郭文贵破产案 · MOTION · ECF #2993

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, et al., . . (Jointly Administered) . . Courtroom 123 . Brien McMahon Federal Building Debtors. . 915 Lafayette Boulevard . Bridgeport, Connecticut 06604 . . Tuesday, March 5, 2024 . . . . . . . . . . . . . . . 2:03 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Chapter 11 Trustee: Patrick R. Linsey, Esquire NEUBERT PEPE & MONTEITH, P.C. 195 Church Street 13th Floor New Haven, Connecticut 06510 Audio Operator: Electronically recorded Transcription Company: Reliable The Nemours Building 1007 N. Orange Street, Suite 110 Wilmington, Delaware 19801 Telephone: (302)654-8080 Email: gmatthews@reliable-co.com Proceedings recorded by electronic sound recording, transcript produced by transcription service. Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 1 of 34

INDEX MOTIONS: PAGE Matter No. 1: Motion to Compel Banco Popular de Puerto Rico to Comply with Rule 2004 Subpoena Filed by Patrick R. Linsey on behalf of Luc A. Despins, Chapter 11 Trustee. Court's Ruling: 7 Transcriptionist's Certificate 34 Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 2 of 34

3 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 1:08 p.m.) THE DEPUTY: The Bankruptcy Court for the District of Connecticut is now in session after recess. The Honorable Julie Manning is presiding. THE COURT: Good afternoon. Please be seated. All right. We have one matter on the calendar at 1:00 p.m., so I ask the courtroom deputy to please call the calendar. THE DEPUTY: Case Number 22-50073, Ho Wan Kwok. THE COURT: Good afternoon. If we could have appearances for the record, please. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey for the Chapter 11 trustee. THE COURT: Good afternoon. All right. On the calendar today is a motion to compel, Attorney Linsey, and you're the only one in the courtroom, so how are we proceeding on this motion that afternoon? MR. LINSEY: I told several people it expected it would be uninteresting, so I hope I'm correct. But this is a -- I would propose to proceed with the motion. THE COURT: Go right ahead. MR. LINSEY: Thank you. This is a motion to compel concerning a Rule 2004 Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 3 of 34

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 subpoena that was served on Banco Popular in Puerto Rico on December 4th, pursuant to the eighth Rule 2004 motion. Following service of the subpoena, we had email and telephone communications with a representative of Banco Popular, the same person who signed the objection that is an exhibit to the motion to compel. And what we were told is that Banco Popular was unwilling to produce documents without either a court order or account holder consent. In light of the fact that most of the parties that are individuals and entities that are identified as of interest in these subpoenas are associated with the debtor, that consent is not something that has been available throughout discovery proceedings and Banco Popular said that they understood that, that that was their policy, and that they required a court order. We filed the motion, pursuant to the hearing notice. Notice has been given to Banco Popular both, by mail and by email to the individual that I had spoken with there. She acknowledged receipt of the motion, but there's not been any other response. There are sort of finer-point objections in the substance of her objection dealing with scope and things of that nature regarding the subpoena. I'm confident that, as

24 25 we have been able to with the vast majority of financial institutions, once there's an order requiring the document

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 production be made, we will be able to resolve those issues with the financial institution, here, as well. So, with that having been said, unless the Court has any questions, I would ask that the proposed order filed with the motion entered. THE COURT: And Banco Popular has not filed any appearance in the case at this time, have they? MR. LINSEY: They've not, Your Honor. THE COURT: Okay. All right. I have reviewed the motion and it does appear that service of the motion and the notice of hearing was properly made. Attorney Linsey has stated for the record that he's actually spoken to someone at Banco Popular who acknowledged receipt of the motion and you've had other discussions about it in which they've said they need a court order which, you know, over time, is not unusual to hear a banking institution request an order compelling the production of documents in connection with a subpoena; although, sometimes they just produce when the subpoena is issued. I'm not sure quite why that didn't happen in this case, but I -- with the unusual circumstances of this case, I understand why the trustee seeks an order compelling Banco Popular to comply with the subpoena. Now, it says, "in awarding sanctions," but you're

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 not seeking any sanctions at this time, are you? MR. LINSEY: No, Your Honor. I apologize. That can be stricken. THE COURT: Okay. I mean, you might seek sanctions if they don't do something after this order, but in any event -- MR. LINSEY: We're not seeking sanctions at this time and I would not describe it as an unfriendly posture. THE COURT: Okay. So, then I would turn to the courtroom deputy. There's a proposed order? THE DEPUTY: Uh-huh, yes. THE COURT: If you could change the title of the order to just say -- to just delete the words "and awarding sanctions." THE DEPUTY: Okay. THE COURT: And in the first paragraph of the order before the "It is hereby ordered" language -- THE DEPUTY: I'm sorry, one second, Judge. THE COURT: Yeah, take your time. THE DEPUTY: I opened the wrong order. THE COURT: Take your time. THE DEPUTY: Let me go back somewhere else. (Pause) THE DEPUTY: Okay. Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 6 of 34

Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 7 of 34

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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 right before the semicolon, you know, where it says, "as conditioned hereafter," the very last line -- words before "it is hereby." Are we looking at the same order? THE DEPUTY: I think we're not. Let me see. THE COURT: Mine's titled "Order compelling Banco Popular to --" THE DEPUTY: Yes. Okay. That's it. THE COURT: All right. Do you see where I am now? THE DEPUTY: Yes, I do. THE COURT: So after the words "as conditioned hereafter," and then I would say, "and after a hearing held on May 5th, 2024 [sic]." THE DEPUTY: Yes. THE COURT: And then I'm fine with the proposed order the way it is from that point forward, okay. So, Attorney Linsey, for the reasons stated on the record and upon review of the motion, the proposed order, the motion is granted and the proposed order will enter with the minor changes noted on the record. MR. LINSEY: Thank you, Your Honor. THE COURT: Okay. Thank you. Now, I have a few questions, to which I don't know if you would know the answer. You may very well, but given how things evolve in this case, I had a few questions.

8 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: Sure. THE COURT: Oh, I said on the record today's date was May 5th -- THE DEPUTY: Oh, I'm sorry. THE COURT: -- but I meant March, so thank you for the correction. I don't know why I said that, but I'm sure I did. So it is "after a hearing held on March 5th." THE DEPUTY: Okay. THE COURT: So that was my mistake, I'm sorry. Thank you. Then, a couple of things. So, we saw today - we've been in court, but we saw there were motions to stay filed in the main case, in two of the adversary proceedings, and, what, the non-avoidance adversary proceedings. And it doesn't -- I'm not certain if you're moving on an expedited basis or just a regular basis or an ex parte basis, with regard to those motions. Because either they're going to get set for hearing or not, and I would gather that they would be set for a hearing in case someone opposes the relief, but I'm not sure how -- what was the intention. What were your intentions, you or the trustee and others that you're working with, with regard to the motions to stay? I know there was one filed in the main case, as I said, and one in each of the applicable adversary Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 8 of 34

9 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. MR. LINSEY: Yes, Your Honor. It's a fair question. Given that we're not in touch with all the parties in the various proceedings, I think that the expectation was that Your Honor would set a hearing. On a sort of related note, the trustee had -- you had asked the last time we were here on a status conference, whether there -- the trustee would be available for a follow up status conference, and the trustee, who is coincidentally on trial in Puerto Rico, but not involving Banco Popular, had asked me to convey that if the Court would entertain a Zoom status conference, that he could be available on Wednesday, March 13th. I don't know if that would work for the Court. Does that not work for the Court? THE COURT: It does not. MR. LINSEY: Okay. Does the Court have other availability next week that I could convey? THE COURT: The 14th. MR. LINSEY: The 14th, okay. THE COURT: But the 13th does not. MR. LINSEY: Understood. Let me speak with the trustee about that. And I think the primary issue that was anticipated to discuss there was anything that the trustee could do to move forward a Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 9 of 34

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 process to move some of these avoidance proceedings where it may be appropriate, to mediation to the extent the defendants are interested -- THE COURT: Well, we don't even have a motion for mediation yet or a process by which -- and we're going to talk about that in a minute, okay. MR. LINSEY: Sure, yeah. THE COURT: So, let's go back to the stay motions. MR. LINSEY: But what I was going to say is we could also -- I think we could discuss in further detail how that -- THE COURT: All right. So I'm not going to schedule any hearings on the stay motions until we have another status conference. Is that what you're -- MR. LINSEY: That was what I would suggest, Your Honor. THE COURT: Yeah. And because one of the adversaries to which the stay motions apply, at least my quick review, is that it was all BVI entities in which there's been service issues anyway in the past. I don't know if there are. So, in any event, that was number one. But also, there was -- in the proposed order, again, I looked at it for less than two minutes, okay, between hearings today -- it looked like there was a carve-Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 10 of 34

1 2 3 out of the stay with regard to some entity named K Legacy and I don't really -- you don't have to tell me now, but I need to understand that at some point, okay.

4 5 Because I don't know why -- I think it says it wouldn't apply to K Legacy.

6 7 8 9 10 MR. LINSEY: K Legacy is involved with an apartment that's located in the United Kingdom that we understand there may be efforts to transfer, and so there's particular exigency with respect to that entity, but the trustee can speak to that in greater detail.

11 12 13 14 15 16 17 18 19 20 21 22 23 THE COURT: Okay. Now, turning to the mediation, when we were here and we talked about the mediation in your presentation, the trustee's presentation, which, you know, obviously no one knew that that's what the trustee was going to ask specifically until the conference, and that's fine, but there was a -- there were a couple of comments made during that status conference, including that Mr. Bassett had a list of adversaries and it sounds as if, though -- but I don't know if this is accurate -- that there might be, on the part of the trustee, some already -- some efforts already to group certain adversary proceedings together. I don't know if that's true, but I want to tell you what my thoughts are about mediation at the moment.

MR. LINSEY: Sure.

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THE COURT: So, you have to have a motion with

12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 proposed procedures, okay. We don't have that. So unless and until there's a motion with proposed procedures that's served on everybody, we -- you know, I can't really do much, right. And we're not just going to -- there has to be - if -- every single case needs a process, but this case really needs a process, right, because I'm not going to start down a mediation road and have people say, Well, she just turned all these things over. There's no process procedure. We didn't know. Are we being forced into mediation? Is this an opt-in or opt-out mediation? I mean, you know, people -- there are all kinds of decisions across the country that say -- and we don't have a Local Rule that mandates mediation -- MR. LINSEY: Uh-huh. THE COURT: -- in adversary proceedings. So a defendant in an adversary proceeding could say, possibly, I don't want this to be mediated, okay. So, you need to think about that, as far as -- in my opinion -- as far as the procedures are concerned. We do not have a mandatory, automatic mediation procedure. And I

22 23 24 think the way things were discussed would have been that people were -- defendants were going to be required to mediate.

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I think if you can get their consent, you've got

| 1 | no problem, obviously.<br>But I don't know if we can force them | | | | | | | | |----|-----------------------------------------------------------------|--|--|--|--|--|--|--| | 2 | to mediate; although, we might be able to, but they still may | | | | | | | | | 3 | have -- they still have to have the ability to understand | | | | | | | | | 4 | that, I think, before there's some kind of order that enters. | | | | | | | | | 5 | And I think, you know, when you file this motion, | | | | | | | | | 6 | the mediation parties, like, who are going to be the | | | | | | | | | 7 | mediation parties; is it just the trustee on the plaintiff's | | | | | | | | | 8 | side and then the defendants?<br>And I think that's probably | | | | | | | | | 9 | the answer, but I don't know that because there isn't a | | | | | | | | | 10 | motion yet. | | | | | | | | | 11 | Again, I told you about Mr. Bassett mentioned | | | | | | | | | 12 | something or someone mentioned -- maybe Mr. Bassett didn't; | | | | | | | | | 13 | maybe the trustee mentioned, I can't recall -- but somebody | | | | | | | | | 14 | mentioned something about Mr. Bassett having a list and | | | | | | | | | 15 | indicated, I think, that something was going to be filed with | | | | | | | | | 16 | that list. | | | | | | | | | 17 | MR. LINSEY:<br>We do have a list of all of the | | | | | | | | | 18 | avoidance proceedings. | | | | | | | | | 19 | And then one thing that we've been working on | | | | | | | | | 20 | doing is sort of slicing and dicing in various ways.<br>There | | | | | | | | | 21 | are various ways to group them.<br>One way is by the amount of | | | | | | | | | 22 | the claim.<br>Another way is by the -- obvious, the vast | | | | | | | | | 23 | majority of these claims are cases where the money went | | | | | | | | | 24 | through the what the trustee believes is an alter-ego entity, | | | | | | | | | 25 | so we've also done some analysis grouping by which alter-ego | | | | | | | | | | | | | | | | | |

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 entities are relevant; although, it's not just one alter-ego to each of the claims. They kind of overlap, so that's a little bit tricky. What we're in the process of doing is coming up with a database that allows for sort of slicing and dicing with a minimum of kind of a fee generation in order to do that analysis. So that's what's been happening in the background. But right now, we have a list of just alphabetically and by adversary proceeding numbers, all of the avoidance proceedings that we would be happy to file if it would be helpful to the Court. THE COURT: Well, I don't know if we need a list of all the names -- and I can do that -- MR. LINSEY: Sure. THE COURT: -- I mean, I don't think that's necessary. I think it would be much more helpful to the Court and to the mediator to understand any groupings that the trustee may have come up with and understanding that you're not going to turn over 270 matters to mediation all in one fell swoop. It doesn't make any sense to me. I mean, I think there has to be some kind of rollout or groupings that get handled at one time; maybe the most controversial issue adversaries -- I have no idea. I don't know who's going to challenge what. But I think you need to think about that and Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 14 of 34

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 I think there needs to be a way to put parties on notice about how the trustee thinks the process should work. MR. LINSEY: Another thought, Your Honor, had been certain -- obviously, these are premised on determinations by the Court that the alter-egos at issue are, in fact, alteregos. So there are certain alter-egos where the Court has already entered judgment -- THE COURT: Right. MR. LINSEY: -- and there are others where the Court has not. So that's been something that the trustee has been considering as well, in terms of how things should move. THE COURT: Okay. And, again, I think you need to think about, you know, can a defendant opt out -- defendant or defendants opt out? Also, can you beginning this process after the answer deadline or before the answer deadline? Because right now, the answer deadline is at least 60 days from the service of the summons. So the trustee is saying he wants things to be turned over to mediation before people even have to answer? I'm not sure if -- I mean, if you have a consent of the defendants on that, I think that makes it a lot easier; if you don't, I don't know if that works, okay. One of the things that I think -- I don't know if the trustee used the term. Someone, I thought, used the term

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| 1 | somewhere, that there were buckets of adversary proceedings, | |----|-----------------------------------------------------------------| | 2 | so that fall in -- that's what I mean talking about, | | 3 | groupings or buckets, right.<br>I think that that's an | | 4 | important issue to focus on.<br>I think that it's going to help | | 5 | with the mediation. | | 6 | I also think you need to think about, what are the | | 7 | mediator's powers?<br>I mean, you know, you say or Trustee | | 8 | Despins said, The mediator can make up all the rules. | | 9 | Well, I don't know that the mediator can make up | | 10 | all the rules without notice to everybody.<br>And what does | | 11 | that mean?<br>The mediator is going to file things?<br>That | | 12 | doesn't make sense.<br>The mediator isn't going to file | | 13 | anything. | | 14 | So there -- it has to be a process that's already | | 15 | in place that the mediator already follows.<br>So, for example, | | 16 | what happens if a mediator mediate mediates a case to a point | | 17 | where the parties get close, but they have some issue that | | 18 | needs to have a determination that they won't agree to in | | 19 | mediation; can the mediator tell the judge that so that the | | 20 | judge can try that issue? | | 21 | That should be in these procedures.<br>If you want | | 22 | to give the mediator some flexibility to narrow the issues, | | 23 | then I think you need to -- it needs to be part of the | | 24 | process. | | 25 | Also, what about if the mediator says -- and | | | |

1 2 3 4 5 6 7 8 9 10 you've got these buckets. Let's say you've got these buckets or groupings and the mediator -- and you give the mediator 50 adversary proceedings that are all preference actions that have some issue that 40 of the defendants, 40 of the adversaries, but 10 don't. What is the mediator supposed to do? Well, the mediator -- if there's flexibility in the process and it's set forth in the procedures, maybe can mediator can tell the judge, These 10 adversaries need to be tried for these issues, or there are common issues, like, or

11 do you take one of those adversary proceedings --

MR. LINSEY: Uh-huh.

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13 14 15 16 17 18 19 THE COURT: -- one of those 10 and try that and then that ruling is applicable or binding on the other nine that haven't resolved. I don't know. I'm just coming up with -- Attorney Linsey, I'm coming up with thoughts and issues, because I think the more the process is transparent and understood from the start, the less issues will arise either in this court or in some appellate court, right.

20 21 22 23 24 25 Judge Tancredi is generally available, okay. But we're not going to get anything to Judge Tancredi until and unless we figure out this whole process. I want the mediation order to be very specific about what he can and cannot do, including those things that I just mentioned - you know, you could come up with other things, by the way --

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 but the things I just mentioned about, what if he gets to an impasse; can he report to the Court that there's an impasse and this issue needs to be tried or resolved. Or he's in a bucket of 10 -- of 50 and 40 settle and 10 don't, well, how does that get handled? What can he do? What powers does he have? Now, he's going to have to run conflicts checks, Attorney Linsey, so if we get to the point of mediation, there's still a possibility, you know, he could have a conflict in an adversary proceeding, so just understand that. I mean, none of us can take on a mediation if we have a conflict, obviously -- MR. LINSEY: Understood, Your Honor. THE COURT: -- but he is generally available: And we didn't talk, you know, extensively, but he does support the idea that there has to be an idea in place that he follows. Of course he can do things as a mediator, but I think if you want him to -- I don't think it's going to be helpful for you all to have a mediation where he either reports: It's settled or not, because that doesn't really help, I don't think. It doesn't make sense to me, right. You want to advance the ball and limit the issues as much as you can. MR. LINSEY: Uh-huh. THE COURT: And giving the mediator the

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 flexibility to do as much as the mediator can, but then in some way, shape, or form, report that to the Court as to what needs to be done to finish or resolve that adversary proceeding without any, you know, prejudice to the parties to come back here and then say, Oh, wait a minute, we think we can finalize it and go back. I'm not -- but, you know, he's got to have some road -- he's got to have some guideposts and he's got to have some lanes he can go in, right, and not go out of. I mean, he needs to -- but I think he should have some flexibility that, you know, that's what you need to think about in my opinion. And he would agree with that, by the way. MR. LINSEY: Understood. THE COURT: So what about beginning -- I need to know. You're going to tell me, I guess. This is what I presume will happen before the status conference, if we have it on the 14th, right, that there'll be some kind of motion or something filed, and I'd like it to be filed before the 13th, if possible -- MR. LINSEY: Uh-huh.

21 22 23 THE COURT: -- so we actually have time to read it. What are you proposing? And, you know, if you're

24 25 seeking this approval of mediation, who do you have to serve and how much time do they have to oppose it or whatever? I

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 don't know, but that's -- while I completely understand and appreciate, you know, saying, We want these mediated, it is -- I will not go down that path without and order and a motion that's been served on people that have some ability to say something, okay. MR. LINSEY: Understood, Your Honor. THE COURT: And if Judge Tancredi has a conflict with one of these matters, what do you propose to do with regard to another mediator? Do you want me to ask Judge Nevins or what do you want me to do? MR. LINSEY: One of the things that have been discussed on the trustee's end was the notion of Tancredi - of Judge Tancredi, excuse me, mediating, you know, being involved and directing a mediation process and certainly being more involved with some of the more significant disputes, but perhaps there'd be other mediators who report to Judge Tancredi. THE COURT: Who, and who's going to pay them? MR. LINSEY: That would be an issue that would need to be addressed -- THE COURT: Well, that's my point, right. MR. LINSEY: -- in the motion, first. And, certainly, there had been a motion anticipated, but one of the reasons -- and I apologize if we

did it in a way that was not what Your Honor would like,

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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 but -- THE COURT: No, I'm not -- you don't need to apologize. MR. LINSEY: Yeah. THE COURT: All I'm saying is, It's going to be fine, but we've got to follow the process. That's all. There has to be a process. Look, you know -- everyone knows that's involved in this case, how many appeals there are out of anything that happens in this case. And I don't want to then to have a new process come in that isn't -- hasn't -- that someone could argue they didn't have due process. You know, the due process rights weren't met. That they didn't understand what was happening. That they were forced to do something that - you know, I don't know want to have any of that, right. I want to do our best to have a process that has been transparent -- MR. LINSEY: Sure. THE COURT: -- out there. Have parties to have an ability to oppose it if they want to, and to have the process of the mediation be clear. Do you think that that includes flexibility on Judge -- if it is Judge Tancredi -- directing some process? Of course it does, but you still have to have some process in place. You can't just say, Okay, Judge Tancredi -- and I'm Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 21 of 34

22 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 not saying you're saying this -- MR. LINSEY: Uh-huh. THE COURT: -- I am explaining the concerning I have is, you can't just say, Okay. Judge Tancredi, here's 270 adversary proceedings. Go at it. That's not going to happen because it's not fair to him either. MR. LINSEY: Of course not. THE COURT: Even though he would absolutely do it, it's still not fair because he doesn't want to get in that position, either, right. He's got a whole bunch of things he's going to have to worry about. So all I'm saying to you is, I think it's going to be fine -- MR. LINSEY: Uh-huh. THE COURT: -- I just think we need to go through a process and make sure the process meets the requirements of notice and a hearing and not just an opportunity for a hearing, but notice and a hearing that will produce some form of an order that, not only, assuming Judge Tancredi will become the mediator, but what happens if there's a conflict and if there's another mediator? What do we go -- what if you say, Yes, would you ask Judge Nevins, then? And what if she has a conflict, then what do you do? Then you've got to pay somebody, right, Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 22 of 34

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 right now you can do this without -- and that's - and we're fully supportive of that; no one has a problem with that. But at some point, there's only the three of us, right. So you have to figure out how is that going to work? MR. LINSEY: So the preliminary thinking on the trustee's side had been that there might be a small panel of mediators who would report to Judge Tancredi where -- THE COURT: Chosen by whom? MR. LINSEY: Chosen in -- the thinking was in consultation with Judge Tancredi to make sure that he -- THE COURT: Well, who's consulting? MR. LINSEY: The trustee, which is why the trustee -- THE COURT: Yeah, see, I don't think that's going to work. MR. LINSEY: Understood, Your Honor. THE COURT: I mean, I don't know, maybe it will, but -- and how are those people going to get paid; they're going to do it for free? MR. LINSEY: I don't anticipate that, and that would be treated by the motion. And there are names that have been discussed on the trustee's end and we can propose them. But the -- and I doubt that there are names that Judge Tancredi would have any issue with and they're likely to --

24 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: It's not an issue whether Judge Tancredi would have an issue with them. That's not going to happen. MR. LINSEY: -- or Your Honor would. Obviously, yeah. Of course. THE COURT: It's not an issue. That's not an issue. The issue is, is the process transparent and understood and people have an opportunity to agree to it or not agree to it or whatever you're proposing? To me it sounds like -- and this is fine if that's what you're proposing -- we'll see what happens, ultimately, but it sounds like the trustee is saying, This is mandatory mediation and that's what's going to happen. Well, we -- our district does not have that, so there isn't any expectation or requirement that a defendant submit itself to mediation. Now, I think a lot of these people will agree; I don't think that's going to be a problem. But you're going to have to work on that. You're going to have to -- you know, in a perfect world in this next -- I don't know how many days -- 50 days or less it is at this point -- more like 40 days -- maybe you'll come in with a whole bunch of "I've got a consent to mediation." You know, a consent to mediation can be one Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 24 of 34

25 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 paragraph filed on the docket of the adversary proceeding. It makes it a lose easier, doesn't it? Then you've got no - then you have a consent to mediation, right? But I think that there are some -- I know there are issues that just need to be put forth in a motion and clear process and procedures submitted. I don't think you can say, Well, we thought maybe Judge Tancredi could pick another panel of mediators, blah, blah, blah. If that's the case, then put it in a motion, right, because -- that's why I asked the question of Trustee Despins last week when that said he'd be the lead mediator, I think was the term, and I was like, Well, what does that mean? I don't know what that means. I mean, I think I know what it means, but I think it needs to be in a motion. MR. LINSEY: Understood, Your Honor. And I appreciate that the procedure needs to be spelled out and there needs to be transparency. THE COURT: All right. So you'll think about that. As far as this status conference, I think you - are you going to file -- well, I guess that's not -- you don't have to file anything. We have said in the past when the trustee has requested a status conference, that they can be -- new dates can be requested. And you're now requesting a date of next week and

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 I'm telling you that the 14th is the first date you've got and it's probably the only date you've got next week, okay. MR. LINSEY: I'll speak with the trustee. And he is on trial, so I don't know the specifics of his schedule, but I know that we have a date on the 19th; there are matters schedules in this case. THE COURT: Yep. MR. LINSEY: So if it doesn't work for the 14th, perhaps the 19th would work. THE COURT: Okay. Let's look at the 19th for a minute. Yes, there's the afternoon of the 19th; there's several fee applications on that afternoon and a motion to dismiss, so there's one -- starting at 1:30 and then at 2 o'clock. So, I mean, that could work if you can't do the 14th, but you'll have to let us know about that, about the 14th. MR. LINSEY: We will, Your Honor. THE COURT: Because I'd still have to issue some kind of order or notice scheduling the status conference for the 14th or the 19th, whatever day it is. MR. LINSEY: And if the status conference is on the 14th, Your Honor would like the motion to be filed no later than the 12th; is that my understanding? THE COURT: Yes. MR. LINSEY: And so if the status conference is on

27 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 19th, then Your Honor would like the motions scheduled, or filed by the 15th? THE COURT: By the 15th, yes -- MR. LINSEY: Okay. THE COURT: -- please. And then there's one other issue besides -- and believe me, you and I could sit here for probably another hour thinking about mediation issues, right -- but I think this common trial, common issue consideration has to be woven in there somehow, right, to give -- because normally a mediator doesn't necessarily get to report back to the judge on where things are, right? MR. LINSEY: Yes, Your Honor. THE COURT: This is a little bit different, so you'd have to think about how you'd want that to work. And then, obviously, you're going to have -- you know, there's going to have to be confidentiality agreements and whatever. You can deal with that. One other thing. The Clerk's Office -- oh, I shouldn't say the Clerk's Office -- well, it is the Clerk's Office, but the courtroom deputy email box, the Bridgeport courtroom deputy email box, last week I believe it was, received two emails, two separate emails from two separate defendants in two separate adversary proceedings that say a lot of things in them like they don't understand -- not that Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 27 of 34

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 they don't necessarily understand why they're a defendant, but they're -- they are concerned about what has occurred. And we haven't docketed those because I have no idea whether or not there's any confidential issues regarding those defendants. So with regard -- and you don't have to answer this now -- but with regard to all of the defendants in the adversary proceedings -- in the avoidance adversary proceedings, not the RICO and alter-ego adversary proceeding, but the -- things have been sealed, but are any of the defendants' names sealed? MR. LINSEY: No, Your Honor. The only things that are sealed in avoidance proceedings are the schedules that are attached to the complaints which list specific dates and transactions reflecting transfers. And the only reason that those are sealed is because they were based on documents that were produced by financial institutions and designated "confidential" or -- THE COURT: Okay. MR. LINSEY: -- or "highly confidential." THE COURT: Okay. Well, what we will do in the meantime between now and the status conference, I didn't look, other than to see that these emails had been sent, right. I didn't really look at the adversaries to see whether or not there'd be any information that is sealed,

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 which there probably is, because every adversary has at least the sealed document of the schedule of the transfers. Is that what you're saying? I think that's probably true, right? MR. LINSEY: Some are -- we tried to not overseal. So where there were -- there were some where the underlying records from financial institutions had not been designated "confidential" or "highly confidential," and in those cases, we did not file anything under seal. THE COURT: Okay. So what we're -- what we will do in the meantime is go back and analyze those and then figure out how to handle those, because normally, our -- the normal process of the Clerk's Office would be to docket those communications on the applicable adversary proceedings, because you could say there are somewhat akin to a pleading, although, I'm not really sure they are. But we haven't done that yet because I don't know whether or not that's appropriate. So we will have to take a look at that, okay? MR. LINSEY: Understood, Your Honor. THE COURT: Okay. MR. LINSEY: And we've heard from some defendants, as well, what I call "self-represented defendants" -- THE COURT: Oh. MR. LINSEY: -- or people who say that they're

30 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 self-represented defendants. THE COURT: Yeah, these people do, too. MR. LINSEY: And sometimes the email addresses that we receive communications from are unconventional or overseas, such that they wind up in spam folders. So, like, it would be in the trustee's interests, as well, to see these communications. THE COURT: Understood. MR. LINSEY: We can be in touch with these people if that's appropriate. THE COURT: Understood. The issue's, I think, going to be, do they get docketed? And if they get docketed, do they get docketed under seal? MR. LINSEY: Understood, Your Honor. THE COURT: I think that's the issue that we have to figure out, because, again, they came to the courtroom deputy email -- the Bridgeport courtroom deputy email box, which is, you know, that's what we use when people submit proposed orders and things like that, but they must've looked at our website and thought that was a way to communicate with the Court, okay. MR. LINSEY: Sure. THE COURT: So, I think those are the only questions I have this afternoon, but I really encourage you Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 30 of 34

| 1 | to think about the mediation issues and how we can make it a | | | | | | | | |----|-----------------------------------------------------------------|--|--|--|--|--|--|--| | 2 | process that is transparent, yet has some flexibility, and | | | | | | | | | 3 | that flexibility is clear.<br>Because I think if you want to | | | | | | | | | 4 | get to a point in adversaries where -- I gave two examples. | | | | | | | | | 5 | One is the parties can't resolve one part of it but the | | | | | | | | | 6 | mediator's resolved the majority of it, but the mediator | | | | | | | | | 7 | wants to tell the Court instead of, I couldn't resolve | | | | | | | | | 8 | this -- well, I resolved these things, but I didn't resolve | | | | | | | | | 9 | that.<br>You try it. | | | | | | | | | 10 | Or the other example is the 50 and 40 resolve | | | | | | | | | 11 | and 10 don't, how do you handle that?<br>And is there a common | | | | | | | | | 12 | issue or a bellwether adversary that gets tried that, then, | | | | | | | | | 13 | becomes applicable to the other adversaries? | | | | | | | | | 14 | I have no idea how you want to handle that, but I | | | | | | | | | 15 | think you need to tell everybody what your thought -- when I | | | | | | | | | 16 | say, "your," you know I mean the Chapter 11 Trustee's | | | | | | | | | 17 | thoughts are on this issue? | | | | | | | | | 18 | MR. LINSEY:<br>Yes, Your Honor. | | | | | | | | | 19 | THE COURT:<br>Okay.<br>Do you have any questions? | | | | | | | | | 20 | MR. LINSEY:<br>I do not. | | | | | | | | | 21 | If it's acceptable to Your Honor, we'll report by | | | | | | | | | 22 | tomorrow morning regarding -- | | | | | | | | | 23 | THE COURT:<br>Oh, yeah, that's fine. | | | | | | | | | 24 | I mean, if you could tomorrow, that would be fine, | | | | | | | | | 25 | just sometime tomorrow.<br>Is tomorrow -- tomorrow's Wednesday, | | | | | | | | | | | | | | | | | |

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 right? MR. LINSEY: Correct, Your Honor. THE COURT: Yes, okay. That would be helpful, yeah. But the first day and probably the only day of really solid availability next week is the 14th. MR. LINSEY: And did Your Honor say what time on the 14th? THE COURT: I didn't, but I would probably want to do it noon or 1 o'clock or 2 o'clock. And if it's the 19th, we can just add it to the calendar -- MR. LINSEY: Yes, Your Honor. THE COURT: -- to the afternoon calendar, okay. MR. LINSEY: I mean, some of the issues that I know that the trustee had wanted to discuss with Your Honor are issues that Your Honor just discussed with me and I can provide some of that information to the trustee. So that will be very helpful. But we'll -- but he'll want to speak with you directly, so we'll reach out about dates. THE COURT: That's great. All right. Thank you, very much. All right. That is our last matter on today's calendar, so court is adjourned. Case 22-50073 Doc 2993 Filed 03/12/24 Entered 03/12/24 10:37:33 Page 32 of 34

| Case 22-50073 | Doc 2993 | Filed 03/12/24 | | Entered 03/12/24 10:37:33 | Page 33 of 34 | | |---------------|--------------------------------------|-------------------------|------------|---------------------------|---------------|----| | | | | | | | 33 | | 1 | | MR. LINSEY: | Thank you. | | | | | 2 | | THE COURT: | Thank you. | | | | | 3 | | THE DEPUTY: | All rise. | | | | | 4 | | The Court is adjourned. | | | | | | 5 | (Proceedings concluded at 1:50 p.m.) | | | | | | | 6 | | | | | | | | 7 | | | | | | | | 8 | | | | | | | | 9 | | | | | | | | 10 | | | | | | | | 11 | | | | | | | | 12 | | | | | | | | 13 | | | | | | | | 14 | | | | | | | | 15 | | | | | | | | 16 | | | | | | | | 17 | | | | | | | | 18 | | | | | | | | 19 | | | | | | | | 20 | | | | | | | | 21 | | | | | | | | 22 | | | | | | | | 23 | | | | | | | | 24 | | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Case 22-50073 | | Doc 2993 | Filed 03/12/24 | Entered 03/12/24 10:37:33 | | Page 34 of 34 | | | | | |---------------|------------------------------------------------------------|-------------------------------------------------------|----------------------------------|---------------------------|--|---------------|--|--|--|--| | | | | | | | 34 | | | | | | 1 | | | | CERTIFICATION | | | | | | | | 2 | I 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 my | | | | | | | | | | | 5 | knowledge and ability. | | | | | | | | | | | 6 | | | | | | | | | | | | 7 | | /s/ William J. Garling | | | | March 7, 2024 | | | | | | 8 | | | William J. Garling, CET-543 | | | | | | | | | 9 | | | Certified Court Transcriptionist | | | | | | | | | 10 | | For Reliable | | | | | | | | | | 11 | | | | | | | | | | | | 12 | | | | | | | | | | | | 13 | | | | | | | | | | | | 14 | | | | | | | | | | | | 15 | | | | | | | | | | | | 16 | | | | | | | | | | | | 17 | | | | | | | | | | | | 18 | | | | | | | | | | | | 19 | | | | | | | | | | | | 20 | | | | | | | | | | | | 21<br>22 | | | | | | | | | | | | 23 | | | | | | | | | | | | 24 | | | | | | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |