--- type: court_doc id: "court_ctb_2482_0" court: "CTB" case_no: "22-50073" doc_number: 2482 doc_type: "ORDER" filed_date: "2024-01-02" lang: "zh" url: "https://mubeitech.com/court/court_ctb_2482_0" json_url: "https://mubeitech.com/api/court/court_ctb_2482_0" --- # 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTIC > 原始法庭文件为英文；下方为英文全文，顶部为中文摘要。 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION IN RE: . Chapter 11 . Case No. 22-50073 (JAM) HO WAN KWOK AND GENEVER . HOLDINGS CORPORATION AND . (Jointly Administered) GENEVER HOLDINGS, LLC, . . Debtors. . . . . . . . . . . . . . . . . . . LUC A. DESPINS, CHAPTER 11 . Adversary Proceeding TRUSTEE, . No. 23-05008 (JAM) . Plaintiff, . . v. . . MEI GUO, . . Defendant. . . . . . . . . . . . . . . . . . . LUC A. DESPINS, CHAPTER 11 . Adversary Proceeding TRUSTEE, . No. 23-05017 (JAM) . Plaintiff, . . v. . . TAURUS FUND LLC, SCOTT . Courtroom 123 BARNETT, as trustee of . TAURUS FUND LLC, and TAURUS . Courtroom 123 MANAGMENET LLC, as trustee . Brien McMahon Federal Building of TAURUS FUND, LLC, . 915 Lafayette Boulevard . Bridgeport, Connecticut 06604 Defendant. . . Thursday, December 21, 2023 . . . . . . . . . . . . . . . 12:04 p.m. (CONTINUED) Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 1 of 67 ![](_page_1_Figure_0.jpeg) INDEX MOTIONS: PAGE Matter No. 1 Chapter 11 Trustee's Emergency Motion for Temporary Restraining Order and for Preliminary Injunction Pursuant to Federal Rule of Bankruptcy Procedure 7065 to Preserve Property of the Estate Court's Ruling: 53 Matter No. 2 Emergency Motion of Chapter 11 Trustee to Order Preservation of Evidence Court's Ruling: 62 Transcriptionists' Certificate 67 Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 3 of 67 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Proceedings commenced at 12:04 p.m.) THE COURTROOM DEPUTY: Adversary No. 23-05008 Despins v. Guo, and Adversary No. 23-05017 Despins v. Taurus Fund LLC. THE COURT: Good afternoon. If we could have appearances for the record starting with counsel to the Chapter 11 Trustee. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey, counsel to the Chapter 11 Trustee. THE COURT: Good afternoon. Mr. Moriarty. MR. MORIARTY: Good afternoon, Your Honor. James Moriarty from Zeisler & Zeisler for the defendant, Mei Guo in Adversary 23-05008. THE COURT: Good afternoon. MR. MORIARTY: Good afternoon. THE COURT: Is anyone else going to be making an appearance this afternoon? None that you are aware of, Attorney Linsey? MR. LINSEY: No, Your Honor. THE COURT: Okay. All right. There is a matter on at twelve that involves Mr. Moriarty and a matter on at one that does not. The matter at one seems to have more consent then the matter on at twelve. Is that correct, Attorney Linsey? Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 4 of 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LINSEY: That is correct, Your Honor. THE COURT: You haven't talked –- there is no one that you are aware of that would be appearing at the one o'clock matter other than the people in this courtroom? MR. LINSEY: I can't say for sure that Mr. Conway would not appear. I can't even say for sure that counsel for the storage facility would not appear. I don't expect counsel for the storage facility to appear. THE COURT: Do you have the ability to ask someone in Your office if they can find out if Mr. Conway or counsel for the –- because I can take the –- I don't want to take the one o'clock matter first if there is a possibility someone is going to show up. MR. LINSEY: That is a good point. Could I just have one moment to make a call? THE COURT: Yes, you may. MR. LINSEY: Thank you, Your Honor. (Pause in hearing) MR. LINSEY: Thank you, Your Honor. THE COURT: You, obviously, don't have an answer to Your question yet, but you made the inquiries. MR. LINSEY: I made the inquiry and I know that counsel from the storage company is not coming. We don't expect Mr. Conway to come; however, the HGA entity, which is the lessee or licensee with respect to storage facility, they 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 are on notice. We don't –- it is –- I doubt it, but its possible that they could show up and try to make an objection. THE COURT: All right. Well, let's take the first matter then in Adversary 05008 –- MR. LINSEY: Thank you, Your Honor. THE COURT: -- in Despins v. Guo. So, Mr. Linsey and Mr. Moriarty have noted their appearances for the record. So, Mr. Linsey, this is the Trustee's application for a temporary restraining order. I didn't study, but I know things have been filed in the last hour or so. So, go ahead and please tell me where things stand. MR. LINSEY: Thank you, Your Honor. Since the last hearing, the Trustee's counsel has spoken with counsel for the defendant. The Trustee understands that the defendant consents to injunctive relief, but not to –- does not consent to moving the funds back to the United States and away from JNFX which is that foreign exchange operation where the funds have diminished substantially over the last ten months. Even after –- we understand from a call last night, even after defendant's counsel apparently spoke with JNFX they do not claim to know how the \$1 million in principal was lost or why \$500,000 in fees were charged. The defendant concedes that the existing injunction in the HK Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 6 of 67 1 2 3 4 5 6 7 8 9 10 case covers these funds and yet some substantial portion of them has clearly been dissipated while that injunction is in place. The existing injunction required the defendants funds to be preserved. The defendant's counsel say that Ms. Guo gave no explicit direction to do specific trades, but may have given instruction or permissions to trade on account prior to the entry of the injunction. Regardless, once the injunction entered, Ms. Guo had an affirmative obligation to make sure that her agent, the exchange was not dissipating the funds. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 So, the concession that the defendant instructed JNFX pre-injunction that they could trade her funds, assuming that is what occurred, nothing else really makes sense is totally inconsistent with the defendants Rule 2004 testimony that she did not know who held those funds. Fees for foreign exchange trading are typically charged or generated when trades are made and are based on the amounts traded. To generate \$500,000 in fees there would need to be substantial trading on this account. There is also a \$60,000 fee that is labeled a pharos fee, P-H-A-R-O-S. We have asked about these fees and why they were generated at Whitecroft's Rule 2004 –- I'm sorry, Whitecroft's 30(b)(6) deposition and the corporate representative improperly refused to answer those questions. THE COURT: Meaning Ms. Guo? MR. LINSEY: Correct, Your Honor. 1 2 3 4 5 6 The million-dollar loss, which is a little –- you know, the million dollar in principal, and I am separating that from the more then \$500,000 in fees cannot be exchanged by fluctuations between the Euro and the dollar during the time period at issue. Those two currencies simply don't move against each other that much. 7 8 9 10 11 12 13 14 15 16 17 So, you know, what we have here is \$13.5 million sale price and now we have proceeds that we understand to be just above \$10 million in remaining funds. It is very important to the Trustee that those funds be preserved, but we have not heard any principal reason why the funds should need to remain offshore. Again, this is a sale that took place in the US, a US buyer, funds were sent offshore. We have not heard any principal reasons why the funds should need to remain offshore. There is a substantial deficit in trust when it comes to what this JNFX operation is going to do, who they are taking orders from. 18 19 20 21 22 23 24 I want to be clear, Your Honor, this is not a brick-and-mortar bank. This is not from our brief review and investigation a brick and mortar anything. You know, this could be people operating out a garage somewhere for all the Trustee knows. The Truste does not know who they are aligned with. They are not in the US jurisdiction. These funds should be brought back to the US where they are safe and 1 2 secure and in compliance with an injunction pending the Court's adjudication of this case. 3 4 5 6 7 8 9 10 11 12 13 14 The Trustee's counsel has had conversations with the defendant's counsel. We have offered that the funds could be held by defendant's counsel in trust accounts who said pick an escrow agent and we will take a look. All we have heard is no, the defendant insists the funds stay offshore with this operation that Whitecroft refuses to answer questions about. We saw an email between Ms. Guo and someone at this operation where they say they received instructions from here that she agreed the terms and conditions. They can't provide us where those instructions were. They can't provide us a copy of those terms and conditions. 15 16 17 18 Keeping these funds where they are is just, frankly, an unacceptable risk to the Trustee. So, I think it's a positive step that we have agreement that an injunction may enter, but it is –- 19 THE COURT: A preliminary injunction. 20 21 22 23 24 25 MR. LINSEY: Correct, Your Honor, a preliminary injunction. You know, I labeled it a preliminary injunction because we would not be in a posture where the parties would have to come back in fourteen days for a hearing is my understanding. It is substantially important to the trust. The Trustee is not trying to do anything more then make sure 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 there is no further dissipation in these funds. So, that is the Trustee's position. I am happy to answer any questions. THE COURT: The exhibits that you attached to the temporary restraining order, now I have to find out which one it is so give me a second, please, okay. MR. LINSEY: Yes, Your Honor. THE COURT: As you know, most of these documents were filed within the last day or two. So, it does take some time to review them. MR. LINSEY: Of course. THE COURT: So, 30-A, which is not a sealed document, to ECF No. 35 –- MR. LINSEY: I'm looking at it now, Your Honor. THE COURT: -- the first page of 30-A says JNFX at the top, the beginning of the address is covered by the ECF information, but then it says 75 King William Street, London, December 12th, 2023, to whom it may concern. Where did you get this document, Attorney Linsey? MR. LINSEY: This document was produced by defendant's counsel. This is one of the documents that was produced approximately one hour before Whitecroft's deposition. Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 10 of 67 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Okay. It doesn't have any stamp on it or anything, but you are telling me this was produced by defendant Guo's counsel. MR. LINSEY: Yes, Your Honor. THE COURT: The deposition was held on what day? MR. LINSEY: On Friday, December 15th. THE COURT: On December 15th. So, on December 12th somehow this document –- well, this document is dated December 12th and it says to whom it may concern. We can confirm Whitecroft Shore Ltd., has the following balances with JNFX Ltd. The account had US dollar balance on 12/12/23 as below. Below it says 12/5/12, which is, obviously, 12/5, that there is a running balance of zero. MR. LINSEY: Well, we have been advised since receiving –- THE COURT: I can't hear you, Attorney Linsey. MR. LINSEY: I apologize, Your Honor. What we have been advised since having filed the TRO motion is that the –- the reason that this says a running balance of zero is that this is a statement of US dollar funds. THE COURT: Yes. Who advised you of that? MR. LINSEY: We have been advised by the defendant's counsel. We have also –- Paul Hasting's London office sent correspondence to JNFX advising that we were pursuing relief with the Court and that funds should not be Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 11 of 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 moved. Both the defendant and JNFX have advised the Trustee that there are –- that there is a Euro balance in the account of, I believe –- I don't have the number in front of me, but I believe it is \$9.1 million. UNIDENTIFIED SPEAKER: Its \$9.3. MR. LINSEY: \$9.3 million in Euro which is just above \$10 million equivalent in US dollars. THE COURT: Well, this document talks about above the 5/12/23 which is 12/5/23 in this country, right. It talks about US/Euro exchange. That is what FX is, right, an exchange? MR. LINSEY: Correct, Your Honor. THE COURT: So, why does it have a zero balance on 12/5 when the other dates, which are not the same dates, meaning there aren't two transactions in one day changing from Euros to US dollars or US dollars to Euros, at least according to this statement. The only transaction that occurs on the same day in this statement is a credit on February 22nd, 2023 of \$12,017,995.86 and it doesn't tell whether its in Euros of US dollars, number one. Number two, the next entry on that statement is a fee of \$300,000 which is apparently a debit because above it is a credit. I assume that is what those things mean. Then there is this on March 3rd \$60,000 debit again to a Ferris Capital and then there is another fee on July 3rd to JNFX. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Then nothing happens until there are these US dollar/Euro exchange on July 28th, 2023 and Euro to US dollar exchange on October 19th, 2023. Then on December 5th, 2023 it says US dollar to Euro debit, not credit, and it says zero. So, what information do you have. I am going to ask Mr. Moriarty the same question about what money –- what do you have in writing that shows that there are funds in this account –- that are being held, I should say, by JNFX? MR. LINSEY: We have an email from someone who purports to be affiliated with JNFX saying that there is a Euro balance in the account. I think Your Honor put the Court's finger on what is an issue of substantial frustration to the Trustee which is we have a lot of questions about this statement. So, at Whitecroft's deposition we asked a number of questions about the statement and were constantly met with invocations in the Fifth Amendment. THE COURT: Okay. What email are you talking about, that the Trustee received from JNFX? MR. LINSEY: That Trustee's counsel received from JNFX. I can probably pull it up on my phone. THE COURT: I don't need to see it necessarily. I want to understand the date of it, please. MR. LINSEY: My –- THE COURT: I would assume or, at least, hope that its after December 12th, 2023. Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 14 of 67 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LINSEY: It was on December –- it was on Monday, because it was after we filed the TRO motion that we got this; otherwise, we would have told the Court in the TRO motion that we gotten that notice. THE COURT: I just want to understand –- MR. LINSEY: Sure. THE COURT: -- you are asking –- that's fine, parties are asking for a consent of a preliminary injunction, right. Under the rules I am supposed to state with specificity why there is a preliminary injunction entering. There is a document here that has been submitted that is not sealed. So, it is not subject to any asserted confidentiality or anything else in this case that shows a zero balance. If I am –- well, any person that would read this would think that there was somehow an exchange of US dollars to Euro and there was a debit or withdrawal of the dollar amount above that was in there on October 19th, 2023 that resulted in a zero balance. MR. LINSEY: I hope so, Your Honor, because that is what I thought when I saw this on Friday shortly before the deposition was supposed to begin. That is why we tried to organize a call with defendant's counsel. Those events are described in the TRO motion and we were told that, basically, defendant's counsel didn't know what this meant, 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 was trying to find out. We tried to inquire about it at the Whitecroft deposition. THE COURT: No, I understand all that. So, you are telling me that there is an email to Paul Hastings or is it Your office? MR. LINSEY: Its to Paul Hastings –- one of Paul Hastings counsel in London. THE COURT: In London from someone purporting to act with authority from JNFX that says that Whitecroft Shore Ltd. has a balance with JNFX Ltd. in a Euro amount that is somehow –- that is equal to approximately \$9. What million dollars? MR. LINSEY: I believe that the –- it is equivalent to a little bit more than \$10 million. THE COURT: Oh, \$10 million. Okay. MR. LINSEY: Its hard to be precise because the precise fluctuates by the day. THE COURT: I understand that. I am not asking you to be precise. MR. LINSEY: Thank you, Your Honor. If Your Honor would like, I think I can get the email. THE COURT: No, I don't need the email at the moment. You asked if I had any questions, that is my first question. MR. LINSEY: Understood. Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 15 of 67 | 1 | THE COURT:
Then also 30-B and 30-C are unsealed | |----|-----------------------------------------------------------------| | 2 | documents to the application for a temporary restraining | | 3 | order.
There are emails between the defendant's counsel, Mr. | | 4 | Vartan, and apparently –- oh, Mr. Romney is cc'd as well from | | 5 | Zeisler & Zeisler.
Apparently someone named James Sadoh, I | | 6 | don't know if am pronouncing his name properly, S-A-D-O-H, at | | 7 | JNFX cc'ing Julia Shaminy Chase (ph) at Gold Leaf BVI.com. | | 8 | Attorney Wernick and Attorney Romney about this account. | | 9 | Apparently, the statement that is 30-A dated | | 10 | December 12th, 2023, although it says to whom it may concern, | | 11 | but according to Attorney Vartan's email that statement was | | 12 | provided to Ms. Guo's BVI counsel.
Who is Ms. Guo's BVI | | 13 | counsel, Mr. Moriarty? | | 14 | MR. MORIARTY:
May I just look at Attorney | | 15 | Linsey's documents? | | 16 | THE COURT:
Sure.
We can pull up 30-A, and B, and | | 17 | C if you would like us to. | | 18 | MR. MORIARTY:
I don't think that that is | | 19 | necessary.
So, its Julia Shaminy Chase who is cc'd on the | | 20 | emails. | | 21 | THE COURT:
So, that is Ms. Guo's BVI counsel? | | 22 | MR. MORIARTY:
It is Whitecroft Shore's BVI | | 23 | counsel and I believe also –- | | 24 | THE COURT:
Well, Your own colleagues said that | | 25 | Ms. Guo's BVI counsel, that is what Your own colleague wrote. | | | | 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. MORIARTY: I have no reason to disagree with what Attorney Vartan wrote, Your Honor. I can tell you that Julia Shaminy Chase is BVI counsel. THE COURT: BVI counsel to what? MR. MORIARTY: As far as I know to Whitecroft and to Ms. Guo. THE COURT: Is there a firm in the British Virgin Islands called Gold Leaf? MR. MORIARTY: I believe so. THE COURT: That is the law firm? MR. MORIARTY: I believe so. THE COURT: Okay. With regard to the exhibits that are attached to Your declaration, Attorney Linsey, there is a declaration in support of the temporary restraining order, the emergency motion for temporary restraining order filed under seal in this adversary proceeding at ECF No. 73. Then there is a redacted version as well, but I am looking at the sealed version. MR. LINSEY: Yes, Your Honor. THE COURT: The sealed version, as does the redacted version, list 32 exhibits in support of the temporary restraining order, request for a temporary restraining order. Then Your chart indicates whether they are sealed or unsealed. In the chart that I have reviewed the sealed documents that I see, every one of them are sealed Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 17 of 67 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because of an assertion that they are highly confidential, not that they are subject to a privileges order. MR. LINSEY: That is correct. In light of the pending motion, we intentionally excluded anything that was potentially privileged from this motion. THE COURT: Right. So my clarification is just what you just said. I wanted to ensure that my review of these exhibits, 1 through 32, none of those exhibits, not one, is subject of the motion that the Trustee filed in the main case seeking some relief in connection with the privileges order. MR. LINSEY: Correct, Your Honor. We are not going to file anything of that nature pending Your Honor's decision. THE COURT: I just want to make sure I have the record correct. So, when I look, and I have looked by the way, at all 32 of these exhibits, it took me some time as I'm sure you can appreciate, but I did look at these exhibits. The only thing that wasn't attached, and I don't know why, but it might have just been –- I don't know if it was in the redacted version, but it wasn't in the sealed version, was the final contempt decision in PAX v. Kwok Exhibit 1, for some reason that is not part of the sealed document. That is not a problem, I am familiar with it. So, I can find it if I need to find it. I have read it before. 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LINSEY: Sounds like that was an oversight. I apologize. THE COURT: No, that is what I said, it's not a problem. First of all, its unsealed and its already part of the record in the main Chapter 11 case and/or in some of the many related adversary proceedings. So, I am not at all concerned about that. I just wanted you to know, when I looked at Exhibit 73 –- excuse me, ECF No. 73, that for whatever reason wasn't there. MR. LINSEY: Thank you, Your Honor. THE COURT: That's all. Not a problem. There is no reason for you to refile it. MR. LINSEY: Okay. Thank you, Your Honor. THE COURT: With regard to the other exhibits that are from 2 through 32, I have reviewed those exhibits. I understand the information contained in those exhibits. The overwhelming majority of which I have not seen before this temporary restraining order, but now I have. So, I just wanted that to be clear that, number one, all of these documents, the 32 exhibits listed in ECF 73 that are presently under seal –- not all of the exhibits are under seal, you have clarified which are sealed and which are not sealed. I have reviewed all of the documents, whether they are unsealed or sealed, in connection with the request for a temporary restraining order because I, obviously, had Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 19 of 67 1 2 3 4 no idea whether or not there would be any form of consent to this application for a temporary restraining order prior to this hearing. So, when you ask about the issues related to the 5 6 7 8 location of the funds the reason I asked the first question that I did ask about whether there really are any monies in the possession and, I don't even know if can say, control, but in the possession of JNFX. 9 10 11 12 13 Attorney Moriarty, you agree with Attorney Linsey that there was some communication from JNFX after this temporary restraining order was filed in which they represent or it represents that it is holding funds on behalf of Whitecroft in an amount of approximately \$10 million? 14 15 MR. MORIARTY: Your Honor, I don't know the exact time that the TRO application was filed. 16 17 18 19 20 THE COURT: Well, you do because it's on the document. I can tell you exactly when it was filed. That is not hard. So, we can do that. That is not a problem. Just give me a minute and then I will be able to tell you exactly when it was filed. MR. MORIARTY: Sure. 22 (Pause) 21 23 24 25 THE COURT: It was filed on December 18th –- I'm sorry, you just have to give me one more minute. I got the wrong screen. 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Pause) THE COURT: At ECF No. 74, December 18th –- I am not sure why this is continuing to –- oh, because its sealed. I apologize. I can't look at that one. MR. MORIARTY: I had the same issue, Your Honor. THE COURT: Okay. Hold on a second, that is my mistake. (Pause) THE COURT: I am looking at the courtroom deputy. Can you see the time because this I sealed. So, the problem is the –- although, I am looking at 73 and it has the time on it. So, I don't know why 74 doesn't have the time on it. I guess because 73 is 74 and 75. So, 73 was filed, which is the sealed document with all the exhibits, Attorney Moriarty, and that was filed at 1:48 p.m. on the 18th of December. MR. MORIARTY: Your Honor, there is an email that I was copied on, it's from Jonathan Green at JN-FX.com and it is addressed to Luc A. Despins 1:46 p.m. on December 18th. It is in response to an email from the Trustee stating what is the amount held and the response is Euros \$9,359,720.99. That is at 1:46 p.m. on December 18th. THE COURT: So, two minutes prior to the filing of the application for a temporary restraining order they said that, but we have no idea whether three minutes later there were any funds there. Is that accurate? Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 21 of 67 | 1 | MR. MORIARTY:
Your Honor, I was on a phone call | |----|-----------------------------------------------------------------| | 2 | yesterday with representatives of JNFX where they confirmed | | 3 | that that amount is still in the account.
JNFX also | | 4 | confirmed that they agree that nothing will be done with | | 5 | those funds absent a further order of this Court or joint | | 6 | instructions from Ms. Guo and the Trustee. | | 7 | THE COURT:
Does the –- I don't think the | | 8 | preliminary injunction order that you submitted says that | | 9 | though.
That is one of the concerns that I had, Mr. | | 10 | Moriarty.
I don't think that this –- maybe I am wrong, by | | 11 | the way, because this just got filed in the last hour. So, I | | 12 | could have missed it.
So, when I say that understand I could | | 13 | be wrong, okay.
So hold on a second, let me see where I am. | | 14 | There is quite a lot of things that were filed.
That is | | 15 | fine, but I am just saying could I be wrong; yes, I could be | | 16 | wrong. | | 17 | (Pause) | | 18 | THE COURT:
All right.
Give me a moment, | | 19 | Mr. Moriarty.
I may be wrong.
I might be looking at the | | 20 | wrong thing.
There were quite a flurry of things and that's | | 21 | fine. All right, here is Your proposed order.
Let me look at | | 22 | Your proposed order.
My understanding is you had redline –- | | 23 | you submitted something that said we will agree to –- I mean, | | 24 | you took their order and you marked it up, right? | | 25 | MR. MORIARTY:
Yes, Your Honor. | | | | 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Okay. So, hold on a second. Its taking a moment to open, so I'm sorry. (Pause) THE COURT: Okay. I've got it now. So, I am looking at this order with Your redline comments and I don't see anywhere in here that JNFX agrees to be preliminarily enjoined. All I see is that Bombardier proceeds may not be transferred from or by JNFX except upon joint written instruction of Ms. Guo and the Trustee. It doesn't say that they're affirmatively agreeing to be enjoined and that is what I think it needs to say. MR. MORIARTY: I agree with you, Your Honor, that it does not say that and I have not had a discussion with anybody at JNFX where JNFX has indicated that they would agree to be enjoined. They have agreed that they would not transfer the funds, but as far as being enjoined and subject to this Court's jurisdiction that is not a discussion that I have had. THE COURT: Okay. When you talk about subject to this Court's jurisdiction I understand Your point; however, I think there has been a lot of decision that the Second Circuit has approved in the Madoff case where once an asset is –- once it is determined that there can be an interest in an asset regardless of whether its outside of this country that this Court has jurisdiction over it and I think the Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 23 of 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Second Circuit decisions in the Madoff case would support that. So, I understand what you are saying. You may not have had a discussion with them, but I think where we left this on Tuesday the two of you said if you couldn't agree you would submit Your competing orders which you have done, right? I will then enter whatever order I think is appropriate. That is what you agreed to. So, if I enter something you didn't consent to or JNFX didn't consent to that doesn't mean that you are still not bound by what you consented to. MR. MORIARTY: Your Honor, I agree that whatever order this Court enters binds whomever the Court has jurisdiction over. So –- THE COURT: It's not just whoever the Court has jurisdiction over, its whatever the Federal Rules of Civil Procedure provide with regard to an injunction which this order, I would specifically refer to, Rule 65(a) and Rule 65(c), I believe, that says who is bound by the order. The order, Rule 65 –- I'm sorry, its (d). It says: "Every order granting an injunction and every restraining order must state the reasons why it issued, state its terms specifically, and describe in reasonable detail and not by referring to the complaint or other document the acts or acts to be restrained. That is (d)(1). | | 25 | |----|----------------------------------------------------------------| | 1 | (d)(2) says: | | 2 | "The order binds the following who receive actual | | 3 | notice of it by personal service or otherwise.
The parties, | | 4 | the parties officers, agents, servants, employees, and | | 5 | attorneys, and other persons who are in active concert or in | | 6 | participation with anyone described in Rule 65(d)(2)(a) or | | 7 | (b)". | | 8 | So, it's not just jurisdiction, it's what the | | 9 | Federal Rules of Civil Procedure provide. And as I stated, | | 10 | there are plenty of decisions in the Madoff case where the | | 11 | Second Circuit has held that the Trustee had the right to | | 12 | seek and obtain assets and relief for assets located outside | | 13 | of the United States because, as we know, property of estate | | 14 | is a broad term and it says all assets wherever located, | | 15 | right. It doesn't say within the United States. | | 16 | MR. MORIARTY:
Yes, Your Honor. | | 17 | THE COURT:
So, I don't think that Your | | 18 | jurisdiction thoughts are persuasive at this time. | | 19 | MR. MORIARTY:
Your Honor, just if I may clarify, | | 20 | I wasn't suggesting one way or another who would be bound, | | 21 | who wouldn't be bound.
When I spoke of jurisdiction, I | | 22 | agree, 65(d) specifically enumerates who is covered by an | | 23 | injunction.
There's a reference to Federal Rule of Civil | | 24 | Procedure 65(d) in the fourth ordered paragraph. | | 25 | And when I say "jurisdiction," maybe I misspoke | | | | 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and I should have said "notice," because 65(d) is -- THE COURT: Well, it's not notice. That's not what the rule says. MR. MORIARTY: 65(d)(2)(c): "Other persons who are in active concert or party or participation with anyone described in 65(d)(2)(a) or (b)." THE COURT: Yes, but it says that you have to actually receive actual notice. So it's not notice, it's "actual notice." MR. MORIARTY: Right. By certainly service or otherwise. THE COURT: Well, there's a big difference between "notice" and "actual notice." All right. So let's talk about the marked-up order, Mr. Linsey and Mr. Moriarty, both of you. MR. LINSEY: Yes, Your Honor. THE COURT: So the second ordered paragraph, the debtors' -- excuse me -- the defendant's counsel has changed that ordered paragraph to say that the Bombardier proceeds may not be transferred, which, by the way, the Bombardier proceeds are not defined in this preliminary injunction order. But, in any event, may not be transferred from or by -- from or by JNFX. So if they're not restrained from Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 26 of 67 Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 27 of 67 27 1 2 3 doing that, then what's the point of this order? What's the point of this paragraph? Or is the trustee comfortable with that language? 4 5 6 7 8 9 MR. LINSEY: The trustee is decidedly not comfortable with the language, Your Honor. Your Honor put, again, the Court's finger on a point that is of a substantial concern to the trustee, which is that this language does not bind -- JNFX is not expressly agreeing to be bound by the order of the Court. 10 11 12 13 14 15 16 But to take a step further from that, what we had originally drafted requires the funds to be returned to the U.S. and I want to be clear, returned to the U.S. The sale occurred in the U.S. There was a U.S. buyer. The defendant caused the money to be sent overseas. The trustee believes that the funds, pending the adjudication of this case, should be brought back. 17 18 19 20 21 And the trustee has, you know, candidly, Your Honor, the trustee would have comfort with a reputable escrow agent holding funds. The trustee would even have comfort with Mr. Moriarty's firm holding the funds; however, we don't know who JNFX is. 22 23 24 25 Even if they did say, Okay, we'll be bound, the trustee does not know who these people are. They're not within the United States and the trustee would be depending on the representations of people we don't know who they are. 1 2 3 4 5 We don't know what assets they have that we could recover from to comply with the Court's order. Or, you know, to the extent that they're acting at the behest of the defendant, the debtor, or others, we'd be depending upon, you know, what word those people are going to give at any given time. 6 7 8 9 10 11 12 13 And, respectfully, Your Honor, I don't mean to be needlessly argumentative, but the trustee certainly does not have confidence in the defendant or the debtor when it comes to comply with court orders. The entire reason this Bankruptcy Court case was filed is because the defendant and the debtor flouted Justice Ostrager's orders to return an asset to the United States for a year and racked up a contempt fine in excess of a hundred million dollars. 14 15 16 17 18 19 20 21 22 23 24 25 So, unless the funds are held by an escrow agent, by someone the trustee has confidence they will respect this Court's orders -- not what the trustee says; just what the Court says they have to do -- the trustee is going to have no security in this regard. And the trustee's concern is not hypothetical. The trustee's concern is based on the fact that we had a sale that occurred with a purchase price of \$13 and a half million. It's a little bit more than a year since the sale closed and we have -- we're now down almost \$3 and a half million and we don't want to see it go down any further. Assuming that money is real, as Your Honor also pointed out, all we have is this email. I don't know who | Case 22-50073 | Doc 2482
Filed 01/02/24
Entered 01/02/24 07:52:24
Page 29 of 67 | |---------------|--------------------------------------------------------------------------| | | 29 | | 1 | Mr. Green is.
I've seen an email from someone named | | 2 | Mr. Green.
I'll be comfortable that there are funds when I | | 3 | hear from an escrow agent I can trust in the U.S. that they | | 4 | received those funds. | | 5 | THE COURT:
I don't recall, Attorney Linsey, | | 6 | because as I said, you know, these have all been filed in the | | 7 | last 48 hours, right, and there's a lot of documents to look | | 8 | at -- | | 9 | MR. LINSEY:
Yes, Your Honor. | | 10 | THE COURT:
-- as part of the 32 exhibits that you | | 11 | attached to the application for a temporary restraining | | 12 | order, is there a document that shows -- that establishes | | 13 | from the trustee's perspective -- and the defendant may | | 14 | disagree, but I'm asking you -- the disposition of the sale | | 15 | proceeds being deposited into an account in the United States | | 16 | before it went to London? | | 17 | MR. LINSEY:
Yeah.
What we have is an asset | | 18 | purchase agreement which reflects that the buyer was in the | | 19 | United States, so that is sufficient to us to indicate that | | 20 | the purchase price originated in the United States.
Our | | 21 | understanding based on circumstances -- | | 22 | THE COURT:
The aircraft purchase agreement -- | | 23 | MR. LINSEY:
Correct, Your Honor. | | 24 | THE COURT:
-- Exhibit 19? | | 25 | MR. LINSEY:
Correct, Your Honor. | THE COURT: Okay. 1 25 2 3 4 5 6 7 MR. LINSEY: So, from the trustee's perspective, to the extent that defendant received the funds in the U.S. or sent them elsewhere or the defendant just told the buyer, Hey, send my sale proceeds overseas, it's the same thing. It's sale proceeds coming from the U.S. that the defendant has caused to be sent overseas. 8 9 10 And let's be clear about why. It's to keep them away from the trustee. It's to conceal and remove property of the estate the trustee is trying to obtain. 11 12 13 14 15 THE COURT: The asset purchase agreement that I'm looking at right now, which is Exhibit 19 of the trustee's exhibits, which is filed under seal, but is only designated as "highly confidential." It was produced by Whitecroft or at least it has a Whitecroft Bates stamp on it. It says: 16 17 18 19 20 21 22 23 24 "This aircraft purchase agreement is made and entered into as of August 2nd, 2022, the effective date by and between Whitecroft shore Ltd., seller, a British Virgin Islands corporation with its permanent legal address at care of Golden Spring New York Ltd., P.O. Box 2120, New York, New York, Golden Spring, who's already been found to be the alter-ego of the debtor, and ACASS USA, Inc., purchaser, a Delaware corporation, with a principal address at 601 Bayshore Boulevard, suite 700, Tampa, Florida." The beginning of the agreement. Now let's go down 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to sale proceeds. Let's find out how that all works. The delivery location of the plane means Bradley, Connecticut, USA, or such other tax-friendly location, as mutually agreed upon by the parties. MR. LINSEY: And that's consistent with -- THE COURT: "Deposit" means the purchase money sum in the amount of \$125,000 United States dollars. Upon execution of this agreement, the deposit or any part thereof currently held by the escrow agent, becomes immediately nonrefundable. The escrow agent is Insured Aircraft Title Service, LLC, whose address and contact information is listed in Section 8.12. Well, I have to go to 8.12, but we'll see where that is. Let's see. MR. LINSEY: It's page 14, Your Honor. THE COURT: If to seller, Whitecroft -- these are just notices. This doesn't give me the escrow agent. It just says -- wait a minute, let's go beyond that. Escrow agent, Joan Roberts, vice president, Insured Aircraft Title Service, LLC, 2 East Main Street, suite 100, Oklahoma City, Oklahoma. So the definitions say the monies are deposited with the escrow agent whose address is in Oklahoma City, Oklahoma. That's what the document, itself, says. Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 31 of 67 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LINSEY: That's consistent -- THE COURT: And in terms of agreements of the escrow agent, are governed and construed by, in accordance with the laws of the State of Oklahoma. Okay. So that's -- let's go back up to the definitions section. (Pause) THE COURT: Final payment in the definition section on page 2 means the purchase price minus the deposit received by the escrow agent, which we've just established is an entity in Oklahoma. I think I said Oklahoma City, Oklahoma. I have to go back and look, but I think that's what it said. All payments under this agreement shall be payable by wire transfer in immediately available funds on the due date thereof. The purchase price is 13 million -- in the definitions -- the purchase price is \$13,500,000 United States dollars. Purchaser shall pay additional conditions, 3.2. Upon execution of the agreement, purchaser shall pay the \$100,000 United States dollars. Termination amount is set forth in the termination agreement between seller and KK Global Holdings, Inc. This termination amount is in addition to the purchase price. Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 32 of 67 | 1 | Prior to the closing, purchaser will have made | |----|----------------------------------------------------------------| | 2 | arrangements with Bombardier, Bradley, Connecticut, for the | | 3 | upcoming calendar maintenance.
Any out of phase task, now | | 4 | completed.
The KA band upgrade to the aircraft allowing the | | 5 | purchaser to take assignment of the seller's deposit with | | 6 | Bombardier in the amount of \$478,910 United States dollars | | 7 | and purchaser shall deliver the Bombardier deposit to the | | 8 | escrow agent, again, located in Oklahoma, prior to closing, | | 9 | in addition to the purchase price. | | 10 | Seller shall provide the purchaser with a document | | 11 | from Bombardier, confirming the transfer of rights to the | | 12 | Bombardier deposit from the seller to the purchaser. | | 13 | Final payment in the closing procedures, | | 14 | paragraph 8, Section 4.1.
At least one business day before | | 15 | the closing date, purchaser shall deliver the final payment | | 16 | to the escrow agent; again, the escrow agent located in | | 17 | Oklahoma.
The escrow agent shall confirm receipt of final | | 18 | payment by email to seller and purchaser. | | 19 | Closing, Section 4.5.
Closing shall occur within | | 20 | three business days and then it goes on. | | 21 | And then Section 5 point -- 4.5.3 says that on the | | 22 | closing date, the parties shall perform the following | | 23 | actions, which shall be coordinated by email in the order | | 24 | presented in which it collectively constitute the closing. | | 25 | And 4.5.3 is escrow agent shall confirm to the | | | | | 1 | parties that the escrow agent has all funds, documents, and | |----|-----------------------------------------------------------------| | 2 | authorizations necessary to transfer, free and clear of all | | 3 | liens, title of the aircraft from seller to purchaser. | | 4 | If all of the above communications are given, | | 5 | 4.5.5, then the parties shall be deemed to have irrevocably | | 6 | instructed the escrow agent and the escrow agent will, | | 7 | without any further instruction, shall undertake the | | 8 | following actions, which shall be irrevocable once initiated. | | 9 | 4.5.5.1, release the purchase price to the seller, | | 10 | per the seller's instruction, plus the Bombardier deposit to | | 11 | the seller, per the seller's instruction, less shares of the | | 12 | escrow fees and provide evidence of such payments to the | | 13 | seller in the form of Fedwire confirmations. | | 14 | Seller's representations and buyer's | | 15 | representations, also, and Whitecroft is the seller.
ACASS | | 16 | is the purchaser.
So the seller's representations that begin | | 17 | in Section -- Article 5, representations and warranties. | | 18 | This is 5.1:
seller's representations and warranties. | | 19 | Seller is duly formed, validly existing, and in | | 20 | good standing of the laws of the British Islands, having the | | 21 | capacity to sue and be sued in its own name, having full | | 22 | power or legal right and authority to carry on its business | | 23 | as currently conducted and to execute, deliver, and perform | | 24 | the provisions of this agreement. | | 25 | The execution, delivery, and performance by seller | | 1 | of this agreement and the sale of the aircraft, having been | |----|---------------------------------------------------------------| | 2 | duly authorized by all necessary action on behalf of seller, | | 3 | and do not conflict with or result in any breach of any terms | | 4 | or constitute a default under any document, instrument, or | | 5 | agreement, to which the seller is a party. | | 6 | 5.1.3, the person executing this agreement on | | 7 | behalf of the seller has full power and authority to do so. | | 8 | MR. LINSEY:
And what happened with the closing, | | 9 | specifically, the receipt of the funds by the escrow agent in | | 10 | Oklahoma City -- | | 11 | THE COURT:
Which provision are you looking at? | | 12 | MR. LINSEY:
Actually, I was going to refer the | | 13 | Court to Exhibit 24, which is the escrow agent's confirmation | | 14 | receipt of funds. | | 15 | THE COURT:
Okay.
Let me finish this and we'll | | 16 | get there. | | 17 | MR. LINSEY:
Thank you, Your Honor. | | 18 | THE COURT:
Thank you. | | 19 | Notices as to Whiteshore [sic] Ltd. are supposed | | 20 | to go to, according to -- on page 14 of the agreement, to | | 21 | attention Max Krasner at maxk@gnsyus.com, which is Golden | | 22 | Spring New York U.S. dot com, who's already been found to be | | 23 | the alter-ego of the debtor. | | 24 | Seller, signature, in witness hereof, the | | 25 | undersigned parties have caused this aircraft purchase | | | | | | 36 | |----|---------------------------------------------------------------| | 1 | agreement to be executed, delivered, and effective as of the | | 2 | date first written above, which is August 2nd, 2022. | | 3 | Page 17, signatures:
Seller, Whitecroft Shore | | 4 | Ltd. by Mei Guo; title, owner. | | 5 | And it's already been established in the record in | | 6 | the main case and possibly in this adversary proceeding, but | | 7 | in others, that the defendant has already testified that the | | 8 | aircraft was sold post-petition in August of 2022, prior to | | 9 | any deposition, in which the defendant attempted to invoke | | 10 | her Fifth Amendment right to self-incrimination -- against | | 11 | self-incrimination, I should say. | | 12 | So you want me to go to 24, is that what you're | | 13 | telling me, Attorney Linsey? | | 14 | MR. LINSEY:
Yes, Your Honor. | | 15 | THE COURT:
Okay.
Give me a minute, please. | | 16 | It'll take a little bit of time to get there. | | 17 | (Pause) | | 18 | THE COURT:
Do you know what?
Hold on, I might | | 19 | have just -- I'm sorry, give me -- there's quite a few | | 20 | exhibits, so I'm almost there. | | 21 | (Pause) | | 22 | THE COURT:
Exhibit 24, which is attached to the | | 23 | application, the emergency application for a temporary | | 24 | restraining order is a document entitled "Insured Aircraft | | 25 | Title Services, LLC, Oklahoma City, Oklahoma, confirmation of | 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 funds re Bombardier, Inc. BD-700-1A11, serial number 9189 from Anna Stafford, October 19, 2022, page 1. To whom it may concern, this will confirm Insured Aircraft Title Services, LLC is holding proceeds in the amount of \$12,032,995.86 in escrow for the benefit of Whitecroft Shore, Ltd. with respect to the sale of the abovereferenced aircraft. Best regards, Anna Stafford, escrow agent. Signed, subject to IATS terms and conditions. So that's the confirmation of the proceeds being held by the escrow agent, who's holding monies in U.S. dollars and whose offices and business is in Oklahoma City, Oklahoma. MR. LINSEY: Yes, Your Honor. And then Exhibit 25 shows what happens next. THE COURT: Exhibit 25 attached to the emergency application for a temporary restraining order is a Whitecroft Shore, Ltd. incorporated under the BVI Business Companies Act with company number 1969460, the company, written resolutions of the sole director of the company made in accordance with the company's articles of association, dated the twenty-first day of December. The undersigned, being the sole director of the company, a company incorporated and existing under the laws of the British Islands, BVI, does hereby consent to the adoption of the following resolutions. It starts by saying, 1 2 3 4 5 6 7 8 9 "It was noted that," and then there are several paragraphs, 1.1 through 1.10. 1.5, noting that there was an escrow agent confirmation of the -- that the escrow agent was holding proceeds related to the purchase price of the aircraft in the amount of \$12,032,995.88 in escrow for the benefit of the company Whitecroft and that, further, to Clause 4.5.5.1 of the asset purchase agreement, the APA, the purchase price may be released by the escrow agent to the seller, pursue the seller's instructions. 10 11 12 13 14 15 16 17 18 19 20 So two months after the escrow agent confirmed its -- that it was holding the proceeds in U.S. dollars for the benefit of Whitecroft, according to Note 1.7, the company has opened an account with JNFX, Ltd. of 75 King William Street, London, EC4N7BE, ("JNFX"), to facilitate the purchase price -- to facilitate -- excuse me, I read that wrong -- to facilitate receipt of the purchase price. JNFX is authorized and regulated by the United Kingdom's Financial Conduct Authority, reference 574489, and is also registered with the United Kingdom's HM Revenue and Customs, money laundering Registration Number 12277592. 21 22 23 24 25 The next note, the company provides account details for a Whitecroft bank account and then the next note, 1.9, says the company desires to instruct the escrow agent to remit the purchase price into the Whitecroft bank account. And the next note says, The company's agents or 1 2 authorized representative must provide the company's instructions to the escrow agent. 3 4 5 6 7 8 9 10 11 Now we get to the resolution. Now, therefore, it is resolved that in 1.1, it was in the best interests of the company, the company that was described above in Notes 1.1 through 1.3, as a pure equity holding company, its only purpose being to hold the title and ownership of the aircraft. Consequently, the Company did not maintain a bank account or hold any other assets and for this reason, never deemed it necessary or commercially practical to open or maintain a bank account. 12 13 14 15 16 So the first resolution is that it was in the best interests of the company to open the Whitecroft bank account for the purpose of receiving the purchase price, which is owed and outstanding to the company as of the day of this resolution. 17 18 19 20 The second resolution is the company, 1.2, authorizes, instructs the escrow agent to act on this resolution to remit the purchase price to the Whitecroft bank account. 21 22 23 24 25 1.3, all previous actions of the company or its duly authorized agents, including, but not limited to Max Krasner, legal accountant counsel [sic] and consultants of the company engage to insist with the opening of the Whitecroft bank account are hereby ratified. 1 2 And 1.4, these resolutions may be signed by electronic signature or transition. 3 4 5 6 7 8 Below this, the 1.1 through 1.4 resolutions on this Exhibit 25 is typed the names Mei Guo, sole director, and then there's a signature line with a signature and the date underneath it of 12/21/2022. It appears to be the same signature of Mei Guo that appears in other documents that we've already discussed on the record today. 9 10 11 12 Now, what about Exhibit 20, Attorney Linsey? There's an email introducing Max Krasner and then Exhibit 21, there's an email from the buyer, ACASS, to Yvette Wang and Max Krasner. 13 14 15 16 17 18 19 20 21 22 MR. LINSEY: Yes, Your Honor. These exhibits were included to show that Golden Spring, the debtors' alter-ego orchestrated the sale of the aircraft. Max Krasner and -- Max Krasner having identified himself as the director of operations of Golden Spring, Jetlaw having testified that Max Krasner, in such capacity, was their contact for the "seller" and then the ACASS letter of interest reflects that they were addressing their letter of interest -- letter of intent, I should say, they were addressing their LOI to Yvette Wang and Max Krasner both, at Golden Spring email addresses. 23 24 THE COURT: I just need a minute to get to those exhibits. 25 (Pause) 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: I'm sorry, somehow I've lost my place. You'll have to bear with me for a moment. (Pause) THE COURT: I don't know why, but I'm having trouble locating 20 and 21 on this document. And maybe I'm skipping over it improperly, but I'm not seeing it on this document. I've looked at it, but I must be in the wrong document. MR. LINSEY: I believe in our sealed filings -- THE COURT: That's what I thought I was in. MR. LINSEY: No, no, we only filed the sealed exhibits and I believe those are unsealed -- THE COURT: Oh, they are unsealed. That's why they're not -- MR. LINSEY: Yeah, so that's why they're omitted. THE COURT: I'm looking at the wrong version, then. Okay. I'm sorry. MR. LINSEY: No, it's confusing. It's confusing to figure out the right way to do it, so we try our best. THE COURT: I understand. All right. So I should be able to see those two exhibits, then, in a different document, because I did look at it. Yes, I think they're in this document. I think they're in 75. Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 41 of 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Obviously, we didn't have these documents ready to pull up the same way we would before an evidentiary hearing, but I do think it's important to note these two documents that are not sealed. THE CLERK: I think it's page 277. THE COURT: 277? THE CLERK: I think so. THE COURT: Okay, thank you -- THE CLERK: You're welcome. THE COURT: -- very much. There we go, 277 in ECF Number 75, it's an unsealed exhibit, which is an email introducing Max Krasner, and it's dated January 25th, 2022, Whitecroft, in care of Gold Spring, New York, attention Yvette Wang or Max Krasner. This is a letter of intent to purchase the aircraft, the Bombardier Global XRS Aircraft, Serial Number 9189, which is the same number we read in the asset purchase agreement and other documents that have already been described on the record during this hearing. And it does say -- the letter is addressed to Whitecroft Shore Limited, in care of Golden Spring, New York, New York, 162 East 64th Street, New York, New York, attention Yvette Wang or Max Krasner, both of whom's email addresses is GSNYUS, Golden Spring, New York U.S., which the Court has already found that Golden Spring is the alter ego of the | | 43 | |----|-----------------------------------------------------------------| | 1 | debtor. | | 2 | And then we go to Exhibit 21 -- | | 3 | MR. LINSEY:
I believe that is Exhibit -- | | 4 | THE COURT:
That was 21, I'm sorry.
I meant 20 is | | 5 | what I wanted to look at.
I apologize, I went too far. | | 6 | Exhibit 20 is an email from Kent Jackson to | | 7 | Valerie Ericson, dated December 29, 2021, regarding Jetlaw | | 8 | engagement, Global Express sale.
It says, "Valerie, good | | 9 | morning.
Yes, I did send out a new engagement letter, here | | 10 | it is signed, and we just received the \$10,000 wire.
Please | | 11 | enter into time slips and let Max know we received their | | 12 | wire.
Thanks, Kent." | | 13 | And then there's an email below from Max Krasner | | 14 | to Christian Deputy at Liberty Jet, Kent Jackson at Jetlaw, | | 15 | and Julian Schulman at Liberty Jet, re T7GTUMPA.
Attached is | | 16 | a signed engagement letter.
And Max Krasner's email is | | 17 | maxk@gsnyus.com, Golden Spring, New York, U.S.
Attached is | | 18 | the signed engagement letter of confirmed wire instructions | | 19 | with Valerie and the payment will be processed today. | | 20 | Looking forward to working with you. | | 21 | And then there is an email below that from | | 22 | Christian Deputy at Liberty Jet to Mr. Jackson at Jetlaw, | | 23 | CCing Mr. Krasner and Julian Schulman at Liberty Jet.
It | | 24 | says, good morning, gents.
I wanted to write you this short | | 25 | email to introduce Mr. Krasner, Max Krasner, to you, Kent. | 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. Krasner is the direct contact between all parties involved in the sale of T7-GQM and the principal. I will work with Max to get your engagement letter back. And then a most -- there is now a redacted portion of that email. And then it just says Mr. Krasner is on vacation and might be able to obtain some emails -- might be able to entertain some emails, so expect the pace to be slow. From Christian Deputy, President, Liberty Jet. So those are the two other exhibits that are not sealed that, Mr. Linsey, I think the trustee is relying on in connection with the assertion that the funds were in the United States, they were controlled by Whitecroft through Golden Spring and that the trustee would like the preliminary injunction to enjoin JNFX and to require the defendant to cause the funds to be returned to the United States and placed in escrow; correct? MR. LINSEY: That's correct, Your Honor. THE COURT: Okay. Mr. Moriarty, do you have any response? MR. MORIARTY: Your Honor, you had asked me a little bit ago before we got into the documents how JNFX would be bound by this order. If the Court were to enter the order that the defendant has proposed whereby the funds could not be transferred except upon the joint written instruction of the defendant and the trustee or further order of the 1 2 3 Court, one, the defendant is certainly going to be bound by the order, and if we read 65 -- Federal Rule of Civil Procedure 65 -- 4 5 6 7 8 9 10 11 THE COURT: The defendant has asserted her right against self-incrimination with regard to every question asked of her regarding Whitecroft, including whether or not she's the principal of Whitecroft. So I heard what you just said, but what difference will that make? She's just going to assert her -- she's already asserted her Fifth Amendment privilege, so she'll be what? She'll be what? She'll be in violation of an order and then what? 12 13 14 MR. MORIARTY: I don't anticipate that she'll be in violation of an order, Your Honor, and obviously I don't know, I can't predict the future. What I do know is that -- 15 16 THE COURT: Well, she's your client. So I'm sure you've counseled her as to what that means; haven't you? 17 18 MR. MORIARTY: I'm not going to discuss what I've discussed with my client or haven't discussed -- 19 THE COURT: I'm not asking you -- 25 20 21 22 23 24 MR. MORIARTY: -- with my client, Your Honor. THE COURT: -- to discuss specifically. You have an obligation to the Court to explain whether or not you've explained to your client what it means to be bound by this order, Mr. Moriarty. MR. MORIARTY: I agree, Your Honor, and that has 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 been done. THE COURT: Okay. MR. MORIARTY: Okay? So JNFX would be bound by this order as somebody in active concert with the defendant. THE COURT: So you're consenting that -- you're saying that JNFX is in active concert with your client? MR. MORIARTY: I'm saying that JNFX controls these funds. As far as I know, the only one that they can take direction to as of -- from right now is Ms. Guo. So I believe that they -- THE COURT: Well, you said as far as you know, but all these documents talk about Yvette Wang and Max Krasner. Nobody seems to know where Mr. Krasner is. MR. MORIARTY: I agree with you, Your Honor, and we do know where Ms. Wang is, she's in federal lockup. I'm telling you that, as far as I know, the only person on this account who can give instructions is Ms. Guo. To the extent -- so I'm going to shift, Your Honor -- to the extent -- THE COURT: Well, shift to what? MR. MORIARTY: To the extent the Court is inclined to grant the order that the trustee is proposing, which is to have the funds brought back into the U.S., I have no authority to consent to that, but what I would ask is, if the Court is going to do that, that the Court give more than five Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 46 of 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 business days to effectuate that transfer, only because Christmas Day is Monday, Boxing Day in the UK is on Tuesday, we have New Year's Day on January 1st. I don't know if that can be accomplished in five days, which is what the trustee is asking for. THE COURT: Okay, I understand that point. MR. MORIARTY: So JNFX has agreed that they will not do anything with these funds. THE COURT: Well, you can say that, but there's no proof in this record that they have -- MR. MORIARTY: Okay. THE COURT: -- okay? MR. MORIARTY: I appreciate that, Your Honor. So if I may just -- THE COURT: I mean, if you have proof, that's different, but you don't. There's nothing that I can rely on that says that they've agreed not to do anything. MR. MORIARTY: I have an email, Your Honor, to -- THE COURT: But we don't -- I don't know who they are, right? It's not -- MR. MORIARTY: Okay. THE COURT: -- there's nothing -- I mean, I could write that email. And I'm not suggesting you -- that's not what I'm saying, Attorney Moriarty. I'm saying, for purposes of proof, right, and establishing who they are, I don't have 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 any proof in this record. MR. MORIARTY: Your Honor, all I have is email correspondence -- THE COURT: I understand. MR. MORIARTY: -- that's all I have. THE COURT: I understand. MR. MORIARTY: So if I may move on to two other points in the order that we've redlined and just identify -- THE COURT: Go right ahead. MR. MORIARTY: -- it for the Court? So we've redlined the third ordered paragraph and that's only out because that would require Ms. Guo's counsel to file something on the docket indicating that the funds had been transferred and, since we were proposing something that wouldn't require the funds to be transferred, that's the reason why that -- THE COURT: Understood. MR. MORIARTY: -- would be out. The fourth ordered paragraph refers to Federal Rule 65(d) and Federal Rule of Bankruptcy Procedure 7065. The proposed changes here are solely to have the order comply with Rule 65(d) -- and when I say comply I mean read the same way Rule 65(d) does. So the trustee's proposed language would say persons in active concert with the defendant and/or the Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 48 of 67 | debtor.
And, as I read 65(d), in its active concert with the | |-----------------------------------------------------------------| | parties, the parties' officers, agents, servants, employees, | | and attorneys.
I don't know that the debtor would fall into | | any of those categories.
So to say the defendant and/or the | | debtor, and then those in active concert, I don't know that | | that would be enforceable, maybe it would be.
I don't want | | to be in a position where something happens and it's -- and | | I'm not saying anything is going to, but I don't want to be | | in a position where something happens and there's an order | | that's broader than maybe it should be. | | THE COURT:
Well, what about waterfall, Max | | Krasner, and Ms. Yvette Wang, given what we just read in the | | record? | | MR. MORIARTY:
I believe, Your Honor, that -- and | | I shouldn't say I believe -- to the extent they're in active | | concert with Ms. Guo, they're covered.
The way that this -- | | THE COURT:
Yeah, but that doesn't mean that the | | Court can't delineate that.
There's nothing in the rule that | | says the Court can't delineate people based upon the evidence | | that's been submitted to the Court in support of an | | application for a temporary restraining order. | | MR. MORIARTY:
I agree, Your Honor. | | THE COURT:
Okay. | | MR. MORIARTY:
The reason for this change is | | because the way that this order reads, it's that Ms. Guo is | | | 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in active concert with these individuals today. So to the extent the Court finds that Whitecroft, Ms. Guo was in active concert with these individuals in January of 2023 or August of 2022 or earlier for purposes of the sale of the jet, they would fall under the active concert language. There's an implication by including them that they are in active concert today, that's the reason for that change. And then if I can just give the Court the last proposed change and then, Attorney Linsey, I'll sit down. The next ordered paragraph, it's ordered that no assets subject to the order, including the JNFX assets, shall be reduced, spent, or otherwise diminished. So, on behalf of our client, we added some language because the funds are currently held in Euros. If they're going to be -- THE COURT: Well, we don't know that, but that's what you believe to be true. MR. MORIARTY: Based on the representations that have been made to both -- THE COURT: Right -- MR. MORIARTY: -- the trustee, his counsel, and myself. THE COURT: -- a representation that has no bearing because it's not based in any evidence before this Court, but I understand -- all I'm saying to you is, go ahead and say whatever you're going to say, but there's nothing 1 2 3 to -- I don't even have anything in front of me that proves that there's any money being held by this entity anyway. But, regardless, go ahead. 4 5 6 7 8 9 MR. MORIARTY: All right. So I'm going to make an assumption that there's money there, okay? And with that assumption, assuming that those funds are held in Euros, if they're going to be transferred onshore, they're going to have to be converted to U.S. dollars. So that conversion could result in fees -- 10 11 12 13 THE COURT: You don't know that. You don't know that, number one; number two, you don't know that they're going to have to be converted here or there; number three, you don't know what the fee structure is upon conversion. 14 15 So I don't agree with that statement at all because you don't know any of that. MR. MORIARTY: Your Honor -- 16 17 18 19 20 21 22 23 24 25 THE COURT: You can -- funds can be converted in different currency to a U.S. bank, it happens all the time. MR. MORIARTY: Your Honor, the only thing that I'm trying to say is I don't want my client to be in a situation where there are fees or there is a downward fluctuation due to the exchange rate and the client is in violation of this order because there has been a reduction in the account value. That's all that this language is intended to do. To the extent that there's a conversion that has to be done if 1 2 3 4 the Court orders the funds into the U.S., and that conversion results in fees and/or downward movement in the account because of conversion rates, that's not a violation of the order. 5 6 THE COURT: Attorney Linsey, what's your position on that language? 7 8 9 10 11 12 13 14 15 MR. LINSEY: We are happy to talk with the defendant about a workable mechanism to transfer the funds back. If we're talking about a commercially reasonable transaction fee that is, you know, from our perspective commercially reasonable, then I don't anticipate that would be an issue. If we're talking about JNFX fees of \$300,000 or \$180,000, that is in no way commercially reasonable and that would be a violation of the injunction from the trustee's perspective. 16 17 18 19 20 21 22 23 24 25 And we have -- and I'm not -- you know, the defendant's position is what the defendant's position is coming in here today, so I'm not faulting Mr. Moriarty for not having the conversation with me about specifics of how the plumbing on this would work. We're prepared to have a conversation with the defendant about how to make this work in a way so that this is not -- she's not unintentionally falling into a trap of violating by compliance with the order, that's not the intent. The intent is to safeguard the funds. | Case 22-50073 | Doc 2482
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Page 53 of 67 | |---------------|--------------------------------------------------------------------------| | | 53 | | 1 | THE COURT:
Okay.
Anything further? | | 2 | MR. MORIARTY:
Nothing from the defendant, Your | | 3 | Honor.
Thank you. | | 4 | MR. LINSEY:
No, Your Honor. | | 5 | THE COURT:
Okay.
Well, I've looked at the orders | | 6 | and I -- I'm not going to enter the order in the manner in | | 7 | which the defendant has marked it up, although I will -- I | | 8 | think you understand, Attorney Moriarty, that I think JNFX | | 9 | needs to be bound by this order, they need to be constrained, | | 10 | whether they consent or not, and that with regard to the | | 11 | joint instructions, it's not going to be any joint | | 12 | instructions, it's going to be further order of this Court. | | 13 | With regard to the people acting in active concert | | 14 | with the defendant, I'm going to think about that a little | | 15 | bit, but I see no reason -- or I see every reason to include | | 16 | Whitecroft, Max Krasner, and Ms. Wang as one of those parties | | 17 | based upon the evidence that's been submitted to this Court, | | 18 | and you haven't submitted any evidence to the contrary. | | 19 | With regard to your issue about conversion and not | | 20 | being in violation because of a fee, I think that's an issue | | 21 | that can be addressed after today, and I'm going to instruct | | 22 | the parties to try to come up with an agreed-upon manner in | | 23 | which the funds will be transferred at some point in the | | 24 | future, but soon, to the United States, and that they be | | 25 | transferred in such a way that these fees that we don't even | | | | 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 understand how they were calculated could then just be automatically deducted from the amounts that are in -- that are apparently in the possession of JNFX at this moment. And then I will have to figure -- we'll have to figure out when you're going to report back on that issue and how you're going to report back on that issue. So I think we should move on to the other issue because this order is going to have to enter today. The court is not open tomorrow, the court is not open on Monday, so this has got to enter today. Anything further? MR. LINSEY: No, Your Honor, the trustee is prepared to appear before Your Honor again or to file a written report regarding a conference with the defendant at any date that the Court would like. The trustee is not trying to force a transaction on an unworkable time frame, but we do believe there's exigency in light of the unknowns here. THE COURT: Mr. Moriarty? MR. MORIARTY: I have nothing to add, Your Honor, other than happy holidays and Happy New Year to everybody. THE COURT: You as well. Thank you. MR. MORIARTY: Thank you. THE COURT: So now we're going to move on to the Adversary 5017, which involves the Taurus Fund and the motion 55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to preserve evidence. So, Mr. Moriarty, you do not have to remain unless you choose to. MR. MORIARTY: Thank you, Your Honor. THE COURT: Okay, thank you. All right, go ahead, Attorney Linsey, with regard to the -- MR. LINSEY: Just a quick drink, please. THE COURT: -- sure -- with regard to the Taurus Fund adversary proceeding. I did see the order that was submitted, I believe, earlier this morning -- oh, no, it was late last night, I'm sorry, on the issue of the preservation of evidence, and I see the agreement that has been made with the Taurus Fund, Mr. Barnett, and the other clients represented by Mr. Conway, and I see that you have an agreement with, I'm not going to call it the Westy Storage Facility, although I know they have a corporate name. And then the only party that hasn't consented to this is HGA Property Management, but I have seen from the documents that you've submitted that the registered agent for HGA Property, which was not HGA Property, was apparently created on April 18, 2023; is that correct, Attorney Linsey? MR. LINSEY: That's correct, Your Honor. THE COURT: The member and manager and the Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 55 of 67 | 1 | registered agent is an individual who has been the subject of | |----|-----------------------------------------------------------------| | 2 | evidence submitted in this main case and possibly in related | | 3 | adversary proceedings.
I don't recall specifically, but I | | 4 | recognize the name.
Is that correct? | | 5 | MR. LINSEY:
That's also correct, Your Honor. | | 6 | THE COURT:
Okay.
And that person has at some | | 7 | point in time been shown to be physically present in the | | 8 | debtor's apartment in the Sherry-Netherland, correct? | | 9 | MR. LINSEY:
Correct, Your Honor. | | 10 | THE COURT:
And were there other examples of this | | 11 | individual being with the debtor? | | 12 | MR. LINSEY:
Not that occur off the top of my | | 13 | head.
I can -- I would have to inquire with colleagues about | | 14 | further evidence, Your Honor. | | 15 | THE COURT:
Was this defendant -- I'm sorry, I | | 16 | apologize, the person isn't a defendant -- was the member of | | 17 | HGA Property Management in any of the photographs in the | | 18 | Mahwah mansion? | | 19 | MR. LINSEY:
I believe that she was in a video | | 20 | that we watched in connection with the HCHK proposed | | 21 | intervenors' motion. | | 22 | THE COURT:
Okay.
All right, so how would you | | 23 | like to proceed then with regard to this order that you've | | 24 | submitted that -- where you have everyone's consent other | | 25 | than the HGA entity? | | | | Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 57 of 67 57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LINSEY: I'll just give a very brief outline of what we're doing. THE COURT: Go ahead, please. MR. LINSEY: The Court is aware from the emergency motion, obviously, that the trustee recently learned of the storage facility in New Jersey, approximately a ten-minute drive away from the Mahwah mansion. The storage units in question were initially leased to Scott Barnett, who is the debtor's bodyguard and driver, and who is also allegedly or nominally the manager of the Taurus Fund defendant. Shortly after the FBI arrested the defendant, Mr. Barnett signed an ownership change addendum assigning all of the rights with respect to the storage facility to HGA Property Operation. The trustee understands that the owner and manager of HGA Property Operation, as we've discussed, are prominent supporters of the debtor. We understand that the monthly rent or fee with respect to the storage facility is \$7,000. The trustee has been in touch with the owner of the storage facility, has gotten some color. This is a large -- these units are large, it's apparently a suite of four rooms. We know that they are designed to survive bomb blasts and that they are guarded by electronic security systems. In short, this is a facility that's designed to protect very valuable property. The trustee has issued subpoenas to the owner of 1 2 3 the storage facility and to HGA. The purpose of the trustee's motion is to make sure that these storage units are secured pending the completion of the trustee's inspection. 4 5 6 7 8 9 10 11 12 13 14 The facts known to the trustee suggest that the reason these storage units exist is to conceal property that was removed from the Greenwich mansion and the Sherry-Netherland apartment, and potentially also the Mahwah mansion. There's every reason to think that the debtor's associates would do the same thing with respect to what's in these units now that they know that we know about their existence, and they do know that because we've issued the subpoena and because we have made the efforts that are outlined in the notice to make sure that they have actual notice of this hearing. 15 16 17 18 19 20 21 22 The trustee understands that based on the notice that the owner of the storage facility has received, the owner of the storage facility has, pending this hearing, taken efforts to secure the storage units. So really what we'd be talking about is maintenance of the status quo for a sufficient time for the trustee to complete that inspection. The trustee is going to begin that inspection on Friday. So I don't think we're talking about a very long 24 25 report back to the Court when the inspection is completed. That's all I have, Your Honor, but I'm happy to time for the inspection to be completed, the trustee will 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 answer any questions. THE COURT: You're going to try to inspect the property tomorrow; is that right? MR. LINSEY: We're going to begin the inspection tomorrow. THE COURT: And Mr. Conway is going to be there, is my recollection; correct? He stated that on the record the other day. MR. LINSEY: We've certainly offered him the opportunity to be there, I can't speak for him -- THE COURT: I think he said he was going to be there. MR. LINSEY: Yes. THE COURT: Let me just take a look one moment. (Pause) THE COURT: So you haven't made any changes to the form of proposed order then, it's the same proposed order that you submitted the other day? MR. LINSEY: Correct, Your Honor, the same one with the original emergency motion. THE COURT: Okay. Then if you would just give me one second, please. MR. LINSEY: Of course. THE COURT: The one other thing I will say with regard to the other matter that we just addressed, can you Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 59 of 67 60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 submit -- can you have someone from your office submit that order in Word to the Courtroom Deputy email box, please? MR. LINSEY: Yes, Your Honor. I can actually do it right now -- THE COURT: That probably makes sense while I'm looking for this. Okay? MR. LINSEY: We sent it to Mr. Moriarty so he can make his redline. THE COURT: Yes. (Pause) THE COURT: In the proposed order that was submitted, Attorney Linsey, granting this emergency motion to preserve evidence -- MR. LINSEY: Yes, Your Honor. THE COURT: -- the proposed order has some redactions in it, the location of the storage units and some other -- I'm not sure how you want that handled. MR. LINSEY: I'm looking at the sealed version, so mine is unredacted. I apologize, I didn't print out the redacted version, so unfortunately -- is there any way it could go up on screen what has been redacted? I apologize for that, Your Honor. THE COURT: Sure. It's ECF Number 83 in 5017. (Pause) THE COURT: Do you see where I am, Attorney Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 60 of 67 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Linsey? MR. LINSEY: Oh, it's right in front of me. THE COURT: So, see, the address is redacted. Then if you'd go to the next page -- (Pause) THE COURT: I think those are the people that - do you see that? MR. LINSEY: I do, Your Honor. (Pause) MR. LINSEY: I apologize, Your Honor. I'm filling in for someone and I had prepared, but I don't have an answer on that. Could I either have a moment or could I report back to the Court? THE COURT: Yeah. I mean, I think we just need to -- I need to know what you want -- how you want that handled. I mean, is that going to be still redacted or -- MR. LINSEY: Well, I don't think that the Court's order could be redacted -- THE COURT: I don't think it can either -- MR. LINSEY: -- if it were to be -- THE COURT: -- but I'm not sure -- MR. LINSEY: -- if it were to be effective, and I believe that some -- THE COURT: And I think the order needs to be changed anyway because you have to say you have the consent Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 61 of 67 Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 62 of 67 62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 of the Taurus Fund and all the defendants and of the Westy - and, again, I'm sorry, I don't remember their corporate name -- right? MR. LINSEY: Yeah, it starts with an A. I know. So, with the Court's indulgence, could we do this: Could I -- could I submit -- or Paul Hastings submit a revised order that includes noting that we had the hearing today and the consent of the defendants and the consent of the owner of the storage facility? And we will address the redaction issue in that revised order that we submit. THE COURT: Yeah, because they're consenting to all that. They're consenting to not modify, remove, empty, dispose of, and all that, that's what needs to be said, right? MR. LINSEY: Understood, Your Honor. 16 17 18 THE COURT: And that the only party that's not consenting is HGA, and then you'll have to deal with that somehow. 19 20 MR. LINSEY: We will note their consent in the revised form of order. 21 22 23 24 25 THE COURT: Okay. And because I'm prepared to grant this motion and enter this order because Mr. Conway, who was here the other day, the 19th, I believe, when we had the first conference, stated on the record that he was going to -- believed he was going to consent, and he asked me did 1 2 3 he have to appear if he consented and I said no. And you have his consent, so he's not here, and he represents all of the defendants in the adversary proceeding. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Your notice that you filed this morning -- or last night, I'm sorry, states that you have the consent of the corporate entity of the storage unit and that the only party who doesn't consent is HGA, which you've shown me in this notice of additional information, ECF 89, that was filed last night that the HGA Property Management, LLC was created, as I've already stated on the record, on April 18, 2023, and that Mr. Barnett transferred the interest in the storage units to this entity, and that this entity is managed and has a member of an individual whom we've seen in the main case and/or in related adversary proceedings having communications with the debtor, Mr. Kwok. In any event, I'm prepared to do that, but the order has to be revised. Okay? MR. LINSEY: So, please -- I feel like we've imposed more than enough on the Court and its staff this week -- please tell me when we need to get you an order by in 21 order for it to be useful today and I'll make sure it 23 24 THE COURT: Well, the staff is going to be gone by 5 o'clock. MR. LINSEY: Okay. 22 happens. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: So if you can get it here between - by 4:00ish, that would be very helpful. The Word document on the other one, I'm sure you can get that here earlier because all you have to do is have someone submit it by Word, okay? MR. LINSEY: I sent it from my phone while we -- THE COURT: Okay, thank you. And then the only other matter that we didn't discuss today and you -- I'm asking you to report this to Mr. Moriarty because I should have when he was here and I had forgotten to -- is I'm not in a position to rule on the trustee's motion regarding the privileges order that was filed in the main case that impacts your summary judgment motion that needs to be filed by tomorrow. MR. LINSEY: Yes, Your Honor. THE COURT: So you need to go ahead and file your summary judgment motion and then -- in the adversary 5008, the Bombardier adversary -- MR. LINSEY: Yes, Your Honor. THE COURT: -- and then we will go from there. MR. LINSEY: So, to be clear, in the version we file tomorrow, we won't include that other evidence -- THE COURT: That is correct. MR. LINSEY: -- pending the Court's order? Understood. THE COURT: That is correct. 65 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LINSEY: Understood, Your Honor. I'll report that to Mr. Moriarty as well. THE COURT: Yes, please. I forgot to say that when he was here, so that was my mistake and I -- MR. LINSEY: I appreciate the notice, Your Honor. So we're -- right now we made a draft and we were just waiting to hear, so -- THE COURT: No, I understand. MR. LINSEY: -- thanks. THE COURT: We've been attempting to review all the documents -- MR. LINSEY: Understood. THE COURT: -- as best we can that have been filed in the last 48 hours -- MR. LINSEY: Sure. THE COURT: -- Okay? MR. LINSEY: Understood. THE COURT: So I think then, Mr. Linsey, that takes care of everything today -- MR. LINSEY: It does, Your Honor. THE COURT: -- in these adversary proceedings? MR. LINSEY: Yes. THE COURT: Okay. Then we will look for the orders and then, obviously, tomorrow the court is closed, but electronic filing is available. So you'll file your motion Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 65 of 67 and then we'll -- in the 5008 for summary judgment and we will proceed accordingly with regard to the schedule that's in place with regard to that motion. Okay? MR. LINSEY: Yes, Your Honor. And I'll echo Mr. Moriarty to say happy holidays to Your Honor and everyone here. THE COURT: Same to you. Thank you very much. All right, that takes care of all the matters on today's calendar. So Court is adjourned. (Proceedings concluded at 1:57 p.m.) Case 22-50073 Doc 2482 Filed 01/02/24 Entered 01/02/24 07:52:24 Page 66 of 67 | | Case 22-50073
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Page 67 of 67 | | |----|-------------------------------------------------------------------------------------------|----| | | | 67 | | 1 | CERTIFICATION | | | 2 | We certify that the foregoing is a correct | | | 3 | transcript from the electronic sound recording of the | | | 4 | proceedings in the above-entitled matter to the best of our | | | 5 | knowledge and ability. | | | 6 | | | | 7 | /s/ William J. Garling
December 26, 2023 | | | 8 | William J. Garling, CET-543 | | | 9 | Certified Court Transcriptionist | | | 10 | For Reliable | | | 11 | | | | 12 | /s/ Mary Zajaczkowski
December 26, 2023 | | | 13 | Mary Zajaczkowski, CET-531 | | | 14 | Certified Court Transcriptionist | | | 15 | For Reliable | | | 16 | | | | 17 | /s/ Tracey J. Williams
December 26, 2023 | | | 18 | Tracey J. Williams, CET-914 | | | 19 | Certified Court Transcriptionist | | | 20 | For Reliable | | | 21 | | | | 22 | | | | 23 | | | | 24 | | | | 25 | | | | | | | | | | | | | | |