郭文贵破产案 · TRANSCRIPT · ECF #2201

元数据

当事人: 郭文贵 (Guo Wengui / Miles Guo / Ho Wan Kwok)
法院: CTB
案号: 22-50073
ECF #: 2201
类型: TRANSCRIPT
立案日: 2023-09-14

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. \* LUC A. DESPINS, et al., \* Adv. Proc. No. 23-05017 \* \* Bridgeport, Connecticut Plaintiffs, \* September 12, 2023 \* v. \* \* TAURUS FUND, LLC, et al., \* \* Defendants. \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* TRANSCRIPT OF PROCEEDINGS BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 For the Chapter 11 Trustee: G. ALEXANDER BONGARTZ, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 Proceedings recorded by electronic sound recording, transcript produced by transcription service. **Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, CT 06484 (203)929-9992**

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APPEARANCES: (Cont'd) For the Chapter 11 Trustee: PATRICK R. LINSEY, ESQ. Neubert Pepe and Monteith 195 Church Street,13th Floor New Haven, CT 06510 For the U.S. Trustee: HOLLEY L. CLAIBORN, ESQ. Office of U.S. Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT 06510 For the Creditors Committee: KRISTEN B. MAYHEW, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For The Sherry-Netherland, SHERRY J. MILLMAN, ESQ. Creditor: Stroock & Stroock & Lavan 180 Maiden Lane New York, NY 10038 TARUNA GARG, ESQ. Murtha Cullina, LLP 107 Elm Street, Suite 1101 Stamford, CT 06902 For the Pacific Alliance ANNECCA H. SMITH, ESQ. Asia Opportunity Fund, LP: Robinson & Cole, LLP 280 Trumbull Street Hartford, CT 06103

| #2051 | INTERIM APPLICATION FOR COMPENSATION FOR PAUL | |-------|----------------------------------------------------| | | HASTINGS LLP, TRUSTEE'S ATTORNEY, | | | FEE: \$8,251.634.83, EXPENSES: \$213,914.83 | | #2053 | INTERIM APPLICATION FOR COMPENSATION (SECOND | | | INTERIM) FOR NEUBERT, PEPE & MONTEITH, P.C., | | | TRUSTEE'S ATTORNEY, FEE: \$357,587.50, | | | EXPENSES: \$10,402.59 | | #2110 | JOINT MOTION OF CHAPTER 11 TRUSTEE AN DEBTORS | | | GENEVER US AND GENEVER BVI FOR ENTRY OF FINAL | | | ORDER (I) AUTHORIZING CHAPTER 11 TRUSTEE TO EXTEND | | | FINANCING PURSUANT TO BANKRUPTCY CODE SECTION 363, | | | (II) AUTHORIZING GENEVER US AND GENEVER BVI TO | | | OBTAIN POST-PETITION FINANCING PURSUANT TO | | | BANKRUPTCY CODE SECTION 364, (III) GRANTING NON | | | PRIMING LIENS AND PROVIDING SUPERPRIORITY | | | ADMINISTRATIVE EXPENSE CLAIM, (IV) MODIFYING | | | AUTOMATIC STAY AND (V) GRANTING RELATED RELIEF | | | |

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Ho Wan Kwok - September 12, 2023 4 (Proceedings commenced at 2:04 p.m.) THE COURTROOM DEPUTY: Case No. 22-50073, Ho Wan Kwok. THE COURT: Good afternoon. If we could have appearances for the record starting with the Chapter 11 Trustee, please. Do you think no one can hear us? I think no one can hear us. THE COURTROOM DEPUTY: Well, that's strange because we're recording. I don't see anything wrong. THE COURT: I'm not on mute. THE COURTROOM DEPUTY: I'm not on mute either. THE COURT: Can anyone hear us? MR. DESPINS: Yes, now. THE COURT: Oh, now he can. Okay. So we're going to have the courtroom deputy call the case again, please. THE COURTROOM DEPUTY: Okay. Case No. 22-50073, Ho Wan Kwok. THE COURT: Good afternoon. If we could have appearances for the record starting with the Chapter 11 Trustee, please. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. THE COURT: Good afternoon. MR. BONGARTZ: Good afternoon, Your Honor. Alex

Ho Wan Kwok - September 12, 2023 5 Bongartz of Paul Hastings for the Chapter 11 Trustee. THE COURT: Good afternoon. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey of Neubert, Pepe and Monteith, counsel for the Trustee and other debtors, and also for the fee application of (indiscernible). THE COURT: Okay. Hold on just a minute because your audio is coming through the computers and not through the speakers. Do you both hear that that issue? Do you? THE COURTROOM DEPUTY: I hear that they're lower. THE COURT: Yeah. They're not coming through the speakers. They're coming through the computer. THE COURTROOM DEPUTY: I don't see anything that's wrong though. I don't see what could be wrong. Wait a minute. Let me just ask Will. (Pause) THE COURT: All right. Hold on, everybody, just a moment, please, which is one of the reasons we hold hearings in person. But it didn't work that way today, so hold on, please. (Pause) THE COURT: It's going to take just a couple of minutes to fix this problem. So if everyone can just hold on, please. Thank you. (Pause) Case 22-50073 Doc 2201 Filed 09/14/23 Entered 09/14/23 10:37:15 Page 5 of 34

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| | Ho Wan Kwok - September 12, 2023 6 | |----|-----------------------------------------------------------------| | 1 | THE COURT: Okay. So can everyone hear me now? | | 2 | All right. Somebody speak and let's see if we make sure it | | 3 | goes through the right speakers, please. | | 4 | Mr. Despins, would you say something, please. | | 5 | MR. DESPINS: Testing 123, testing. | | 6 | THE COURT: Is that right? That's right. Okay. | | 7 | Good. Now we can pick up the record appropriately. Sorry. | | 8 | All right. So we had taken Mr. Despins' | | 9 | appearance and Mr. Linsey's appearance, so please continue. | | 10 | Mr. Bongartz, you want to go next? | | 11 | MR. BONGARTZ: Sure. This is Alex Bongartz again | | 12 | from Paul Hastings on behalf of the Chapter 11 Trustee. | | 13 | Thank you. | | 14 | THE COURT: Good afternoon. | | 15 | MS. CLAIBORN: Good afternoon, Your Honor. Holley | | 16 | Claiborn for the U.S. Trustee. | | 17 | THE COURT: Good afternoon. | | 18 | MS. MAYHEW: Good afternoon, Your Honor. Kristen | | 19 | Mayhew, Pullman & Comley, on behalf of the Official | | 20 | Committee of Unsecured Creditors. | | 21 | THE COURT: Good afternoon. | | 22 | MS. MILLMAN: Good afternoon, Your Honor. Sherry | | 23 | Millman with Stroock & Stroock & Lavan on behalf of the | | 24 | Sherry-Netherland. | | 25 | THE COURT: Attorney Millman, when you speak | | | |

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| | Ho Wan Kwok - September 12, 2023 7 | |----|----------------------------------------------------------------| | 1 | again, if you do, if you can just get closer to your mike | | 2 | because it was just very muffled. Okay? And as you know, | | 3 | just because we have audio, if it's muffled, the reporter | | 4 | can't pick it up. So you don't have to say it again, but if | | 5 | you do say anything else, if you just get closer to your | | 6 | microphone I'd appreciate that. | | 7 | Go ahead, Attorney Garg. Sorry. | | 8 | MS. GARG: Good afternoon, Your Honor. It's okay, | | 9 | Your Honor. Good afternoon. Taruna Garg on behalf of the | | 10 | Sherry-Netherland. | | 11 | THE COURT: Good afternoon. | | 12 | MS. SMITH: Good afternoon, Your Honor. Annecca | | 13 | Smith, Connecticut counsel for PAX. | | 14 | THE COURT: Good afternoon. | | 15 | Okay. Thank you all for being here. | | 16 | When we were looking at the calendar yesterday, we | | 17 | did notice that the matters on the calendar had objection | | 18 | deadlines and no objections were filed. | | 19 | And as Trustee Despins has pointed out in the | | 20 | past, there are certain times when a remote hearing might be | | 21 | possible in order, for many reasons, but one of which is in | | 22 | order to save time and money for the estate. | | 23 | And since none of the matters on the calendar | | 24 | today were objected to, under that specific circumstance, I | | 25 | decided that we would hold these hearings remotely today. | | | |

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| | Ho Wan Kwok - September 12, 2023 8 | |----|----------------------------------------------------------------| | 1 | Now, I think the first two, the applications for | | 2 | compensation, are fairly straightforward. I think the DIP | | 3 | motion is fairly straightforward, although it may need more | | 4 | of an explanation for the record. | | 5 | So Trustee Despins, do you want to commence with | | 6 | the compensation applications first? | | 7 | MR. DESPINS: It's up to you, Your Honor. I was | | 8 | going to start with the DIP, but I -- but wherever you want | | 9 | to do. | | 10 | THE COURT: You go ahead then. Start with the DIP | | 11 | first then -- | | 12 | MR. DESPINS: Okay. | | 13 | THE COURT: -- which is -- | | 14 | MR. DESPINS: Okay. Your Honor, this is the DIP | | 15 | motion filed by the Kwok's estate and the two Genever | | 16 | debtors, and it's really a rescue loan from the Kwok estate | | 17 | to the Genever estates, and it is to provide, you know, case | | 18 | financing to the Genever debtors, mostly frankly Genever US, | | 19 | in the amount of up to \$2 million. And I'd like to provide | | 20 | some background on that. | | 21 | As Your Honor knows from prior hearings, Genever | | 22 | US has at this point probably around 20, \$25,000 left in the | | 23 | bank. And Genever BVI has no cash. | | 24 | And because the insurance company has not agreed | | 25 | to pay for the repairs caused by the fire, of course there's | | | |

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Ho Wan Kwok - September 12, 2023 9 litigation on that and that's pending and it's going to go forward, but that's going to take time and, you know, there are things that need to happen immediately to bring this apartment back to a level that is sufficient to sell it or to rent it, although the primary goal is to sell it, and that needs to happen now. And in a sense this motion should really have been heard, and it's on me for not having sequenced it at the same time as the renovation project motion, but they're related in a sense that most of the funding would go to the renovation project at the apartment. And the cost there of doing what they call a white boxing of the apartment, that means to clean up all the damage caused by the fire in that 20 percent area or so of the apartment, and white box that, not bring it back to the way it was, but really put, you know, put white sheetrock and reestablish all the connections of the piping, the plumbing, the electricity, et cetera. It sounds like it's pretty simple, but it's not in the sense that do you need an architect to do that? Do you need an architect to supervise the various processes that needs to occur? There's asbestos that was discovered that needs to be remediated. And of course that motion is not before the Court, but I wanted you to understand the magnitude of the project

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Ho Wan Kwok - September 12, 2023 10 and why we're contemplating a loan of \$2 million just essentially to finance that aspect of that case. And there's more to that in the sense that, yes, there will be professional fees for the counsel hired by Genever to pursue the AIG litigation and things like that, but most of the \$2 million loan will be going towards the renovation project. And the reason why it can't wait is because this is like the Russian dolls. You know, basically you need to start with the smallest one and then put more and more and more. So we need to start immediately with the basic work that needs to be done obtaining the permits, et cetera, et cetera, otherwise a year will go by and we'll have done nothing. And of course we can't do that. So that's why we need the money now to finance this renovation project. And to be clear, as we said in the motion, the Kwok estate has no obligation to do this. The Kwok estate is doing this because it wants to preserve the ability to see proceeds from this apartment coming to it. And of course if it didn't lend the money, then this would end up being a total liquidation where no money may be going up to the Kwok estate level. And, therefore, the Kwok estate, you know, from that point of view, it makes sense to make that loan to preserve that ability.

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Ho Wan Kwok - September 12, 2023 11 But this is not a risk-free loan. There are circumstances under which, Your Honor, this loan may not be repaid. I think that those circumstances will not happen, but that's certainly a possibility. And I've explained why, Your Honor. This loan, and I'll be very candid, Your Honor, is one-sided. You know, there are provisions there that you would never have with a commercial lender. For example, it says that the -- the lender is funding at its discretion, well, that means at my discretion as the Trustee, so that's not an arm's length, you know, loan, but that's because it's done in the spirit of -- for which it is intended. This is not to shore the recoveries of the Genever US creditors. This is to preserve the equity value potentially and, therefore, it is a one sided document. So the first part is that loans are made at my discretion. The payments may be made directly to the vendors. So for example, I don't have to send money to the Genever US account to pay for the architect. It can pay the architect directly and that will become a loan even though Genever US will not have actually touched the money. There are provisions like that, Your Honor. But as I said, this is not a risk-free loan and that's why we need to have these provisions. In addition to that, Your Honor, we've had

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Ho Wan Kwok - September 12, 2023 12 extensive negotiations with the Sherry-Netherland regarding this loan and their rights, because the Sherry-Netherland -- obviously we are -- the apartment is in the Sherry- Netherland, but the Sherry-Netherland is a secured creditor. They have a pledge of the shares and the rights under the lease, and we've agreed that they're senior to our loan. And we've agreed to other accommodations to them. But I would say that generally the Sherry- Netherland, their relationship to date has been extremely constructive, which is counter-intuitive a little bit in the sense that I'm sure a lot of people there are very upset about what happened, but they have been very, very helpful. As you can imagine, if we did not have their cooperation, this would be extremely difficult to do the renovation project and all that because there are so many hoops you have to jump through in New York. This is a union building, et cetera, et cetera. So the point is the Sherry-Netherland has been extremely supportive to date and I hope that this will continue. But as part of the DIP loan, we have reached some accomodation agreements with them that are reflected in the DIP order and I wanted to mention that to Your Honor. And Your Honor, we filed a proposed amended, revised amended order for the final DIP, which is at docket no. 2185. We filed that I believe yesterday. And the

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Ho Wan Kwok - September 12, 2023 13 changes, let me just go to the mark to show changes version, the changes are fairly minimal and they were mostly at the request of the U.S. Trustee. And there was a provision. I mentioned before that there were some accommodations or agreements reached with the Sherry-Netherland, and this would be on page 39 of 45 of docket 2185, so that's the marked changes version, but you'll see that paragraph 12 provides that we have the authority to pay the post-petition fees of the Sherry- Netherland, that means counsel for the Sherry-Netherland. And the U.S. Trustee requested, and we agreed, and the Sherry-Netherland also agreed, that prior to making these payments, Genever US will file a notice with the Court attaching the relevant invoices. There will be a time period for people to object. And if objections are filed, there will be a hearing. But that way there's a process for people to be heard if they disagree with the payments that would be made. By the way, this only gives us the authority. It does not direct us or obligate us to make these payments. But nevertheless there's a built-in provision now to allow people to object to that proposed payment, which is really the change that was reflected from the prior version of the order, which is now -- and then the order that revises this is document 2185, Your Honor.

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Ho Wan Kwok - September 12, 2023 14 THE COURT: And at paragraph 12 of the ordered paragraphs, that's what you're talking about right now? MR. DESPINS: Correct. THE COURT: Okay. MR. DESPINS: And on the marked version, it's page 39 of 45, paragraph 12, authority to pay certain postage and fees. THE COURT: Yes, I see it. MR. DESPINS: So that, Your Honor, unless you have questions, I think that would complete the initial presentation. THE COURT: I have a few I think minor questions. So I think I heard you say, and I believe this is how I read it, but you can please correct me if I'm wrong, the money is being loaned to Genever USA -- US, but essentially you're going to pay it out of the Kwok estate all these expenses? MR. DESPINS: Yes. THE COURT: Okay. And Genever USA only has \$20,000 in its operating account at this time, or somewhere -- I shouldn't say that -- an amount close to \$20,000, it might be a little bit more than that? MR. DESPINS: Correct. THE COURT: But it doesn't have funds available in order to obtain this kind of financing out in the market?

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| | Ho Wan Kwok - September 12, 2023 15 | |----|---------------------------------------------------------------| | 1 | MR. DESPINS: It would be impossible for Genever | | 2 | US to pay this financing. Because, one, you would have to | | 3 | be junior to the Sherry-Netherland, which we are, but risk | | 4 | of non-repayment would be very high under certain scenarios. | | 5 | So that the 9 percent interest rate charge here is really a | | 6 | bargain in a sense that there is no way that anyone would | | 7 | lend money on that basis given the risks involved. And the | | 8 | risks are, to be perfectly blunt, how much of the apartment, | | 9 | you know, white boxed, would sell for? And two, is there | | 10 | insurance coverage? | | 11 | And we believe there should be insurance coverage, | | 12 | but, you know, insurance litigation, there's always the | | 13 | risk. | | 14 | THE COURT: Are you talking about the AIG | | 15 | insurance issue or? | | 16 | MR. DESPINS: Correct. Correct. | | 17 | THE COURT: Okay. | | 18 | MR. DESPINS: That's what I'm talking about. | | 19 | THE COURT: Okay. | | 20 | MR. DESPINS: So anybody coming from the outside | | 21 | would have to take that -- those risks that I just | | 22 | described, and I'm not sure anyone would do that. | | 23 | THE COURT: So you anticipate that the funds will | | 24 | be used to essentially clean up the fire damage, remediate | | 25 | asbestos, but nothing really more, so that the property | | | |

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Ho Wan Kwok - September 12, 2023 16 could be sold, excuse me, shown for sale and hopefully sold? That's the point of this loan? MR. DESPINS: That's correct, Your Honor. I mean, I know it's hard to believe, and we'll get to that next week I guess when we go through the renovation project, but the costs in New York City to do work on the apartment is crazy, but that's just the nature of the beast. Like architect work, which to my mind should be very simple, but of course I'm not an architect, you know, costs could cost \$250,000. And why? Because you need to obtain all these permits from the various city departments. You need to -- you need to coordinate because this is a co- op. So for example, the walls are owned by the Sherry- Netherland, so the Sherry-Netherland is going to do some work jointly with us on this, but the coordination of that is huge, which is what the architect is going to do, and et cetera. So that's why the loan is \$2 million. It's not only -- it's really not mostly to pay professional fees, but it's mostly to pay for this renovation project. THE COURT: Okay. I'm just looking to see if I have any more questions. If you just please give me one moment. Oh, I guess I did have one other question, which isn't, you know, I just didn't understand. The Sherry-

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Ho Wan Kwok - September 12, 2023 17 Netherland's first lien, and the security interest, and first lien on the cash deposit, those already exist, don't they? Those liens? MR. DESPINS: You mean the Sherry-Netherland liens? THE COURT: Yes. MR. DESPINS: Yes, they do exist. As part of any purchase of a co-op, apparently the co-op has a security interest in the shares. Those already exist. They've existed since the apartment was purchased. THE COURT: Right. So they're not getting any new liens under this DIP order? They're just acknowledging the existence of the liens and acknowledging that they're senior to this borrowing? MR. DESPINS: Correct, Your Honor. THE COURT: Okay. MR. DESPINS: And one point. You just pointed out one of the concessions we made, or one of the agreements we made, to get the Sherry-Netherland on board with this. As Your Honor may know, under the lease with the Sherry-Netherland, there's a prohibition on giving security interest to anyone on the shares. And of course we are getting security interest on the shares. And of course we needed to have the Sherry-Netherland's non-objection to that as part of this agreement, so this was part of the give and

Ho Wan Kwok - September 12, 2023 18 take that we entered (indiscernible). THE COURT: Understood. The Sherry-Netherland still has, Attorney Millman, you still, your client still has essentially, and I forget what the terminology is, I apologize, but what essentially is still a security deposit that you -- that was in place, at least we talked about some time ago, is that still -- there was about \$3 million in an account. What is the status of that account? MS. MILLMAN: Your Honor, I just want to make sure first that you can hear me clearly now? THE COURT: Yes, I can. Thank you. I can. Thank you very much. MS. MILLMAN: Okay. Good. So there's approximately one million in the account at this point. As Your Honor knows, pursuant to an order of Judge Garrity, the Sherry-Netherland is allowed to apply the security deposit toward post-petition maintenance and regular assessments. Right now that usage was paused for that for now positionally on the basis that the apartment is arguably uninhabitable now. And so for the last few months, really since March, but for a few costs that are not a part of the Case 22-50073 Doc 2201 Filed 09/14/23 Entered 09/14/23 10:37:15 Page 18 of 34

maintenance, there are other less-significant costs, but they're monthly costs, other than that, we've paused

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| | Ho Wan Kwok - September 12, 2023 19 | |----|----------------------------------------------------------------| | 1 | applying the deposit or charging for post-petition | | 2 | maintenance, you know, until we hear from our insurance | | 3 | company. | | 4 | THE COURT: I see. | | 5 | MS. MILLMAN: It's about a million dollars. | | 6 | THE COURT: Okay. Thank you. That's helpful to | | 7 | know. | | 8 | All right. Does anyone else wish to be heard with | | 9 | regard to the DIP financing motion? | | 10 | (No response) | | 11 | THE COURT: Okay. Trustee Despins, I'm looking at | | 12 | this order that was submitted yesterday, and I, you know, we | | 13 | found just one or two minor typos that we can correct. | | 14 | On the notice paragraph on what is, I don't know | | 15 | what page, I'm looking at the clean version, which is page 7 | | 16 | of 45 of the document that was filed yesterday, I'm looking | | 17 | specifically at page 3, oh, I actually should look at page | | 18 | 2, we have to add the hearing date on page 2 so that's ECF | | 19 | No. 2185, page 6 of 45. At the second paragraph, there's an | | 20 | asterisk and a bracket, that's where we'll need to add the | | 21 | hearing date. | | 22 | And I can see the courtroom deputy nodding her | | 23 | head so she sees where I am. | | 24 | Okay. On the next page, conclusions of law, | | 25 | paragraph A, third line, it says the individual debtor filed | | | |

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Ho Wan Kwok - September 12, 2023 20 with a voluntary petition, I think it was just filed a voluntary petition. I think with is an added word. MR. DESPINS: Yes. Yes. THE COURT: On page 8 of 45, lettered paragraph D, where it says notice, I would change that title to notice and service. And then on the second line of that paragraph D, proper, timely, adequate and sufficient notice and service of the motion and the DIP hearing. I'm looking to the courtroom deputy, if she's following what I'm saying. THE COURTROOM DEPUTY: I think I missed that last -- THE COURT: Paragraph D. THE COURTROOM DEPUTY: Yes. THE COURT: Second line where it's -- THE COURTROOM DEPUTY: Oh. THE COURT: -- the sentence starts proper, timely, adequate and sufficient notice and service. THE COURTROOM DEPUTY: Yes. Okay. THE COURT: And then in the next line toward the end of the third line, and no other -- no other or further notice or service. THE COURTROOM DEPUTY: Okay. THE COURT: Okay? THE COURTROOM DEPUTY: Yes.

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Ho Wan Kwok - September 12, 2023 21 THE COURT: Then if we go to page 10 of 45, which -- in paragraph 1, where it says disposition, the relief requested in the motion is granted on a final basis as set forth herein. I know the language in the next sentence is standard, but I want it to be clear that no objections were filed, Trustee Despins, so I just would rather it read no objections to the motion have been filed, period. MR. DESPINS: Of course. THE COURT: Okay? MR. DESPINS: Yeah. THE COURT: And then I don't -- I do not have any further changes to the order. Attorney Claiborn, did you review the order? MS. CLAIBORN: Yes, Your Honor. THE COURT: And you, the U.S. Trustee's -- MS. CLAIBORN: I have no other changes. THE COURT: The U.S. Trustee's Office has no further changes or objections to anything in the order? MS. CLAIBORN: That's correct, Your Honor. THE COURT: Okay. Thank you. Does anyone else wish to be heard with regard to the proposed order? (No response) THE COURT: Okay. Then for the reasons stated on the record, and due to the specific circumstances, facts and

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Ho Wan Kwok - September 12, 2023 22 circumstances of these Chapter 11 cases, the motion for a final debtor-in-possession order is granted, and the proposed order that appears at pages 5 through 21, but then we have to attach the DIP credit agreement as Exhibit 1, can enter with the minor changes noted on the record. Okay? Thank you. Now we can move on to the applications for compensation. MR. DESPINS: Thank you, Your Honor. THE COURT: Thank you. MR. DESPINS: So the first one I guess we can deal with is the Paul Hastings application, and that's for the period from March 1st, 2023 to June 30th, 2023. We filed an extensive application with details, Your Honor. And yesterday we filed a revised -- there were no objections that were filed -- we filed a revised proposed order to reflect the reduction that was agreed to with the U.S. Trustee. And actually, that's just, you know, just to reflect that reduction. And on that point, Your Honor, I will note that I heard you loud and clear, because you probably said four times in the case, that we do -- that you do not expect, you know, these reductions to be ordinary course or something like that, but nevertheless we had extensive discussions with the U.S. Trustee and decided that it would be better

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Ho Wan Kwok - September 12, 2023 23 for the case generally, and to save Your Honor time, and to minimize fees, because we're talking about fees, to agree to that fee reduction. And I wanted you to understand that we are -- we had heard you loud and clear about this, but nevertheless it's that we decided that it was in the best interest of the case to agree to those fee reductions. So I believe that that is reflected in the order. Also, we were asked by counsel for Mr. -- actually, in this case, it's counsel for the debtor's daughter to provide that the carve out that's contained in the Lady May order, which is at ECF No. 1953, be incorporated in the order the way it was incorporated the last time around, and we did that, Your Honor. Obviously, I'm happy to entertain any questions you may have, but given the lack of objections, unless Your Honor has questions, I don't think I should, you know, go on. THE COURT: The only question I had is about the Lady May, is what you just described. I'm not sure I'm -- I don't recall what it is in that prior order that -- MR. DESPINS: Yes. THE COURT: -- that they're focusing on. MR. DESPINS: Yeah. This is paragraph 9 of the Lady May order that provides that if it turns out that they

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Ho Wan Kwok - September 12, 2023 24 actually own the Lady May, and of course there's an issue about, meaning that if Your Honor does a reversal on appeal not only of the Lady May ownership, but of the alter ego, then they would be entitled to seek disgorgement from the professionals, which is consistent with the practice in this district, which is to provide that there's a sentence that says subject to final adjustment and disgorgement in the event all admin claims are not paid in full. So that's the -- that's the paragraph. And you may remember, Your Honor, you spent a lot of time on that paragraph when we were going through it. And basically this allows them to seek disgorgement from the professionals to the extent it's finally determined that they own the Lady May. But, you know, that's -- THE COURT: Okay. MR. DESPINS: -- really the provision of the Lady May order. THE COURT: So you're saying that the added language as provided in the order approving the sale of the Lady May preserves their right to seek disgorgement if somehow -- if, it could obviously happen, if on appeal the order approving the sale is overturned is what you're saying? MR. DESPINS: Correct. THE COURT: Okay.

Ho Wan Kwok - September 12, 2023 25 MR. DESPINS: Final order. It has to be by final order. THE COURT: Okay. Okay. All right. Attorney Claiborn, do you wish to be heard on the second interim fee application of Paul Hastings? MS. CLAIBORN: Thank you, Your Honor. I just want to confirm the understanding and the agreement to the reduction that's been memorialized in the U.S. Trustee's statement that's filed on the document at 2170. And that number matches the number in the revised order submitted by Trustee Despins. THE COURT: Okay. Thank you. I'm just looking at the revised order again. So Trustee Despins, am I correct that this will be the last, at least unless something changes, this is going to be the last fee application filed because we're going to be proceeding under the process of the procedures that were set up in the last month or so? MR. DESPINS: Well, there will be quarterly fee applications filed, but -- THE COURT: Right. I'm sorry. That didn't -- MR. DESPINS: -- under that -- THE COURT: I didn't ask the question well. I apologize. You're right. There will be quarterly fee -- Case 22-50073 Doc 2201 Filed 09/14/23 Entered 09/14/23 10:37:15 Page 25 of 34

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Ho Wan Kwok - September 12, 2023 26 MR. DESPINS: No. But you're absolutely correct. This is the last of these types of applications unless something changes. THE COURT: Right. Okay. Good. I just want to make sure I'm understanding, and I believe I am. So you've just confirmed that, so that's fine. Does anyone else wish to be heard on the second interim fee application of Paul Hastings? (No response) THE COURT: Okay. Hearing no further comments, and I will state again for the record, no objections have been filed to the second interim fee application of Paul Hastings, which seeks an order approving compensation and reimbursement of expenses for the period of March 1st, 2023 through June 30, 2023, I've looked at the revised proposed order, which appears on pages 5 through 7 of ECF 2184, and Attorney Claiborn has confirmed that the dollar amounts in -- on page -- on the first page of the order, which is on page 5 of 2184, is the dollar amount that the United States Trustee's Office and Paul Hastings has agreed to as far as the fees to be awarded to the applicant, the only thing I'm going to do, ask the courtroom deputy to do, Trustee Despins, is in the first paragraph of the order it just says after notice and a hearing, just have the courtroom deputy, she already knows, notice and a hearing held on September

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| | Ho Wan Kwok - September 12, 2023 27 | |----|----------------------------------------------------------------| | 1 | 12, 2023, just because you never know, sometimes that's very | | 2 | helpful believe it or not to people in the future to know | | 3 | that there was actually a hearing held, and with the many | | 4 | docket entries in this case, I think it is helpful, so | | 5 | otherwise, I have no other changes to the proposed order, | | 6 | and the interim application, the second interim application | | 7 | is granted and the proposed with the minor changes noted on | | 8 | the record will enter. | | 9 | MR. DESPINS: Thank you, Your Honor. | | 10 | THE COURT: Thank you. | | 11 | And now we have the final fee application? | | 12 | MR. DESPINS: Mr. Linsey. | | 13 | MR. LINSEY: Yes, Your Honor. That is the | | 14 | application of my firm, Neubert, Pepe and Monteith, as | | 15 | Connecticut counsel and conflict counsel for the Trustee, | | 16 | and as counsel, Connecticut counsel for the Genever debtors. | | 17 | The application seeks allowance of \$357,587.50 in | | 18 | fees, \$10,402.59 in expenses. There's a certificate of | | 19 | service, which was filed at 2077 on the docket. There are | | 20 | no objections. The United States Trustee has filed a | | 21 | certificate of no objection, which is at 2169. | | 22 | The application itself speaks in considerable | | 23 | detail about the manners in which my firm has been involved | | 24 | in these proceedings. And I'm happy to answer any questions | | 25 | Your Honor has. | | | |

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Ho Wan Kwok - September 12, 2023 28 Absent that, I would just note that we filed a revised order in the same order that Paul Hastings did which is at 2186. THE COURT: 2186. Yeah. MR. LINSEY: Yes, 2186. And that adds the -- that adds the same language that Trustee Despins referred to referring to the Lady May sale order. And with that, we would ask that the application be granted. THE COURT: Okay. Thank you. Does anyone else wish to be heard on the second interim allowance of compensation and reimbursement of expenses of Neubert, Pepe and Monteith? (No response) THE COURT: Attorney Claiborn, as Attorney Linsey noted, you filed a statement of no -- the U. S. Trustee's Office filed a statement of no objection, correct? MS. CLAIBORN: That's correct, Your Honor. It's document no. 2169. And I don't have anything to add beyond that. THE COURT: Thank you. And I see, Attorney Linsey, the language you're referring to in the -- regarding the order approving the sale of the Lady May, adding that to your -- to this order to preserve the rights that were requested in connection with the Paul Hastings order in case there is a final order

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| | Ho Wan Kwok - September 12, 2023 29 | |----|----------------------------------------------------------------| | 1 | overturning the sale of the Lady May. | | 2 | The only change we'd need to make is just to add | | 3 | the hearing date in the first paragraph of the proposed | | 4 | order that appears on pages 5 and 6 of ECF 2186. | | 5 | So for all those reasons, the second interim | | 6 | application for compensation of Neubert, Pepe and Monteith | | 7 | is granted, and the proposed order will enter with the | | 8 | minor, with the very minor changes noted on the record. | | 9 | MR. LINSEY: Thank you, Your Honor. | | 10 | THE COURT: Thank you. | | 11 | All right. That concludes all the matters on | | 12 | today's calendar, unless someone has something they have a | | 13 | question about. | | 14 | MR. DESPINS: Yes, Your Honor. If I may? | | 15 | THE COURT: Yes. Go ahead. | | 16 | MR. DESPINS: I'm really duty bound to inquire | | 17 | about the status of the criminal stay in our motion to stop | | 18 | that the -- Kwok and Yvette Wang from pursuing that criminal | | 19 | stay matter because we have a deadline coming up of | | 20 | September 21st in that case. And obviously we would want to | | 21 | avoid that. So I'm sorry. I wanted to bring that up. | | 22 | THE COURT: Well, there was an objection filed to | | 23 | your motion in this, in this court. | | 24 | At the same time, my understanding is that, and | | 25 | you can correct me if I'm wrong, that the district court in | | | |

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Ho Wan Kwok - September 12, 2023 30 the Southern District of New York criminal proceeding is allowing you, as the Trustee of the estates, to file some sort of repsonse, is that correct, to the motion -- MR. DESPINS: That's correct, Your Honor. THE COURT: -- to the motion to stay filed by Mr. Kwok's criminal counsel in the criminal proceedings, correct? MR. DESPINS: That's correct. THE COURT: Okay. So to -- so I'm going to wait to see what the district court does. This is -- this is not -- I don't know that the bankruptcy court has any authority, and I haven't been able to find any, that would allow a bankruptcy court to tell a party in a criminal proceeding that they can't seek some form of relief from the court in that criminal proceeding. I haven't seen any authority that would provide this court with the authority to do that. MR. DESPINS: Well, I -- I don't know if you've had a chance to look at the joinder filed by -- THE COURT: I did. I did. MR. DESPINS: -- the committee in PAX because I thought they cited a number of cases where -- THE COURT: They cited -- they cited one case which was helpful. I think the committee cited one case which held that the district court in the criminal

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Ho Wan Kwok - September 12, 2023 31 proceedings ruled on that motion, not the bankruptcy court. If I'm, Attorney Mayhew, if I'm saying something incorrect, please correct me, but my recollection of the review of the joinder was -- I understand the committee joins and they cited a case which was helpful, because I don't think there were any cases cited before that, but I think what that case said, well, my recollection of what that case said, is that the district court made that, in the criminal action made that determination, not the bankruptcy court, and I think that is an important distinction with a difference. I'm not sure that the bankruptcy court has authority, any authority, to enjoin anyone from doing anything in a criminal proceeding that is not part of the bankruptcy -- I don't know how a criminal proceeding could be part of the bankruptcy case. So I understand you may be frustrated. And I understand that, you know, you may feel that you would rather this court address the issue, and maybe I'll still have to address the issue after the district court rules, but I don't see -- I am not convinced or persuaded that there's any authority that exists that would authorize a bankruptcy court to stay a debtor who is no longer in possession, who is not only the subject of a criminal proceeding, but, in fact, incarcerated, from seeking relief

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Ho Wan Kwok - September 12, 2023 32 in that criminal proceeding. It doesn't mean he's going to obtain that relief, but I don't -- I don't see how the bankruptcy court has the authority to do that, any bankruptcy court. MR. DESPINS: Your Honor, it's because this is an attempt to control property of the estate. I mean, if this Chapter 11 case is stayed, the effect on property of the estate would be huge. You know. It's just I can't even conceive of it. We had a deadline, for example, the two-year statute of limitations is coming up in February. If this case is stayed, what's going to happen to all these important questions? THE COURT: Well, you're going to have to move to extend that statute of limitations, number one. Number two, the Mahwah mansion is not property of the estate at this time. That determination hasn't been made. MR. DESPINS: I know. No. But I want to be clear, they're seeking a stay of the entire Chapter 11 case. THE COURT: No. I understand. MR. DESPINS: Not only -- THE COURT: I read it. I understand. MR. DESPINS: Okay. THE COURT: I understand what they're seeking. MR. DESPINS: Okay.

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Ho Wan Kwok - September 12, 2023 33 THE COURT: But the case that the committee cited, the district court did not grant that relief. MR. DESPINS: Understood. But I don't think there's any precedent. Your point is that there's no precedent where a bankruptcy court has enjoined such a proceeding. THE COURT: Correct. MR. DESPINS: I hear that. But I don't think there's any case where the relief was sought, except for that Boston District Court case, which sought in the district court, usually sought in the court where the case is pending. But I understand your -- understand your views and I appreciate the feedback, Your Honor. THE COURT: It may -- I have no idea what's going to occur, but I understand your request. And it doesn't mean that your request might not be addressed in some way, shape or form at some point, but I don't see any authority to have a bankruptcy court enjoin a criminal defendant from seeking relief in a criminal case. MR. DESPINS: Understood. THE COURT: Thank you. MR. DESPINS: Thank you, Your Honor. THE COURT: Is there anything further anyone would like to add to the record this afternoon?

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Ho Wan Kwok - September 12, 2023 34 (No response) THE COURT: Okay. That conclude the hearings in the Kwok and Genever-related Chapter 11 cases this afternoon. Those are the last matters on the calendar, so court is adjourned. Thank you, all. ALL COUNSEL: Thank you, Your Honor. (Proceedings concluded at 2:54 p.m.) I, CHRISTINE FIORE, court-approved transcriber and certified electronic reporter and transcriber, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above- entitled matter. 15 September 14, 2023 16 Christine Fiore, CERT