | 25 | So I agree that there's -- you know that there's | | | |

Ho Wan Kwok - June 27, 2023 16 an ongoing obligation of all counsel to act appropriately in connection with discovery requests, so I think we do need to address it. What is your -- what are your issues, and I'm happy to hear them, with regard to the scope of the subpoenas? What are -- I need your specific objections with regard to the scope please. MS. FORNOS: Gladly. It's the same that we have been saying from the beginning. The Trustee has requested every single document. I will draw the Court's attention specifically to document request number 4 -- 14 -- THE COURT: Okay. MS. FORNOS: -- which specifically asked -- THE COURT: Document request number 14? MS. FORNOS: Yes. It specifically asks for all sources of income of our entity. That request is not proportional to what's at issue today and what's at issue for the Trustee. The Trustee wants, rightfully so, and, again, I agree with the Trustee, the Trustee wants to understand the relationship between our entity and other entities, no objection. We get that. We will produce that. We have started that production. We have more. Case 22-50073 Doc 1980 Filed 07/05/23 Entered 07/05/23 17:21:35 Page 16 of 93

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Ho Wan Kwok - June 27, 2023 17 But the line, and what we absolutely feel needs to not be the subject of this Rule 2004, at least at this time, which is not proportional, are over 8,000 member information and payment. THE COURT: Right. And we just discussed that. Okay? MS. FORNOS: Yes. THE COURT: You need to go figure out whether there's some provision in this membership agreement that says that the information can't be turned over. Okay? 11 And if it can't be turned -- if there isn't that provision in the membership agreement, then I'm not clear as to how the confidentiality agreement doesn't protect that issue. MS. FORNOS: Your Honor, I don't think that the confidentiality, the protective order, covers the personal identifying information and banking records of third parties. That's not -- we'll discuss it with the Trustee. And I'll go back and double-check the protective order. But I am concerned about -- THE COURT: Well, then it could be amended to do that. I mean, there's many ways this could be. We're not -- I'm not going to kick this, and I'm not suggesting you're saying kick, so let me just use a better word --

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| | Ho Wan Kwok - June 27, 2023 18 | |----|----------------------------------------------------------------| | 1 | MS. FORNOS: Understood, Your Honor. | | 2 | THE COURT: -- but this -- the last hearing we | | 3 | had, if my memory is correct, and I believe I asked you this | | 4 | -- I know I asked you the question, but I might not know -- | | 5 | remember the exact words -- I asked you if you had any | | 6 | quarrel with what Attorney Bassett said about the process | | 7 | that had occurred with you being the counsel and Attorney | | 8 | Bassett regarding production under the subpoena, including | | 9 | going back to a period of time -- and I don't have it in | | 10 | front of me, but the two of you will remind me -- | | 11 | MR. BASSETT: It was Attorney Luft at that time, | | 12 | Your Honor. | | 13 | THE COURT: Oh, Attorney Luft. Okay. That's | | 14 | right. It wasn't Attorney Bassett. It was Attorney Luft. | | 15 | -- that you were involved in this issue with the | | 16 | subpoena back I believe the representation was in December | | 17 | of 2022, and maybe even earlier, and there was this -- there | | 18 | was a representation made that, you know, there will be no | | 19 | production made at all back as far as December. | | 20 | Now, I understand that for reasons that I don't | | 21 | think are in the record of this case yet, but maybe they | | 22 | are, there's quite a few things in this case, so it's not | | 23 | always easy to remember everything that's occurred, the | | 24 | officers and directors of your client departed. | | 25 | And now as of June 1st this FFP, which sounds like | | | |

Ho Wan Kwok - June 27, 2023 19 it's, you know, a professional organization to come in and manage companies when necessary -- MS. FORNOS: It is. THE COURT: -- has produced 300 documents. That's what I've heard. And that's a good start, but that's not where we should be as of now. We had a hearing on June 6th. It's June 27th. And I'm sure you did, but I suggested to you that your client needed to understand the seriousness of this issue. And 300 documents in 21 days to me is not -- I would have expected more than that, okay, especially given the fact that there's a pending motion to compel, which could then turn into a contempt order ultimately if the motion to compel is granted, and so I expected to see more of a production than 300 documents at this point. What I'm hearing you say today, and I understand it, it seems to me that, and I'd like you to correct me for the record, that the biggest issue you see is this membership information. Okay. So if you've only -- if you've produced 300 documents, and I think you said that they were documents with regard to the corporate structure or the corporate creation assets that the corporation owns, loan documents, I would think there would be more than 300 documents with regard to just the loan documents.

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Ho Wan Kwok - June 27, 2023 20 But if your -- if your biggest issue and your -- and it sounds like maybe, and I could be wrong, your only issue is this membership information, then I think there's absolutely ways that can be addressed. And it can be addressed now and it can be addressed in less than 60 days. I don't think your client is entitled to 60 days at this point. I already provided additional time by setting a new deadline for you to file your response, which you did and I appreciate, but I don't think 300 documents is what I was thinking we would be discussing today. MS. FORNOS: Understood, Your Honor. The Court has it correct. I think the issue here is that we have more to produce. We are working towards that production. But FFP needs time. And if the Court thinks -- THE COURT: To do what? MS. FORNOS: To review. To ensure that they understand what's being produced. Your Honor -- THE COURT: Well, you're going to tell them that. You're going to counsel them on that, Counsel. That's what you're doing, right? You're not letting them blindly go through those documents. MS. FORNOS: No. But they still need time.

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Ho Wan Kwok - June 27, 2023 21 And if the Court will indulge me, this is not the only issue that they have on their plate. There are a lot of things they're trying to address and we just need time. We respect -- we understand the Court's position. And candidly we truly appreciate the Trustee's frustration as well. But we just need a little bit of time to continue produce what we're producing. On the -- on the issue of where we object, the membership information is also contained in our bank statements because the deposits show the membership information. What we have objected to is this wholesale you get to have everything, there's basically no limit, there's restraint to the Trustee. THE COURT: But what if they subpoena the bank? Did they subpoena the banks? MS. FORNOS: If they did, I'm not aware of it. THE COURT: Okay. MS. FORNOS: But they can certainly do that. That's their prerogative. But at -- and I'm sure they're working with other counsel to do that. But the issue we are asking for is time. And if the Court wants to, for example, adjourn the hearing so that we can come back to you and we can -- you could see the progress that's been made and the

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| | Ho Wan Kwok - June 27, 2023 22 | |----|----------------------------------------------------------------| | 1 | production, and actually whittle down what's left to really | | 2 | fight about, we're amenable to that as well. We just need | | 3 | time. And that's -- I'm asking that on behalf of -- | | 4 | THE COURT: No. I understand. | | 5 | MS. FORNOS: -- the independent manager. | | 6 | THE COURT: And I think the only -- well, one of | | 7 | the thoughts or concerns I have with that request is that | | 8 | was what was asked on June 6th for 60 days. Now we're at | | 9 | June 27th and we're asking for another 60 days, you're | | 10 | asking for an additional 60 days. So we're not -- we're not | | 11 | progressing, we're extending. | | 12 | MR. BASSETT: Your Honor, could I be heard on the | | 13 | timing issue further, please? | | 14 | THE COURT: Yes. | | 15 | MR. BASSETT: So I just -- it's critically | | 16 | important that some of the information we put in our reply | | 17 | brief is not lost on the Court because I think it goes a | | 18 | long ways to explain why we are extraordinarily concerned, | | 19 | extraordinarily skeptical, about the suggestion that all we | | 20 | need is more time. | | 21 | And whether it's working out an issue with regard | | 22 | to whether certain information about membership interests is | | 23 | confidential and how we're going to sort through that, as | | 24 | you said, they've only produced 300 documents. | | 25 | Obviously this is an organization that's engaged | | | |

Ho Wan Kwok - June 27, 2023 23 in any legitimate business. They have way more than 300 documents to produce. So there's a lot more that needs to be done. We've been at this for over six months. Counsel has been involved from the beginning. She's now saying, well, there's this new organization in place that's acting as independent manager. But we are absolutely not even close to comfortable that all of a sudden we're going to get compliance with our subpoena and that there's not going to be spoliation of materials or things happening in the background while we're trying to get discovery and that is what I wanted to briefly walk the Court through which is in our reply brief. As I think we've explained previously, the premise of so many of the objections that you're hearing from counsel is that there's really no connection between G Club and the debtor. Your Honor, in the criminal indictment, the Government alleged that G Club is quote, "Functionally owned and controlled by Ho Wan Kwok." That blows their scope objection out of the water. That is way more than enough for 2004 purposes for us to get documents from G Club related to their operations, finances, source of funding, et cetera, way more than crossing that threshold. Case 22-50073 Doc 1980 Filed 07/05/23 Entered 07/05/23 17:21:35 Page 23 of 93

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Ho Wan Kwok - June 27, 2023 24 But what gets really, really troubling is the fact that during this entire prolonged meet and confer process, where we were getting the runaround, we were being told at one point, as Mr. Luft described to the Court the last time we were here, that they were so offended by the suggestion that there was a connection between the debtor and G Club that they were just not going to produce documents at all. While we were getting those responses from them, what we've come to learn from information filed in the criminal case there were allegations that in January and March of 2023, this is in the memorandum that we cite at Exhibit 8 to our reply brief, January and March of 2023, two individuals affiliated with HCHK spent more than approximately six weeks in the UAE to assist moving the operations and money of G Clubs. January and March of 2023 while we were getting the runaround about getting documents in response to our subpoena. In April of 2023, while we were having our third

meet and confer with counsel for G Club, according to the documents filed by the Government in the criminal case and notes from Yvette Wang that were -- that accompanied that filing in the criminal case, Ms. Wang directed a G Club employee to remove \$7.1 million in G Club checks from a G Club P.O. box. April 2023. These are all allegations -- THE COURT: Hold on a second.

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Ho Wan Kwok - June 27, 2023 25 MR. BASSETT: -- in the criminal indictment. THE COURT: Just tell me where -- what you just said again. Ms. Wang did what on what date? According to this brief by the Government. MR. BASSETT: Right. So what we say in our -- THE COURT: Is that what you're telling me? MR. BASSETT: So what we say in our reply brief, Your Honor, at paragraph -- at paragraph 10, and this is in the -- THE COURT: But I want to go directly to your source, right? MR. BASSETT: Sure. THE COURT: What's your source? Your source is the -- a brief? MR. BASSETT: Exhibit B to our reply brief, Your Honor. THE COURT: Okay. Give me a moment to -- MR. BASSETT: (Indiscernible) declaration attached to? THE COURT: Give me a moment to get there, please. All right. I'm starting on the first page of Exhibit B, this Memorandum of Law of the United States of America in Opposition to Defendant Yvette Wang's Motion for Pretrial Release. What page do you want me to go to?

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| | Ho Wan Kwok - June 27, 2023 26 | |----|--------------------------------------------------------------| | 1 | MR. BASSETT: My colleague is getting my copy of | | 2 | the document, but it's -- according to our reply brief it's | | 3 | at pages 37 and 38. | | 4 | THE COURT: Of the Government's brief, right? | | 5 | MR. BASSETT: That's right. | | 6 | THE COURT: All right. Hold on. There's a lot of | | 7 | different stamps on the top of this, so it's a little hard | | 8 | to follow, but we'll get there. | | 9 | Am I supposed to be looking at the transcript of | | 10 | the proceeding? | | 11 | MR. BASSETT: No. It's the memorandum that the | | 12 | Government filed. | | 13 | THE COURT: Yeah. The memorandum. Okay. | | 14 | MR. BASSETT: Yeah. It's regarding the continued | | 15 | detention of Yvette Wang. | | 16 | THE COURT: Right. So I've got the memorandum. | | 17 | And it says it's 42 pages. | | 18 | MR. BASSETT: And it starts on page 34 of the PDF, | | 19 | 34 of 242. | | 20 | THE COURT: Right. So what page am I going to? | | 21 | Thirty-eight? Thirty-seven and eight of 242, is that what | | 22 | you're saying? | | 23 | MR. BASSETT: That's what I'm saying, Your Honor. | | 24 | THE COURT: Okay. So this is the Government | | 25 | saying that, okay, that Wang played a key role in the |

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| | Ho Wan Kwok - June 27, 2023 27 | |----|---------------------------------------------------------------| | 1 | sprawling and complex fraud spearheaded by Ho Wan Kwok. | | 2 | Okay. And then it said the fraud's relied on at least four | | 3 | interrelated parts, the GTV Media Group Private Placement, | | 4 | the Farm Loan Program, G Club Operations, LLC and Himalaya | | 5 | Exchange. | | 6 | Is that what you're talking about? | | 7 | MR. BASSETT: That's right, Your Honor. | | 8 | And the particular language that we referenced in | | 9 | our reply brief that I was referring the Court to is at the | | 10 | bottom of page 37 where it talks about -- it's in the middle | | 11 | of the second paragraph on page 37 -- for example, as shown | | 12 | in the images below, the task dated April 11th, 2023, and it | | 13 | goes on to talk about what Wang directed an unnamed | | 14 | participant -- | | 15 | THE COURT: Wait. Wait. I'm not following where | | 16 | the line says per the images below. I'm on page -- | | 17 | MR. BASSETT: Page 37. | | 18 | THE COURT: -- of two -- of 242? | | 19 | MR. BASSETT: Page 37 at the bottom, Your Honor. | | 20 | I apologize. I can't see -- | | 21 | THE COURT: So page 37 of the brief? | | 22 | MR. BASSETT: Yes. Yes, Your Honor. | | 23 | I guess it's 73 of 242 if you look at the PDF. | | 24 | THE COURT: Okay. That will help because I don't | | 25 | have page numbers, so. Seventy-two? | | | |

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Ho Wan Kwok - June 27, 2023 28 MR. BASSETT: Seventy-three of 242. THE COURT: Seventy-three. MR. BASSETT: And it's the second paragraph starting with on June 13th, 2023. THE COURT: Okay. There I am. Okay. I've got you. MR. BASSETT: Right. THE COURT: So your now saying I'm looking at page 73 of 242 of your reply to the -- MR. BASSETT: To Exhibit B. To Exhibit B to our reply. THE COURT: Right. MR. BASSETT: Exhibit B -- THE COURT: Exhibit B to your reply. MR. BASSETT: -- being the memorandum filed by the Government. THE COURT: And you're pointing me to a paragraph that starts on June 15, 2023 pursuant to a judicially authorized search warrant? MR. BASSETT: That's correct. THE COURT: The Government seized documents on electronic devices from CC-1. Preliminary review of the contents of the notebook recovered from CC-1, which is in Mandarin and English, reflects that CC-1 was in communication with Wang and engaged in extensive tasks at

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Ho Wan Kwok - June 27, 2023 29 the direction of Kwok, Wang and other co-conspirators since Wang's arrest and detention. For example, as shown in the images below, a task dated April 11, 2023 reflects that Wang directed CC to provide her with information relating to the operations of the Kwok-controlled businesses. And then there's an image. It says checklist April 11, 2023, Yvette wants a, and then there is characters that are Mandarin I assume, CC's notebook entries similarly reflect information requested by boss and what appears to be a detailed tracking of finances and other operations of various fraud instrumentalities. MR. BASSETT: Yeah. THE COURT: And then it goes on about as to the -- as relevant to the 7.1 million G Club checks in the P.O. box, a notebook entry dated April 18, 2023 references locating Employee-1, i.e., a G Club's employee who had traveled to the UAE in 2023. See super at 25. Employee-1 was in physical -- was in possession of a physical key to the P.O. box. The notebook entry shown below in a redacted form reads in sum and substance and as in formally translated. So I'm looking at an image that has mostly Mandarin characters I believe, but in English the word mailbox, right? That's what I'm looking at?

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| | Ho Wan Kwok - June 27, 2023 30 | |----|----------------------------------------------------------------| | 1 | MR. BASSETT: That's correct, Your Honor. | | 2 | THE COURT: And then it says Employee-1 have HR, | | 3 | i.e., Human Resources locate. Tell HR to locate Employee-1, | | 4 | get the check in the N.Y. mailbox. HR to locate Employee-1. | | 5 | Cherry Blossom authorized Employee-1 to give the check to | | 6 | 3C, i.e., 3 Columbus Circle where HCHK offices are located. | | 7 | MR. BASSETT: That's right. | | 8 | And that next -- that next line is kind of the | | 9 | critical one that I -- | | 10 | THE COURT: From additional evidence the | | 11 | Government has collected it is clear that Wang instructed | | 12 | CC-1 to secure the checks located in the N.Y. mailbox, i.e., | | 13 | the G Club's P.O. box in Manhattan. | | 14 | MR. BASSETT: And the point there being, Your | | 15 | Honor, this is while we were in the midst of our obviously, | | 16 | you know, well-reasoned investigation of G Club. Obviously | | 17 | we were pursuing these documents because we wanted to | | 18 | explore exactly this type of connection and get information | | 19 | regarding G Club's assets, the exact types of things that | | 20 | are being talked about in this indictment. | | 21 | To the extent that G Clubs had money in an | | 22 | account, checks in a mailbox, all these types of things, | | 23 | obviously, that's why we were not only pursuing our | | 24 | investigation under 2004 of G Club, but we were trying to do | | 25 | so as quickly as possible to make sure that information | | | |

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Ho Wan Kwok - June 27, 2023 31

wouldn't go stale.

And the entire time we are being told we're not going to give you the documents. We're so offended you would suggest that there's a connection between G Club and the debtor. We're just -- we're not going to cooperate. But now an independent manager's going to be appointed.

The entire time we were getting this constant runaround and delay it now comes to light, based on the Government's very detailed allegations in the papers that it's filed in the criminal case to seek Ms. Wang's further confinement, that things were happening in the background. G Club's assets were potentially being dissipated, all while we were trying to get these documents.

So I don't think I need to really explain why at this juncture the Trustee does not have an appetite for a further 60 days.

THE COURT: This was the brief that was submitted by the Government at a continued bail hearing for Ms. Wang, is that correct?

MR. BASSETT: Yeah. She sought to be released and the Government opposed it. This is --

THE COURT: And what did the Court do? MR. BASSETT: No ruling yet. THE COURT: No ruling on whether she is -- can be released? This pretrial release. So she wants to be

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Ho Wan Kwok - June 27, 2023 32 released from pretrial detaining, is that right? MR. BASSETT: That's correct. As far as we understand, there has been -- there has been no ruling. And obviously we're dealing in a world of allegations. We're not -- I think that's part of the problem. It's the idea that in order to obtain discovery we first need to prove a connection or prove something. It's completely backwards. It's like saying in order to get discovery in a litigation you have to file your complaint and win and then you get discovery. That's completely backwards. I mean, there was a mountain of credible allegations pointing to G Club's being a mere instrumentality of the debtor and certainly have an extensive connection to him and the fraud he is alleged to have engaged in based on the criminal case in New York. So there's -- if there was ever an entity within this orbit of shell companies of Mr. Kwok's that was ripe for investigation of a 2004 by the Trustee, without limit to particular categories of assets or documents, its G Clubs. And that's what we've been trying to get for six months now. THE COURT: Okay. Anything further, Mr. Bassett, at the moment? MR. BASSETT: No, Your Honor. THE COURT: Okay. Thank you.

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| | Ho Wan Kwok - June 27, 2023 33 | |----|---------------------------------------------------------------| | 1 | Would you like to respond? | | 2 | MS. FORNOS: Yes, Your Honor. | | 3 | Because what Mr. Bassett has highlighted I don't - | | 4 | - want to make sure the record is perfectly clear relates to | | 5 | a detention matter that is presently before the Court in the | | 6 | Southern District. And the Trustee candidly would not have | | 7 | known this, but Friday afternoon her lawyers asked for more | | 8 | time to address all of this because this was new information | | 9 | for them. | | 10 | So I can't comment on the allegations, the | | 11 | criminal allegations that are being made that relate to a | | 12 | defendant. It's not my place to comment on that. | | 13 | We simply come back with a simple point that the | | 14 | independent manager which has a fiduciary duty to the | | 15 | company is working to produce the documents that we need. | | 16 | I do object to any allegation or aspersion that I | | 17 | somehow in part of discussing this was -- or that G Club was | | 18 | enabling Ms. Wang to do whatever she allegedly was supposed | | 19 | to be doing from -- from prison. | | 20 | In April the management of G Club was no longer in | | 21 | place, period. FFP is now aware, and as a result of the | | 22 | filing which was just last week, they're going to track down | | 23 | and find out what's going on with the P.O. box. | | 24 | Candidly, Your Honor, that's a matter that G Club | | 25 | needs to take up with the U.S. Government and will likely do | | | |

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Ho Wan Kwok - June 27, 2023 34 so, but this is not an issue for the motion to compel and the time frame that we are asking to comply. We simply want a reasonable time to continue to produce documents and hopefully moot more hearings on this. THE COURT: Is there anything further you'd like to add for the record? MS. FORNOS: Just, Your Honor, that if the Court would like to issue an order for 60 days as of June 6th when I first requested the 60 days, the Court's point was clear, we are certainly amenable to 60 days from June 6th. THE COURT: Okay. Thank you. MS. FORNOS: Thank you. THE COURT: Anything further, Mr. Bassett? MR. BASSETT: I don't believe so, Your Honor. THE COURT: Okay. Thank you. With regard to the Trustee's motion to compel compliance with Rule 2004 subpoena ECF No. 1805 as it relates to G Club Operations, LLC, and with regard to the objection to the motion to compel and related relief filed on behalf of G Club Operations, LLC, and the reply filed by the Chapter 11 Trustee, the Court has heard argument on these -- on the underlying motion, 1805, at a prior hearing, and now has reviewed the documents filed that the Court ordered the parties to file after that hearing on June 6th, and now has looked at some of the information that was filed

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| | Ho Wan Kwok - June 27, 2023 35 | |----|-----------------------------------------------------------------| | 1 | by the Trustee on Friday, June 23rd, and -- the Court will | | 2 | take the matter under advisement, although it is likely that | | 3 | a ruling will be issued before the end of this week. | | 4 | Okay. So that concludes 1805 for this afternoon. | | 5 | MR. BASSETT: Thank you, Your Honor. | | 6 | MS. FORNOS: Thank you, Your Honor. | | 7 | THE COURT: Thank you. | | 8 | So with regard to the other matters on at 11 a.m., | | 9 | Trustee Despins, are we at a position to talk about a | | 10 | consent order or are we moving toward the sale? How are we | | 11 | proceeding? | | 12 | MR. DESPINS: If we could, with your permission, | | 13 | proceed with the interpleader -- | | 14 | THE COURT: Yes. | | 15 | MR. DESPINS: -- I believe that counsel for the | | 16 | escrow agent has filed on the docket a proposed order. I | | 17 | don't know the docket number. | | 18 | MS. WILLIAMS: Good afternoon, Your Honor. | | 19 | Latonia Williams, for the record again, of Shipman & | | 20 | Goodwin, LLP on behalf of U.S. Bank as escrow agent. | | 21 | Yes, that is correct. So the parties have all | | 22 | agreed to the consent order that has been entered on the | | 23 | docket as docket item number 38. | | 24 | THE COURT: I see. I haven't opened it yet, but I | | 25 | see that it was filed. Thank you. I'll take a look at it. | | | |

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Ho Wan Kwok - June 27, 2023 36 (Pause) THE COURT: Okay. It says it's a consent order, but I don't see anybody consenting. I mean, I want to know who's consenting to this order either by saying affirmatively that the parties consent -- oh, I'm sorry, it's at the -- it didn't say -- here it is, page 2. And with the consent of the parties to this adversary proceeding namely the escrow agent HK, the Committee and the Trustee. Now, what's HK? Who's HK? Are we talking -- it's just HK Funds Investments (USA), not Ms. Guo, correct? Oh, it's not -- I don't think that's Attorney Williams' answer -- question to answer. MR. KINDSETH: Good afternoon, Your Honor. THE COURT: That's the whole point. They're in the middle. MR. KINDSETH: Good afternoon, Your Honor. Stephen Kindseth, for the record, for HK USA and Ms. Guo. That is correct. It is HK that is the party to the escrow agreement that is consenting to the relief set forth in this order. THE COURT: I'm looking at some documents so that I make sure I understand this. (Pause) THE COURT: So if this stipulated order, Trustee

Ho Wan Kwok - June 27, 2023 37 Despins, is -- or consent order is entered, then this adversary proceeding should be closed, correct? Why would it remain open? The funds are going to be -- going to be turned over to you to be held in a trustee account. So what would be the purpose of keeping this adversary proceeding open? MR. DESPINS: Because it is the view of the -- of Mei Guo and HK that they're doing this as an accommodation to the Trustee to invest the funds, but they're not conceding that we can have the funds, and they want to rely on the terms of the escrow agreement to argue the point. So that issue remains -- THE COURT: Well, Mei Guo isn't a party in this adversary proceeding, nor is she a party to the escrow agreement. MR. DESPINS: Okay. Well, again, it's hard for me to explain their position, but their position is that HK International, although we think we should be controlling it, but their point is that they want to maintain that the escrow agreement continues to govern -- THE COURT: Well, they've done that through an appeal of the second counterclaim, haven't they? MR. DESPINS: You know what? I shouldn't be arguing this because I agree with you. THE COURT: No. But I don't understand why this

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Ho Wan Kwok - June 27, 2023 38 adversary proceeding needs to be open, Mr. Kindseth. If you're agreeing to this consent order, then why does this adversary proceeding need to remain open? It's an interpleader action. It's been resolved by the -- by the monies being removed from escrow and being placed in the possession and control of the Trustee. MR. KINDSETH: Your Honor, an interpleading -- interpleader action actually has two phases. The first phase is with respect to the escrow party who seeks to complete that party's obligations by depositing those funds with the Registry of the Court. THE COURT: But that's not happening. MR. KINDSETH: Actually, correct. But the way we're trying to resolve this, and if we can't resolve it this way, so be it, we won't resolve it this way -- THE COURT: I didn't say you couldn't. I'm asking a question. MR. KINDSETH: Okay. THE COURT: Why does this adversary proceeding need to remain open? MR. KINDSETH: For the second phase, Your Honor. THE COURT: What second phase? MR. KINDSETH: All interpleader actions have two phases.

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Ho Wan Kwok - June 27, 2023 39 The first is with -- THE COURT: Not if they're resolved, they don't. MR. KINDSETH: Actually, the first phase of the interpleader action is for the escrow agent to deposit the funds with the Registry. THE COURT: Not -- MR. KINDSETH: What this consent order does, Your Honor, if I may be heard please, what this consent -- THE COURT: You may be heard, Counsel, but I can ask questions. So you need to be respectful of the Court. So go right ahead. MR. KINDSETH: I'm trying to answer the question, Your Honor. And I apologize that I'm not doing so, but I would like to try. An interpleader action inherently has two phases. The first phase is what to do with the escrow agent. And the second is what to do with the funds. And what we're agreeing, as an accommodation to the Trustee, is to permit the Trustee to have the funds held by the estate and the Trustee and permitting those funds to be invested. And what the consent order provides is that vis-a- vis the Court in the interpleader action it will be treated as though it is in the Registry of the Court and, therefore, our rights as to the second phase of the interpleader action

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Ho Wan Kwok - June 27, 2023 40

are not being defeated.

The second phase of the interpleader is where the parties interplead, meaning assert claims against each other with respect to what happens with those funds. And, in fact, the Trustee has done that in terms of filing the -- his answer and also filing the motion for summary judgment.

So the motion for summary judgment is the Trustee's argument as to phase two of the interpleader action as to what should happen with the funds.

Our argument in response is going to be that the escrow agreement specifically required that although the Court could enter a judgment with respect to the property of, whether it is property of the estate, the escrow funds.

The escrow agreement, which this court authorized and ordered as part of the stipulated order, specifically required that such bankruptcy order shall be final and no longer appealable.

And so our argument in phase two in opposition to the Trustee's motion for summary judgment will be that the escrow agreement, as authorized by this court, governs the proceeds in escrow and requires a final and no longer appealable order in order for their disbursement, and so we're simply dealing with by agreement phase one of the interpleader action.

And now on an expedited basis I may add the

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Ho Wan Kwok - June 27, 2023 41 summary judgment motion can be heard. Our brief is due I believe either July 5th or 7th and the hearing is scheduled I believe for July 12th which is the second aspect of the interpleader action. Thank you, Your Honor. THE COURT: There are many provisions in the stipulated order that relate to the escrow agreement that the HK parties have not abided by as well, Counsel. And when you say we are agreeing, who's we? MR. KINDSETH: I apologize. I meant HK. THE COURT: HK. MR. KINDSETH: You're right. THE COURT: Okay. Thank you. Anything further, Mr. Bassett or Trustee Despins? MR. DESPINS: Yes, Your Honor. I just want to talk about paragraph 2, that's the paragraph that allows the Trustee to invest the money in treasury securities. There are ghosts, what I refer to as ghosts, in there that we need to fix. There are references to a term called custodial accounts which is -- was in the prior draft, should not be there again. And we -- because the new language should be in treasury securities and not in the custodial account, so we need to fix that. And I want to tell Your Honor about the background Case 22-50073 Doc 1980 Filed 07/05/23 Entered 07/05/23 17:21:35 Page 42 of 93

Ho Wan Kwok - June 27, 2023 42 of this. It's that we wanted to invest this in treasury securities and deposit the treasury securities in a custodial account at a financial institution. The U.S. Trustee had concerns about that approach and said that their experience is that other trustees or other debtors in possession that have a lot of cash go and buy treasury securities directly from the Treasury so we put that in that order relying on that. We hope that we can do that. And apparently you can buy it in traunches of up to \$10 million. If we're able to do that, the order will work fine. If that doesn't work, we'll need to come back to the Court and modify this so that we, in fact, can have a broker buy the securities, transfer it to a custodial account. But hopefully we won't have to deal with that issue because we can buy the treasury securities at a high interest rate directly from the Treasury, which accomplishes our goal of maximizing returns to the estate. We're talking about potentially a million plus a year here in interest. So I wanted to mention that. So, one, we need to fix, in paragraph 2, the references to custodial account should be removed. And other than that I think that that -- so we would need to file a supplemental order to reflect those deletions. Other than that I think, Your Honor, we would be

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| | Ho Wan Kwok - June 27, 2023 43 | |----|---------------------------------------------------------------| | 1 | done with this. Thank you. | | 2 | THE COURT: Attorney Williams? | | 3 | MS. WILLIAMS: Thank you, Your Honor. Again for | | 4 | the record, Latonia Williams of Shipman & Goodwin on behalf | | 5 | of U.S. Bank as escrow agent. | | 6 | Your Honor, thank you for indulging all of the | | 7 | parties. We worked really hard to try to get a consent | | 8 | order together in advance of appearing before Your Honor. | | 9 | And I think because of that there were items that we need to | | 10 | address. I think that that's something that we can do very | | 11 | quickly. | | 12 | What I would propose is that my office can | | 13 | circulate an amended version of the consent order to all of | | 14 | the parties to the interpleader action. And hopefully this | | 15 | afternoon we can get any typos or items that we need to | | 16 | clear up cleared up and then submit it again to the Court. | | 17 | And we're happy to do that either in the context | | 18 | of filing another supplemental docket reflecting the consent | | 19 | order on the docket, or if the Court would prefer we can | | 20 | also submit it directly to chambers CC'ing all of the | | 21 | parties on the email, whichever one. | | 22 | MR. DESPINS: But if I may, I want to make sure | | 23 | that the only issue that's been identified is the use of the | | 24 | term custodial account that should be removed. | | 25 | But are there other issues other than that? | | | |

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Ho Wan Kwok - June 27, 2023 44 MS. WILLIAMS: Not that I am aware of. MR. DESPINS: Okay. Thank you. MS. WILLIAMS: I think that we did was we filed the document that had been circulated amongst the parties -- MR. DESPINS: Okay. MS. WILLIAMS: -- and that just was missed in the process probably. MR. DESPINS: Thank you. THE COURT: Yeah. Just give me one moment. I understood what you said. Thank you. I'm just -- as you noted, this document was filed while we were in court so I haven't had the opportunity to fully read it and make sure that I understand it fully which is why questions were asked. (Pause) THE COURT: So this order says that the, and I understand why, that the escrow agent is dismissed from the action. So then who's the plaintiff? We have two defendants against each other, that's what we're -- that's what this is going to be? MR. DESPINS: I think so, Your Honor. THE COURT: All right. Attorney Williams, if you would please do as you suggest which is submit the revised proposed order to all parties through email or however you'd

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Ho Wan Kwok - June 27, 2023 45 like to do that. And then since it appears that the changes are very minimal, you don't have to docket the order again. You can submit it to the courtroom deputy email box, the Bridgeport Courtroom Deputy Email Box which is kind of a generic email address. And it's on the website somewhere. I'm looking at the courtroom deputy. Just give me a little help there where it is so that it's easily -- we tried it to make it more prominent, but I don't know if it is or not. MR. DESPINS: We can provide it, Your Honor. It shouldn't be a problem. THE COURT: Okay. MS. WILLIAMS: Yes. We'll take care of that, Your Honor. THE COURT: Okay. Thank you. Then with regard to the motion to deposit funds into the Registry of the Court and to discharge the plaintiff from the interpleader action, ECF 19, that matter is resolved by consent order which will be substantially in the form of a consent order that was filed on the docket today at ECF No. 38 at 12:09 p.m. The parties will submit a revised consent order in the manner just discussed on the record. And once that consent order is submitted it will be signed and entered in

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Ho Wan Kwok - June 27, 2023 46 the adversary proceeding. So that resolves the motion to deposit the funds in to the Registry of the Court, ECF No. 19. So are we now moving on to the sale, Trustee Despins? MR. DESPINS: Yes, Your Honor. I believe that there is an agreement on an amendment to the proposed order. And of course, Your Honor, you'll decide how you want to proceed. But the amendment is not too long. But you may want to -- we haven't -- we haven't docketed that order yet, so you may want to take time to review that and then we reconvene at your convenience. It would be a much shortened hearing I expect in light of that proposed amendment to the order. THE COURT: So there's no opposition to the -- there's no longer any opposition to the sale? MR. DESPINS: Well, subject to that modification being made, there would be -- there are two -- four pro se people that have filed objection, but I don't think -- I think they were confused about, you know, I think their thinking is that it's a private sale orchestrated or for the benefit of Mr. Kwok, but of course that's not what's happening. So those objections would remain outstanding, but I don't believe they would be problematic.

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| | Ho Wan Kwok - June 27, 2023 47 | |----|--------------------------------------------------------------| | 1 | But there would still be a need for short | | 2 | testimony to make sure we have a record of good faith, fair | | 3 | market value, et cetera, and that shouldn't be too long. | | 4 | Because it wouldn't be -- there would no longer be the issue | | 5 | of motion to quash a subpoena. That issue would go away. | | 6 | And we understand that subject to the order being | | 7 | satisfactory to Your Honor that the HK parties would not | | 8 | cross-examine witnesses or oppose the release. | | 9 | I think it's probably important for you to look at | | 10 | the order to make sure you're comfortable with it. | | 11 | THE COURT: The order that you're going to file | | 12 | that you haven't filed yet? | | 13 | MR. DESPINS: Yeah. Correct. But I think -- | | 14 | THE COURT: When is that going to be filed? | | 15 | MR. DESPINS: In less than ten minutes, Your | | 16 | Honor. | | 17 | THE COURT: All right. Well, then -- | | 18 | MR. DESPINS: Shall we email it to the courtroom | | 19 | deputy, is that the best way, or -- | | 20 | THE COURT: Yes. | | 21 | MR. DESPINS: Okay. That will be faster. | | 22 | THE COURT: The proposed order that was already | | 23 | submitted -- | | 24 | MR. DESPINS: The one attached to the reply? | | 25 | THE COURT: Right. -- has extensive findings and | | | |

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| | Ho Wan Kwok - June 27, 2023 48 | |----|---------------------------------------------------------------| | 1 | conclusions of law, which is fine, but that record's going | | 2 | to need to be made in some way, shape or form. | | 3 | MR. DESPINS: Yes, Your Honor. That's why there | | 4 | will be testimony, but we don't expect it to be the same | | 5 | process that if the HK parties opposed. | | 6 | THE COURT: So how -- I'm going to need to read | | 7 | this order. So if we take a recess until 2:00 p.m. is that | | 8 | too long for you, Trustee Despins, or is that workable? | | 9 | MR. DESPINS: I think that's fine, Your Honor. | | 10 | THE COURT: Okay. So I'm looking at you and | | 11 | you're saying that probably within the next 10 to 15 minutes | | 12 | the courtroom deputy is going to receive an order in the | | 13 | courtroom deputy box that you'll show me so we can look at | | 14 | it and come back -- before we come back out at 2 p.m.? | | 15 | MR. DESPINS: Yeah. It should be five minutes, | | 16 | Your Honor. | | 17 | THE COURT: Okay. All right. Then court is in | | 18 | recess until 2 p.m. | | 19 | (Proceedings recessed at 1:15 p.m.) | | 20 | (Proceedings resumed at 2:24 p.m.) | | 21 | THE COURT: (Delay in start of audio) the Lady | | 22 | May. | | 23 | And then when we were about to come out, Trustee | | 24 | Despins, I was told there was a second order with other | | 25 | revisions, is that accurate? | | | |

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Ho Wan Kwok - June 27, 2023 49 MR. DESPINS: That's correct, Your Honor. THE COURT: Okay. MR. DESPINS: Did you get a chance -- THE COURT: So paragraph 9 was revised again? MR. DESPINS: That's correct, Your Honor. THE COURT: That's the only paragraph that was revised again? MR. DESPINS: That's correct, Your Honor. If I -- I can take the Court through or the intent of the changes if you -- THE COURT: Yes, please. MR. DESPINS: Okay. It was just to make clear that the HK parties rights, if they ever prevail on appeal, final and non-appealable order, will apply to the proceeds of the Lady May but also to estate assets to the extent the proceeds from the Lady May have been used. And before that it used to say that they had or that any claim, interest or encumbrances would apply to the proceeds of the sale and the debtor's estate. And we modified that to provide that that's only in the event that they get a final, non-appealable order to satisfy their claims. So, for example, if we spend the entire 22 million, I guess that will be the net proceeds we would receive, and -- but we have other estate assets, there's no

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Ho Wan Kwok - June 27, 2023 50 need for professionals to disgorge any funds because there's estate assets to make them whole. Again, to be clear, this only applies if they get a final, non-appealable order that says that they own the Lady May. So this was -- THE COURT: When you say they? MR. DESPINS: The HK parties. THE COURT: Well, isn't the -- MR. DESPINS: HK USA -- THE COURT: HK USA is the only party that's ever asserted that they own the Lady May in this -- in this court. Isn't it? MR. DESPINS: I think that's correct, but -- THE COURT: That's what the whole adversary proceeding -- MR. DESPINS: Yes. THE COURT: -- was about. MR. DESPINS: No. You're right. THE COURT: That's the complaint that started the adversary proceeding in April of 2022, a declaration. They wanted a declaratory judgment that they owned the Lady May. MR. DESPINS: That HK USA owned it. THE COURT: That HK USA, not Mei Guo. MR. DESPINS: Yeah. So, again, I'm -- THE COURT: So why is Mei Guo in there?

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Ho Wan Kwok - June 27, 2023 51 MR. DESPINS: I'm not in a position to defend Mr. Kindseth's position so I'll let him address this. THE COURT: Well, are you agreeing to that? MR. DESPINS: I frankly -- I think Your Honor is correct that Mei Guo is not, has never -- has never argued that she owns the Lady May, so you're probably correct, Your Honor. THE COURT: Mr. Kindseth? MR. KINDSETH: Yes. I don't have the adversary proceeding before me. I think that -- THE COURT: We can pull it up. MR. KINDSETH: I think that -- THE COURT: It will take us three seconds. You filed the complaint and it's a declaratory judgment. I can read you the first paragraph that HK USA owned the Lady May which was filed to stop the relief from stay motion of PAX back in March of 2022. There's no allegation in that complaint that Mei Guo owned the Lady May. So I don't understand why I would enter an order that says that if HK and/or Mei Guo are entitled to receive payment from the proceeds or the debtor, and/or the debtor's estate, to the extent such finally determined -- of such finally determined interest. The only interest that's been sought to be

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Ho Wan Kwok - June 27, 2023 52 determined in this court, both through your complaint and the counterclaim on which summary judgment was entered, was whether or not HK USA owned the Lady May in connection with your complaint. And in connection with the counterclaim asserted by the Trustee in the first counterclaim was whether or not collateral estoppel would apply to the finding of Justice Ostrager that Mr. Kwok was the beneficial owner of the Lady May. That's it. There's no mention of Mei Guo in the first counterclaim or in your complaint. So if you two want to talk about that I'm happy to give you a few minutes, but I don't understand why I would enter an order that says what that -- in the middle of paragraph 9 says. I don't know why the HK parties are defined as HK USA and Mei Guo, and/or Mei Guo I should say. That's what it says. And/or. Doesn't even say and. It says and/or. There's nothing in the record of this case that would support that so I'm not sure why I would enter that language in this order. Do you want a few minutes to discuss it? MR. KINDSETH: We would not need that. Thank you for confirming, Your Honor. We can take Mei Guo out of the proposed language.

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Ho Wan Kwok - June 27, 2023 53 THE COURT: Okay. Thank you. Then that line will say in the event of final and no longer appealable order enters determining that the Lady May and/or its proceeds are property of HK International Funds Investments (USA) Limited, LLC, HK USA. Take and delete together with HK USA, the HK parties, in which case HK USA shall be entitled to receive payment from the proceeds and/or the debtor's estate to the extent of such finally determined interests. And then again three lines down satisfy HK USA. Does anybody have any issue with that? MR. KINDSETH: No issue with that. THE COURT: Okay. All right. Trustee Despins, you now are going to present evidence in support of the findings of fact and conclusions of law you'd like the Court to make in connection with the sale motion? MR. DESPINS: Yes. Mr. Bassett will handle that, Your Honor. THE COURT: Okay. Please proceed. MR. BASSETT: Thank you, Your Honor. So, Your Honor, to preview for the Court the evidence that the Trustee intends to introduce, we have some exhibits which have been filed on the docket as part of a witness and exhibit list at ECF 1930.

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Ho Wan Kwok - June 27, 2023 54 And then I anticipate that we will have two witnesses who will testify. We will first have Dirk Johnson from Edmiston, the broker, who was retained by the Trustee with the approval of the Court to assist with the sale. He submitted a declaration along with the sale motion which is also at Exhibit 26 in the witness and exhibit list that I mentioned at ECF 1930. We would propose to have Mr. Johnson adopt his declaration as his direct testimony, obviously subject to any objections that anyone may have. And Mr. Johnson is in the courtroom in order to answer any questions that the Court may have. I don't anticipate that there would be cross- examination, but he also would be available for that as well. And then we would have the Trustee take the stand for some relatively brief testimony as well. That's sort of the roadmap. And I'm happy to start with the -- with the exhibits if that pleases the Court. THE COURT: Well, I want to make sure that no one has any objection to your proposed process to proceed. Okay? Does anyone have any objection to Attorney

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| | Ho Wan Kwok - June 27, 2023 55 | |----|----------------------------------------------------------------| | 1 | Bassett's proposal of how he's going to proceed with | | 2 | evidence in this matter? | | 3 | (No response) | | 4 | THE COURT: All right. Hearing no objection, then | | 5 | go right ahead, Attorney Bassett. | | 6 | MR. BASSETT: Thank you, very much, Your Honor. | | 7 | So as I mentioned the witness and exhibit list | | 8 | that we submitted is at ECF 1930. Exhibit B to that | | 9 | document is the exhibit list. I believe the exhibits | | 10 | themselves have also been filed on the docket. In fact, I | | 11 | am confirming that they have, but -- because the copies that | | 12 | I'm looking at have Bates or have ECF stamps at the top. | | 13 | And the list consists of Exhibits 1 through 28. | | 14 | These exhibits I would say generally fall into three | | 15 | categories. | | 16 | Exhibits 1 through 14 are online internet listings | | 17 | and other documents evidencing Edmiston's marketing efforts | | 18 | for the Lady May demonstrating what they did to attract | | 19 | interest in the sale process, including, as I said, online | | 20 | advertising, their social media posts, et cetera. Those are | | 21 | Exhibits 1 through 12. Exhibit 13 is a sample email of the | | 22 | type of outreach that was made to potential bidders. | | 23 | Exhibit 14 is a marketing report prepared by the broker. | | 24 | And then after that we get into what I would call | | 25 | a kind of second bucket or category of documents on the | | | |

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| | Ho Wan Kwok - June 27, 2023 56 | |----|----------------------------------------------------------------| | 1 | exhibit list. Beginning with Exhibit 15 through Exhibit 25, | | 2 | these are the letters of intent or bids that the Trustee | | 3 | received from bidders in the sale process. We have | | 4 | identified them with letters to protect their | | 5 | confidentiality which was agreed upon with them as part of | | 6 | the process. | | 7 | After Exhibit 25, Exhibit 26, as I mentioned | | 8 | previously, is the declaration of Mr. Johnson. | | 9 | And then after that, Your Honor, Exhibits 27 -- | | 10 | Exhibits 27 and 28 are the purchase and sale agreement, the | | 11 | final purchase and sale agreement, and the addendum to that | | 12 | agreement respectively. | | 13 | I am happy to talk about any of the exhibits in | | 14 | more detail as the Court would like, but at this stage, | | 15 | absent objection, I would offer Trustee Exhibits 1 through | | 16 | 28 into evidence. | | 17 | THE COURT: Does anyone have any objection to the | | 18 | introduction of Trustee Exhibits 1 through 28 into evidence | | 19 | as full exhibits in connection with the motion to sell the | | 20 | Lady May? | | 21 | (No response) | | 22 | THE COURT: Hearing nothing, then Exhibits 1 | | 23 | through 28 are admitted in full. | | 24 | (Trustee Exhibits 1 through 28 received in evidence as | | 25 | full exhibits) | | | |

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Ho Wan Kwok - June 27, 2023 57 THE COURT: Now, Mr. Bassett, you're going to have to point me to what you want me to read. I'm not going to read all 28 of those exhibits. Okay? MR. BASSETT: Understood, Your Honor. THE COURT: All right. And with regard to Mr. Johnson's declaration we'll -- when we take that up we'll make sure that no one wants to cross-examine Mr. Johnson. Okay? MR. BASSETT: And with the Court's permission I would actually take that up now. THE COURT: Okay. MR. BASSETT: And as I said Mr. Johnson is in the courtroom -- THE COURT: Would Mr. Johnson stand up, please. Okay. Good afternoon, Mr. Johnson. Mr. Bassett's going to make some statements about your declaration and I'm going to ask you if you agree with whatever he's saying. Okay? MR. JOHNSON: Yes, Your Honor. THE COURT: Okay. Thank you. Go ahead, Mr. Bassett. MR. BASSETT: So, Your Honor, we -- I'm trying to figure out, I apologize, the most efficient and best way to proceed. We had intended on offering the entire declaration into the record which I would propose to have Mr. Johnson

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Ho Wan Kwok - June 27, 2023 58 adopt as his testimony. I'm happy to summarize for the Court or point the Court to particular parts of it, in addition -- THE COURT: I think you can summarize. That's fine. MR. BASSETT: Okay. THE COURT: Everyone, well, this document, this exhibit has been on the docket. I do think you can summarize. I don't think you need to go through every paragraph. MR. BASSETT: Sure. THE COURT: I understand when Mr. Johnson was retained, I mean, we went through his qualifications and his experience, and he being a broker based in Newport where the boat has been -- the yacht has been sold so I don't think we need to go through that. Okay? MR. BASSETT: Understood. So by way of quick summary, then, you're correct, Your Honor, I won't belabor the experience. But Mr. Johnson is with Edmiston. He's been there for two and a half years, 15 years of experience in the industry, as described in paragraph 3 of his declaration. He's involved in -- he has been involved in many, many sales of luxury yachts over the course of his lengthy career. As the Court is aware, he was retained in April of

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Ho Wan Kwok - June 27, 2023 59 2023 by the Trustee to help market and sell the Lady May. The agreed-upon list price at the outset of that engagement for the Lady May was a list price of \$26,500,000. And I would proffer that Mr. Johnson would testify that there is a strategy in setting a sale price, which is to set a price that you hope will be obviously higher than what you expect to get in order to, you know, follow the concept of if you don't ask you don't receive. Since Mr. Johnson was retained by the Trustee, he immediately embarked upon a marketing process. On the Trustee's behalf, consistent with the practices that he follows in the industry, he began reaching out to potential buyers, both within his own network of people that he knows from his extensive experience in the industry and working with people and selling yachts in the past, as well as reaching out to other brokers in the industry. And then also engaging in an online advertising and marketing campaign, as well as a print advertising and marketing campaign, and that's where I would refer the Court to those exhibits 1 through 12 on the exhibit list that were already admitted into evidence. These are examples of the types of marketing efforts that Mr. Johnson engaged in. And those marketing efforts are described in a bit more detail in narrative fashion in paragraph 7 of his declaration.

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Ho Wan Kwok - June 27, 2023 60 In addition to those marketing efforts, as I said, he emailed many people in his industry of -- in his network of industry brokers. And ultimately the distributions that Edmiston has for marketing purposes for the yacht were sent to approximately 1850 brokers in the yacht industry. As I said it was also -- the yacht was also listed online at websites that are used to market property such as the Lady May. In terms of other marketing, Edmiston is the title sponsor of the London Heliport. He used that platform to market the Lady May to potential buyers. Also did marketing within private aviation terminals that are frequented by the people who have the means to potentially buy a yacht as the Lady May. In paragraph 11, and thereafter as Mr. Johnson would testify there was initially a good amount of interest in the Lady May. There were a handful of potential buyers who requested to be shown the property and, in fact, upon request, were shown the yacht. After that, by May 20th, that's when the Trustee and Mr. Johnson began receiving actual bids. At that time, they received five potential bids with purchase prices of -- sorry, they received at that point five offers for the Lady May with proposed purchase prices ranging from 18 million to

Ho Wan Kwok - June 27, 2023 61 20 million. In response to that, Edmiston at the Trustee's direction countered those bids at \$23 million. In response to that counter, one of the initial bidders increased its bid to 20 million while the others did not increase their offer. After that what Mr. Johnson would say is that he told the Trustee that he did not think a prolonged marketing process, given the unique nature of this particular market, would be helpful and he recommended and in consultation with the Trustee decided to set a deadline of Tuesday, May 30th at 5 p.m. for interested parties to submit best and final bids. That was communicated to these potential bidders as well as other parties who did not previously make a bid but had expressed interest in the Lady May. That Tuesday, May 30th deadline came. And at that time the Trustee received five bids. I would note that, as Mr. Johnson testifies in his declaration, all of these interested bidders who were informed of the May 30th deadline were given very clear parameters about what the bids would have to look like and what, you know, what qualifications they would have to meet in order to be deemed acceptable. The minimum purchase price, for example, was \$20

Ho Wan Kwok - June 27, 2023 62 million. There was -- there was a requirement with respect to a 20 percent deposit within 48 hours of the bid being selected as the winning bid. Also importantly there was a form purchase agreement that the Trustee prepared that had to be used for the basis for all the bids. And to the extent there were any modifications those had to be provided in blackline. And also importantly there was a modification to what would be a more typical requirement in the industry that would allow a buyer to walk away following a survey of the yacht after purchase. The Trustee wanted that tweaked to limit the buyer's rights in that regard. So after that email went out with all the those requirements and instructions, five bids, this is paragraph 15 of the declaration, were ultimately received. Three of these five bids exceeded the \$20 million minimum. Two were below that. It's important to note that during this what I would call the second round of bidding two bidders that were not initial bidders submitted bids, so two other people. But then also not all bidders that participated in the initial round were still interested and submitted a further bid by the May 30th deadline so some of those initial parties had dropped off already. For example, as Mr. Johnson would testify, one of

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| | Ho Wan Kwok - June 27, 2023 63 | |----|----------------------------------------------------------------| | 1 | the prior bidders who initially had submitted a bid for 20 | | 2 | million said he was not interested in bidding further | | 3 | because he did not want to participate in a competitive | | 4 | bidding process. | | 5 | Once these bids were received on May 30th, the | | 6 | Trustee then himself personally engaged in further | | 7 | discussions with each of these bidders and employed a | | 8 | process that the Trustee believed was designed to leverage | | 9 | the most he could out of each potential bidder and hopefully | | 10 | generate the best possible sale price. | | 11 | One of the bidders who had submitted a bid by the | | 12 | May 30th deadline ultimately increased his bid as a result | | 13 | of this process deployed by the Trustee to \$24 million | | 14 | thereby becoming the highest bidder. That individual who is | | 15 | Mr. Chambers, the proposed buyer, was ultimately selected as | | 16 | the winning bidder. | | 17 | The other bidders who were in the process at that | | 18 | point, the other two second highest bidders, were notified | | 19 | and given an opportunity to submit a further better bid and | | 20 | they both declined to do so. | | 21 | Mr. Johnson further testifies, this gets into | | 22 | paragraph 17 of his declaration and thereafter, that he | | 23 | believes the proposed sale to the buyer is the highest -- is | | 24 | for the highest and best bid for the Lady May, that is the | | 25 | product of an arm's-length bidding and negotiation process, | | | |

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| | Ho Wan Kwok - June 27, 2023 64 | |----|--------------------------------------------------------------| | 1 | and that he believes the buyer has proceeded in good faith | | 2 | during the entirety of the bidding and negotiation process. | | 3 | He further testifies in summary that he believes | | 4 | the purchase price offered by the buyer pursuant to the PSA | | 5 | is the best available price for the Lady May. | | 6 | He also further testifies that he does not believe | | 7 | that implementing formal bidding procedures and running a | | 8 | public auction process would have increased the price, but | | 9 | rather would have risked losing the transaction with the | | 10 | buyer and undermining the momentum that had been established | | 11 | in the process to date. | | 12 | There's further testimony in paragraphs 19 and 20 | | 13 | about why he does not think a formal auction process would | | 14 | have been beneficial, which is consistent with the remarks | | 15 | that are already made in that regard. | | 16 | So, again, Your Honor, that is I think perhaps a | | 17 | more lengthy summary than you had envisioned of the | | 18 | testimony, but that is still indeed just a summary. | | 19 | And, again, we would -- we would propose to have | | 20 | Mr. Johnson adopt the entirety of this declaration as his | | 21 | direct testimony. Again, obviously subject to questions | | 22 | that the Court may have and subject to any cross | | 23 | examination. | | 24 | THE COURT: Okay. Thank you. | | 25 | Mr. Johnson, were you able to hear Attorney | | | |

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Ho Wan Kwok - June 27, 2023 65 Bassett? MR. JOHNSON: Yes, Your Honor. THE COURT: Okay. Is there anything that Attorney Bassett said that you disagree with? Or is there anything you'd like to add? MR. JOHNSON: No, Your Honor. THE COURT: Okay. Thank you. You can have a seat, sir. Does anyone wish to cross-examine Mr. Johnson? (No response) THE COURT: All right. Hearing no response to cross-examination, I agree that the declaration can be adopted as Mr. Johnson's direct testimony. I have no questions with regard to Mr. Johnson's direct testimony. Thank you. MR. BASSETT: Thank you, Your Honor. At this time, the Trustee would call his next witness which is the Trustee himself. THE COURT: Go right ahead. (The witness is sworn.) THE COURTROOM DEPUTY: Please be seated. State your name and address for the record. THE WITNESS: Luc Despins, 200 Park Avenue, New York, New York.

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Luc Despins - Direct - Bassett 66 DIRECT EXAMINATION BY MR. BASSETT: Q Mr. Despins, in addition to serving as the Chapter 11 Trustee, you are a partner in the financial restructuring group of Paul Hastings, is that correct? A That's correct. Q How many years have you been practicing bankruptcy law? A 37 years. Q And during those 37 years of experience have you been involved in overseeing sale processes of Chapter 11 estates in any capacity? A Yes, I have. On dozens of occasions. Q And what kinds of assets? A All sorts of assets. Pipelines, entire companies, such as Fruit of the Loom, software companies or software products, leases for retail properties. There's many -- there are many others that I can't recall, but, you know. Q And what types of roles have you personally performed with respect to those types of asset sales? A I was either debtor's counsel or committee counsel that was working jointly with the debtor selling the asset. Q And you've reviewed the declaration of Mr. Johnson, correct? A I have. Q Is there anything in that declaration that you disagree

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Luc Despins - Direct - Bassett 67 with? A No. Q Is what he said about the sale and marketing process that occurred with respect to the Lady May, is that all accurate based on your involvement in the process? A It is. Q And, Mr. Despins, can you just describe for the Court what -- how would you describe your involvement in that process in terms of your coordination with Mr. Johnson? A Well, obviously I relied primarily, because I'm not a yacht expert, I rely on the expertise of Edmiston and Mr. Johnson. But when it comes to the actual bidding I wanted to be hands-on and leading that process. Q And based on that process and the way it was described in Mr. Johnson's declaration, and my summary of that, in your view, does the proposed sale to the buyer that resulted from that process maximize value for this Chapter 11 estate? A Absolutely. This really represents the fair market value of this asset. It's been tested not only in the first round, but the second round. But even after the purchase price reduction I contacted the sole remaining bidder that could have been interested, that was the runner-up, to say you understand that you can now buy this asset for more than 23,150,000 and

Luc Despins - Direct - Bassett 68 they declined. So the point is that there's been several market tests. And the fact that there's nobody at the hearing here today saying I want to bid more given the marketing process that was used, you know, tells us that this is the value of this asset. Q And stated differently, would you say that in your view the proposed sale to the buyer represents the highest and best offer for the property? A Absolutely. Q Based on your interactions with the buyer and his representatives throughout the process do you believe the buyer has acted in good faith? A Yes, he has. Q Do you believe that you and your representatives throughout the process have acted in good faith? A Yes, I do. Q Are you aware of any bidding collusion or any other conduct like that that may taint the process that has occurred? A None at all. Q Do you have any understanding of whether or not the buyer is an insider, affiliative, or otherwise connected to the debtor? A He is not. But more than that, we've had him make a Case 22-50073 Doc 1980 Filed 07/05/23 Entered 07/05/23 17:21:35 Page 68 of 93

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| | Luc Despins - Direct - Bassett 69 | |----|--------------------------------------------------------------| | 1 | representation in the purchase agreement that he was not | | 2 | connected in any way to Mr. Kwok. | | 3 | Q So as Mr. Johnson testified the buyer ultimately, after | | 4 | the submission of bids on May 30th, agreed to pay \$24 | | 5 | million for the yacht. But then that price was later | | 6 | reduced, right? | | 7 | A That's correct. | | 8 | Q So what happened? | | 9 | A Well, the purchase agreement contemplated a survey | | 10 | process. We knew this, had mentioned this to the Court in | | 11 | status conferences before. | | 12 | It's like buying a house. When there's an | | 13 | inspection there's a risk involved in that. | | 14 | And we negotiated in the purchase and sale | | 15 | agreement a provision that basically the price could only be | | 16 | reduced if there was a certification by the surveyor that | | 17 | there were defects with respect to the systems or the | | 18 | machinery of the yacht. | | 19 | And, in fact, what happened is that there was a | | 20 | survey. A reputable firm from Florida, you know, handled | | 21 | the survey. | | 22 | Because I did not want to take their word for it, | | 23 | we -- I've asked our expert, Mr. Dexter White, to shadow | | 24 | their work, to be there on the yacht when they did the sea | | 25 | trial. But also to follow what they were doing and to | | | |

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| | Luc Despins - Direct - Bassett 70 | |----|----------------------------------------------------------------| | 1 | verify whether any defects they would identify were real. | | 2 | And, in fact, he did, and reported all this to me. | | 3 | Q So how ultimately was the issue resolved as it relates | | 4 | to these defects or other items that the buyer identified | | 5 | following the survey? | | 6 | A Yeah. The survey identified, you know, four main | | 7 | items, issues with the yacht. | | 8 | And not to get too technical but the first one was | | 9 | the black water processing system. That was defective, | | 10 | really defective. | | 11 | The second one was the electrical converter | | 12 | system. This is a European made yacht, operates on a | | 13 | European current. Must be converted to U.S. current. And | | 14 | so there is a machinery to do that. It's called a -- I | | 15 | forget the exact term, but it's a converter, and that | | 16 | converter apparently had been exposed to salt water and was | | 17 | not operating correctly. So that was the second item. | | 18 | The third item were the generators. I guess the | | 19 | way to look at is like a battery. But those had been used | | 20 | extensively, probably because of the first problem, meaning | | 21 | that there was an inability to rely on current that you can | | 22 | use at the dock. And the practical effect of that is that | | 23 | the generator had a very limited time life. And so that's | | 24 | the third issue. | | 25 | And the fourth issue was the fact that this yacht | | | |

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Luc Despins - Direct - Bassett 71 was operating on Windows XP. And you might think, well, let's go to Office Depot and get a new software. But I learned that you can't just change the software. You need to change the -- a lot of the programing and that allows you to download. Because Windows XP, by the way, is very old and Microsoft does not provide updates to that, you cannot download all the maps and all the programs you need to operate this yacht along the U.S. coastline. And basically you needed to replace that. And so it was not like a 300 or \$2,000 job. It's something like, just on that item alone, was between 25 and 50,000 to replace. Q So did the buyer make a demand for how much he thought it would cost to fix these issues and, therefore, how much he wanted to reduce the purchase price by? A Yes. The initial demand was 2.5 million. Q Did you do anything to try to get an understanding for your benefit of what -- as to what you think the, you know, appropriate cost of fixing those issues would be? A Yes. I had extensive discussions with Mr. White, our expert, who concluded that, you know, the range of costs for all these issues would be in the 750 to \$850,000 range. But I think it's important to point out that the way this works in the purchase agreement, if the buyer identifies or if the survey identifies a defect, at that

Luc Despins - Direct - Bassett 72 point the buyer can walk and that really reverses the leverage that I have. Because, you know, the brokers were very specific about this. They said if the buyer walks based on a defect in the survey this boat will be or this yacht will be considered toxic in the marketplace and it will take you months to sell it and you'll never get more than \$20 million because the buyer is a well-known person in the industry. He owns several yachts. Good for him. And a seal of approval from him is very valuable, but a reject from him would be, in the words of the brokers, would be deadly to our process. Q You referred to this party in your answer, to Mr. White, who you I think characterized as your expert. Can you tell the Court more about who Mr. White is? A I think the Court may be familiar. He's with a company called I think EOS. We retained them to -- when there were repair -- we had established a repair reserve. Initially retained by PAX. Then he became our expert. So he has been on the yacht several times before in the context of looking at establishing a repair reserve and I decided to use him for this process because he was already very familiar with the yacht. Q So after talking to him and, you know, getting from him his estimate of what these repairs would cost, did you then

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| | Luc Despins - Direct - Bassett 73 | |----|------------------------------------------------------------------| | 1 | go, try to negotiate resolution with the buyer? | | 2 | A Yes, I did. | | 3 | Q And what happened? | | 4 | A Well, this is where he made the demand for 2.5 million | | 5 | and I said that's not reasonable. So we had a back-and | | 6 | forth over that. And I initially offered 750 which he | | 7 | rejected. And then we resolved it at 850. Which, you know, | | 8 | I, to be honest, this is like it's my own money. I felt | | 9 | devastated about that. But it -- that was the -- it was | | 10 | that in closing the deal or rolling the dice with other | | 11 | bidders that were bidding in the 16, 17 million dollar | | 12 | range. | | 13 | And also we have to remember that the cost of this | | 14 | toy is ridiculous. We have to pay the crew. We have to pay | | 15 | docking fees. | | 16 | And so the -- so it was painful to accept that | | 17 | reduction, but that was the best way to maximize the estate | | 18 | in my judgment. | | 19 | Q And now this, the purchase and sale agreement with the | | 20 | buyer, does that have a date by which the transaction must | | 21 | close? | | 22 | A Yeah. June 30th. | | 23 | Q What's the -- what do you understand the reason for | | 24 | that date is? | | 25 | A Because the buyer wants to use the boat during the July |

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Luc Despins - Direct - Bassett 74 4th holiday. I mean, he had this whole plan of bringing another yacht of his back from Italy to the U.S. but he changed that based on this purchase. And as recent as this morning I talked to his counsel and the June 30th date is a real date that they insist on. Q I think those were the specific questions that I have for you. But before I conclude is, as we're asking the Court to approve the sale today, is there anything else that I've omitted that you think the Court should know? A No. I would say generally that I think this is really the best price that could be obtained. The assessments I had gotten from other brokers and this broker about what this could sell for were in the low 20s, \$21,000 million. And I said I'm rejecting that. Let me do our bankruptcy magic and we'll create value. And they laughed at me and said, no, it's going to sell for 21- 22. So I'm very happy with the result. But, you know, I think that this is really the best value for this. And I believe that we would have heard because the whole marketplace knows about this purchase. There are yacht publications. And actually Mr. Chambers, the buyer, told me that he was very upset that his name was mentioned. I said,

Luc Despins - Direct - Bassett 75 well, it's a court process, we need to identify your name as the purchaser. But apparently his name was plastered in all these yacht publications, so everyone knows about this transaction. And so, therefore, the market knows that this is being sold today if the Court approves it for 21, sorry, 23,150. So I derive a lot of comfort from that that this is the best value out there. MR. BASSETT: No further questions, Your Honor. THE COURT: Thank you. So as part of this deal, Mr. Despins, the motion to quash is resolved as well? THE WITNESS: That's correct, Your Honor. THE COURT: Okay. And that is because the objectors are withdrawing their objection to the sale? THE WITNESS: Subject to -- THE COURT: I'm sorry. Let me be clear about that. There were four written objections, three in the form of a letter. I'm not talking about those objections. I'm talking about objections of the HK USA party. And I don't recall right now, I'd have to look back, whether Ms. Guo also filed an objection. But the motions to quash that were also scheduled

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Luc Despins - Direct - Bassett 76 for hearing today, my read of that is that there was discovery served on you in connection with the sale process, that was served on you by HK USA and maybe Ms. Guo. I don't remember. You'd have to enlighten me. But those issues are resolved? The Court doesn't have to address that? THE WITNESS: That's correct, Your Honor. THE COURT: And the -- and so the objections that were -- the only objection I know of was, other than the letters that I just spoke about that were submitted by parties and filed on the docket, was by -- was on behalf of Ms. Guo and HK International I believe. I think it's ECF 1939. So that's resolved? That's going to be withdrawn, Mr. Kindseth, that objection? MR. KINDSETH: Based on the agreement to include the revisions to the sale order, we will withdraw our objection. And we're withdrawing the subpoenas. So those have been resolved based upon the revisions to the sale order. THE COURT: All right. So the motion to quash will become moot assuming the sale is approved. But we haven't gotten there yet, but I want to make sure I'm not -- I'm understanding this clearly. All right. I don't have any further questions,

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Luc Despins - Direct - Bassett 77 Trustee Despins. Does anyone wish to cross-examine Trustee Despins? (No response) THE COURT: Okay. Hearing nothing, then you may step down. THE WITNESS: Thank you. THE COURT: Thank you. (Witness excused) THE COURT: Mr. Bassett? MR. BASSETT: Your Honor, that will conclude the Trustee's presentation of evidence in support of the sale motion. At this time I'm happy to proceed with some brief closing remarks. THE COURT: Let me just make sure I don't have any other questions. I think I do not, but I'd like to take a moment to make sure. MR. BASSETT: Of course. (Pause) THE COURT: Go right ahead, Mr. Bassett. MR. BASSETT: Thank you, Your Honor. So just briefly by way of closing I think the evidence that has been presented, the 28 exhibits that have been moved into the record, the declaration of Mr. Johnson, the broker, and the testimony by the Trustee, as well as the, you know, the final purchase and sale agreement itself,

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Ho Wan Kwok - June 27, 2023 78 I think all of those strongly support a finding by this court that this sale is the product of a robust process run by the Trustee, with the assistance of experienced professionals, including the broker and Mr. White, the marketing process occurred according to industry standards and consistent with the unique nature of this particular market for this particular asset as described by Mr. Johnson in his declaration based on his years of experience. Ultimately the sale process has culminated in a sale -- culminated in a sale as of May 30th for \$24 million, which in the eyes of the broker and the Trustee is a resounding success. As Mr. Despins -- as the Trustee testified in detail that \$24 million was of course thereafter reduced by \$150,000, that reduction I'll submit, based on the record before the Court, was appropriate, was in the best interest of the estate. That type of negotiation post closing following a, sorry, not post closing but following a survey is something that happens routinely. And in this case the Trustee with the assistance of Mr. White resolved that situation in a way that was beneficial to the estate and preserved for the estate this value-maximizing transaction. I would like to note that I think it speaks volumes that there, other than the few pro se objections,

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| | Ho Wan Kwok - June 27, 2023 79 | |----|--------------------------------------------------------------| | 1 | which I will touch on, there are no other pending objections | | 2 | by any party in interest to this sale. The sale has the | | 3 | full support of some of the largest constituencies with the | | 4 | largest economic stakes in these cases, namely PAX and the | | 5 | committee. | | 6 | So I think, Your Honor, based on the absence of | | 7 | any objection, based on the robust record that the Trustee | | 8 | has presented today, we would submit that the sale should be | | 9 | approved pursuant to Section 363 of the Bankruptcy Code. | | 10 | And we believe that all of the findings and the | | 11 | provisions of the proposed order are both supported by the | | 12 | record that has been established based on today's evidence | | 13 | and are otherwise appropriate under the Bankruptcy Code and | | 14 | the Bankruptcy Rules, we would ask that the sale among other | | 15 | things be free and clear under Section 363 of the Bankruptcy | | 16 | Code, obviously subject to the reservation of rights | | 17 | language that has been included in the proposed order with | | 18 | respect to the proceeds of the sale that was discussed with | | 19 | Mr. Kindseth. | | 20 | We also believe the buyer should be entitled to | | 21 | the protections of Section 363(m) of the Bankruptcy Code. | | 22 | The testimony supported a finding that the buyer acted in | | 23 | good faith. | | 24 | We also request as part of our proposed order that |

the 5 percent fee to the broker be approved. I think it is

Ho Wan Kwok - June 27, 2023 80 clear from Mr. Johnson's testimony and from the Trustee's that he added substantial value and played an integral role in this process. We would further ask that -- there was some reference in some of the papers to Local Rule 6004-2. To the extent, and we put this in our motion, but to the extent that that rule could be read to suggest that there needs to be a separate formal appraisal accompanying a sale motion, we would request a waiver of that because here the process itself, as demonstrated by the testimony of the Trustee and Mr. Johnson and the other evidence demonstrates the fair market value of the yacht. Finally, Your Honor, we would request a waiver of the stay under Bankruptcy Rule 6004(h) which would ordinarily apply for 14 days. Here there has been testimony by the Trustee of the need to close by June 30th. And Mr. Johnson also touches on that in his declaration. So with that, Your Honor, we would respectfully request an order, the proposed formal order that we've submitted, we propose that that be entered approving the sale. Case 22-50073 Doc 1980 Filed 07/05/23 Entered 07/05/23 17:21:35 Page 80 of 93

Absent any questions, that's all I have by way of closing, Your Honor.

THE COURT: Does anyone else wish to be heard?

Ho Wan Kwok - June 27, 2023 81 MR. SARNOFF: Yes, Your Honor. May I briefly be heard? Stuart Sarnoff. THE COURT: Could you come forward please so we can hear you? MR. SARNOFF: Sure. Thank you. Stuart Sarnoff, O'Melveny & Myers, on behalf of Creditor PAX. Mr. Bassett represented that, you know, we did not object and, indeed, endorsed this. And I just wanted to put on the record that PAX has been through the sale materials and all of the exhibits and, indeed, does support this sale. And we've been waiting a long time for assets to come into the estate. And as the largest creditor do support the sale at this price. THE COURT: Thank you, Attorney Sarnoff. Does anyone else wish to be heard? MS. MAYHEW: Your Honor, Kristen Mayhew on behalf of the committee. We similarly support the sale. We've reviewed all of the materials and we believe that it does present the highest and best offer for this -- for the yacht. And we believe that the sale motion should be approved. THE COURT: Thank you. MS. MAYHEW: Thank you. Case 22-50073 Doc 1980 Filed 07/05/23 Entered 07/05/23 17:21:35 Page 81 of 93

THE COURT: Does anyone else wish to be heard? MR. BOONE: Good afternoon, Your Honor. Robbie

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Ho Wan Kwok - June 27, 2023 82 Boone on behalf of the buyer. I'd like to confirm that the buyer agrees with all the proposed changes to the order, and would also like to thank Your Honor for accommodating me to appear via Zoom due to the flight cancellations yesterday. THE COURT: Thank you. Thank you for appearing. Sorry your flight was cancelled due to the weather. I understand that's why you needed to appear remotely and that is fine. Attorney Bassett and I believe Trustee Despins both have stated on the record that your client is ready, willing and able to close this transaction, Attorney Boone. Is that correct? MR. BOONE: Yes, Your Honor. He is ready, willing, and very much wants to close this as quickly as possible. THE COURT: And you think it's going to close on the 30th, on June 30th? MR. BOONE: On the 30th or before if we can arrange all of the pieces that we need to arrange in terms of getting it out of the free-trade zone and all the other points that need to be checked off. But, yes, the 30th would be the absolute latest date that we would close. THE COURT: Okay. Thank you.

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Ho Wan Kwok - June 27, 2023 83 The only -- does anyone else wish to be heard with regard to the order? I just have a couple of things. I mean, I've looked at this for -- I've looked at this just today as you know. Okay? So if no one else wishes to be heard, the only thing I would like to do and -- Attorney Claiborn, did you wish to be heard? MS. CLAIBORN: I apologize. And I before I make my comments, I apologize to all the parties, and I neglected to raise this issue earlier. I just wanted to add to the order a provision that a closing sale statement be filed on the docket within ten days of the closing happening so that the parties -- THE COURT: That's required under our local rules. MS. CLAIBORN: It's just not part of the actual order and I -- THE COURT: No. MS. CLAIBORN: -- neglected to raise that issue. THE COURT: There's a couple of changes so, none of which are substantial or substantive in my opinion, but I would like them to be made to the order. So I hope someone's taking notes, right? MR. BASSETT: Yes, Your Honor. MR. DESPINS: Yes, Your Honor.

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Ho Wan Kwok - June 27, 2023 84 THE COURT: Okay. So with regard to the order, on the second page, before the defined term the hearing, does everybody see where I am kind of the middle of the -- of the -- of page 2? All right. So after where it says and hearing on the motion having been held, do you see that, Counsel, where I am? MR. DESPINS: Yes. THE COURT: On page 2? MR. DESPINS: Yes. MR. BASSETT: Yes. THE COURT: Okay. So I'd like you to add the following language: Having been held on June 27th, 2023, during which the Trustee's Exhibits 1 through 28 and the testimony of Mr. Johnson and the Trustee were admitted into evidence in support of the sale. Okay? MR. DESPINS: Yeah. MR. BASSETT: Yeah. THE COURT: Does that make sense to you? MR. DESPINS: Yes, Your Honor. THE COURT: It does. Okay. All right. Then same page, the Court hereby finds that, footnote 4, I have no problem with the first sentence of footnote 4, but I don't want to have the last two sentences

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| | Ho Wan Kwok - June 27, 2023 85 | |----|---------------------------------------------------------------| | 1 | of footnote 4 because sometimes the district court finds | | 2 | that confusing. So that if someone were to appeal, I don't | | 3 | want to have the district court say we have to another | | 4 | hearing to tell me what our findings of fact and conclusions | | 5 | of law. Okay? | | 6 | MR. DESPINS: Yes, Your Honor. | | 7 | THE COURT: Mr. Bassett, we just were going to | | 8 | talk about, but I don't know, think you have, I don't think | | 9 | I let you let, we need to just -- I think we -- it does talk | | 10 | about overruling objections, but I'd like to specifically | | 11 | refer to the objections. | | 12 | You can just say the objections filed to the sale, | | 13 | ECF numbers. I don't -- you don't need to recite every | | 14 | single person's name. But, again -- | | 15 | MR. BASSETT: Understood. And -- | | 16 | THE COURT: -- if this is appealed. | | 17 | MR. BASSETT: Yes. | | 18 | THE COURT: -- I want the district court to | | 19 | understand what we're talking about. | | 20 | MR. BASSETT: Absolutely, Your Honor. And thank | | 21 | you for reminding me. | | 22 | THE COURT: Okay. | | 23 | MR. BASSETT: Because I meant to raise that in my | | 24 | comments and I forgot. | | 25 | So as I understand it, outside of the objection | | | |

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Ho Wan Kwok - June 27, 2023 86 filed by HK USA, and I believe Mei Guo which has been resolved and withdrawn based on the entry of the revised proposed order, I think there are only four other objections. THE COURT: Correct. That's all that I've seen. MR. BASSETT: And I believe, I apologize, I have the name, but I may be missing the ECF docket number for one of them, but I -- THE COURT: I have them all, so. MR. BASSETT: I have 1947, 1946, 1945, and then there's one more. THE COURT: Nineteen, thirty-three. MR. BASSETT: Nineteen, thirty-three. And I believe subject to being corrected by a colleague or the Court that these objections are substantively identical, if not entirely identical, but they -- it's hard, a little bit hard for us to interpret exactly the arguments that are being put forth, but they appear to be some individual creditors who are a little bit confused about the process being run in the motion before the Court. They had taken issue with the idea of Mr. Kwok, himself, personally selling the yacht in a private sale without them first having been compensated for their claims or grievances against Mr. Kwok. Of course we actually -- the Trustee I believe

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Ho Wan Kwok - June 27, 2023 87 actually reached out one of them and said, look, that's not what's going on here. And I think there was just some -- it is clear that there was some confusion. But in any event those parties are not here today. I don't think the objections have any merit. Of course this is the Trustee selling the yacht for the benefit of all creditors of the estate, including these creditors to the extent that they have claims and, therefore, we would ask for those objections to be overruled. THE COURT: I have reviewed the objections that were filed in letter format. There are four as we just stated: 1933, 1945, 1946 and 1947. And they are substantially the same. They are asking the Court to not allow a sale by the individual debtor of the yacht until they are compensated for their claims. None of the parties are here in the court to prosecute their objections. Their objections, while I understand why they feel that they needed to make them, it appears they did not understand that the Trustee is selling the Lady May and not Mr. Kwok and that no funds from the Lady May are going to Mr. Kwok which is what the -- what each of the objections were concerned about. So all of those objections are overruled for the

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| | Ho Wan Kwok - June 27, 2023 88 | |----|----------------------------------------------------------------| | 1 | reasons stated on the record. And I'd like that to -- I'd | | 2 | like that to be stated in the order. | | 3 | And I'd also like the objection filed by Mei Guo | | 4 | and HK International, ECF 1939, to be -- to indicate in the | | 5 | order that that objection is resolved by agreement because | | 6 | of the language added to the order as requested by counsel | | 7 | for HK International Funds and Mei Guo. | | 8 | The change I already made to paragraph 9 stands. | | 9 | We already went through that at the beginning of the | | 10 | hearing. And I think counsel probably understood that | | 11 | change to paragraph 9. There's three places in that | | 12 | paragraph in the -- in the redline version that was | | 13 | submitted around 2:10 or something along those lines where | | 14 | that change needs to be made. | | 15 | And then, Trustee Despins, I agree with the U.S. | | 16 | Trustee's Office that there should be a provision made in | | 17 | the order, and you can put it somewhere around -- it looks | | 18 | like paragraph -- you can do whatever -- wherever you think | | 19 | it's appropriate, but it might be appropriate in -- well, | | 20 | let me see for example. I don't know where it's -- it might | | 21 | be paragraph 22, except that you say that the closing | | 22 | statement will be filed on the docket of the case within ten | | 23 | days after the closing occurs. Okay? | | 24 | MR. DESPINS: Yes, Your Honor. | | 25 | THE COURT: I have no further changes to the | | | |

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Ho Wan Kwok - June 27, 2023 89 order. MR. BASSETT: Thank you, Your Honor. THE COURT: All right. So for all the reasons stated on the record, including in connection with the record of this case and the record of the related adversary proceedings, to the extent that they are relevant to the sale of the Lady May, the motion to sell the Lady May to the highest and best bidder as identified by the Trustee in the proposed order and in testimony and in -- and through counsel who's appeared on behalf of the highest bidder is approved. The motion is granted. The proposed order with the changes that I've noted on the record will enter. I assume, Attorney Boone, you want that order as soon as possible. So we'll need to -- I mean, I'm sure you can make these changes fairly quickly and we can try to execute the order tonight. MR. DESPINS: That would be great, Your Honor, because we need to send it to Europe for the closing and all that. So that would be great. THE COURT: Well, if you can get those -- well, you made the other changes in a short order so I would assume you can probably make these changes in less than 20 minutes.

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Ho Wan Kwok - June 27, 2023 90 MR. DESPINS: Yes, Your Honor. THE COURT: And then submit the order to the courtroom deputy email box again and then the order will enter. Okay? MR. DESPINS: Thank you, Your Honor. THE COURT: I know there was a lot of work that went into this. I appreciate Mr. Johnson being here today in case anyone did have questions of him. It was a -- it was necessary for you to be here, sir, because we don't know whether anybody would have questions. And I did review your marketing efforts and all of the exhibits that were submitted in general. I saw what your firm did. I saw the letters of intent that were received. I saw your declaration obviously. We talked about that. I had seen the purchase and sale agreement and then ultimately the addendum, which are all the exhibits that were introduced at today's hearing. So I appreciate the efforts of all the parties involved. And I think that it is clear, I shouldn't say I think, it is clear that the sale of the yacht is in the best interests of the debtor's estate and creditors. And the evidence submitted by the Trustee supports

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Ho Wan Kwok - June 27, 2023 91 the granting of the motion pursuant to Section 363 and with the protections of 363(m) and the applicable rules, Federal Rules of Bankruptcy Procedure. I know the Trustee has also asked the order to enter under Section 105. And given the specific facts and circumstances of this case and the record in this case and the related adversary proceedings, the Court will include a reference to Section 105 as a way -- in order to augment the relief that is already set forth in the applicable sections of the Bankruptcy Code under which the sale of the asset has been sought and obtained. Is there anything further we need to do this afternoon? MR. DESPINS: Not on this matter, Your Honor. THE COURT: We have a 4 o'clock status conference. I know. I'm sorry. I should have said with regard to the motion to sell. MR. DESPINS: No, Your Honor. Thank you. THE COURT: Okay. MR. BASSETT: Thank you, Your Honor. THE COURT: All right. So I'll give you the time to go do that now. We'll take a recess until 4 o'clock. And then maybe the order will even enter before the recess if the changes can be made in that time frame. Okay? So thank you, all.

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| | Ho Wan Kwok - June 27, 2023 92 | | | | | | |----|-------------------------------------------------------------|--|--|--|--|--| | 1 | Court is in recess until 4:00 p.m. | | | | | | | 2 | (Court recessed at 3:25 p.m.) | | | | | | | 3 | I, CHRISTINE FIORE, court-approved transcriber and | | | | | | | 4 | certified electronic reporter and transcriber, certify that | | | | | | | 5 | the foregoing is a correct transcript from the official | | | | | | | 6 | electronic sound recording of the proceedings in the above | | | | | | | 7 | entitled matter. | | | | | | | 8 | | | | | | | | 9 | | | | | | | | 10 | July 5, 2023 | | | | | | | 11 | Christine Fiore, CERT | | | | | | | 12 | | | | | | | | 13 | | | | | | | | 14 | | | | | | | | 15 | | | | | | | | 16 | | | | | | | | 17 | | | | | | | | 18 | | | | | | | | 19 | | | | | | | | 20 | | | | | | | | 21 | | | | | | | | 22 | | | | | | | | 23 | | | | | | | | 24 | | | | | | | | | | | | | | | | | | | | | | |

| | | Ho Wan Kwok - June 27, 2023 | | 93 | | |----|--------------------------|-----------------------------------------|------|----|--| | 1 | | | | | | | 2 | INDEX | | | | | | 3 | | | | | | | 4 | | DIRECT CROSS | | | | | 5 | WITNESS FOR THE TRUSTEE: | | | | | | 6 | | Luc A. Despins 66 | | | | | 7 | | | | | | | 8 | EXHIBITS: | | PAGE | | | | 9 | 1-12 | Online internet listings of sale | 56 | | | | 10 | 13 | Sample email to interested parties | 56 | | | | 11 | 14 | Broker marketing report | 56 | | | | 12 | 15-25 | Letters of intent from bidders | 56 | | | | 13 | 26 | Dirk Johnson's declaration | 56 | | | | 14 | 27 | Purchase and sale agreement | 56 | | | | 15 | 28 | Addendum to purchase and sale agreement | 56 | | | | 16 | | | | | | | 17 | | | | | | | 18 | | | | | | | 19 | | | | | | | 20 | | | | | | | 21 | | | | | | | 22 | | | | | | | 23 | | | | | | | 24 | | | | | | | 25 | | | | | | | | | | | | |