郭文贵破产案 · ECF #2586

元数据

当事人: 郭文贵 (Guo Wengui / Miles Guo / Ho Wan Kwok)
法院: CTB
案号: 22-50073
ECF #: 2586
类型: UNKNOWN
立案日: 2024-02-07

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, | * * * * | | Debtors. | * | | LUC A. DESPINS, CHAPTER 11 TRUSTEE, | * Adv. Proc. No. 23-05008 * * | | Plaintiff, | * | | v. MEI GUO, | * * Bridgeport, Connecticut * February 5, 2024 | | Defendant. | * * | | * * * * * * * * * * * * * * * * | * | | #2532 AVOIDANCE CLAIM ADVERSARY PROCEEDINGS #88 MOTION FOR SUMMARY JUDGMENT | BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE MOTION FOR ORDER APPROVING PROCEDURES APPLICABLE TO | | APPEARANCES: | | | For the Chapter 11 Trustee: | AVRAM EMMANUEL LUFT, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 | | | PATRICK R. LINSEY, ESQ. Neubert Pepe and Monteith 195 Church Street,13th Floor New Haven, CT 06510 | | Proceedings recorded by electronic sound recording, transcript produced by transcription service. | Fiore Reporting and Transcription Service, Inc. Shelton, CT 06484 (203)732-6461 | | | |

APPEARANCES: (Cont'd) Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 For the U.S. Trustee: HOLLEY L. CLAIBORN, ESQ. Office of the United States Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT 06510 For the Creditors Committee: KRISTIN B. MAYHEW, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For the Creditor, Pacific STUART M. SARNOFF, ESQ. Alliance Asia Opportunity O'Melveny & Myers LLP Fund L.P.: Times Square Tower 7 Times Square New York, NY 10036 TREVOR L. BRADLEY, ESQ. Robinson & Cole LLP 1055 Washington Blvd. Stamford, CT 06901 For the Defendant, Mei Guo: MELISSA F. WERNICK, ESQ. Chiesa Shahinian & Giantomasi, PC 105 Eisenhauer Pkwy Roseland, NJ 07068 JAMES M. MORIARTY, ESQ. Zeisler & Zeisler, P.C. 10 Middle Street, 15th FL Bridgeport, CT 06604

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Ho Wan Kwok - February 5, 2024 3 (Proceedings commenced at 1:09 p.m.) THE COURT: We're now proceeding on the calendar at 1:00 p.m., so I ask the courtroom deputy to please call the calendar. THE COURTROOM DEPUTY: Case No. 22-50073, Ho Wan Kwok, and Adversary No. 23-5008, Despins versus Guo. 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. LINSEY: Good afternoon, Your Honor. Patrick Linsey for the Trustee. THE COURT: Good afternoon. MR. LUFT: Good afternoon, Your Honor. Avi Luft on behalf of the Chapter 11 Trustee. THE COURT: Good afternoon. MS. CLAIBORN: Good afternoon. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon. MS. WERNICK: Good afternoon, Your Honor. Melissa Wernick for Defendant Mei Guo in the adversary proceeding 23-5008. THE COURT: Good afternoon.

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Ho Wan Kwok - February 5, 2024 4 MR. MORIARTY: Good afternoon, Your Honor. James Moriarty, from Zeisler & Zeisler, also for Ms. Guo in the adversary proceeding. THE COURT: Good afternoon. MS. MAYHEW: Good afternoon, Your Honor. Kristin Mayhew, Pullman & Comley, on behalf of the Official Committee of Unsecured Creditors, appearing in the main case. THE COURT: Good afternoon. MR. SARNOFF: Good afternoon, Your Honor. Stuart Sarnoff, O'Melveny & Myers, on behalf of Creditor PAX, in the main case. THE COURT: Good afternoon. MR. BRADLEY: Good afternoon, Your Honor. Trevor Bradley, of Robinson & Cole, also for PAX. THE COURT: We couldn't hear you, Mr. Bradley. Could you just -- MR. BRADLEY: I apologize. THE COURT: That's okay. MR. BRADLEY: Trevor Bradley of Robinson & Cole for PAX. THE COURT: Okay. Thank you. All right. On the calendar then in the main case is a motion filed by the Trustee in connection with administrative issues related to the filing of upcoming

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Ho Wan Kwok - February 5, 2024 5 adversary proceedings. And then in the adversary proceeding is the motion for summary judgment. So I would assume we're starting with the main case motion, Trustee Despins? MR. DESPINS: Yes, Your Honor. THE COURT: Okay. And, Mr. Linsey, I saw you stand. Are you going to be arguing that? MR. LINSEY: I will, Your Honor. THE COURT: Okay. Go right ahead. MR. LINSEY: Thank you. May I approach? THE COURT: Yes, you may. Thank you. MR. LINSEY: Thank you, Your Honor. The Chapter 11 Trustee has filed a motion requesting that the Court approve of procedures that would govern the imminent avoidance actions which are expected to be filed. At this point, the Trustee expects to file in excess of 100 of these avoidance actions by February 15th. We have noted that in other cases courts in this circuit have approved litigation procedures that are meant to affect an orderly administration and procedural flow of these cases. We have tried to, you know, only include what we need I think in order for thing to move forward in an

Ho Wan Kwok - February 5, 2024 6 orderly fashion, so I will just briefly outline what those procedures are. First, the avoidance procedures deal with the confidentiality provisions of the protective order, and with respect to the FDIC, the protective order addendum. Under the protective order and the protective order addendum, producing parties have marked certain documents confidential and highly confidential. That includes many of the bank records from which the transfers in the avoidance procedures were discovered, such that arguably these complaints and schedules attached to the complaints contain confidential and highly confidential information. So what the avoidance procedures do is they provide that notwithstanding anything in the protective order and the protective order addendum, provided that a defendant and the defendant's counsel sign the agreements that are attached to the addendum and the protective order becoming bound by them, the Trustee is permitted to provide those complaints to the defendant and the defendant's counsel. And I note that as to the defendant as well, because under the highly confidential provisions of the protective order, typically those would be attorney's eyes only. Case 22-50073 Doc 2586 Filed 02/07/24 Entered 02/07/24 21:30:54 Page 6 of 57

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Ho Wan Kwok - February 5, 2024 7 In light of the limited information in these, in these complaints, which is generally transfers that went to the defendant in the complaint, we believe it's appropriate that the defendant should be able to see those. And in the interest of, you know, maximum notice, in addition to the notice procedures that were provided under the order expediting the hearing, the Trustee did send a copy of the motion by last Tuesday to anyone who produced discovery to the Trustee under the Rule 2004 order so that -- so that they had notice of these. So basically, anybody who had marked something confidential or highly-confidential has notice of what this -- what this sort of tweak is in that regard. Earlier today the Trustee filed a revised, proposed order on granting the motion that adds a provision, at the request of the FDIC, where -- which, in light of some of the statutory obligations it has governing privacy, wanted to see some additional language. And the reason that we had that conversation with the -- with the FDIC is the FDIC is one of those parties that we sent the -- we sent the motion to. What the -- what the confidentiality provisions will also do is they will relieve us and the Court of the obligation of having to file separate motions to seal in each and every one of these adversary proceedings, which

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| | Ho Wan Kwok - February 5, 2024 8 | |----|---------------------------------------------------------------| | 1 | would be a burden to the Trustee and to the Court | | 2 | essentially to hear the same motion in excess of 100 times | | 3 | to decide the same thing. | | 4 | Does Your Honor have a question? | | 5 | THE COURT: That motion to seal, that issue, | | 6 | you're only talking about the complaint though? | | 7 | MR. LINSEY: Correct, Your Honor. This is limited | | 8 | to the complaint -- | | 9 | THE COURT: Okay. | | 10 | MR. LINSEY: -- and we will -- | | 11 | THE COURT: That's what I read. That's my | | 12 | understanding. | | 13 | That if there was some other motions or something | | 14 | that needed to be filed that had seal issues, that might | | 15 | need to be sealed, you'd be filing a motion then with that? | | 16 | MR. LINSEY: Absolutely, Your Honor. | | 17 | And it may be that there are issues that emerge | | 18 | that are common to many of these avoidance proceedings. In | | 19 | that case, there is a procedure under the avoidance | | 20 | procedures for the Trustee to file a supplemental motion | | 21 | that would affect all of the avoidance procedures on notice | | 22 | to all of the avoidance defendants. | | 23 | But right here, what we're really limited to is, | | 24 | as far as the confidentiality and sealing goes, is the | | 25 | initial complaint. | | | |

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Ho Wan Kwok - February 5, 2024 9 Beyond that, the avoidance procedures provide additional time for the defendant to respond to the complaint, 60 days from the completion of service, and provide the Trustee 60 days to respond to any motion filed under 12(b) seeking to dismiss a complaint. Again, those provisions are largely in light of the volume of complaints that are expected to be filed. Further, the avoidance procedures provide that the clerk and the Court will not automatically schedule initial case conferences for each and every one of these avoidance proceedings. We didn't think it would be productive to have in excess of 100 pretrial conferences that, in light of the timing of the filing of these cases, would probably be bunched up a couple of months from now. Rather, we have a procedure whereby triggering from the response deadline for the defendant to respond to the complaint, the Trustee and the defendant will conference regarding the appropriate scheduling order, submit it to the Court for the Court's consideration, or if the parties cannot agree on a scheduling order, we'll request a pretrial conference. The defendant, of course, or the Trustee, any party, is free to request a pretrial conference at any time. And, you know, something else I'll point out is, any defendant that upon the filing of an adversary

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Ho Wan Kwok - February 5, 2024 10 proceeding feels that the avoidance procedures are not appropriate to that defendant, has the right to seek amendment of the procedures as to that amendment -- as to that defendant after the filing. So no one's locked into this. But, you know, at the same time, the procedures that I've outlined, we don't view them as burdensome to the defendants. If any of the defendants coming in disagree, they can -- they can bring that issue to the Court's attention at the appropriate time. So with that, I believe that's all I have unless Your Honor has any questions. THE COURT: I do have a few questions, but not very many. MR. LINSEY: Sure. THE COURT: The FDIC is only involved on behalf of one bank is my recollection in that protective -- that amendment to the protective order. It's not the FDIC as a whole, right? They've only filed an appearance. And that stipulated addendum is only with regard to a bank that begins with an S. MR. LINSEY: Signature Bank, Your Honor. THE COURT: Okay. Right? Is that correct? MR. LINSEY: That's correct. However, there were a number of accounts at

Ho Wan Kwok - February 5, 2024 11 Signature Bank. And I would call them particularly fertile accounts as far as avoidable transfers go. So I think that -- THE COURT: So you're saying there'll be more than one adversary proceeding in which a bank account at Signature Bank will be the subject of a proceeding or -- MR. LINSEY: Off the top of my head, I would estimate dozens. THE COURT: Okay. All right. I just want to make sure. They didn't file any other appearance that I'm aware of or filing other documents other than on behalf of Signature Bank? MR. LINSEY: Correct, Your Honor. I did speak with them several times after they got a copy of the motion last week and we were able to work out agreed upon language prior to the objection deadline. THE COURT: Okay. Thank you. Now I understand. I saw that you had a redline version of the order and that the 1974 Privacy Act language was at the request of the FDIC on -- as the receiver of the bank? MR. LINSEY: That's correct, Your Honor. THE COURT: Okay. MR. LINSEY: That applies to obligations that they have with respect to privacy that are -- that can be modified, but require an order from the Court with this

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Ho Wan Kwok - February 5, 2024 12 language, so that's why we've consented to put that language in. THE COURT: That's fine. Okay. With regard to the avoidance action procedures notice that you're going to file in every adversary proceeding -- MR. LINSEY: Yes, Your Honor. THE COURT: -- it says that it will be served -- that notice will be served like a summons and complaint with -- it doesn't refer to 7004, but you don't need to. And that's fine. I think the anticipation is, but it doesn't say it clearly, I don't -- and I don't think you need to change it, I'm just asking you this question, that the notice that you're going to file in each adversary proceeding, if this motion is granted, would be served along with the summons and complaint. Is that your anticipation? Because, to me, that seems to make the most sense. MR. LINSEY: That's correct, Your Honor. THE COURT: Okay. All right. Then I read -- MR. LINSEY: And I'll say it was a little vague on that and that was because we did not have the -- we did not know the timing of when the Court would consider this. THE COURT: Sure. MR. LINSEY: So just in case we were to have filed

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Ho Wan Kwok - February 5, 2024 13 and served previously -- THE COURT: Well, you might need to -- MR. LINSEY: -- but that is -- THE COURT: -- change this order a little bit anyways -- MR. LINSEY: Sure. THE COURT: -- so if you want to add to that paragraph B the Trustee shall serve a copy of the avoidance notice with the summons and complaint, you can do that too. So I -- when you filed this motion, or when the motion was filed, I talked with the clerk of the court obviously because the clerk of the court is going to need to address all these issues. Right? MR. LINSEY: Sure. THE COURT: And the -- I don't think we can do what you're asking in C, but I think there's a way to accomplish the same thing. Okay? MR. LINSEY: Okay. THE COURT: Because the problem will be if you file a -- I understand that it's only motions that, or at least I believe I understand, that it's only motions -- you would only file motions in the main case that have common issues in a number of adversary proceedings. Correct? That's the thought behind this paragraph C? MR. LINSEY: Correct, Your Honor.

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Ho Wan Kwok - February 5, 2024 14 THE COURT: So the problem with that is, from the clerk's office perspective, and I understand it, is that it'll provide -- it can provide problems if there are any appeals because the document won't be in the adversary proceeding. So I suggested, and the clerk of the court thought it would work, and I think it will, I don't -- if you had -- this is -- this was the example I came up with. It doesn't mean that this is an example of what you would actually file, but that you're two or three months down the road. You've got, I don't know, 40 adversary proceedings in which you're agreeing to further extend the response date to the defendants, right, in those 40 out of 100 the way that it could be accomplished so you only have one document, even though it's going to have -- because you're still going to be filing a notice in each of the adversary proceedings, so you still were going to be filing a main document, at least this is the way I read it, a document in the main case and then notices of that document in each adversary proceeding? MR. LINSEY: I don't -- I don't believe that was the thought. The thought was that the -- by email, any counsel would be served or any defendant would be served, under 7004, if they weren't -- if they weren't appearing, a

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Ho Wan Kwok - February 5, 2024 15 certificate of service would be filed in the main case. The thought behind this, and obviously we're absolutely flexible about how to do that, how to do this, was, one, the burden to the Trustee of filing north of 100 kind of the same motion over and over again. And then the burden to the Court -- THE COURT: Yeah. I don't want you to have to do that -- MR. LINSEY: -- of having -- THE COURT: -- except you're going to -- MR. LINSEY: Yeah. THE COURT: -- have to do it in a certain way I think -- MR. LINSEY: Sure. THE COURT: -- a different way -- MR. LINSEY: Okay. THE COURT: -- than the main case. I think what you could do, and the clerk of the court believes that there's no problem with this -- MR. LINSEY: Okay. THE COURT: -- from CM/ECF perspective, okay, that you would just -- if it's a motion on consent to extend the time to reply, further extend the time to reply, you create one motion with all the captions in it of the cases and you just -- you're going to have to file it in all 40 of them,

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Ho Wan Kwok - February 5, 2024 16 but it's one document. MR. LINSEY: Okay. THE COURT: It's not -- it's not 40 documents. Okay? I think you're still going to have to file it in every one of them though. Because if there is an appeal, it's not -- it has to be -- that docket has to be correct and accurate, right? MR. LINSEY: Understood, Your Honor. THE COURT: And the district court, I'm not going to have the district court saying, well, wait a minute, you've got some notice. Or you don't even have it in the adversary, it's in the main case. You know. That's not how it works, right? So it might be a little burdensome insofar as it would have to be filed on numerous cases, however, it's the same document. You don't have to create 40 documents. MR. LINSEY: Understood, Your Honor. THE COURT: Okay? So I think we can figure out a way. And if you -- and I -- the clerk in the court and I have, we talked about it today. Okay? So I mean, it's not -- if there's any issue after this hearing with regard to that, then the clerk of the court will reach out to you. But I think what the -- C would have to be modified to say that you can absolutely file a motion that's

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| | Ho Wan Kwok - February 5, 2024 17 | |----|----------------------------------------------------------------| | 1 | common to more than one adversary proceeding, such as my | | 2 | example that I gave you, Attorney Linsey. I don't know that | | 3 | that's, you know -- but that it's that you're going to have | | 4 | to file it in the -- you can put all the captions in one | | 5 | document, right? | | 6 | Or maybe, maybe the way we can do it is this too. | | 7 | You list all of them in the motion and it just gets filed. | | 8 | MR. LINSEY: Yeah. | | 9 | THE COURT: But the problem is what caption do you | | 10 | use if you do that? That's part of the problem, right? | | 11 | MR. LINSEY: I would suggest something in the | | 12 | form. Obviously they're not going to be consolidated, but | | 13 | something consolidated, a caption that looks consolidated | | 14 | ish for this particular purpose in light of the fact that -- | | 15 | otherwise there are -- | | 16 | THE COURT: Well, maybe you say -- | | 17 | MR. LINSEY: -- going to be 20 pages of caption. | | 18 | Yeah. | | 19 | THE COURT: I understand that too. | | 20 | So, you know, maybe what we have to figure out is | | 21 | -- you know, the problem is you're not going to be listing | | 22 | the plaintiff and the defendant in -- if you don't have a | | 23 | caption that says plaintiff and defendant, right? | | 24 | So maybe you have to say plaintiff, and then | | 25 | defendants in avoidance actions, and then you list the | | | |

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Ho Wan Kwok - February 5, 2024 18 defendants in the pleading. However you're going to do it -- MR. LINSEY: Sure. THE COURT: -- we'll talk to the clerk of the court again to make sure we're all on the same page, but it can't be filed in the main case, unfortunately. It just can't. It's just not going to work. MR. LINSEY: So it won't be filed in the main case. That was what I wanted to clarify. THE COURT: Yeah. MR. LINSEY: Okay. Understood. THE COURT: It cannot be filed in the main case. It's got to be filed in an -- in the adversary proceedings. MR. LINSEY: Okay. THE COURT: It won't work. The transfer of documents from the clerk's office to the clerk's office presents a number -- if it was on appeal, presents a number of logistical issues anyway. And that would add to problems that we don't want to have. Okay? MR. LINSEY: Understood, Your Honor. THE COURT: So we'll figure out how to do that, whether it's you put all the captions in or you -- we agree that -- I mean, I could agree in this order, subject to talking to the clerk of the court again, Attorney Linsey, so just to let you know, that you had some kind of generic

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Ho Wan Kwok - February 5, 2024 19 caption, but you've got to -- it's got to be listed in the pleading, every adversary number at least, otherwise it's not going to make any sense. MR. LINSEY: Sure. THE COURT: All right. So we'll have to figure that out. All right. With regard to D, does there need to be, and maybe there doesn't, okay, but I'm going to ask the question, does there need to be any reference to the privileges order? We've got the protective order and the addendum for the sealing. MR. LINSEY: They're just not, Your Honor. There's not any privileged information. THE COURT: Okay. Okay. Good. I just am asking the question. Then I think you need to change the language in D to be similar to the language that the FDIC asked for, which just says this order is acting as an order granting the motion to seal all the complaints when necessary. Right? Because otherwise there isn't going to be an order that says you -- you have the right to seal. Right? MR. LINSEY: Okay. THE COURT: You're not going to file a motion because you already filed the motion. This is the

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Ho Wan Kwok - February 5, 2024 20 procedure. What the FDIC language said -- something about this order constitutes an order of the Court, you know, and so I think you'd have to say this order constitutes an order of the Court allowing for the avoidance complaint to be filed under seal when it's -- it contains information -- it or its exhibits contains information that has been designated highly-confidential or confidential under the terms of the protective order and the protective order addendum. Okay? MR. LINSEY: Yes, Your Honor. And just to set the Court's expectations, this is really only going to apply to the schedules that are attached that itemize specific transfers. We're not -- we're not expecting the contents of the complaint. THE COURT: Okay. MR. LINSEY: It's part of the complaint in that they're schedules -- THE COURT: Okay. MR. LINSEY: -- that are included in the complaint. THE COURT: That's fine. MR. LINSEY: But the provisions of the complaint will be out there. And those will be filed. So basically what we'll be doing with sealed ones is filing, filing

Ho Wan Kwok - February 5, 2024 21 complaints with redacted schedules, and then -- and then filing the unredacted schedules with the complaints under seal. THE COURT: Okay. And then it says service of a redacted avoidance complaint shall constitute sufficient service of a complaint as required. You mean after service has been made, right? I mean, you're not saying that this order, just because you file a redacted avoidance complaint, is service? MR. LINSEY: Correct, Your Honor. The issue here is we don't want an argument later that, well, because you didn't initially send us the unredacted, because we can't give them the unredacted complaint until they sign the exhibit. THE COURT: Fine. That's fine. MR. LINSEY: Yeah. THE COURT: Okay. That's fine. Thank you. I just wanted to make sure that I understood that. MR. LINSEY: Yes, Your Honor. THE COURT: Then the only other question I had, you've already -- you did address. I didn't realize it until after I read it more. The periods, you know, the Trustee should have 60 days to respond to a motion to dismiss, but you have below that any party can seek to change those time periods. So

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Ho Wan Kwok - February 5, 2024 22 that's -- that's in there. So that's fine. At some point, I don't know when that will be, but H talks about -- I completely agree, no pretrial conferences will be scheduled. The summons won't have a pretrial date. There's no problem with that. At some point, I guess, you'll have to -- we can talk about it in hearings if they come up, you know, we'll have to know somewhere where things are headed I suppose in these adversaries at some point. I don't know, there could be several groupings of adversaries depending upon what's going on, right? MR. LINSEY: I expect there will be organizational and administrative issues to address with the Court after these are filed, and I think that the specifics of those will come into more -- into greater relief, again, after they're filed. THE COURT: All right. So that's the only questions or concerns that I see. And the major one being the filing in the main case at C. MR. LINSEY: Understood, Your Honor. THE COURT: And so, I will talk to the -- I'll talk to the clerk of the court again, but -- and you can think about it if you want in the meantime, but I think -- I don't know how it's going to be, whether it's the caption issue or the listing, but we have to figure that out.

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Ho Wan Kwok - February 5, 2024 23 MR. LINSEY: Your Honor, that's absolutely acceptable to the Trustee. Would Your Honor like us to file a revised order or -- THE COURT: Well, what's acceptable, because I said two different things? So I just want to make sure I understand. MR. LINSEY: The combined caption and the filing in the individual cases. THE COURT: So you're going to put all of the adversary captions in the -- in the thing -- in the motion, or are you just going to put one that says -- I don't know what it's going to say. See -- MR. LINSEY: A combined caption that says the Trustee against the defendants in the -- in the avoidance actions and refers to all of the adversary proceeding numbers. THE COURT: That is applicable to that motion. And then you're still going to have to file it in every one of those, unfortunately. MR. LINSEY: Understood, Your Honor. THE COURT: Okay. All right. That's fine. I think that's fine, subject to what the clerk of the court says. He could tell me I'm wrong. So if there's any problems, someone will reach out to you. Okay? MR. LINSEY: So then will the -- will the Court

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Ho Wan Kwok - February 5, 2024 24 amend the order or would you like us to file an amended order? THE COURT: Well, I would like you to not do anything yet until we talk to the clerk of the court and then he'll communicate with you, okay -- MR. LINSEY: Thank you, Your Honor. THE COURT: -- as to what's the best thing to do. Because I wanted to hear what your thoughts were on it first, right? I don't know. I could have been reading it wrong. I just wanted to make sure I understood what you were trying -- I completely understand what you're trying to accomplish. I just want to make sure the order does that properly and the process is acceptable to the clerk of the court. Okay? MR. LINSEY: That's fine, Your Honor. Thank you. THE COURT: You're welcome. Attorney Claiborn just stood up. So I would assume you would like to be heard? MS. CLAIBORN: I just had a brief comment to make, Your Honor. THE COURT: Sure. MS. CLAIBORN: In two parts. One, is to say that the U.S. Trustee does not oppose any of the relief that's being requested in the

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Ho Wan Kwok - February 5, 2024 25 Trustee's motion. And the second part is to assert that the U.S. Trustee does have statutory rights under Section 107. And to the extent that the U.S. Trustee seeks access to the sealed documents, that will be the way it goes. I just want to make sure that no one here understood this to be a waiver of any of those rights. MR. LINSEY: We do not. THE COURT: Okay. I would assume that that was correct, but that's good to make -- MS. CLAIBORN: Better to have said it out loud so everyone's on the same page. THE COURT: That is correct. It's better to make it known on the record. All right. Does anyone else wish to be heard in connection with the Trustee's motion for procedures applicable to avoidance claim adversary proceedings? (No response.) THE COURT: All right. Hearing no response, the -- I have as I said, reviewed your motion, reviewed the proposed order. I understand why you're seeking to do this. I think it's appropriate under the circumstances that you've described in the motion and during this hearing, so the motion is going to be granted, going to be granted. The only issue is that issue about paragraph C.

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Ho Wan Kwok - February 5, 2024 26 So someone will reach out to you and let you know whether or not you need to submit a revised propose order on that issue or if it will just be taken care of. I don't know the answer to that yet. Okay? MR. LINSEY: Thank you, Your Honor. THE COURT: All right. Thank you. So that motion is granted. All right. Then the second matter on the calendar is the motion for summary judgment filed on behalf of the Trustee in adversary 23-5008. MR. LINSEY: Thank you, Your Honor. Again, Patrick Linsey for the Trustee. This adversary proceeding involves a familiar fact pattern in this case, but also an interesting kind of philosophical question, which is what does it really mean to own an asset? In this case, we have a debtor who funded the purchase of a valuable asset, a Bombardier private jet, originally purchase by the debtor for \$37 million. The debtor caused the asset to be transferred to shell companies owned by his subordinates and family members. In this case, first, the debtor's family chef, Hung Chung Wong, and then Mei Guo, the debtor's daughter. After the debtor transferred the asset to insider-held shell companies, the debtor continued to fund the asset

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| | Ho Wan Kwok - February 5, 2024 27 | |----|---------------------------------------------------------------| | 1 | and the debtor continued to use the asset. The debtor also | | 2 | spent at least \$5 million to maintain and operate the asset. | | 3 | And finally, the debtor's insider, who purportedly | | 4 | owns the shell company who last owned the asset, has no | | 5 | plausible explanation for how she came to own it. | | 6 | Obviously, those are -- that's a fact pattern that we've | | 7 | seen time and again in this case, particularly with respect | | 8 | to this defendant as regards the Lady May. | | 9 | But worse, in this case, we have the debtor | | 10 | orchestrating the sale of the asset during the bankruptcy | | 11 | without notice to the Court, without notice to the estate, | | 12 | that was accomplished through the debtor's alter ego, Golden | | 13 | Spring. Your Honor will recall that Golden Spring | | 14 | participated in this case at the outset as the proposed DIP | | 15 | lender. And then once the Trustee was appointed, | | 16 | disappeared. | | 17 | Following the sale, the debtor, again through | | 18 | Golden Spring, first tried to send the sale proceeds to the | | 19 | debtor's son in Kazakhstan and then the proceeds were sent | | 20 | overseas to London. All of this is shown by evidence that | | 21 | is wholly undisputed. | | 22 | The defendant's burden, under those circumstances, | | 23 | are to come forward with evidence to show genuine issues of | | 24 | material fact and the defendant has failed to do so. | | 25 | Rather, in this adversary proceeding, the defendant has | | | |

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| | Ho Wan Kwok - February 5, 2024 28 | |----|---------------------------------------------------------------| | 1 | consistently invoked the Fifth Amendment. | | 2 | Now, that is the defendant's right. As I'll | | 3 | discuss later, the Trustee is not seeking a negative | | 4 | inference on that basis, but the defendant's decision does | | 5 | have consequences. | | 6 | And one of those consequences is that the | | 7 | defendant may not -- may not avoid having to testify at a | | 8 | deposition, may not avoid producing evidence in discovery, | | 9 | and then come forward with what is effectively testimony and | | 10 | evidence in seeking to oppose the merits in the action. | | 11 | Now, I'll briefly outline the facts here. | | 12 | And I'm going to be a little bit vague because | | 13 | some of the -- some of the exhibits at issue were designated | | 14 | highly-confidential. And while I believe everyone in this | | 15 | courtroom -- | | 16 | MR. DESPINS: No. | | 17 | MR. LINSEY: Actually, PAX and the -- PAX and the | | 18 | committee have signed the Exhibit A to the protective order. | | 19 | I don't know that everybody in the courtroom has signed | | 20 | Exhibit A to the protective order. | | 21 | MR. DESPINS: No. | | 22 | MR. LINSEY: So it's up to Your Honor whether Your | | 23 | Honor wants to close the courtroom to people who have signed | | 24 | Exhibit A of the protective order and agreed to be bound by | | 25 | it. I can try to be a little bit vague, but some of the -- | | | |

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| | Ho Wan Kwok - February 5, 2024 29 | |----|-------------------------------------------------------------| | 1 | THE COURT: Why don't you try being vague first | | 2 | and then we'll see how it goes. | | 3 | MR. LINSEY: Okay. The debtor purchased the | | 4 | aircraft in September of 2009 for just over \$37 million | | 5 | through Headwind Group for his private use. | | 6 | In 2012, the debtor refinanced the Bombardier. He | | 7 | represented himself in the course of that refinancing to be | | 8 | the beneficial owner of the aircraft and he executed loan | | 9 | documents, including a personal guarantee of the financing | | 10 | operations. | | 11 | Between 2012 and 2005, the debtor repeatedly | | 12 | declared to the lender that the Headwind Group was a single | | 13 | person -- single-purpose entity -- | | 14 | Yes, Your Honor. | | 15 | THE COURT: Can you tell me the years again. I'm | | 16 | sorry. I didn't hear what you said. You said I think | | 17 | between 2005, did you just say? | | 18 | MR. LINSEY: I'm sorry. I said 2012 and 2015. | | 19 | THE COURT: I'm sorry. | | 20 | MR. LINSEY: Did I say 2000 -- | | 21 | THE COURT: That was my fault. | | 22 | MR. LINSEY: I think I misspoke, Your Honor. | | 23 | THE COURT: Okay. Okay. | | 24 | MR. LINSEY: Between 2012 and 2015, the debtor | | 25 | repeatedly declared to the lender that Headwind was a | | | |

Ho Wan Kwok - February 5, 2024 30 single-purpose entity that didn't produce financial statements, and it's only -- it's only purpose was to hold the aircraft. In July of 2015, the debtor caused Headwind Group to engage ACASS Canada, which is a company that operates and maintains aircraft. The debtor executed an aircraft managing agreement for Headwind with ACASS. ACASS is going to be a name that comes up a lot in this story. Now, in that initial aircraft management agreement and in many other documents, the notice address that was listed was that for Golden Spring, which is the debtor's alter ego. Between March and July of 2016, Headwind transferred the aircraft to Anton Development, and there's no evidence of any consideration being paid for that transfer. At the time of the transfer, Anton Development was -- was nominally owned by the -- by Hung Chung Wong, who the debtor's wife has testified was the debtor's family chef. During the same time frame, in May of 2016, the debtor directed transfers in order to repay loan obligations. So not only was Anton Development getting the aircraft transferred, they were -- the loan obligations were also being paid off. The following month, if that weren't a sweet

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| | Ho Wan Kwok - February 5, 2024 31 | |----|--------------------------------------------------------------| | 1 | enough deal, the debtor caused to be transferred \$1.16 | | 2 | million to Anton Development from a Headwind account. | | 3 | Thereafter, in June of 2017, Mr. Hung, that's Hung | | 4 | Chung Wong, surrendered his equity in Anton Development to | | 5 | the defendant for no consideration. That fact is admitted | | 6 | in the 56(a)(2) statement at No. 13. | | 7 | That was on the same date that the defendant | | 8 | received nominal ownership of Eastern Profit Corporation | | 9 | Limited from Mr. Hung, and that is a -- that's an entity | | 10 | that Judge Liman, in his decision, found to be the debtor's | | 11 | alter ego. | | 12 | When the Trustee asked the debtor about the | | 13 | Bombardier at the debtor's Rule 2004 obligation, or rather | | 14 | examination deposition, the debtor invoked the Fifth | | 15 | Amendment. | | 16 | Following the petition date, the debtor caused the | | 17 | Bombardier to be sold, without notice to the Court or to the | | 18 | estate, and that sale was orchestrated through the debtor's | | 19 | alter ego Golden Spring. The Trustee has deposed Jetlaw, | | 20 | which was counsel for the seller in this transaction. | | 21 | Kent Jackson of Jetlaw testified that it was clear | | 22 | to him that Max Krasner, Director of Operations for Golden | | 23 | Spring, was the -- was the contact for, quote/unquote, "the | | 24 | principal." The principal is known to be one of the | | 25 | debtor's aliases. In fact, reference to the flight -- the | | | |

Ho Wan Kwok - February 5, 2024 32 ACASS flight logs shows that the debtor was described as the principal. And if that weren't already clear, the supplemental declaration that ACASS provided reflects that any user other than -- other than the debtor was redacted from those flight logs. So again, it's clear that the debtor was the one being referred to as the principal. ACASS sent a letter of intent to purchase the Bombardier to Whitecroft. That letter of intent was directed to the attention of Golden Spring, listed Max Krasner and Yvette Wang, using Golden Spring email addresses. Around the time that the -- that the aircraft was sold, this is in August of 2022, ACASS wired \$135,000 to Golden Spring, which transaction was booked as a, quote/unquote, "refund" to Whitecroft. The Bombardier was sold for \$13.5 million pursuant to an aircraft purchase agreement. The counterparty to that agreement was ACASS USA, which is an affiliate of ACASS Canada. And correspondence reflects that Max Krasner emailed with ACASS about where to send the sale proceeds. Originally Mr. Krasner asked the sale proceeds be wired for the benefit of the debtor's son, Kwong Guo, at a bank in Kazakhstan. Case 22-50073 Doc 2586 Filed 02/07/24 Entered 02/07/24 21:30:54 Page 32 of 57

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Ho Wan Kwok - February 5, 2024 33 When that didn't work, the sale proceeds were then directed overseas to JNFX, a financial institution that deals in foreign exchange. Your Honor is aware of the ins and outs of those events from the preliminary injunction motion that Your Honor already heard. I know the Court is at this point well familiar with the legal standards applicable to summary judgment, so I'll just very quickly go through that summary judgment is appropriate when there's no genuine issue of material facts. When the moving party's evidence demonstrates the absence of any genuine issue of material fact, the burden shifts to the defendant to go beyond the pleadings and designate specific facts to show that there's a genuine issue for trial, and here that's not been done. One thing that's been an issue throughout this case and, in fact, even throughout this proceeding and, in fact, even before this adversary proceeding was filed, is the inability of the Trustee to get any evidence whatsoever from the defendant regarding -- regarding Whitecroft and the aircraft. Well prior to this adversary proceeding being filed in August of 2022, the Trustee served a Rule 2004 subpoena on the defendant. That subpoena included Whitecroft under the subject matter, requested documents related to any transactions that Whitecroft was engaged in.

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Ho Wan Kwok - February 5, 2024 34 Your Honor recalls the proceedings that occurred, the compliance and contempt proceedings, regarding that subpoena, and yet the defendant never provided responsive documents that would have shown the existence of the aircraft, indeed, before the sale had closed. After the Trustee filed this adversary proceeding, the defendant invoked the Fifth Amendment and has invoked the Fifth Amendment throughout this adversary proceeding. The Trustee did seek documents from Whitecroft and Anton Development, and ultimately Whitecroft and Anton Development were compelled to comply with the Trustee's subpoenas. However, even then, the Trustee believes that the Trustee has not received all documents. The documents came late. And at the 30(b)(6) deposition of Whitecroft, the defendant appeared as Whitecroft's corporate representative and then invoked the Fifth Amendment in response to practically every substantive question that was posed. Corporations do not have a Fifth Amendment privilege. The defendant has argued in papers, including her summary judgment opposition, that the defendant has the individual right under the Fifth Amendment. That misses the point. The law under the -- in the Second Circuit appears in numerous cases that corporations are obligated to produce

Ho Wan Kwok - February 5, 2024 35 a corporate representative who will not invoke the Fifth Amendment. And those cases are cited in the Trustee's reply to the 56(a)(2) statement at -- there's *SEC v. CKB168 Holdings*, which is 2014 U.S. District, Lexus 2004, 204380. That cites numerous other cases that are also cited in the 56(a)(2) reply. Here, we don't have a corporation who designated a representative who showed up and then perhaps unexpectedly invoked the Fifth Amendment. We have a corporate representative who showed up at the deposition for the purpose of invoking the Fifth Amendment with respect to practically every substantive question that was asked. Again, contrary to the debtor's opposition, the Trustee is not requesting at the summary judgment stage that the Court draw an adverse inference. However, the Trustee may point out that the defendant's actions in this adversary proceeding and invocation of the Fifth Amendment do have consequences which include that the defendant may not testify as to -- as to her theory of the case after refusing to do so in discovery. Likewise, citing evidence after the defendant provided a blanket refusal to provide any written discovery in this 2004 -- rather, in this adversary proceeding. Case 22-50073 Doc 2586 Filed 02/07/24 Entered 02/07/24 21:30:54 Page 35 of 57

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Ho Wan Kwok - February 5, 2024 36 The legal standards of the Trustee's substantive claims are not under -- are not in dispute to the Trustee's knowledge. I'm happy to answer any questions about them. Broadly stated, we have two legal claims that involve a lot of overlapping facts. One is under New York Law for beneficial ownership. This is the same legal standard that governed Justice Ostrager's decision regarding the Lady May. The other is a claim for beneficial ownership under British Virgin Islands law, that is, that the defendant was a nominee owner, that her interests was purely nominal, and that she was, the term of art that is used there is, a bare trustee for the beneficial owner who is the defendant. So the same facts reflect both that the debtor beneficially own the Bombardier under New York Beneficial Ownership Law and that the defendant was a bare trustee under BVI law. And if we look at this case through the factors that are considered under New York Beneficial Ownership Law, I think -- I think it becomes quickly obvious how compelling the Trustee's case is. First of all, New York Beneficial Ownership Law will consider who funded the asset. In this case, the debtor financed the purchase of

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| | Ho Wan Kwok - February 5, 2024 37 | |----|--------------------------------------------------------------| | 1 | the asset through Headwind Group. The debtor signed loan | | 2 | obligations with respect to that financing. The debtor | | 3 | personally guaranteed those obligations. Then the debtor | | 4 | paid off the financing when the -- when the aircraft was | | 5 | transferred to Anton Development. | | 6 | Those transfers from -- of the Bombardier to Anton | | 7 | and then to Whitecroft, the surrendering of the equity in | | 8 | Anton Development from Mr. Hung to the defendant, there's no | | 9 | evidence of any -- of any consideration. | | 10 | The defendant has admitted that she did not pay | | 11 | consideration to receive the equity in Anton Development, an | | 12 | entity that at the time owned a very valuable private jet. | | 13 | Number two, who nominally owned the shell company | | 14 | and what was their connection to the debtor? | | 15 | Here, the nominal owners of the shell company is | | 16 | at issue, Anton Development and Whitecroft, or the debtor's | | 17 | family chef, a personal employee of the debtor, and the | | 18 | debtor's daughter, an insider and close family member. | | 19 | Number three, who used and controlled the asset? | | 20 | If we look at the ACASS flight logs, we see that | | 21 | it was the debtor who continued to use and control the asset | | 22 | even after the Bombardier was transferred to Anton | | 23 | Development and then Whitecroft. In fact, the debtor flew | | 24 | on the Bombardier 57 times during that period. | | 25 | In her opposition papers, the defendant argues | | | |

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| | Ho Wan Kwok - February 5, 2024 38 | |----|----------------------------------------------------------------| | 1 | that she used the aircraft too. But if we follow the | | 2 | citation that's listed for that premise, what we see is a | | 3 | reference to the defendant's 2004 testimony that she flew on | | 4 | the aircraft as a child with her family. That does not | | 5 | prove the defendant had any real or beneficial interest in | | 6 | the aircraft, rather, that supports the Trustee's case. | | 7 | We also see that the debtor bragged about his | | 8 | ownership of the aircraft, including in videos posted to | | 9 | social media. In fact, in these videos, he even joked about | | 10 | being -- about claiming to be destitute while being able to | | 11 | enjoy the use of a luxurious private aircraft. | | 12 | We also see who orchestrated the sale of the | | 13 | aircraft, and that was Whitecroft -- that was rather Golden | | 14 | Spring, which by this court's judgment is the debtor's alter | | 15 | ego. | | 16 | Number four, who funded the maintenance and | | 17 | operation of the aircraft? Essentially, who took care of | | 18 | that? | | 19 | Again, the evidence here is undisputed, it was the | | 20 | debtor who funded the aircraft through Golden Spring, the | | 21 | debtor's alter ego. | | 22 | And then lastly, what explanation does the | | 23 | purported shareholder of the shell company have that she, in | | 24 | fact, was the beneficial owner, was the legitimate owner of | | 25 | the aircraft, of the asset? | | | |

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Ho Wan Kwok - February 5, 2024 39 And here we have no explanation whatsoever. These undisputed facts reflect that it was the debtor who enjoyed all of the benefits of ownership of the Bombardier. They also demonstrate that any role that the defendant had with respect to Whitecroft was purely nominal and that the defendant served as nothing more than a bare trustee subject to the debtor's rights as the beneficial owner. And one of the key features that we see under BVI law is that the bare trustee is obligated to the beneficial owner to surrender the asset upon the beneficial owner's demand. That right, that right to obtain the asset, is now property of the estate subject to turnover to the Trustee under Section 542(a). So for that reason, under count one, the Court should order that the Bombardier proceeds in the amount of \$13.5 million be turned over to the Trustee for the benefit of the estate. And to the extent that the defendant turns over any amounts less than \$13.5 million, a judgment should enter with respect to the deficiency. As to count four, which is the BVI claim, I'm speaking specifically with respect to Whitecroft here, the Court should enter that all equity interest in Whitecroft shall be turned over to the Trustee, including all rights of

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Ho Wan Kwok - February 5, 2024 40 corporate control of Whitecroft. I'll briefly discuss the facts applicable to the other BVI shell companies. The evidence is likewise undisputed that the debtor, not the defendant, owns the BVI -- the other BVI shell companies as defined in the complaint. The defendant testified in her Rule 2004 deposition, this was prior to the adversary proceeding being filed, since which time she's invoked the Fifth Amendment, that she transferred companies in 2017 by, quote, "people managing her family fund." At least two of the BVI shell companies were previously nominally owned by the debtor's family chef, that's Whitecroft, as I discussed earlier, and also Rosiaque (ph) Ventures Limited. Corporate registration forms and other documents associated with the BVI shell companies link these shell companies to the debtor. These forms required that the owner of the BVI shell companies provide contact information. They list the debtor's phone number. How do we know that it was the debtor's phone number? Because it's the same number that the debtor wrote down on his application to purchase property at the Sherry- Netherland. The verification forms also list 22 South Bay Road

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Ho Wan Kwok - February 5, 2024 41 as the address. We know that that is an address associated with the debtor in Hong Kong because that property was insured through Leading Shine Limited, which was listed as a related foreign company to the -- on Golden Spring's tax return. We also see an address similar to that address that likewise appears on the application to purchase property at the Sherry-Netherland. Moreover, the -- providing these entities to the defendant as a bare trustee is utterly consistent with the debtor's modus operandi handling his financial affairs and having, you know, shell companies that hold his assets being nominally held by insiders, family members, or people subject to his control. In response to the Trustee's undisputed evidence, the defendant has offered no evidence that she paid any consideration to assume ownership of these entities, nor has she provided any plausible explanation of how she came to nominally own these entities. And again, the explanation here, as with Whitecroft, as with Bombardier, is the obvious one, which is that the debtor -- the defendant was serving as a nominal owner so that the -- so that the debtor could have assets, at the same time have them be insulated from the reach of his creditors.

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| | Ho Wan Kwok - February 5, 2024 | |----|----------------------------------------------------------------| | | 42 | | 1 | In the absence of any facts to oppose summary | | 2 | judgment, the opposition rests largely on evidentiary | | 3 | objections, and all of those objections fail. | | 4 | I'll address them briefly, but I'm happy to answer | | 5 | any specific questions that Your Honor has. | | 6 | I'll also note that as an attachment to the | | 7 | 56(a)(2) reply that the Trustee filed, there is a chart that | | 8 | specifically treats each exhibit to which there was an | | 9 | evidentiary objection and lists the Trustee's responses. | | 10 | First, there are the authentication objections. | | 11 | There were more than 20 authentication objections. | | 12 | From the outset, it bears noting that the standard | | 13 | for authentication of evidence under 901 of the Federal | | 14 | Rules of Evidence is not particularly high. The standard is | | 15 | just that the -- where there is sufficient proof introduced | | 16 | so that a reasonable juror could find in favor of | | 17 | authenticity for identification. | | 18 | And it's notable here, with respect to all of | | 19 | these authenticity objections, the defendant does not claim | | 20 | that any of the exhibits at issue are inauthentic. The | | 21 | defendant simply says that the Trustee failed to adequately | | 22 | authenticate them. | | 23 | So in light of this, and this is a procedure that | | 24 | I suppose is now familiar from Greenwich Land, the defendant | | 25 | went to the producing parties, who produced the evidence at |

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| | Ho Wan Kwok - February 5, 2024 43 | |----|----------------------------------------------------------------| | 1 | issue, obtained authentication declarations that | | 2 | authenticate these exhibits. | | 3 | Those authentication declarations were filed as | | 4 | exhibits with the Trustee's reply papers. So in light of | | 5 | those declarations, you know, the authentication objections, | | 6 | to the extent that they ever had weight, are now muted -- | | 7 | are now mooted. | | 8 | I'll briefly discuss the hearsay objections for | | 9 | the documents at issue. Most of the -- there were, again, | | 10 | in excess of 20 hearsay objections. | | 11 | Most of these objections are resolved by the | | 12 | business records exception to the hearsay rule because the | | 13 | documents were made by a person with knowledge at or near | | 14 | the time of the events in question, were maintained as part | | 15 | of a regular practice of the business, and were kept in the | | 16 | course of regularly conducted activity. | | 17 | Again, those -- those standards are met by the | | 18 | authentication objections, rather, by the authentication | | 19 | declarations that were filed by the Trustee with the | | 20 | Trustee's reply papers. And there are specific citations to | | 21 | those authentication declarations, which also reflect the | | 22 | business records exception applying in the Trustee's | | 23 | 56(a)(2) reply. | | 24 | There are other exceptions to the hearsay rule | | 25 | that apply as well. | | | |

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Ho Wan Kwok - February 5, 2024 44 One example is the debtor's monologs about the experience of flying on the private jet. Those are subject to the present sense exception to the, rather, present sense impression exception to the hearsay prohibition. If you read the content of the debtor's -- the debtor's monologs, he's quite literally describing his experiences as they occur, including the sounds he is hearing, the upholstery he is touching, sometimes the food that he is tasting. The debtor's lengthy monolog in which he talks about buying a -- buying the Bombardier, and jokes about pretending to be penniless, also falls against the statement -- falls under the statement against interest exception to the hearsay rule. First of all, the debtor invoking the Fifth Amendment makes it clear that the debtor is an unavailable witness. And these statements the debtor made are contrary to the declarant's proprietary or pecuniary interest. And I think that's clear from the fact that the debtor's pecuniary interests, as manifested by his conduct throughout this Chapter 11 case, are to have his assets nominally held by family members in order to protect them from his creditors. Finally, I just want to briefly address the defendant's frivolous estoppel argument.

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Ho Wan Kwok - February 5, 2024 45 The defendant claims that the Court, in granting a motion to compel filed by the Trustee, apparently secretly determined the merits of this adversary proceeding in favor of the defendant. This was the motion to compel Whitecroft and Anton Development to comply with the Trustee's subpoenas, the motion to compel, and the Court's order granting it, provided that the defendant must act in her capacity with respect to the entities in order to ensure compliance. The defendant contends that by seeking discovery from these shell companies through their nominal owner, who held herself out as controlling the companies, the Trustee is now precluded from making the very argument that he sought the discovery to support. And the defendant, in making this argument, quite brazenly omits to disclose that at least five times in the motion to compel the Trustee referred to the defendant's interest in the companies at nominal. In fact, the Court's order refers to the defendant's interest in the companies as nominal. Moreover, the defendant's argument in the context of the debtor's shell game is simply a non sequitur. The defendant's role as a nominal director and shareholder of Anton Development and Whitecroft is in no way inconsistent with the Trustee's claims.

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Ho Wan Kwok - February 5, 2024 46 This is at the core of the debtor's shell game, is to have insiders and close family members as nominal shareholders, nominal officers or directors, of entities with the debtor as the beneficial owner. So for the foregoing reasons, under the first count, the Court should determine that the Bombardier proceeds are property of the estate, order that they be turned over within five business days. And to the extent that the proceeds turned over to the Trustee are less than the amount of the Bombardier proceeds, and again that's \$13.5 million, the Court should enter a money judgment against the defendant. On count four, the Court should determine that Whitecroft and the other BVI shell companies are property of the estate, and the Court should order that all equity interests in these companies and rights of corporate control be turned over to the Trustee. And with that, I'm happy to answer any questions the Court may have. THE COURT: I do not have any questions at the moment. MR. LINSEY: Two corrections, Your Honor. First of all, I mixed up my former Soviet Republics. It's Kurdistan, not Kazakhstan. I think there was a West Wing episode where someone messed those up.

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Ho Wan Kwok - February 5, 2024 47 Second, I referred to the defendant as having gotten declarations, it was the Trustee that went and got the declarations after the defendant raised those evidentiary objections. I apologize for misspeaking. And again, I'm happy to answer any questions. THE COURT: When you're talking about the declarations, you mean the -- what were attached to your reply with the authentication of the documents? Is that what you're talking about? MR. LINSEY: Correct, Your Honor. THE COURT: Okay. I don't have any questions at the moment. Thank you. MR. LINSEY: Thank you. Attorney Wernick, are you going to argue or Attorney Moriarty? MS. WERNICK: I will be, Your Honor. THE COURT: Okay. Thank you. MS. WERNICK: Thank you. Thank you, Your Honor. And good afternoon. THE COURT: Good afternoon. MS. WERNICK: I want to start with why we're here this afternoon. And as Attorney Linsey presented, the Trustee filed a motion for summary judgment on the first and fourth

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Ho Wan Kwok - February 5, 2024 48 counterclaims as to the beneficial ownership of the Bombardier and the Bombardier proceeds, together with the entity Whitecroft Shore Limited, as well as a handful of other BVI companies that the Trustee refers to as BVI shell entities in their papers. And when Attorney Linsey came up here, he started with what he presented as a philosophical question as what does it mean to own an asset? And I would respectfully submit to Your Honor that summary judgment is not the appropriate forum to be addressing such philosophical questions. The standard for summary judgment is well known, but I think the most important part of the Court's consideration this afternoon. Summary judgment may only be granted where there is no genuine issue of material fact, and the fact as to which there are no such issues warrant judgment for the moving party as a matter of law. In determining whether a genuine issue of material fact exists, the Court must examine the evidence in the light most favorable to and draw all inferences in favor of the non-movant. And summary judgment is improper if there's any evidence in the record that could reasonably support a verdict for the nonmoving party.

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Ho Wan Kwok - February 5, 2024 49 And if there is evidence in the record from any source from which a reasonable inference in the nonmoving party's favor may be drawn, the moving party has not obtained summary judgment. The Court must draw all reasonable inferences in favor of the nonmoving party and it may not make credibility determinations or waive evidence. Credibility determinations and the weighing of evidence are not appropriate at the summary judgment stage. In this case, and in this posture, all ambiguities must be resolved in favor of the defendant, Ms. Guo, and all inferences must be drawn in favor of Ms. Guo at this stage of the proceeding. And this is critically important because the Trustee makes much of Ms. Guo's purported failure to present affirmative evidence in this case. But courts within this district have denied even unopposed motions for summary judgment where the moving party has failed to its burden. It's the Trustee's burden to present evidence that would prove his claim. But looking at the evidence relied upon by the Trustee, the defendant respectfully submits that he failed to do so here where every reasonable inference must be given the defendant. I want to start where Attorney Linsey ended with

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Ho Wan Kwok - February 5, 2024 50 respect to the BVI companies. The Trustee asserts that the debtor is a beneficial owner of the BVI companies, including Whitecroft, despite acknowledging that each of the BVI companies identify Ms. Guo as their sole owner. And in order to ask the Court to make this leap, the Trustee relies on a smattering of evidence that don't add up to the inference that the Trustee's asking Your Honor to draw. By merely referring to an address on a verification page that undisputably indicates that Ms. Guo is the owner of these entities, the Trustee asks the Court, because that same or similar address appeared on other papers relating to other entities, concludes that these companies must be associated with the debtor. That is not a reasonable inference to draw under this circumstance and do not -- and does not allow the Court to draw the conclusion that the BVI companies referred to in the pleading are beneficially owned by the debtor. The same is true with respect to Whitecroft, where the evidence is even stronger, as it's undisputed that Ms. Guo is and always was the sole member and shareholder of Whitecroft, signed agreements relating to the entity, and has been identified by numerous law firms as the owner of Whitecroft.

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Ho Wan Kwok - February 5, 2024 51 With respect to the Bombardier itself, the Trustee relies upon affidavits that were not submitted in connection with his initial moving papers on summary judgment, and only provided on reply in connection with a statement, or apply to a local Rule 56(a)(2) statement, which I understand not to be called for under the local rules and to not be considered by the Court. With respect to the Bombardier itself, the Trustee also asks the Court to make improper leaps and inferences based on facts such as that Mr. Krasner was somehow associated with the sale of the plane and, therefore, could have only been working for Golden Spring as opposed to Whitecroft. It's undisputed that Whitecroft was the record title owner of the plane dating back to 2018. And in this case, drawing all reasonable -- all reasonable inferences in favor of Ms. Guo, summary judgment cannot be entered. And with that, I'll rely on papers (indiscernible). THE COURT: Okay. Thank you. I don't have any questions at the moment. Thank you. MS. WERNICK: All right. Thank you, Your Honor. MR. LINSEY: Can we have a few seconds, Your Honor? THE COURT: Yes, you may.

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Ho Wan Kwok - February 5, 2024 52 MR. LINSEY: Thank you. (Pause.) MR. LINSEY: Just a couple of points, Your Honor. First of all, the law is clear that we're -- the Trustee has made his case. On the basis of facts under summary judgment, under *Celotex*, and other case law, it is the defendant's obligation to affirmatively come forward with facts. The defendant has failed to do so. Therefore, the cases cited by the defendant with respect to unopposed motions for summary judgment do not apply. Briefly, as to Mr. Krasner, we know that Mr. Krasner was working for Golden Spring because Mr. Krasner identified himself as the Director of Operations for Golden Spring. Mr. Jackson of Jetlaw specifically testified to that. It's also seen in documentary evidence that we obtained from Jetlaw. I'll also just refer to something that the defendant's -- defense counsel said in passing. Defense counsel referred to letters from law firms. I believe what she's referring to there is two of the exhibits that the -- were attached to the declaration of Mr. Vartan together with the defendant's opposition papers. Those exhibits are discussed in the Trustee's 56(a)(2)

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| | Ho Wan Kwok - February 5, 2024 53 | |----|------------------------------------------------------------------| | 1 | reply. And the Trustee has, as pointed out in that reply, | | 2 | that those exhibits are improper. | | 3 | And the reason that they're improper is that the | | 4 | Trustee sought to ask questions of the defendant as the | | 5 | corporate representative for Whitecroft at the Whitecroft | | 6 | deposition and the defendant invoked the Fifth Amendment as | | 7 | to those specific documents. | | 8 | They may be opinion letters by counsel in the BVI. | | 9 | We don't know exactly what they are. And the reason we | | 10 | don't know exactly what they are is because of exchanges | | 11 | like this. | | 12 | I asked the question we're going to move on to | | 13 | Exhibit 11, please take a look at this document and let me | | 14 | know when you've familiarized yourself. The defendant | | 15 | finished reviewing. | | 16 | Have you seen this document before? Answer, I | | 17 | don't remember. What is this document? Answer, Fifth | | 18 | Amendment. What is Vistra? That was -- Vistra was the | | 19 | signer of one of the letters. Fifth Amendment. What is | | 20 | Vistra Legal BVI Limited? Fifth Amendment. Who signed this | | 21 | document for Vistra Legal BVI Limited? Fifth Amendment. | | 22 | Why was this document created? Fifth Amendment. | | 23 | I will represent to you that Whitecroft produced | | 24 | this document to the Trustee, the plaintiff, in response to | | 25 | the plaintiff's subpoena. From where did Whitecroft obtain | | | |

Ho Wan Kwok - February 5, 2024 54 this document to produce it to the Trustee? Fifth Amendment. That's cited on page 45, that exchange is cited on page 45 of the defendant's, rather, the Trustee's 56(a)(2) reply. Also cited as a similar exchange with respect to the other exhibit. Again, discussed glancingly by defendant's counsel. It is, therefore, wholly improper for the defendant to seek to use that evidence in order to oppose summary judgment. Finally, I'll just point out in closing, the same thing I said in starting, which is that this is -- this is really starting to become -- these cases are almost starting to become echoes of one another. The similarities between this case and the Lady May case are so -- are so close, sometimes they almost look like carbon copies of one another. We have valuable assets that were transferred, funded by the debtor, transferred from the debtor through one of the debtor's subordinates to be nominally held through a shell company by the debtor's family member. We have, notwithstanding the nominal ownership by the shell company ostensibly held by the family member, the debtor continues to use and enjoy the asset. The debtor continues to fund and control the asset rather than the Case 22-50073 Doc 2586 Filed 02/07/24 Entered 02/07/24 21:30:54 Page 54 of 57

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Ho Wan Kwok - February 5, 2024 55 defendant. In light of the case law described, the compelling facts that have been set forth in the Trustee's motion for summary judgment, none of which have been disputed, the Court should enter judgment as requested. Thank you. THE COURT: Thank you. MS. WERNICK: Your Honor, just an extremely brief reply? THE COURT: Certainly. Go right ahead. MS. WERNICK: Thank you. So I want to start with Attorney Linsey's harkening back to the Lady May action. And I think, again, what's most important here is that we're here in connection with a separate proceeding and the Trustee must satisfy his burden with respect to summary judgment in this proceeding. I wanted to point Your Honor's attention to the case *Jones vs. Sampson*, which is from the District of Connecticut, where in footnote one the Court made clear that there are no replies to Rule 56(a)(2) statements and declined to consider such a statement in that case. And I have a Westlaw cite if Your Honor would like. THE COURT: Yes. Did you cite that in your brief? MS. WERNICK: It was -- it was only in response to

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Ho Wan Kwok - February 5, 2024 56 the reply submission -- THE COURT: Okay. All right. MS. WERNICK: -- so we would not have briefing. THE COURT: So, go ahead. Say that again. MS. WERNICK: It's *Jones vs. Sampson*. THE COURT: *Jones*. Right. MS. WERNICK: 2023 Westlaw 1069487. THE COURT: Okay. Thank you. MS. WERNICK: And so with that, we respectfully disagree with Attorney Linsey and the Trustee's position that the Trustee has satisfied its burden with respect to the facts presented here, and the application of the facts to the law do not warrant the entry of summary judgment in this case. THE COURT: Okay. Thank you. All right. All right. Does anyone else wish to be heard in connection with the motion for summary judgment? (No response.) THE COURT: All right. I have -- I did look at the motions prior to today, but I obviously have to go back and look at them again given the presentations made by counsel this afternoon, so I will take the matter, the motion for summary judgment in adversary 23-5008 under advisement. Are there any other matters we need to address

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Ho Wan Kwok - February 5, 2024 57 this afternoon? MR. DESPINS: Not at this time, Your Honor. THE COURT: Okay. Then those are the only matters that -- those are the remaining matters on today's calendar. So thank you all. Court is adjourned. (Proceedings concluded at 2:21 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 February 7, 2024 16 Christine Fiore, CERT