郭文贵破产案 · TRANSCRIPT · ECF #3150

元数据

当事人: 郭文贵 (Guo Wengui / Miles Guo / Ho Wan Kwok)
法院: CTB
案号: 22-50073
ECF #: 3150
类型: TRANSCRIPT
立案日: 2024-04-30

原始法庭文件为英文，下方为英文全文。

全文

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., . . Debtors. . . . . . . . . . . . . . . . . . . LUC. A DESPINS, CHAPTER 11 . TRUSTEE, . . Plaintiff, . . Adversary Proceeding v. . No. 23-05013 . HCHK TECHNOLOGIES, INC.; , HCHK PROPERTY MANAGEMENT, . INC.; LEXINGTON PROPERTY AND. STAFFING, INC.; HOLY CITY . HONG KONG VENTURES, LTD.; . ANTHONY DIBATTISTA; YVETTE . WANG; AND BRIAN HOFMEISTER, . Courtroom 123 AS ASSIGNEE OF THE HCHK . Brien McMahon Federal Building ENTITIES, . 915 Lafayette Boulevard . Bridgeport, Connecticut 06604 Defendants. . . Tuesday, April 23, 2024 . . . . . . . . . . . . . . . 1:00 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE 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 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 1 of 186

| | | 2 | |----------|--------------------------------------|---------------------------------------------------------------------------| | 1 | APPEARANCES: | | | 2 | For the Chapter 11 | | | 3 | Trustee: | Luc A. Despins, Esquire PAUL HASTINGS, LLP 200 Park Avenue | | 4 | | New York, New York 10166 | | 5 6 | | Nicholas A. Bassett, Esquire 2050 M Street, NW Washington, DC 20036 | | 7 | | Patrick R. Linsey, Esquire NEUBERT PEPE & MONTEITH, P.C. | | 8 9 | | 195 Church Street 13th Floor New Haven, Connecticut 06510 | | 10 | For the U.S. Trustee: | Holley L. Claiborn, Esquire UNITED STATES DEPARTMENT OF JUSTICE | | 11 | | OFFICE OF THE UNITED STATES TRUSTEE The Giaimo Federal Building | | 12 | | 150 Court Street, Room 302 New Haven, Connecticut 06510 | | 13 | For the Official | | | 14 | Committee of Unsecured Creditors: | Kristin B. Mayhew, Esquire | | 15 | | PULLMAN & COMLEY, LLC 850 Main Street | | 16 | | 8th Floor Bridgeport, Connecticut 06601 | | 17 | For Pacific Alliance | | | 18 | Asia Opportunity Fund: | Stuart M. Sarnoff, Esquire O'MELVENY & MYERS, LLP | | 19 20 | | Times Square Tower 7 Times Square New York, New York 10036 | | | | | | 21 22 | | Annecca H. Smith, Esquire ROBINSON & COLE, LLP 280 Trumbull Street | | | | Hartford, Connecticut 06103 | | 23 | | | | 24 25 | | | | | | |

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| | Case 22-50073 Doc 3150 Filed 04/30/24 | Entered 04/30/24 08:17:20 | Page 3 of 186 | |----|---------------------------------------------|-------------------------------------------------------------------------|---------------| | | | | 3 | | 1 | ALSO APPEARING: | | | | 2 | For G Club Operations: | Jeffrey M. Sklarz, Esquire | | | 3 | | GREEN & SKLARZ, LLC One Audubon Street | | | 4 | | 3rd Floor New Haven, Connecticut 06511 | | | 5 | For Fox News Network | | | | 6 | and Marcum LLP: | Henry P. Baer, Esquire FINN DIXON & HERLING, LLP 177 Broad Street | | | 7 | | 15th Floor Stamford, Connecticut 06901 | | | 8 | | -and- | | | 9 | | Andrew R. Gottesman, Esquire | | | 10 | | MINTZ & GOLD 600 3rd Avenue | | | 11 | | New York, New York 10016 | | | 12 | For HCHK Property Management, Inc.: | John T. Shaban, Esquire | | | 13 | | LEVINE & LEVINE, PLLC 2 Jefferson Plaza I | | | 14 | | New York, Suite 100 Poughkeepsie, New York 12601 | | | 15 | For Taurus Fund LLC: | Michael T. Conway, Esquire | | | 16 | | LAZARE POTTER GIACOVAS & MOYLE LLP 747 Third Avenue, 16th Floor | | | 17 | | Fifth Floor New York, New York 10017 | | | 18 | For Weddle Law PLLC: | Richard J. Corbi, Esquire | | | 19 | | THE LAW OFFICES OF RICHARD J. CORBI PLLC | | | 20 | | 1501 Broadway, 12th Floor New York, New York 10036 | | | 21 | | | | | 22 | For Blueberry Builders, LLC: | Heather Spaide, Esquire MARINO, ZABEL & SCHELLENBERG, PLLC | | | 23 | | 657 Orange Center Road | | | 24 | | Orange, Connecticut 06477 | | | 25 | | | | | | | | | | | | | |

| Case 22-50073 | |---------------| | | | 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 | | | | | | | | Doc 3150 | Filed 04/30/24 | Entered 04/30/24 08:17:20 | Page 4 of 186 | ----------------|-----------------------|-------------------------------------------------------------------------------|-----------------------------------------------------------------|---------------| | | | | 4 | | ALSO APPEARING: | | | | | For 3 Columbus | | | | | | Circle LLC: | | | Matthew Pesce, Esquire MURTHA CULLINA | | | | | 107 Elm Street, 11th Floor Stamford, Connecticut 06902 | | | For Anthem Health | | | | | Plans, Inc.: | | | Jessica Signor, Esquire SHIPMAN & GOODWIN LLP | | | | | 300 Atlantic Street, Third Floor Stamford, Connecticut 06901 | | | For Mei Guo: | | | Stephen M. Kindseth, Esquire ZEISLER & ZEISLER | | | | | 10 Middle Street | | | | | 15th Floor Bridgeport, Connecticut 06604 | | | For Marie Petrantoni: | | Holly G. Rogers, Esquire | | | | | MELICK & PORTER, LLP 900 Main Street South | | | | | Suite 102 Southbury, Connecticut 06488 | | | For Defendant: | Ivan J. Ladd-Smith, Esquire SPEARS MANNING & MARTINI LLC 2425 Post Road | | | | | | Suite 203 | | | | | Southport, Connecticut 06824 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 5 | |----|-----------------|------------------------------------------------------------------------------------------|------| | 1 | | INDEX | | | 2 | MOTIONS: | | PAGE | | 3 | Matter | | | | 4 | #3003: | Motion for Order Modifying Avoidance Action Procedures to Include Procedures for | 6 | | 5 | | Mediation of Avoidance Actions Filed by Patrick R. Linsey on Behalf of Luc A. | | | 6 | | Despins, Chapter 11 Trustee | | | 7 | Matter #268: | Motion for Default Judgment by Court Pursuant to Fed. R. Civ. P. 55(b)(2) and | | | 8 | | Fed. R. Bank. P. 7055 against HCHK Technologies, Inc.; HCHK Property | | | 9 | | Management, Inc.; Lexington Property and Staffing, Inc.; Holy City Hong Kong | | | 10 | | Ventures, Ltd.; Anthony DiBattista; Yvette Wang; and Brian Hofmeister, as Assignee of | | | 11 | | the HCHK Entities. Filed by Patrick R. Linsey on Behalf of Luc A. Despins, | | | 12 | | Plaintiff | | | 13 | | | | | 14 | | | | | 15 | | | | | 16 | | | | | 17 | | | | | 18 | | | | | 19 | | | | | 20 | | | | | 21 | | | | | 22 | | | | | 23 | | | | | 24 | | | | | 25 | | | | | | | | | | | | | |

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 (Proceedings commenced at 1:04 p.m.) THE CLERK: Case No. 22-50073, Ho Wan Kwok. And Adversary No. 23-5013, Despins versus HCHK Technologies, et al. THE COURT: Okay. Good afternoon. I'm going to take appearances for the record first for all parties appearing in the main Chapter 11 jointly administered cases and then for the parties appearing in Adversary 23-05013. Trustee Despins, would you like to start? MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. THE COURT: Good afternoon. MR. BASSETT: Good afternoon, Your Honor. Nick Bassett from Paul Hastings, counsel for the Chapter 11 Trustee. THE COURT: Good afternoon. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey of Neubert, Pepe & Monteith, Connecticut counsel for the Trustee. THE COURT: Good afternoon. Good afternoon, Your Honor. THE COURT: You have to come forward. I'm sorry. You know, because everything is on audio, we have to make sure that the microphone can pick up your voice. MR. SHABAN: Good afternoon, Your Honor. John Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 6 of 186

7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Shaban for the HCHK entities. THE COURT: Good afternoon, Attorney Shaban. MR. SKLARZ: Good afternoon, Your Honor. Jeffrey Sklarz, Green & Sklarz, for G Club and also for Weddle Law Firm, who is also represented by Richard Corbi, who's over to my left, and he will file pro hac vice papers for Attorney Corbi, ask that he handle the matters related to (indiscernible). THE COURT: All right. Give me just a moment. Okay? So when you are appearing -- and it's absolutely fine. I just want to know there are specific adversary proceedings you're involved in in connection with the mediation procedures. Correct? MR. SKLARZ: Correct. THE COURT: So I think I may have a list, but I'd rather you tell me what you think you're involved in first, and then I can see if I'm right. MR. SKLARZ: I will admit Your Honor that I am not sure of what the adversary proceedings are. THE COURT: But I have them, I think. I have -- MR. SKLARZ: I have a list too. THE COURT: Okay. MR. SKLARZ: But I -- if I may have a moment. THE COURT: I have -- I believe you have an

25 appearance, and you're asking for a visiting attorney to be

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 appearing in 24-05275 and in 24-05188. MR. SKLARZ: Yes. 5188, I do know is the Weddle adversary. I think the other adversary that you're referring to is Pillsbury Winthrop. THE COURT: I believe so. Yes. MR. SKLARZ: Yes. But the Pillsbury Winthrop is not filed or actually, they have filed in this one. So, yes, we would be here for Pillsbury -- THE COURT: Well, you filed an objection to the mediation procedures and that relates to both of those adversary proceedings. Okay? MR. SKLARZ: Yep. Yep. THE COURT: I just want to make the record as clear as we possibly can so that it -- this recording will be recorded as it has been in all of the hearings since this case, the main Chapter 11 case of Mr. Kwok was filed in February of 2022. The recording will be available for transcript purposes in the main case. And it will cite to various adversary proceedings. And obviously, we're going to have a hearing in an adversary proceeding that's in the main case - related to these main cases as part of today's calendar. The reason I'm trying to be specific is, at some point, some counsel may only want a portion of the transcript. I don't know. That's up to them. But it's all Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 8 of 186

| 1 | -- with any kind of transcript request would have to be made | |----|----------------------------------------------------------------| | 2 | through the main case. And I just wanted to be clear about | | 3 | that and then clear what you're here on. | | 4 | You're here -- the procedures related to the | | 5 | mediation was filed in the main case, but you represent | | 6 | parties in those two specific adversary proceedings. | | 7 | MR. SKLARZ: Yes. | | 8 | THE COURT: As well. Okay. | | 9 | MR. SKLARZ: G Club, Pillsbury, and Weddle. | | 10 | THE COURT: Okay. Thank you. | | 11 | MR. SKLARZ: Thank you. | | 12 | THE COURT: Good afternoon. | | 13 | MR. CONWAY: Michael Conway, Lazare Potter | | 14 | Giacovas & Moyle, represent First Funding, (indiscernible). | | 15 | THE COURT: Okay. Thank you. | | 16 | MR. GOTTESMAN: Good morning, Your Honor. I'm | | 17 | sorry, good afternoon, Your Honor. | | 18 | THE COURT: That's okay. | | 19 | MR. GOTTESMAN: Andrew Gottesman of Mintz & Gold. | | 20 | I represent Fox News in adversary proceeding 24-0515 and | | 21 | Markham LLP in adversary proceeding 24-05229. | | 22 | THE COURT: Thank you. Good afternoon. I see | | 23 | Attorney Baer is with you on both of those matters. Is that | | 24 | right, Attorney Baer? | | 25 | MR. BAER: Good afternoon, Your Honor. Yes. | | | |

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 That's correct. THE COURT: And then you have any other matters as well? MR. BAER: Yes, Your Honor. I'm also appearing on behalf of Nardello (phonetic) & Company, which is adversarial proceeding 24-05162. Teris-Phoenix LLC, which is 24-05044. Post Oak Motors, 24-05017, and then Hanon Hong Kong Opportunities Offshore and Onshore Funds, which is 24-05272. THE COURT: Did you file an objection on behalf of the last defendant? MR. BAER: We did not, Your Honor. (indiscernible). THE COURT: Okay. That's fine. I just wanted -- I didn't have a record of that, so I wanted to make sure that what I had was accurate. MR. BAER: That's correct. Thank you. THE COURT: All right. Thank you. MS. SPAIDE: Good afternoon, Your Honor. Heather Spaide from Marino, Zabel & Schellenberg, here representing Blueberry Builders, LLC. And I have -- THE CLERK: I'm sorry. I did not get your name. THE COURT: You just have to speak more into the microphone. I'm sorry. MS. SPAIDE: Heather Spaide from Marino, Zabel & Schellenberg Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 10 of 186

11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE CLERK: I'm sorry, could you say it again? MS. SPAIDE: Heather Spaide. THE COURT: It's S-P-A-I-D-E, is that right? Yes, I saw your notice of appearance. MS. SPAIDE: Yes, thank you. And we -- Blueberry Builders LLC is an adversary proceeding 24-05007, and it also filed a limited objection to the motion on the calendar today. We also moved the pro hac vice admission of Attorney Amy Oden, who is here with me today. THE COURT: Good afternoon. It may have been moved along for entry. I believe it is going to be entered if it hasn't already. So that's fine. You can absolutely appear. The only thing I would note, Attorney Spaide, is for your office to note. The clerk's office, noted that Attorney Marino filed notices of appearance on behalf of Attorney Zabel with his CM/ECF, but we can't do that. So I'm just telling you that the clerk's office has to maintain that record from the person that actually files it. So it's fine. You don't have -- just if you would talk to them about that and make sure that works out in the future, I'd appreciate that. MS. SPAIDE: I'll talk to our paralegal, yes. Thank you. THE COURT: I appreciate that. Thank you. MS. ROGERS: Good afternoon, Your Honor. Holly Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 11 of 186

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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 Rogers, Melick & Porter, on behalf of Marini Pietrantoni, and Muniz (phonetic), which is a defendant in adversary proceeding 24-05205. And we have not filed any response to the Trustee's motion regarding the avoidance procedure. THE COURT: Okay. Thank you. MR. PESCE: Good afternoon, Your Honor. Matthew Pesce, Murtha Cullina, on behalf of avoidance action defendant 3 Columbus Circle. We filed a limited objection in the main case on behalf of 3 Columbus Circle, but we also represent two other of avoidance action defendants, but we did not file objections in those matters for those clients. THE COURT: Okay. Thank you. Good afternoon. MS. SIGNOR: Good afternoon, Your Honor. Jessica, Signor, Shipman Goodwin. I'm here on behalf of three separate avoidance defendants. The first is Art Wolf Inc. That avoidance defendant can be found at adversary proceeding 24-05033. I'm also here on behalf of Anthem Healthcare Choice Assurance Inc, which was formerly known as Empire Health Choice Assurance Inc, and does business as Empire Blue Cross Blue Shield, and that is at adversary proceeding 24- 05112. And finally, I'm here on behalf of Anthem Health Plans Inc. That's at adversary 24-05058. We have filed limited objections. We filed those in the main docket of the

| | Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 13 of 186 | |----|-----------------------------------------------------------------------------------------------| | | 13 | | 1 | case, and we also filed them in the adversary. | | 2 | THE COURT: Okay. Thank you. | | 3 | MS. SIGNOR: Thank you. | | 4 | THE COURT: Trustee Despins, Attorney Signor, just | | 5 | wait for one second, please. Attorney Signor worked with me | | 6 | as a law clerk years ago. So I just want you to know that. | | 7 | And if there's any conflict and anyone has any issues, I'd | | 8 | like them to raise it, sooner as opposed to later. I don't - | | 9 | - I haven't seen Attorney Signor. I do know her personally. | | 10 | I know her family, but I haven't had any discussions with her | | 11 | in quite some time, quite frankly. | | 12 | But in any event, we do get together with the law | | 13 | clerks every once in a while. So I just want you to know | | 14 | that and make sure that there's no conflict from your | | 15 | standpoint. | | 16 | MR. DESPINS: No issues, Your Honor. | | 17 | THE COURT: Okay. Thank you. | | 18 | MS. SIGNOR: Thank you. | | 19 | THE COURT: Thank you. | | 20 | MR. SARNOFF: Good afternoon, Your Honor. Stewart | | 21 | Sarnoff O'Melveny and Myers on behalf of Creditor PAX in the | | 22 | main case. | | 23 | THE COURT: Good afternoon. | | 24 | MS. SMITH: Good afternoon, Your Honor. Annecca | | 25 | Smith, Robinson & Cole, lead counsel for creditor PAX in the | | | |

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 main case. THE COURT: Good afternoon. I feel like we need to have the microphone up or something so we don't have to all bend down, but sorry. MS. MAYHEW: Good afternoon, Your Honor. Kristen Mayhew, Pullman & Comley on behalf of the Official Committee of Unsecured Creditors. THE COURT: Good afternoon. MR. KINDSETH: Good afternoon, Your Honor. Stephen Kindseth (indiscernible). I apologize that we don't have the adversary proceedings in which I sued on her behalf. THE COURT: Okay. MR. KINDSETH: And we did not file any objection immediately adversary proceedings of the main case that I don't anticipate participating in. Just here observing, Your Honor. THE COURT: Okay. Thank you. MR. KINDSETH: Thank you, Your Honor. MR. LADD-SMITH: Good afternoon, Your Honor, Ivan Ladd-Smith with Spears, Manning & Martini for adversary defendant Beile Li. We did not object and do not intend to object to the proposed mediation procedures. THE COURT: Good afternoon. And just to be clear for the record, the Manning in that name is a relative of mine, my brother, but he is not involved in the case. I Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 14 of 186

15 1 2 3 4 5 6 7 don't know anything about it other than I saw an appearance they filed. So, Trustee Despins, I don't know if you have any concerns about that, but I -- MR. DESPINS: No issues. THE COURT: -- note that for the record. Okay. Thank you. MR. LADD-SMITH: Thank you, Your Honor. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 15 of 186

8 9 10 THE CLERK: May I just have that name again? MR. LADD-SMITH: Yes. Ivan, I-V-A-N, last name is hyphenated. It's Ladd-Smith. L-A-D-D hyphen S-M-I-T-H.

THE CLERK: Okay. Thank you.

12 MR. LADD-SMITH: Thank you.

13 14 15 16 17 THE COURT: Thank you. All right. Before we talk about the mediation procedures, I thought it might make sense to address the motion for default judgment since there are more people on the Courtroom on the mediation procedures than on the motion for default judgment.

18 19 20 21 22 23 So as we turn to adversary in 23-05013, Despins versus HCHK Technologies, I think it makes more sense to proceed that way. Attorney Bassett, are you going to be proceeding with the motion? MR. BASSETT: Yes, Your Honor. THE COURT: Okay. Please proceed.

24 25 MR. BASSETT: Thank you. May I approach? THE COURT: Certainly. Thank you.

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1 2 3 4 5 6 7 8 MR. BASSETT: Thank you. Again, for the record, Nick Bassett from Paul Hastings on behalf of the Chapter 11 Trustee. Your Honor, I'll try to keep my remarks brief this afternoon because we are once again revisiting an issue that the Court has had occasion to consider multiple times in this case. In fact, essentially in this very same adversary proceeding with this very same defendant or set of defendants.

9 10 11 12 13 14 15 As the Court is by now well aware, the defendant at issue, the main defendants at issue who are here objecting are the entities known as the HCHK parties. That includes HCHK Technologies, HCHK Property Management, Lexington Property and Staffing, and then their parent company, Holy City Hong Kong Ventures. I'll describe that relationship in a bit more detail, although the Court is familiar with it.

16 17 18 19 20 These parties, Your Honor, have already had numerous opportunities before this Court to state their case as to why they deserve to be heard and as to why they believe that they hold meritorious defenses to the Trustee's claims. They failed at every turn.

21 22 23 24 25 They were served with complaints in June 2023. They had answered deadlines in July of 2023 for three of the defendants, and then in August of 2023 for the last defendant, Holy City, which is a foreign defendant, the answer deadline was set by order of the Court.

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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 All four entities missed those answer deadlines without excuse. On August 28th, after the last of the answer deadlines, they collectively moved for an extension of their deadline to respond to the complaint. The Court approximately one month later, after briefing and a hearing, rightfully denied that motion and granted the Trustee's cross motion for entry of default against the defendants. In November, the HCHK parties took a second bite of the apple, moving to set aside the default after already having failed to demonstrate that they were entitled to an extension of time to answer, after extensive briefing and again another hearing. On February 28th of this year, the Court denied the motion to set aside, finding, among other things in the process, that defendants have been properly served with the complaint, that they willfully defaulted thereafter, and that they had failed to present a meritorious defense to the Trustee's claims. The Trustee now is here moving for default judgment against the HCHK parties. That judgment, Your Honor, should be granted because the Trustee readily satisfies the requirements for default judgment under Second Circuit law. These requirements are twofold. One, that the defendants have been validly served with the complaint and two, that the allegations of the

1 2 3 complaint, taken as true with all inferences drawn in the plaintiff's favor set forth a claim thoroughly under applicable law.

4 5 6 7 8 9 10 And I will not spend too much time addressing the -- in fact, I won't spend any time addressing the service process issue because I think the record before the Court is clear. I don't think the defendants are even contesting that they were served with process. So unless counsel would raise that, I will not spend any of the Court's time addressing service.

11 12 13 14 15 16 I will instead focus on why the Trustee has demonstrated through the allegations in the complaint that he is entitled to a default judgment as a matter of law on his claims that the HCHK entities, namely the three subsidiary entities, are the debtor's alter ego and/or are beneficially owned by him.

17 18 19 20 21 22 23 24 25 And as I said, Your Honor, in undertaking this analysis, it is very important to remember that Second Circuit law is crystal clear, that upon a default, the defendant has waived its ability to contest the truthfulness or the accuracy of any allegations in the complaint. The only question before the Court is whether the allegations taken as true, and importantly, all interferences drawn in plaintiff's favor set forth a plausible claim for relief. The Trustee's complaint easily clears that bar,

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19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Your Honor, and therefore judgment is appropriate. So the main thrust of the HCHK parties' objection and why they think the complaint is insufficient is they characterize these entities that issue as operating entities that are far different from HKUSA, which is another entity that this Court has already held with the debtor's alter ego. HKUSA, of course, was the shell company that the debtor used to hold title to his yacht to Lady May, and he had placed HKUSA under the nominal ownership of his daughter. Your Honor, I will be the first to admit that the HCHK entities are in fact different for HKUSA. The HCHK entities are not shell companies that the debtor used for the specific purpose of holding title to a single asset. They are instead entities that the debtor used to fund his personal expenses to shield his other assets from creditors. But the fact that they are different from HKUSA in no way means they're any less alter ego. In fact, as I will describe, I think these facts at issue that are relevant to the alter ego analysis as to these entities are in some ways far more egregious than the facts that were at issue for HKUSA. When conducting the alter ego analysis under Delaware law, Your Honor, the Court first looks to see whether there had been -- there's factors that Court supply, of course, but the sum and substance of those factors as

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1 2 3 4 5 whether or not the complaint was alleged that the debtor or the person at issue has exercised dominion and control over the entities in question, such that there's a showing that they are all collectively under the debtor's control in a single economic unit.

6 7 8 9 10 Here, there are numerous facts in the complaint that support that conclusion and any suggestion -- and there are many of these suggestions -- in the objection to the motion are highly disingenuous. And I'll get to that in a minute.

11 12 13 14 Your Honor, he allegations start at the top with individuals with whom this Court is very similar. Yvette Wang, the debtor's criminal coconspirator, with whom he is presently in jail, is the sole owner of Defendant Holy City.

15 16 17 18 19 20 The Court has already found that Yvette Wang is a person who was employed by the debtor and under his control. Holy City owns 99.9999 percent of each of the HCHK entities. So the HCHK property, HCHK Technologies, and Lexington, above that the 99.999 percent owner is Holy City, and the sole owner above that is Yvette Wang.

21 22 23 24 25 The other individual who owns 0.0001 percent of the ownership of each of the operating level entities is Mr. Anthony Di Bautista, another individual whose name has come up constantly in these cases, someone who is also employed by the debtor and has been subject to his control.

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1 2 3 4 5 6 Yet another individual who has been employed as alleged in the complaints by all of the HCHK entities is Mr. Max Krasner. Mr. Max Krasner's name also has appeared nearly everywhere in this Chapter 11 case as an individual who has been employed by the debtor, who has carried out its business dealings in the debtor's direction, et cetera.

7 8 9 10 11 In addition to the ownership and persons in control of these entities who are clearly people who are controlled by the debtor as alleged in the complaint, the HCHK entities were all located at 3 Columbus Circle in New York City.

12 13 14 15 16 17 18 That address is significant because that is the same address at which the debtor and people acting at his direction filmed videos that were the subject of the protests and the harassment campaign this Court already enjoined after finding that those protests and harassment campaign were being directed by the debtor and his associates and were designed to interfere with this Chapter 11 case.

19 20 21 22 23 24 In addition to both allegations, Your Honor, the complaint alleges that the HCHK entities served as the debtor's -- essentially his piggy bank, both receiving funding from other entities controlled by the debtor and then by paying expenses for the debtor and his associates. For example, the complaint alleges that HCHK

25 Technologies made payments for the debtor's -- the Cirrus jet

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1 2 3 4 5 6 7 that the debtor allegedly owns. HCHK Technologies also helps fund the maintenance and operation of the Lady May, which the Court has already found is property of the estate. HCHK Technologies also helped fund the same types of maintenance and operation expenses for the debtor's Bombardier jet, which is the subject of another adversary proceeding before this report.

8 9 10 11 12 The complaint alleges that Lexington Property and Staffing made payments to the debtor's personal legal counsel and the counsel for other debtor controlled entities such as Lamp Capital, which this Court has already found is an alter ego of the debtor.

13 14 15 16 17 18 19 The complaint further alleges that Lexington made payments to known debtor associates and employees including Yvette Wang, Max Krasner, Brock Barnett, another individual within the Court is familiar which the Trustee has alleged to be the debtor's driver and bodyguard, and Aaron Mitchell, who is an attorney representing the debtor who this Court is familiar with and has appeared before this Court.

20 21 22 23 24 25 The objectors go to great lengths to point out that there are less allegations concerning funding with respect to HCHK property. But Your Honor, the complaint plainly alleges in paragraph 27 and elsewhere that HCHK property was part of the same single enterprise along with HCHK Technologies, Lexington Property and Staffing, and many

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1 of the debtor's other shell companies.

2 3 4 5 6 7 8 It also operated out of the same location, had the same employees and owners that had Yvette Wang, Anthony Di Bautista, Max Krasner, and control. Your Honor, there are more than enough allegations as to each of the entities to at least demonstrate that there is a plausible claim set forth in the complaint with all inferences drawn in the Trustee's favor that each of the entities is the debtor's alter ego.

9 10 11 12 13 14 15 16 17 18 To kind of drive this point home, Your Honor, I think the accounting firm that was retained for all of the HCHK entities (indiscernible). Again, this is alleged in the complaint. An email correspondence, the accountants at Markham LLP, hired to perform accounting work for the HCHK entities, stated in an email, quote, that they were representing entities indirectly owned by Miles Kwok, owner of GTV Media. Couldn't have said it better myself, Your Honor, because that's exactly the economic reality of who the HCHK entities were.

19 20 21 22 23 24 25 Before I move on to talk about why the facts in the complaint demonstrate that the HCHK entities were very clearly used by the debtor to commit a fraud and injustice, which I think is maybe the most compelling -- one of the more compelling facts we have here, I do want to just take a moment to respond to a couple of the allegations in the objection.

1 2 3 4 5 6 I think it's paragraph 26 of the objection and elsewhere where the HCHK parties go so far as to say that the complaint affirmatively supports the opposite conclusion, that somehow the complaint paints a picture of these entities being independently operating businesses with their own bank accounts, assets, business objectives, et cetera.

7 8 9 10 Your Honor, I don't know how anyone could possibly read our complaint and come across with that impression with a straight face. There is nothing whatsoever in our complaint that includes such allegations.

11 12 13 14 15 16 17 18 19 20 21 In fact, the only way the objection attempts to paint that picture is by citing to submissions in the New York assignment proceedings, which I'll talk more about in a second, in which the assignment papers, which as I will talk about in a second, we allege were part of the attempt to effectively defraud this Court and the estate, where they characterized the HCHK parties' businesses as being independent and having certain business objectives, et cetera. In our complaint, we expressly -- if you look at paragraph 27 of our complaint -- we expressly say that those statements are inaccurate.

22 23 24 25 And that is not what these HCHK parties, in fact, were, that they were, in fact, shell companies for the debtor. So for them to say that we have alleged that the HCHK entities are separate and distinct operating entities

1 2 that are not the debtor's alter egos is -- it's completely disingenuous and inaccurate.

3 4 5 6 7 Your Honor, the second component of the alter ego test under Delaware law is for the plaintiffs to show that the -- here the debtor used the alter ego relationship with the entities in question here, the HCHK entities, to commit a fraud or injustice.

8 9 10 11 12 13 Now, here as with HKUSA, we have alleged that the debtor used these entities to help hide his assets from creditors and to pay his personal expenses through entities purportedly not controlled by him. In that way, the allegation is similar to HKUSA, where the debtor used a shell company to hide his assets.

14 15 16 17 18 19 20 21 22 23 But here it goes so much further beyond that because well after the commencement of this Chapter 11 case, the debtor not only had in the past, you know, used these entities to hide his assets and help funnel his funds to other shell companies, he used them, as alleged in the complaint, as part of a scheme to keep assets from the administration of this Chapter 11 case outside the oversight of this Court. They did that through the commencement of the assignment proceedings in New York State Court in April of 2023.

24 25 Now, as the Court -- the Court is well familiar with the assignment proceedings, so I won't discuss them in

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1 2 3 4 5 too much detail, and I won't belabor the point. But obviously, the commencement of an assignment proceeding may seem somewhat innocuous until you understand who the creditors in that assignment proceeding, who was the benefit (indiscernible) were.

6 7 8 9 10 11 12 13 14 15 16 17 18 And as the Court knows, and as it's been established in the separate litigation in its adversary proceeding related to the intervention motion, those creditors were people associated with the debtor and under the control of and acting at the direction of the oftsanctioned personal counsel of the debtor, Mr. Yongbing Zhang, whom this Court found was both, A, representing their interests as members of a "creditors representative and a creditors committee" in that intervention litigation and also the same individual who, as the Court is aware from prior litigation in connection with the motion to vacate entry of the default judgment, the same individual who was directing counsel for the HCHK entities here.

19 20 21 22 23 24 25 And had the Court not granted the release to prevent those assignment proceedings from going forward, they may have well succeeded, in which case all of the assets, which are rightfully property of the estate, would have been distributed to all of these creditors who, in fact, are people acting at the debtor's direction. All of that, Your Honor, is alleged in the complaint.

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1 2 3 4 5 6 7 8 9 10 11 12 The -- I guess the other point I would make as to bad faith in the equities, Your Honor, is we also can't forget the history of how we got here through the motion to vacate and the motion for extension of time, as the Court will recall, for misrepresentations of these defendants as to when they were retained, the engagement letter, which showed that they became aware of and were actually contacted by their client well before the answer deadline was initially not disclosed to the Court. When it was finally disclosed, Mr. Yongbing Zhang's name was redacted for no justifiable reason. Your Honor, from the very beginning, these defendants have been

13 14 15 playing games. And I think that also weighs strongly on the overall equities of the situation and therefore the second prong for the alter ego analysis.

16 17 18 19 20 So the last thing I will do, Your Honor, is just very quickly address some of the other arguments that the HCHK parties make. I actually won't spend any time on them at all unless the Court would like me to, but just to note them for the record.

21 22 23 24 25 The HCHK parties assert that the Trustee's claim for reverse veil piercing is not a cognizable claim under Delaware law. The Court has already rejected that argument on multiple occasions, I think most recently in the Lamp Capital default judgment decision.

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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 They also argue that the Trustee's claims are barred by the in pari delicto and Wagner rule. The Court has addressed that on multiple occasions including HKUSA and in Lamp Capital. Obviously, that document does not apply here as the Court has held because the Trustee's bringing some claims under Section 544 of the Bankruptcy Code on behalf of creditors. So Your Honor, in summary, the Trustee has properly served the defendant, has more than plausibly demonstrated that his claims for alter ego and their beneficial ownership are valid under Delaware law. And none of the other arguments that have been raised in opposition to the complaint have merit. So for those reasons, we think default judgment is appropriate, and we respectfully request that our motion be granted. THE COURT: Thank you. MR. SHABAN: May I approach? THE COURT: Certainly. Thank you. MR. SHABAN: Thank you. Good afternoon, Your Honor. THE COURT: Good afternoon. MR. SHABAN: I'll try and be as brief as I can. I think the issue has been fairly well briefed. And some general comments and then some specific comments. I think it's ironic that we actually -- I actually

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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 find myself here arguing essentially a 12(b)(6) motion because from the beginning of this case, all we've tried to do is plead. All we've tried to do is answer the complaint. We actually did file a proposed answer, opted not to challenge the settlement agreement. We did -- we're not going to challenge the complaint. Let's get to the meat of the issue. That, unfortunately, has not been permitted for the reasons the Court's aware of. So here we are. Here now we actually have to face this complaint. It's not a third bite at the apple. This is a new issue. The first -- the first couple of times we were here and say, sorry we were late. We've reconstituted. We've gotten organized. Please let us plead because we think what they're saying is not right. We don't think they have viable -- you know, we don't think their alter ego claims are correct. What's happened with this bite, so to speak, or the only bite, is we're challenging the complaint because that's where we're at. In order to get a default judgment under Second Circuit law, they have to plead viable claims under Delaware law that these four entities are the alter ego or equitability owned by this debt. And they haven't done that. And, you know, I mean, I think the reasoning is pretty obvious because, understandably, they were sort of rushed. The Trustee was rushed because, look, oh my

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1 2 3 4 5 goodness, there's this agency action going on. We got to stop this. So they put together a complaint with allegations and associations and affiliates and vague, you know, guilt by vague association in order to throw enough facts up on the wall to seek a preliminary injunction motion.

6 7 8 9 10 11 12 That's how you do that. So this -- if all this stuff is true, it could be a claim here so let's pause. That's fine to get a preliminary injunction motion. But we're here with them now, they're at the default judgment stage, and it backends with a 12(b)(6) motion. This complaint is insufficient to plead all three of their claims or veil piercing against these entities.

13 14 15 16 17 18 19 20 And I mean, the best place, I think, to start is sort of to -- and we'll do this in a second -- to juxtapose the other cases where the Court has (indiscernible). If you look at this complaint, there are no allegations, no allegations that this debtor had day to day control of these entities. None. There are no allegations that this debtor had direct control of finances of any of these entities. None.

21 22 23 24 25 There are no allegations. None. And Trustee had to -- had to admit this -- that somehow this debtor sourced his funds, and to these entities had high access. Drastically different from the other cases, HKUSA and Lamp Capital. So he had to admit that.

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1 2 3 4 5 And that's -- so you examine this complaint and you examine these parties, they're drastically different than the other shell companies that the debtor may or may not have used. We're looking at this complaint, they don't state a viable cause of action.

6 7 8 9 10 11 12 13 14 15 I mean, let's look at the huge differences between this complaint and the HKUSA complaint, where we attach an exhibit to our opposition. And I think it's relevant to that pretty quickly or pretty clearly. All kinds of allegations regarding control, you know, with HKUSA, none regarding the HTHK direct control. That's the bootstrap argument that we'll talk about in a moment. Direct control. You know, and the HKUSA, didn't file -- they alleged -- they alleged they didn't a file corporate formalities. None of that's alleged here.

16 17 18 19 20 21 22 23 24 In fact, they actually plead that they're Delaware corporations and this is how their owned, and the exhibits they attach to their complaint, which for this court to be considered talk about their business purpose and list all of the creditors, all of the books, all of the finance of these viably operating entities. That wasn't the case in HKUSA or even Lamp Capital. You know, in the HKUSA case, they allege, specifically, that this is a shell corporation of the debtor used to hide assets.

I think that was the one where the -- where the

| | Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 32 of | |----|----------------------------------------------------------------------------------------| | | 186 32 | | 1 | yacht got pocketed. That's not here. That's not what we | | 2 | have here. The, you know, the same -- I mean, the same with | | 3 | Lamp Capital. | | 4 | You know, they argue that the Lamp Capital was | | 5 | formed by the debtor. That's not alleged in this case. They | | 6 | allege that the Lamp Capital was created to hide the -- | | 7 | excuse me, the yacht and apartment. That's not alleged in | | 8 | this case. They allege that there was shared ownership with | | 9 | the debtor. | | 10 | That's not alleged in this case. They allege | | 11 | there was no independent purpose of the Lamp Capital | | 12 | entities. | | 13 | THE COURT: Well, what's your -- I'm sorry. When | | 14 | you said they alleged that there was shared what? | | 15 | MR. SHABAN: I believe it'd be Lamp Capital | | 16 | complaint. It was alleged that we -- they shared space with | | 17 | the debtor (indiscernible). And I'm -- if I'm wrong on that, | | 18 | so that's -- I haven't read that complaint a long time ago. | | 19 | My understanding is that complaint says, they share office | | 20 | space with (indiscernible). | | 21 | Here, what they say, they share office space with | | 22 | each other and certain associates are affiliates of debtor, | | 23 | but not the debtor itself. So, again, it's this entire | | 24 | bootstrap argument that just keeps coming back. It's to form | | 25 | the basis of this very complaint. Lamp Capital. There were | | | |

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1 2 no corporate formalities. That was alleged. They don't allege that here because they can't.

3 4 5 The only thread -- the only thread between those cases and this case was the involvement of Ms. Wang, who this Court has held was an employee. Okay. Fine.

6 7 8 9 10 11 12 13 Yes. She was an employee. There were -- there were some common employees. But the huge difference between their alleged theory and the -- and the cases that we talked about and these cases or this complaint is that there, the debtor used his -- these shell entities to hide assets, hide his assets, hide his property, hide his money, and used his son or daughter to do it. Here, we don't have that, but that's not what's happening.

14 15 16 17 18 19 20 21 22 23 24 This complaint appropriately alleges that some of the assets and a lot -- a lot of the assets here are from either affiliates, alleged affiliates, whatever that means, of this debtor and Chinese dissidents, which -- who are part of the movement. And this has been a common theme of what's going on in this case. Is, yeah, there's going to be crossover between parties. There's going to be crossover between employees. There's going to be crossover between some creditors because, undeniably, all of these parties are part of a broad, global, political movement. It's not some big confidence scheme. It's part of

25 a broad, political, global movement. And just because some

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1 2 3 4 5 6 of these HCHK entities operate a business to support that movement doesn't ipso facto bootstrap from those entities, which are viable Delaware entities, through Ms. Wang, who there is no allegation that somehow she was controlled by debtor or that she was hurt with his employee. I don't think that's enough under Delaware law.

7 8 9 10 11 12 And then back to a debtor who there's been no allegations that he hid money, controlled them, you know, collapsed them, and used them -- used them as part of a shell game. These entities were viable running entities. They have \$29,800,000 to \$30,000,000 worth of assets. They had creditors. Yep.

13 14 15 16 17 18 19 20 21 22 23 Some of them correspond to others. Well, it's astonishing to me that this Trustee seems to think that just because there's a commonality, business purpose, political purpose, and some financial purpose, then that makes everybody -- everybody's connected to the debtor. The Court's heard me use the metaphor before in my brief. Just because the band leader gets arrested, doesn't put the rest of the band in jail. It doesn't make the rest of the band liable for the band leader's actions. And that's what this complaint is trying to do. It doesn't allege the specificity that has to be alleged under Delaware law.

24 25 Now in terms of, you know, the actual specificity, I'll try and be quicker, Your Honor. Again, no allegations

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1 2 3 4 5 6 7 8 9 10 11 or single unit. No allegations with joint funding. No allegations of inadequate capitalized. But zero allegations regarding HKUSA was all over. No allegations that the funds came from the debtor. None. Zero. There's no allegations that this debtor would fund these entities to hide them from creditors. The only allegations are this debtor was associated with these affiliates, and that these affiliates were Ms. Wang, and there were some donors that were part of the movement, put some money in these entities. That's a far cry from what happened on HKUSA and what happened in Lamp Capital.

12 13 14 15 16 17 18 19 They admit they had a corporate purpose through their attachments. That's our assertion. They understand, the Trustee says, well, we try to carve out. They're kind of cherry picking, it's fun, right? They essentially, the ABC action petitions, and they use what they want as evidence, but then they cherry pick out what they don't want as evidence. I'm not quite sure that's appropriate, but the Court to make that that determination.

20 21 22 23 24 25 They allege separate tax returns. Like, they -- Markham LLP. I think someone's here from there. Yeah. They filed tax returns. In fact, a couple of weeks ago, I had to call Trustee's office in order to get tax information for some of the employees of these HK entities (indiscernible) so they could file their taxes.

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1 2 3 4 5 These are operating businesses with employees, with contracts, with leases, with property under management, with assets, cameras, videos, all this stuff. And yes, it was part of the movement, but that is not an illegal purpose. That was part of the movement.

6 7 8 9 10 11 They alleged creditors/donors from these Chinese business. That's huge. My humble opinion. That shows exactly what we've been saying. (indiscernible) debtor hiding assets. A lot of these funds came in from Chinese business. And, again, there's no allegations regarding sources.

12 13 14 15 16 17 18 19 20 21 22 23 And so for the four entities, HKA (phonetic) (indiscernible) BVI. No -- actually, it's no allegations at all. In the reply, they try -- they try and say, well, we just want to turn over -- turnover of assets, but they don't file a legal authority. Why would this BVI entity be required to turn over assets when they haven't -- when there's been no claims made against them? They're thrown in the mix. I mean, they make this big dirty snowball. G Series, Holy City, Lamp Capital. And then they try to pull out snowflakes and say, aha, they can't do that. This Holy - - with the BVI entity, there's no allegations. Their corporate existence is valid. Their

24 25 corporate existence has actually been provided to the Court in affidavits. Their corporate existence can't be pierced

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1 2 3 4 because they've made no allegations for piercing the parent company. They are the owners of the equity of the subsidiaries. So I don't know -- I don't know how they jump over that hurdle.

5 6 7 8 9 But assuming that you even could jump over the fact that this parent has not been -- it's essentially not been sued, and it's been named in here. But the parent company has not been sued. There's been no allegations to pierce that corporate veil.

10 11 12 13 14 15 With respect to HCHK properties, again, no allegations controlled by debtor, no allegations (indiscernible) -- no allegations about the formalities (indiscernible), no allegations regarding sourcing. No allegations regarding that the debtor had some of his expenses paid.

16 17 18 19 20 21 22 In fact, they cite -- they say they cite that and give you in a brief, but what they actually cite to, Lexington, Lexington Properties. So this is part of this more part of this dirty snowball bundle complaint. They pick a bunch of random facts and some names and associations, stick it all in a big pile, and say, aha, everybody's painted with the same brush. That's not Delaware law.

23 24 25 All four entities have viable corporate existence, and there's a presumption of validity under Delaware law. And this complaint does not vitiate or penetrate that

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1 2 3 corporate existence. And we can't do it by picking a fact from this entity and a fact from this G Shares guy, and somebody said something in another case.

4 5 6 7 8 9 10 11 12 Jam it in and say, well, you know, pox on all your (indiscernible). That's just not Delaware law. It's not Connecticut law. Again, no sourcing property. No sourcing from the debtor. HCHK Tech. Same thing. No allegations about debtor control. No allegations about it being undercapitalized. No allegations about lack of formality. No allegations regarding it being a facade. No allegations regarding debtor's money being placed there. What they do allege is debtor's associates place money there.

13 14 15 16 17 18 19 20 What does that do? Associates. I mean, it's -- I think I used an example a couple of months ago when Jim and Tammy Faye Baker fell from grace 15 years ago, not everyone in the church was on the hook for their transgressions. Not everyone in the church was held liable for debts they incurred. Not everyone in the church was dragged before a court and said, aha you got to get painted with the same brush as these two.

21 22 23 24 25 That's what this Trustee is trying to do here. Again, again, no allegations regarding sourcing. HCHK Tech, same thing. No allegations regarding control, undercapitalization, no allegations regarding bad formalities, none. Absolutely, practically the opposite.

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1 2 3 4 5 6 Delaware corporation, just another owner. The only allegations regarding money being placed there is for debtor's associates. Well, one is -- one is the affiliates, but one could use associates. But, again, that's not the standard. That's not what happened at Lamp Capital. That's not what happened at HKUSA.

7 8 9 10 11 12 13 14 In those cases, the debtor took money, took a boat, took an airplane, created a paper entity and tried to hide it. What you have here are viable entities that were performing and performing operations in the name of the movement, undeniable, and that they have employees, contracts, real estate, equipment, and purpose. And this complaint does nothing to vitiate that. It's the same bootstrapping.

15 16 17 18 19 20 21 22 23 24 Well, the debtor employed Wang. And Wang was part of these entities, so ergo, you can jump over Wang and pierce the corporate veil, you know, from the entities, you get back to the debtor, without any allegations regarding Wang, other than the fact that she was his employee. There's no - there's no alter ego allegations regarding Ms. Wang. There's no -- yes. You say this was debtor's employee. That's the control argument. But in terms of corporate formalities and an actual business contract, there's nothing in there because (indiscernible) it's not true.

It's interesting to see if and when all these

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40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 documents actually come to light that the Trustee mostly has control. You know, the Court's seen some of them. We have a lot of them hidden for or concealed for now. They were contracts and entities and viable businesses. Common names. Absolutely. Common movement. Absolutely. And does that make everybody on the hook for the debtor's stuff? No. It doesn't. Lastly, HCHK, Lexington. They're saying no allegations regarding control, capitalization, formalities, (indiscernible), nothing there. No allegations that the debtor sourced his money there to hide it. Plead that -- we do plead that there were, you know, there were some assets there. They had multiple bank accounts, and then perhaps there was some bills paid. And it's interesting. And this -- and I'll try and sum up here. I mean, this is probably the most disingenuous argument that they're making is, on the one hand, HKUSA and/or Lamp Capital, debtor was using it to hide his assets. Debtor was using it to hide money and to hide it from creditors. Here, they're alleging bootstrapping that either through Ms. Wang or through affiliates, these entities got funds, not from the debtor, but from somewhere, creditors,

23 24 25 other businesses, contracts, and that it -- that somehow, at least in the case of one of these entities -- I think it was Lexington -- perhaps the debtor did have some of his expenses

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| 1 | paid. I think it was paragraph 38 or 39 at the point lists a | |----|------------------------------------------------------------------| | 2 | whole bunch of expenses that were paid. | | 3 | It was a driver, like, five law firm bills, all | | 4 | this other stuff. So the difference between hiding assets | | 5 | and poaching money is drastic, drastic. And here you have | | 6 | HCHK entities that are operating viable businesses for the | | 7 | purposes of the movement, among other things. There was a | | 8 | property management, everything else, but there was some | | 9 | (indiscernible) for the purpose of the movement. | | 10 | And here, you have the debtor hiding assets, | | 11 | hiding planes, hiding boats. This is an easy case. This is | | 12 | a hard case, and they haven't pled it sufficiently. So, you | | 13 | know, again, it's the complaint that controls here. Not | | 14 | innuendo, not -- I mean, they keep bringing up the engagement | | 15 | letter. Just -- | | 16 | THE COURT: What about the allegations in the | | 17 | complaint that the HCHK Tech made payments for the Lady May | | 18 | and the jet? How is that not an allegation that's | | 19 | sufficient. When you just talked about -- you just said that | | 20 | the HKUSA and Lamp Capital and all they made claims. They | | 21 | used that. Your words were they had -- they -- those | | 22 | entities were created or controlled assets of the debtor to | | 23 | hide them. Isn't that what you just said? | | 24 | MR. SHABAN: Correct. (indiscernible). | | 25 | THE COURT: So then -- so then the HCHK Technology |

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| 1 | allegations in the complaint that say that payments were made | |----|------------------------------------------------------------------| | 2 | from the funds of HCHK Technology to pay the expenses of the | | 3 | Lady May and the jet, how is that not related? I don't | | 4 | understand how you, with regard to that issue, how you can | | 5 | say that that's not a plausible cause of action. | | 6 | MR. SHABAN: Well, I think -- | | 7 | THE COURT: Considering that all the allegations | | 8 | are deemed through at this point because the default | | 9 | presented. | | 10 | MR. SHABAN: But the -- all pled -- pleaded | | 11 | allegations are deemed true. There are some allegations, but | | 12 | I can't remember -- | | 13 | THE COURT: Well, I didn't find that any of them | | 14 | weren't well pled in the default. Right? I mean, no one's | | 15 | asked me to make any findings that there was an allegation | | 16 | that wasn't well pled. | | 17 | MR. SHABAN: That's right. And that's -- and | | 18 | that's (indiscernible). That's the purpose of this. That's | | 19 | what -- why we are where we are. | | 20 | THE COURT: Well, it's not exactly the purpose. | | 21 | The difference is you're saying it fails to save claim upon | | 22 | which one can be granted. | | 23 | MR. SHABAN: Right. | | 24 | THE COURT: That's not saying it's not well pled. | | 25 | There's a difference. Right? You're saying legally it | | | |

43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 doesn't plead a cause of action. There's a difference in those two standards. MR. SHABAN: I understand. THE COURT: And so what I'm saying to you is when I'm looking at your argument, I'm looking at the allegations in the complaint. Right? MR. SHABAN: Correct. THE COURT: That's what I need to look at, and I need to look at your response to those allegations. And some of your responses, you talk about exhibits versus the actual language in the paragraphs of the complaint. And while I completely understand that I can look at the exhibits, I'm looking at the allegations in the complaint. Do they state a claim, a plausible claim upon which relief can be granted? And so I'm not going to ask you very many other questions, but with regard to your statements about the Lady May and the jet, and those two entities being created to hide assets of the debtor, your words, then how is it not a plausible claim that HCHK Tech is either an alter ego or beneficial owner of assets of the debtor when the funds of that entity were used to pay expenses of the Lady May and the bombardier jet? Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 43 of 186

24 25 MR. SHABAN: Well, with specifics -- I understand the Court's question and comment regarding well pled versus

44 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 viable cause of action. And yes, there is a distinction, but -- and I understand that. With respect to HCHK Technologies, the Trustee pleads that the funds came from Chinese dissidents. So it's paragraph 34. The Trustee pleads it that the funds for this entity and their creditors were from Chinese dissidents as part of the movement. That's in the -- that's in the allegation. So whether I -- and I think some of the some of those might have been -- THE COURT: It says in paragraph 33 through 38 that the HCHK entities were financed by the debtor. That's the allegation in those paragraphs. MR. SHABAN: Well, that's the argument. THE COURT: No. That's all the allegations in the complaint. I mean, I can read them. We can pull it up and look at them. MR. SHABAN: Right. But on the face of this complaint, I don't think it's sufficient, and that's our argument. THE COURT: That's fine. That's fine. I'm just asking the question based upon -- with your statements. I understand that you don't agree, and that's absolutely fine. I -- the question is based upon the statement you made about HKUSA, and Lamp Capital. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 44 of 186

MR. SHABAN: Well, and it's sort of an indirect way of answering the Court's question in a different way. If you look at the reply, the reply goes -- jump those somersaults trying to repair the failed allegations of the complaint. You look at page 4 and page 6. It makes all

8 9 10 11 12 13 14 All the stuff they were supposed to allege in the complaint and didn't, they alleged it in the reply, cite motion papers, and never cite the complaint. And the reason is, they didn't plead it in the complaint. They did it in this vague, blunderbuss way, mostly because they're trying to get a preliminary injunction. I get it. Now it's the (indiscernible).

these allegations regarding facade and a lack of corporate

purpose and the daily control.

15 16 17 18 19 20 21 22 23 24 25 If we have to do a complaint, if we got to -- this complaint doesn't plead viable causes of action. Delaware law is very strict and very protective of their companies. And the other -- the other cases, Lamp Capital, HKUSA, it was it was simple. Way more simple. Here, you got employees, contracts, property, leases, donors from over from China. It's part of the movement. All the stuff that we've been saying, and not a single allegation, not a single allegation that this debtor put his money in these entities. Not one. THE COURT: I disagree with that statement. What you just -- that last statement that you just made. At least

46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 my reading of the paragraph in the complaint that says that the HCHK -- it alleges that the HCHK entities are financed by the debtor. MR. SHABAN: Through affiliates and associates. THE COURT: Says they're financed by the debtor. MR. SHABAN: Respectfully, I think the allegations all the -- THE COURT: The word "the debtor's" in there. And it -- MR. SHABAN: Oh, it's in there. THE COURT: -- and it -- financed by the debtor. MR. SHABAN: Truthfully, I'm not sure there's a single straight allegation. I'll look. But the body of the complaint is if the debtor's affiliates, the debtor's associates, the debtor's -- bootstrapped. THE COURT: The debtor's -- the debtor's -- acting under the direction of the debtor. MR. SHABAN: Arguably, if -- that's their argument. But that's not their allegation. THE COURT: That's their allegation. That's their allegation. MR. SHABAN: Well, I -- respectfully, we think that this is too far -- it's bootstrapped. They can replead this complaint and probably -- and probably meet the Delaware standard. I'm sure they could, given enough time, and I Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 46 of 186

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1 2 3 4 5 think they should be required to because these allegations don't jump a hurdle that appears in the corporate balance. And lastly, I know we talked, the counsel, quick trip to the in pari delicto Wagner issue. And the Court has ruled on it.

6 7 8 9 10 11 12 13 14 15 16 17 This case is different, we think, because of bootstrapping. I don't think that debtor's creditors, based on these facts, working through either Wang or Chinese dissidents or non-named affiliates, could go after HCHK, much the same way as I don't think this debtor -- the debtor only has -- I mean, the Trustee only has what the debtor had, or the Trustee only has what the -- what the unnamed or the general creditors have. And based on these allegations, the bootstrapping, it has -- it all goes through Wang. It all goes through unnamed affiliates. It all goes through unnamed associates. Those are our legal terms. Those are his words in order to get to HCHK.

18 19 20 21 22 23 24 25 I think -- I think in pari delicto here is applicable because if everything this Trustee is saying, if we say -- if this -- if this debtor and everybody in HCHK is trying to perpetrate a fraud, well, then it -- then we're out. That's what the document says. That's exactly what the document says. Right? So it does apply here for the reason that we've said. So, I've gone a lot longer than I expected to. I apologize. If there's anything else, I'm here for the

| | Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 48 of 186 48 | |----|-----------------------------------------------------------------------------------------------------| | 1 | Court. | | 2 | THE COURT: No, I'm sure I'm going to give Mr. | | 3 | Bassett an opportunity to respond and then I'll give you a | | 4 | final opportunity to respond. | | 5 | MR. SHABAN: Thank you, Your Honor. | | 6 | THE COURT: Okay. Thank you. | | 7 | MR. BASSETT: Again, good afternoon. Nick Bassett | | 8 | from Paul Hastings on behalf of the Chapter 11 Trustee. Your | | 9 | Honor, counsel for the HCHK parties can say as loudly and as | | 10 | many times as he wants that there are no allegations in the | | 11 | complaint regarding control, funding by the debtor, et | | 12 | cetera, but that does not make it true. The complaint is | | 13 | what controls. The allegations of the complaint, | | 14 | specifically, are what control. The only issue before the | | 15 | Court today is whether the allegations, taken as true, with | | 16 | every inference drawn in the Trustee's favor, state a | | 17 | plausible claim for relief under Delaware law. And they | | 18 | absolutely do. It's not even a close call as to whether that | | 19 | hurdle has been cleared. | | 20 | Your Honor, counsel is very passionately asserting |

21 22 23 24 25 his argument that this complaint is sufficient. I get that. But I think to understand how strongly his clients really feel about that argument, you can look back at their motion to vacate the entry of default under Rule 55(c). A critical component of that standard, which they bore the burden to

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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 prove, was that they had meritorious defenses to the complaint. Other parties have been in that same situation. Lamp Capital. Lamp Capital tried to make that showing by raising all of the 12(b)(6) arguments they could think of. In pari delicto, Wagner, allegations of the complaint were insufficient. What did the HCHK parties do? They didn't even pretend to want to file a motion to dismiss. The only thing they said was, Your Honor, and counsel's repeated that again here today. Your Honor, these are viable entities. And just because they're part of the movement doesn't make them an alter ego of the debtor. Your Honor, that was what -- that was what they elected to go with, a blanket denial of the alter ego allegations supported by no evidence. It can't be considered here today. But what it is telling about is that this 12(b)(6) argument was nowhere to be found when they had to raise the meritorious defense. They raise it now as a last ditch effort to try to avoid the entry of default judgment against them after having time and time again, opportunity after opportunity, to come to the Court, demonstrate why they should be allowed to be heard notwithstanding their extraordinarily and inexcusably dilatory behavior. And they

haven't done it.

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1 2 3 4 5 Your Honor, they've had the opportunity and they failed. Now all of the things that counsel has said that are not in the complaint are in the complaint. He says there are no allegations of control. That is categorically untrue on the face of the complaint.

6 7 8 9 10 11 12 13 14 15 The complaint alleges all over the place that Yvette Wang, the nominal owner of these entities, is the debtor's lieutenant, his employee, the person who carries out his bidding. This is the same person who has been criminally indicted alongside the debtor in the Southern District of New York, alleged to be his lieutenant, his partner in crime, the person who carried out his every wish, defrauding people of over \$1,000,000,000. That's the Yvette Wang that we're talking about. The idea that that's not allegations of the debtor's control is nonsensical. Of course, it is.

16 17 18 19 20 21 22 23 24 That is concrete, strong evidence of the debtor's control over these entities. And it doesn't stop with Yvette Wang. We have Max Krasner, another individual whom the debtor controls as alleged in the complaint and as discussed and found by the Court in prior rulings in this case. He was also an employee of these entities. Anthony Di Bautista, same thing. Your Honor, the complaint alleges that the debtor himself exercised control through the people that he directs.

Of course, he's not directing every alter ego

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1 2 3 4 entity in his enterprise personally. That wouldn't make any sense. He's doing it through people under his direction. That's exactly what is alleged in the complaint. Counsel also said that there is no allegations of hiding assets.

5 6 7 8 9 Wrong. And I didn't admit that there wasn't. Of course, there is. That's exactly what he's using these entities for. All the cash that they hold, all the assets that they have, those are entities that rightfully belong to the debtor and rightfully belong to this estate.

10 11 12 13 He is using these entities to hide them. That is alleged in the complaint. Counsel also said that there is no allegation that these entities' sources of cash come from the debtor. Again, false. Court walked through this.

14 15 16 17 18 19 20 The complaint directly alleges that the debtor funded these entities through other sources of cash that he controls. The fact that he -- there's not allegations that he himself wrote a check from his checkbook is irrelevant. Of course, he didn't operate that way. He operated through layers of shell companies, and that's exactly what's alleged in the complaint.

21 22 23 24 25 More specifically, as to Lexington, there are some names of companies that this Court is very familiar with, specifically alleged in the complaint, some of the entities that funded Lexington, Golden Spring. Court has already found that Golden Spring is debtor's alter ego.

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1 2 3 4 5 Saraca (phonetic), already found in the protest litigation that Saraca is controlled by the debtor. Leidenschein, there's an alter ego complaint pending against Leidenschein. ACA Capital, same thing, alter ego complaint pending against ACA Capital.

6 7 8 9 10 11 12 13 14 15 As to the other two entities, there are also clear and specific allegations in the complaint which are buttressed by the other findings that this Court has already made in the intervention litigation that they are funded by the debtor. Those allegations, that's all of the individuals listed as the creditors of these entities, i.e., the people that funded it, they are not, as counsel said, and this is not alleged in the complaint, that they are funded by unrelated dissidents. That is absolutely not what is alleged.

16 17 18 19 20 21 What is alleged is that the two HCHK entities were funded by persons acting at the debtor's direction and under his control. These are the individuals who were represented by, who are members of the "creditors committee", represented by the creditors' representatives. Court already found this in the intervention litigation.

22 23 24 25 Those individuals are taking their direction from the debtor's personal counsel, Mr. Yongbing Zhang, who has filed multiple frivolous lawsuits for which he has been sanctioned against both the Trustee, my law firm, against Mr.

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| Sarnoff and his firm and his clients. That same counsel is | |---------------------------------------------------------------| | the one that counsel for the HCHK parties elected to redact | | from the engagement letter that he filed with the Court so | | the Court would not see that connection. | | |

5 6 7 Your Honor, the allegations in the complaint of the control of these entities by the debtor and their funding is all over the place. It's not even a close call.

8 9 10 11 12 13 14 15 Lastly, Your Honor, I just wanted -- counsel made an argument regarding Holy City saying there's really nothing in there about Holy City. Your Honor, you've seen this argument before. Holy City is named in the complaint because it is the entity that allegedly nominally owns the companies in question, who are alleged to be the debtor's alter ego. The Court has already dismissed that argument and should dismiss it here.

16 17 Your Honor, unless you have any other questions, I think that's all I have at the moment.

18 19 20 THE COURT: I have nothing at the moment. Thank you. MR. BASSETT: Thank you.

21 22 23 24 MR. SHABAN: May I be brief? THE COURT: Yes. MR. SHABAN: Thank you, Your Honor. May I approach?

THE COURT: Please.

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| 1 | MR. SHABAN: Keeps raising meritorious defenses. | |----|-----------------------------------------------------------------| | 2 | That's not where we're at. We're here under the controlling | | 3 | authority of the Second Circuit, that in a motion for a | | 4 | default judgment, you got to look at the complaint and see if | | 5 | it's pled viable causes of action under applicable law. | | 6 | It hasn't done it. That's the argument. And so | | 7 | but bringing up old, essentially, irrelevant arguments about | | 8 | Mr. Zhang or, you know, what happened on previous motions. | | 9 | That's not what's before the Court. It's this complaint, | | 10 | these allegations. | | 11 | And the reason this complaint or my supposition | | 12 | that this complaint fails is, again, they were trying to -- | | 13 | they were trying to -- they were trying to just run the same | | 14 | game plan that they did with HKUSA and Lamp Capital and some | | 15 | of the other entities because that's what they had at their | | 16 | disposal. They had very little time to do it because they | | 17 | had to stop the assignment. They want to stop the assignment | | 18 | actions. Okay. | | 19 | So they tried to -- they tried to jam the square | | 20 | peg to a round hole, didn't have the allegations to fill the | | 21 | hole, but they had an -- they had enough allegations to get a | | 22 | preliminary injunction. Now that we're looking at the | | 23 | complaint, the gaps in their complaint are everywhere. Just | | 24 | because you say someone's affiliated, doesn't mean anything. |

25 Just because you say someone's under the direction of someone

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| 1 | doesn't meet the standard under Delaware law. Again, it's | |----|------------------------------------------------------------------| | 2 | bootstrapping. | | 3 | It's the HCHK entities, which no one is denied | | 4 | were viable entities operating for purposes mostly for | | 5 | (indiscernible) and then supporting each other. Then there's | | 6 | Wang, and then there's allegedly debtor. Well, she's on the | | 7 | -- the bootstrapping through Wang and trying to get these | | 8 | entities, which no other creditor or debtor himself could | | 9 | have done. And now they're trying to do it. They're trying | | 10 | to do it in the name of the Trustee. | | 11 | It's different with -- with the other | | 12 | (indiscernible). One, two, three. Corporate, corporate, | | 13 | corporate here. There's -- there are people in between, | | 14 | whether it be affiliates, whether it be investors, whether it | | 15 | be Wang. | | 16 | Look through the complaint, Your Honor. | | 17 | Obviously, I regret the Court's going to have to reread this, | | 18 | but there's a -- there's a lot of -- there's a lot of smoke. | | 19 | But when it comes to the elements in the Delaware law, | | 20 | there's not a lot of fire. There's vague references, they're | | 21 | not specific to meet the burden between viable causes of | | 22 | action. | | 23 | So, respectfully, we think they should replead. I | | 24 | mean, the Court has two options, strike the complaint, which | | 25 | the Court is not going to do, or make them replead. And | | | | | | |

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| 1 | respectively, we think that's what we're at. | |----|-----------------------------------------------------------------| | 2 | THE COURT: Okay. Thank you, Counsel. All right. | | 3 | I will take the matter, the motion for default judgment under | | 4 | advisement, review your arguments made today. And again, the | | 5 | pleadings submitted and the complaint and will rule | | 6 | accordingly. So thank you. That concludes the hearing on | | 7 | the motion for default judgment. | | 8 | I'm not sure, counsel, if you have to stay here | | 9 | for any of the mediation, but if you don't, you certainly are | | 10 | not required to. | | 11 | MR. SHABAN: Thank you, Your Honor. I may hang | | 12 | out for a little bit, but sneak out at the perfect time. | | 13 | THE COURT: That's fine. Thank you. Then the | | 14 | other matter on today's calendar is the motion for the order | | 15 | modifying the avoidance action procedures. And I will say I | | 16 | have seen objections filed. There were 11 objections. One | | 17 | was withdrawn today. As a matter of fact, it's my | | 18 | understanding earlier today. | | 19 | And I would assume, Trustee Despins, you were | | 20 | turning back with (indiscernible) you want to address where | | 21 | things stand with regards to the mediation procedures and the | | 22 | objections? And then I will hear from any parties who have | | 23 | filed an objection that wish to be heard. | | 24 | MR. DESPINS: Yes, Your Honor. Mr. Bassett will | | 25 | handle this one. I think we filed an amended proposed order | | | |

57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Friday or Saturday? MR. BASSETT: Yes, Your Honor -- THE COURT: A second amended proposed order, is that what you're referring to? MR. BASSETT: That's right, Your Honor. THE COURT: Okay. MR. BASSETT: And if I may, I may address the Court from counsel table? THE COURT: Certainly. MR. BASSETT: Thank you. And I may very likely have Attorney Linsey jump in when appropriate because he had a lot of discussions with other parties leading up to the submission of the proposed order, et cetera. But just to walk the Court through kind of the history very briefly. So following the filing of the motion, we had a status conference. Following that status conference on, I believe it was March 22nd, the Trustee filed an initial revised proposed order of the mediation procedures. The Trustee then served that order in accordance with the direction of the Court on all of the parties to the avoidance action. I can represent that that included every domestic relocated defendant in I believe over 100 actions, does not include the foreign located defendants who are still in the process of being served. But all told, when it comes to the Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 57 of 186

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1 2 3 domestic defendants, I think we ended up serving the mediation procedures on -- I think it's approximately 200, if not more, defendants.

4 5 6 7 8 9 Of those parties who were served with the mediation procedures, there were 12 objections, I believe, filed by the deadline. And in addition to those 12, there were a few other parties who reached out informally to myself or to Attorney Linsey to discuss some issues that they have with the procedures.

10 11 12 13 14 15 16 17 18 We, thereafter, talked to both the objecting parties and the other parties who reached out, both on the phone and via email to see if some of their issues could be resolved. We did, in fact, end up addressing, I believe, at least some of every objecting party or every other party who came to their issues, not all of them. As a result of those efforts, we were able to, I believe, resolve at least one objection in its entirety. I believe that Lester Hill is the party who I believe the objection was resolved.

19 20 21 And then, some of the other parties who have told us that they may object ended up not objecting as a result of us being able to accommodate some of their changes.

22 23 24 25 And so, Your Honor, at this time I won't walk you through all of the issues that we changed in the revised proposed order. And by the way, this, for the record, was submitted last Friday, the most recent revised proposed order

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1 2 3 4 5 6 on April 19th. And it's available on the main docket at ECF 3105. We have the revised proposed order at Exhibit A and then Exhibit B, I believe, is a red line showing changes to the initial proposed order. And I think Exhibit C is changes to the revised proposed order, the prior revised proposed order.

7 8 9 10 11 Some of the changes, just by way of example, that we made Your Honor, and this came up in the last hearing, but one of the issues that has been raised was that mediation should only be mandatory for those parties that have actually been served.

12 13 14 15 16 17 And for example, to the extent that defendants located abroad have not been served, they would not be subject to mandatory mediation in the first instance, although procedures could be adopted for those adversary proceedings after the parties have been served. That is now addressed specifically in the order.

18 19 20 21 22 23 24 There were some comments raised around what happens in the event of conflict that the mediator -- that mediators and the panel might have. We would address those comments by revising and sort of strengthening, if you will, that language and they had said if a mediator identified a potential conflict of interest that mediator may recuse him or herself. That language is now shall.

We have extended certain deadlines, including

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1 2 3 deadlines to reply to any motion -- to reply in support of any motion to dismiss that is filed. Parties asked for a little more time, we granted that.

4 5 6 7 8 Some parties have raised an issue that came up with last hearing concerning the consequences of failing to participate in the mediation process in good faith. There's paragraph in the mediation procedures that talks about what remedies and sanctions may be available to the Court.

9 10 11 12 13 14 15 Some parties were concerned about running afoul of that provision if they simply, despite their best efforts, were not able to reach a settlement. We tried to give them comfort that, of course, we're not seeking to do that. So we added some language to the order that basically says, failure to reach a settlement in and of itself will, of course, not be grounds for any sanctions.

16 17 18 19 20 21 22 Another comment that some parties raised were with regard to the provision of the mediation procedures that addresses the ability of Judge Tancredi to provide recommendations to this Court as to how certain adversary hearings might be stayed while some of them should go forward etcetera to try to help facilitate the orderly litigation of these matters that they have to be litigated.

23 24 25 Some parties wanted to be heard on that. So we built in a period in which after Judge Tancredi makes such a recommendation, they could respond.

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| 1 | So those are the -- those are the main types of in | |----|----------------------------------------------------------------| | 2 | the summary of some of the main types of issues that we | | 3 | resolved. I'm not sure exactly how many issues are | | 4 | outstanding. I think it's maybe close to 10, maybe a dozen. | | 5 | But rather than try to anticipate all of those, I | | 6 | think it may make sense for the Court to hear from the | | 7 | objecting parties, and then I can respond accordingly. | | 8 | THE COURT: Yes. I have a few questions first, | | 9 | but I think that's fine. I'm looking at the document that | | 10 | you talked about that you just mentioned on the record. TCF | | 11 | 3105. And I had a few questions about it. | | 12 | When we get to Page 3, I'm looking at a red line | | 13 | version that starts on Page 37 of the document. I thought | | 14 | that was the one that I should look at when I looked at the | | 15 | entire document, but I don't know if that's correct. It | | 16 | seemed to me to be the one that had the changes that you just | | 17 | referred to on the record. | | 18 | MR. BASSETT: That is correct. I believe this | | 19 | would be the red line that shows -- this would be the red | | 20 | line that shows all changes to the original version of the | | 21 | order that we filed with our motion. | | 22 | THE COURT: Okay. So then I -- so the second red | | 23 | line it captures everything that you've talked about with the | | 24 | objecting party? | | 25 | MR. BASSETT: That's correct. Both versions | | | |

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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 capture all of the changes, but the second red line being at page 67 of 96 would show and track changes only the changes that have been made to the order that we served on the parties after talking to them. THE COURT: So which of those two orders are you thinking that the Court would enter? Am I looking at -- MR. BASSETT: Oh, no. There's a -- I apologize, Your Honor. Just to be very clear, they're the same order, what we did for the benefit of the parties and the Court is provide two different versions of the red line. So if you want to look at just the clean version of the order that we're asking the Court to enter, that would actually be the one that's at Exhibit A, because that's just the clean version showing no changes of the revised proposed order. The next two showed different comparisons of the current order to past orders. THE COURT: Okay. MR. BASSETT: And that's at page 7 of 96. I'm happy to look at anything. THE COURT: Page 7? MR. BASSETT: Yes, Your Honor. Yes, Your Honor. THE COURT: Okay.

23 24 25 MR. BASSETT: But the content (indiscernible). THE COURT: All right. Give me a moment then, if you would please.

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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 So I'm looking at what I believe you just indicated, Attorney Bassett, is a clean version of the second revised proposed amended order approving procedures applicable to avoidance claim adversary proceedings, which starts on page 6 of 96. MR. BASSETT: That's correct, Your Honor. I misspoke. 6 of 96. THE COURT: That's okay. I want to make sure I'm at the right place in this order. So give me a moment, please. Okay. So when we start with paragraph E on Page 8 of 96, talking about any avoidance defendants time to respond to a complaint shall be 60 days from the date of service provided, however, without further order of the Court, the Trustee and any avoidance defendant may stipulate to further extend the defendant's response up to 90 additional days. So I think I've seen in the last week some of those stipulations be filed. When I say some of those to be better accurate for the record, meaning the Trustee's already agreed to further extend response dates in certain adversary proceedings. Correct? MR. BASSETT: That's correct. THE COURT: For at least 90 days. Okay. So what I'm trying to figure out, and maybe you've already done this, I see a date of May 14th or 15th in this order, which would - - could be a trigger for matters to go into mediation. But

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1 2 3 4 5 6 it wouldn't be with regard to those matters that you've already agreed -- or would it be with regard to the matters you've already agreed to extend the time out to answer or otherwise respond to the complaint? MR. BASSETT: So Attorney Linsey can maybe help me if I get something wrong, the correct paragraph reference,

7 8 9 10 but I believe the way that it works that's put on the procedures, Your Honor, is that the submission mediation, that that process is triggered by whatever date it is that the particular defendant's answer or response is to.

11 12 13 14 THE COURT: Right. So what I'm saying to you is, I believe that in the last week or two, I've seen several adversaries proceed -- I don't know how many. I can't tell you. I didn't count.

15 16 17 18 19 20 21 22 23 But I would say 20, let's just pick a number, where the Trustee has stipulated to extend the defendant's response date for an additional 90 days. They don't need a Court order and that's fine. That's completely fine. What I'm asking is, let's presume those 20 are -- I'm speaking of 20 adversary proceedings out of 275 or whatever -- that the 90-day period won't -- will not have run by May 14th or 15th, whichever the date is. And I apologize. I'll find it in a second.

24 25 For those being put aside for now, the attorney's asked -- why I'm asking the question and I'm probably not

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1 2 3 4 5 6 7 8 asking it very well. The last hearing we talked about timing and how many adversary proceedings were going to go to Judge Tancredi at what point in time and were they're going to be what essentially is a rolling amount of adversary proceedings over a period of time. And so I viewed that 90 days in stipulations that have been filed in certain adversary proceedings as basically those wouldn't be in the first bucket of adversary

9 10 proceedings turned over to Judge Tancredi. I could be wrong about that. That's why I'm asking the question.

11 12 13 14 15 MR. BASSETT: Well, I believe this is paragraph 2 J, of the procedures that the way it would work in that situation is that they would not go to Judge Tancredi until after the answer deadline. So it would be sequenced in that way.

16 17 THE COURT: And that's what I'm trying to come -- (Background conversation)

18 19 THE COURT: You're triggering them off the appearance date or the response date?

(Background conversation)

21 22 23 24 25 MR. BASSETT: Your Honor, let us confer on that. THE COURT: I think you might be triggering it off from the appearance date versus the response date. And I think that may have occurred because of discussions during the last hearing where someone said, well, what about if I

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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 already filed a response? Something along those lines. MR. BASSETT: Understood. I guess what I was envisioning, Your Honor, is a scenario where the Trustee has informed the Court of an extension of an answer deadline, but the defendant to that adversary proceeding has not yet appeared. And then would not THE COURT: Okay. That's different. That's a different category. Right? MR. BASSETT: In that case, it's triggered by the appearance. That's correct, Your Honor. THE COURT: Okay. MR. BASSETT: And in response to your question, I was envisioning a scenario where the appearance would not be until the 90-day deadline. THE COURT: Right. So I'm saying there's several categories. That's my point. Right? And so I'm trying again to figure out if to the extent possible -- and I mean, of course, it's possible. I just don't know how specific we can be -- you can be with this procedure, how many of these cases are going to Judge Tancredi initially? I'm just trying to figure that out. I don't think that -- it doesn't have to be etched in stone, but I think Judge Tancredi needs to have some kind of idea. Right? Are we talking that on May 15th or 14th -- I think it's the 15th. I keep saying 14th. I don't know

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1 2 3 what they are. I'll find it in the order. Are we -- are we saying to Judge Tancredi here, here's 200 adversary proceedings?

4 5 6 7 8 9 Or are we saying it's May 15th according to the order? Or are we saying, here, Judge Tancredi, here's 40? I don't know. I don't know what we're saying. And that's what I want to understand. I don't -- I'm not anticipating that either will necessarily present a problem, but I think we need to know. That's all I'm saying.

10 11 12 13 14 15 16 MR. BASSETT: Understood, Your Honor. And the one point I would make or a thought that occurs to me is that, as we have discussed in the past, what we envision happening with these mediation procedures, given the sheer number of defendants and the commonality of issues across all these adversary proceedings and some are like legal issues the parties will be raising will be virtually identical. Right?

17 18 19 20 21 22 So as we've discussed in the past, subject to discussing with Judge Tancredi, we think it would make a lot of sense to try to, you know, bucket and mediate groups of issues or groups of adversary proceedings together, which also will save costs for the estate and for all the defendants involved.

23 24 25 And to that end, you know, I think the process and division was something would all go to mediation at roughly the same time to enable that kind of grouping or bucketing to

| 1 | occur. | |----|-----------------------------------------------------------------| | 2 | However, we are open to in our -- as the Court is | | 3 | aware from the stipulations being filed, you know, giving | | 4 | people additional time to answer, and it may not be that | | 5 | everything is on the same track. | | 6 | THE COURT: So are you expecting Judge Tancredi to | | 7 | determine that with -- and is that what you're asking? | | 8 | MR. BASSETT: That's exactly correct, Your Honor. | | 9 | THE COURT: Okay. All right. That's number one. | | 10 | Number two, in page -- on page 8, that paragraph E again, | | 11 | then you have sub paragraphs 1, 2. You're talking about | | 12 | stayed avoidance claims and partially stayed avoidance claims | | 13 | and stayed designation notices. | | 14 | That -- the notice issue is fine. I mean, that's | | 15 | just filing something in an adversary that's going to stay | | 16 | whether or not it's fully stayed or partially stayed. And as | | 17 | to whom, if it's partially stayed. Okay? | | 18 | But what my question was is -- the way I read it, | | 19 | and again, I could be wrong, is that the fully stayed claims | | 20 | and the partially stayed claims are somewhat impacted by an | | 21 | order that already stays certain adversary proceedings | | 22 | because it relates to the debtor, and it's the debtor's | | 23 | entities or employees and what you will assert are related to | | 24 | the debtor. | | 25 | And so my point of that question is, does that -- |

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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 and you're not going to be able to answer this, I don't think, at the moment, but I'm going to ask you to think about it. Does that order, the order that already stayed some of these adversary proceedings, pending the disposition of the criminal proceeding. MR. BASSETT: Right. THE COURT: They -- you know, made part of this order. MR. BASSETT: So I don't think it does, Your Honor, because that order -- and I apologize I don't have the ETF reference handy. THE COURT: 3038. MR. BASSETT: Okay. That order, Your Honor, relates to and stays the two adversary proceedings. The omnibus alter ego adversary proceeding as we referred to, which is the adversary proceeding in which is the debtor is seeking of declaration that a number of different entities are the debtor's alter ego. And then it also stays the civil RICO litigation in which the -- THE COURT: But it has the carve out too. Remember that carve out. MR. BASSETT: (indiscernible) legacy. That's correct, Your Honor. The avoidance action adversary proceedings, which are the center for this procedures order,

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| 1 | are not themselves directly part of that stay order. | |----|---------------------------------------------------------------| | 2 | What 3-A -- and I'll describe the categories here. | | 3 | Exhibit 3-A and 3-B and there's also an Exhibit 4, but | | 4 | Exhibit 3-A, which consists of the stayed avoidance claims | | 5 | under this procedures order, is comprised of all of those | | 6 | avoidance actions in which the Trustee is alleging a transfer | | 7 | by one of the defendants in the omnibus alter ego complaint. | | 8 | In other words, the allegation in that avoidance action would | | 9 | be that one of the alleged alter egos of the debtor was the | | 10 | party that nominally made the transfer to the defendant. | | 11 | And an issue that was raised before and which we | | 12 | have addressed through Exhibit 3-A is that those adversary | | 13 | proceedings should not really proceed from litigation until | | 14 | just out of good order and efficiency until the omnibus alter | | 15 | ego adversary proceeding as against the alter ego entity at | | 16 | issue in that complaint has been completed. | | 17 | THE COURT: So it is related. | | 18 | (Overlapping voices) | | 19 | MR. BASSETT: Exactly, Your Honor. | | 20 | THE COURT: It is related to the prior stay order. | | 21 | MR. BASSETT: Exactly. It is -- it is -- it is | | 22 | very much related, Your Honor, because it, again, it involved | | 23 | -- those avoidance actions involved entities that are | | 24 | defendants in the omnibus author ego action which are stayed | | 25 | by the other order. But without this language and this | | | |

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| 1 | order, these avoidance actions would not themselves be | |----|------------------------------------------------------------------| | 2 | stayed. | | 3 | THE COURT: Right. So all I'm saying is maybe you | | 4 | need to make a reference in that paragraph about the prior | | 5 | order, right, and the connection between the two. Because I | | 6 | didn't add them up. I did not do the math, but it looks to | | 7 | me like you could be talking about 70 adversary proceedings | | 8 | out of the 270. Right? I mean, there's three or four pages | | 9 | on Exhibit 3-A. | | 10 | MR. BASSETT: Understood. | | 11 | THE COURT: Right? I don't know how many there | | 12 | are. I didn't add them up, but there's a lot. | | 13 | MR. BASSETT: You can certainly reference the | | 14 | other -- | | 15 | THE COURT: I also understand actually, though, | | 16 | because I had to look at it. I didn't pick up on it at | | 17 | first. I think that there are some instances, at least I | | 18 | thought there were, yes, where the adversary proceeding is | | 19 | listed, the number is listed more than once because you make | | 20 | sure it applies to each defendant. Was that the purpose of | | 21 | that? For example, there's an adversary proceeding 24-05248, | | 22 | and that appears seven times, but each line item has a | | 23 | different defendant's name. | | 24 | MR. BASSETT: That's correct, Your Honor. And | | 25 | another reason for that is that the stay that we are | | | |

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| 1 | proposing is claim-specific rather than adversary proceeding | |----|----------------------------------------------------------------| | 2 | specific. | | 3 | THE COURT: Okay. | | 4 | MR. BASSETT: And that's where -- that's where | | 5 | Exhibit 3-B comes in because some of these employment | | 6 | complaints involve claims by -- sorry, involve allegations by | | 7 | the Trustee that entities the debtor has already been | | 8 | established as owning and controlling are the ones that | | 9 | nominally made the transfer to the defendant. So for | | 10 | example, Golden Spring is an entity that's already been | | 11 | adjudged to be the debtor's alter ego. | | 12 | To the extent that the debtor is alleging that -- | | 13 | or sorry the Trustee is alleging that Golden Spring made a | | 14 | transfer to a particular avoidance action defendant, the same | | 15 | logic of staying that claim does not apply as it does to the | | 16 | other ones that involve entities at issue in the omnibus | | 17 | alter ego complaint, because there already has been the | | 18 | predicate alter ego finding as to the transferee entity or | | 19 | the transferor entity rather. So those would not be stayed. | | 20 | THE COURT: Although, they may be partially | | 21 | stayed. | | 22 | MR. BASSETT: Those claims would not be stayed. | | 23 | Meaning that an adversary proceeding that contains | | 24 | allegations of transfers from other omnibus alter ego | | 25 | entities, those adversary proceedings can only be partially | | | |

| | Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 73 of 186 | |----|-----------------------------------------------------------------------------------------------| | | 73 | | 1 | stated. | | 2 | THE COURT: And those partially stayed claims in | | 3 | those adversary proceedings, the other claims will proceed to | | 4 | mediation? | | 5 | MR. BASSETT: Unless they are listed on Exhibit 4, | | 6 | Your Honor. | | 7 | THE COURT: Okay. Again, I didn't make an | | 8 | analysis of a cross reference or anything. That's what I | | 9 | think you need to do. Right? I mean, so Exhibit 4 is -- | | 10 | MR. BASSETT: Exhibit 4 is a list of those | | 11 | entities or those defendants, rather, which will not be | | 12 | subject to automatic mediation unless there is an order, | | 13 | agreement, or order in the Court. | | 14 | THE COURT: They're just defendants. | | 15 | MR. BASSETT: They're just defendants. | | 16 | THE COURT: They're not -- it doesn't mean the | | 17 | whole adversary proceeding is stayed. And the whole | | 18 | adversary proceeding isn't subject to maybe -- excuse me. | | 19 | That's not accurate. | | 20 | It can mean that there could be an adversary | | 21 | proceeding in which one of these parties on Exhibit 4 is a | | 22 | defendant, but that that other defendants, that adversary | | 23 | proceeding could proceed forward and could be subject to | | 24 | mediation? | | 25 | MR. BASSETT: That's correct, Your Honor. And | | | |

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| 1 | some of the individuals listed on Exhibit 4 may be involved | |----|-------------------------------------------------------------------| | 2 | in adversary proceedings that are entirely stayed. | | 3 | THE COURT: Right. | | 4 | MR. BASSETT: Because of their involvement on the | | 5 | alter ego. But then some of the entities on Exhibit 4 may be | | 6 | in an adversary proceeding that's not stayed at all because | | 7 | none of it involves the omnibus alter ego or another party | | 8 | that's subject to mediation. | | 9 | THE COURT: Right. But we see why I'm asking the | | 10 | questions. I just want to make sure I understand. So if | | 11 | Judge Tancredi says to me, which he's not going to say | | 12 | anything to me about substance. But if he said something, | | 13 | asked me a question about a procedure, I want to be able to | | 14 | say, well, this is what I believe was said. | | 15 | You're going to order a transcript anyway and give | | 16 | it to him hopefully, right? Because I just wanted him to | | 17 | understand what your process is. Okay? And I think I | | 18 | understand it. I've gone through it, but there is the | | 19 | different -- there's an overlap in certain places and then | | 20 | there isn't an overlap in certain places. | | 21 | So it needs to be clear. And I mean, I think it | | 22 | is, but that's why I asked you the question. Okay? And I do | | 23 | think that the Exhibit 3-A list is conditioned upon or is | | 24 | related to the prior stay order of the RICO and the omnibus | | 25 | alter ego adversary proceeding. Those are already fixed. | | | |

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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 MR. BASSETT: That's right. And we're happy to add an appropriate reference to that provision. THE COURT: Okay. MR. BASSETT: (indiscernible). THE COURT: All right. Well, let me see. I had a few other questions. That was the biggest question was I wanted to understand that process. Okay? Then, there are a few other things that I think the objecting parties, certain objecting parties have raised, and I'll hear from the parties about them, but I want to point them out to you first. So my understanding of the mediation panel, Attorney Bassett, and I could be wrong again, is there may not be one. But there may be one if that's what Judge Tancredi thinks is appropriate. Okay? That's what -- is that what you're asserting or that's what your procedures provide. Correct? MR. BASSETT: That's correct, Your Honor. There will not necessarily be a mediation panel. THE COURT: Okay. Now, with regard to the issue of the mediation panel, I think there is -- I will hear from the objecting party. I mean, I think -- I'm not sure if either Judge Tancredi determines that panel or the parties determine that panel. I don't think the Trustee can determine that panel in consultation with Judge Tancredi. At least --

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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 MR. BASSETT: So I think the way we meant to draft it in paragraph 2-K of the order -- THE COURT: That's what I'm looking at. MR. BASSETT: -- is to say that the Trustee would consult with Judge Tancredi concerning the potential use of the mediation panel. But ultimately, the appointment of any other mediators to that mediation panel would be subject to the approval of the Court. That would not happen until Your Honor -- THE COURT: Right. But what happens if the defendant objects? Because that's what I'm trying to determine, what's the process? MR. BASSETT: So any defendant would have the opportunity to respond to any proposed mediation panel. And to the extent that they have objections, they would be heard by the Court (indiscernible). THE COURT: It doesn't quite say that, but that's what I think is required. MR. BASSETT: Okay. Sure. We will make that clear, Your Honor. THE COURT: Okay. The next paragraph, I would like you to say within 14 days of any mediation referral or other date that is subject to the availability of Judge Tancredi. Right? Because I don't know what his schedule is. I don't know if he's going to be ready within 14 days of a

77 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 mediation referral. I mean, it very well maybe, but I don't want an order boxing him in to that. Okay? You see where I am in L? MR. BASSETT: I do, I do, Your Honor. I think what we intended with that provision was just to say that within 14 days of the referral. THE COURT: I understand. MR. BASSETT: A letter -- THE COURT: Submit a letter. I understand. But other days start clicking after that letter gets submitted. All I'm suggesting is -- MR. BASSETT: Oh understood, Your Honor. Understood. THE COURT: Okay. I just want there to be an acknowledgment that 14 days shouldn't necessarily start the clock if Judge Tancredi is not ready. MR. BASSETT: Understood, Your Honor. THE COURT: Okay. The letter that you want to send to the courtroom deputy, we have you know how, Attorney Bassett, we have the generic courtroom deputy email box? That's the same thing you're going to use in Hartford. You're going to use that that email box. Okay? MR. BASSETT: Okay. THE COURT: And then, obviously, it doesn't need to say this. I'm not asking you to change the order. But Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 77 of 186

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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 when that letter is submitted by you or anyone on behalf of the Trustee, then it has to be cc'd to the defendant in that adversary proceeding. So there's no allegations of any ex parte communications or anything, even though Judge Tancredi will be acting as a mediator. I want to make sure that everybody understands that ground rule as well, Okay? MR. BASSETT: Understood. And we're talking about the -- THE COURT: The letter. MR. BASSETT: -- the submission of the letter. THE COURT: Right. Just the -- I just -- I just want to, you know, we just want to make sure that the record is clear and that everyone is on notice upon submission of that letter. MR. BASSETT: Understood. THE COURT: Okay? So let's turn, if you would, to M, please. This is when an avoidance defendant believes that the claims against it should not be subject to mediation. So the only question I have on that is not with regard to the defendants that haven't been served yet, Attorney Bassett, because I understand what you're saying about that. You know, we'll deal with that when they're served, but within 14 days of the mediation referral. So, again, the mediation referral is that letter. Correct? MR. BASSETT: Correct, Your Honor.

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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: Okay. And that letter is -- you're going to be -- well, let me ask you this question, actually. It's not necessarily clear. So what happens if the defendant doesn't have a lawyer, but they've been communicating with you, which I assume some have, right? So how are they going to be served with that mediation referral? I just want -- I don't want to have somebody come in and say, we didn't have 14 days. We didn't get served. You know? So if I file my motion on the 21st day after you referred to mediation, I don't want to -- I don't want to have an argument about whether or not it was timely or not. Okay? That's the point that I'm raising. MR. BASSETT: Okay. THE COURT: Meaning, if you have a lawyer, then they -- and you -- and they're agreeing, obviously, to the submission of the letter and they can be served, that's one thing. But you've got to think about parties who don't have a lawyer. If they consent and agree to accept whatever you're giving them as service through an email address, that's fine. But I think you need to get that. I'm not saying it needs to be in this order, Attorney Bassett. I'm just telling you, I don't want to -- I hope to not have any hearings on whether or not that motion is timely filed if somebody believes that they shouldn't be subject to

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| 1 | mediation. Okay? | |----|-------------------------------------------------------------------| | 2 | MR. BASSETT: Understood, Your Honor. Thank you. | | 3 | THE COURT: And as the next paragraph, the only | | 4 | thing -- you said before and I -- the word that they would -- | | 5 | the mediator, if there was a conflict, would -- maybe you | | 6 | already changed the language. No. The third line of them, I | | 7 | wouldn't say shall abstain, I would just say shall refuse or | | 8 | not act. I -- just abstain has a meaning that I don't really | | 9 | want to get into either. Okay. Just change that word, | | 10 | please. Thank you. | | 11 | MR. BASSETT: Got it. Thank you. | | 12 | THE COURT: We're going to have to address the | | 13 | fees and costs of the mediator when we talk about objecting | | 14 | parties, but U, paragraph U, talked about the fees and costs | | 15 | of the mediator. So you'll have to -- it appears that issue | | 16 | has not been resolved. So that's something we'll have to | | 17 | address. | | 18 | MR. BASSETT: That's correct, Your Honor. | | 19 | THE COURT: X, again, the only issue with X in my | | 20 | opinion is if the defendant doesn't have a lawyer, how does | | 21 | that 30 days begin to run for them? You know, how do you -- | | 22 | how do you serve them? Right? If there's a report that's | | 23 | filed that says it wasn't a full settlement and then they | | 24 | only have 30 days to respond to the complaint, just figure | | 25 | out a mechanism so that we don't have to address that as |

81 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 well, please? MR. BASSETT: Understood. THE COURT: Okay. I think that was -- those were my major concerns other than I'm going to hear from the objecting parties, and we'll address those issues. But do you have any questions about my questions? MR. BASSETT: I don't think so, Your Honor. THE COURT: Okay. MR. BASSETT: Thank you very much. THE COURT: All right. Thank you. So we have objections filed by several parties. And if we just take them in order of when they were filed, but I think the first two are the objections of Art Wolf, Inc. And Anthem Health Choice Assurance, Inc. By Attorney Signor, please proceed. MS. SIGNOR: Thank you, Your Honor. Again, Jessica Signor from Shipman & Goodwin, for Art Wolf, Inc. And then the Empire Blue Cross Blue Shield, which is the DBA of one of the defendants. I will spare Your Honor all of the formerly known as and currently known as names, and then Anthem Health Plans Inc. Thank you, Your Honor, for hearing us. Our objections were largely the same for the three defendants. So I'll address them en masse, if that's okay with the Court. THE COURT: That's fine. Go right ahead. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 81 of 186

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82 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 MS. SIGNOR: Your Honor, similar to other avoidance defendants, our clients have been subjected to litigation, receiving transfers, in the ordinary course from entities that the Trustee says are alter egos. Putting aside those issues for the moment and the fact that our clients do not object to mediation and proceeding with a mediation, our limited objections for each of the avoidance defendants are largely the same and focus on three points. The first is that the mediator fee is to be split equally between the Trustee and each of the avoidance defendants. The second point is that there is required inperson attendance by an avoidance defendant representative and counsel. And the third is the note regarding resolutions of mediation in and of itself (indiscernible), Your Honor. The third point, the Trustee's counsel indicated they have included language that I believe resolved that, less of an objection and more of a point that we wanted made. But we think that that's been resolved in the second amended order.

21 22 23 24 THE COURT: Are you -- I think you're referring to, and I'll ask Attorney Bassett. I should have asked you when you said that Attorney Bassett, previously, but I think the one that you're referring to is in V?

MR. BASSETT: That's correct.

83 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: Failure to achieve settlement alone cannot constitute grounds for finding of bad faith or the imposition of sanctions? MR. BASSETT: That's correct. Last sentence of V, as in Victor. THE COURT: Okay. So then that takes care of one of the grounds for objecting, Attorney Signor, on behalf of your clients. Is that correct? MS. SIGNOR: Yes. That is correct, Your Honor. THE COURT: Okay. Great. Go right ahead then, please. MS. SIGNOR: With regard to point 2, that's the in-person requirement for attendance of an avoidance defendant representative. This requirement, Your Honor, requires clients who in the case, just by way of example, of Art Wolf requires cross country plane fare, lodging, the time cost of money that these individuals will be out. And Your Honor, it's easily resolved in today's day and age to have these avoidance defendant's representatives appear telephonically or remotely or through video conferencing. Our clients have no objections to counsel being required to be present, and that is completely doable. It's with regard to the avoidance defendant's representative, to try and avoid those costs, that we think should be a part of the mediation procedure order. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 83 of 186

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1 2 3 4 5 6 7 Your Honor, turning to our first point, which is in regard to cost splitting of the mediator fee. The way it's currently set up in the motion is that it would be split equally between the Trustee and each avoidance defendant. That being said, the motion does not have any sort of a fee cap. There's no sense of a mediator's hourly rate. If they were to, we did have a mediator.

8 9 10 11 12 And that although there is a provision in the mediation order that an avoidance defendant can make a hardship showing, the very act of having to make that hardship showing and make that motion with the Court will only incur additional fees for these avoidant defendants.

13 14 15 16 17 18 Our objection has cited to four cases throughout the country where there have been these omnibus avoidance action, where the Court requires the plaintiff bringing those actions to bear the full cost of the mediation. I understand that the Trustee's motion cited to six different cases. Five of those, I think, are fairly easily distinguished.

19 20 21 22 23 24 25 For those cases, if you look at the Court's orders, they require caution on a fixed predictable schedule. That's not what we have here. There's just a straight split between both parties. One of the other cases was cited had the Trustee (indiscernible) the mediator's fees for all adversaries proceedings weather it's seeking \$20,000,000 or less.

1 2 3 4 5 And anything over \$20 million would be by "order". Again, there's sort of a predictable nature to what those fees would be. And I believe that the Trustee cited one case that just required sort of a straight split, which seems to be what they're suggesting here.

6 7 8 9 10 At base, Your Honor, suing the party to receive these transfers in the ordinary course, speaking to them, stay a litigation against them to compel mediation and then forcing a 50/50 split on those parties, it's at its base, unfair and inequitable.

11 12 13 14 And we would just request that there -- there be some sort of cost splitting or something clarified in the order that brings some predictability to what those costs may be instead of this open ended nature.

15 16 17 18 19 20 21 Your Honor, that addresses all of the points in our objections. And we just call the Court's attention to one item we were unable to address in the red line version of what was filed on Friday afternoon in ECF number 3105. I happen to look. I just think there might be some language that creates an unintended ambiguity for the -- for the avoidance defendants and the Trustee.

22 23 24 25 And we're happy to work that out, but since we're on the record, we just thought to close it out. In ECF 3105 at page 39, there seems to be, I guess, maybe the best way to explain this is by way of example.

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| 1 | The mediation referral seems to be triggered upon | |----|-----------------------------------------------------------------| | 2 | the notice of appearance with no actual mediation referral | | 3 | being made until May 15th. We have some clients where now we | | 4 | have stipulation with the responsive meeting deadline before | | 5 | May 15th, when we might have this gap period. We just don't | | 6 | want to see a situation where the mediation referral date -- | | 7 | there could be any question of any sort of default. | | 8 | So I guess maybe there might be -- there might | | 9 | need to be some clarifying language. And, of course, we're | | 10 | happy to work with Trustee's counsel to get that language. I | | 11 | just would point it out to the Court. | | 12 | THE COURT: Thank you. | | 13 | MS. SIGNOR: And I'm happy to take any of the | | 14 | Court's questions with regard to our objections if that would | | 15 | be helpful. | | 16 | THE COURT: I do not have any questions. Thank | | 17 | you. Attorney Bassett, do you want to respond to these | | 18 | issues? First of all, obviously, one of the issues is no | | 19 | longer an issue, but the issue about remote attendance of | | 20 | client representatives. | | 21 | MR. BASSETT: Yes, Your Honor. I think it does | | 22 | probably make sense for me to address these issues now | | 23 | because my comments and proposals that I have may end up | | 24 | resolving some of the same objections other parties would | | 25 | have. | | | |

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1 2 3 4 5 6 As to in-person attendance, I believe it's Section 2-L of the mediation procedures, which that's the mediator with the authority to decide whether the mediation will be held by video or whether it will be in person. And then, the mediator, I believe, in paragraph 2-O, will also decide the location.

7 8 9 10 11 12 13 So to the extent that individual defendants have concerns about their ability to travel across the country if somebody is located in Washington or California, they don't - - a major hardship for them to travel here, we are obviously going to be flexible with that. And I assume that Judge Tancredi or any other mediator will be flexible in that as well.

14 15 16 17 18 19 20 21 What we didn't want to do was, at the outset, allow everyone to participate by video because in our experience, particularly from maybe dealing with some people who don't necessarily have the strongest appetite to engage, it may not be productive. And our experience is a lot more productive when you get people in the same room, both as the two parties and the mediator. So that's the reason for setting it up that way.

22 23 24 25 But in practice, I can't imagine it will be a real concern because, like I said, we're certainly going to be sensitive to any major hardship travel issues that is imposed on people. And the judge will ultimately decide that as

1 well. Judge Tancredi will.

2 3 4 5 6 7 8 THE COURT: Well, I'm looking at L and it says that the mediation referral letter, the letter I was talking about with you, describes the claims at issue and advises - and advising regarding their ability to participate in mediation the following 60 days as well as whether the mediation session should take place in person or via video conference.

9 10 11 12 13 So I suppose the mediation letter could request that the individuals participate via the -- that the client representatives participate via video conference. Right? Isn't that what that -- I mean, that language seems to provide the ability to make that request.

14 15 16 17 18 19 20 21 22 MR. BASSETT: That's exactly right, Your Honor. The parties join the request form, they can make that request and the following (indiscernible) describes how, after receiving a letter, Judge Tancredi will direct that the mediation be conducted in person or via video conference. THE COURT: Well, maybe what you need to add to that paragraph is that, you know, it's counsel for a defendant is an appearing counsel. They'll need to expect to appear in person unless otherwise directed by the mediator.

23 And that the client representative may be allowed to

24 25 participate via video conference upon request, but it must be a client representative with authority to settle. I mean, I

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1 2 3 4 5 6 don't think I saw that anywhere in here, did I? I mean, you you've got to have somebody who's got authority to settle. Otherwise, you're wasting your time. And I think that's an issue where someone appears and they do not have authority to settle, then the Trustee would have an issue to bring to the Court.

7 8 9 MR. BASSETT: Understood, Your Honor. I don't have the reference at my fingertips, but I believe we did have that concept.

10 11 12 13 14 THE COURT: But maybe you need to put it there, too, is what I'm saying, right? I think more than one defendant has raised this issue about being in person. I think the lawyers should expect, and I think Judge Tancredi would require the lawyers to be there.

15 16 17 18 19 20 And at certain points, it's possible that they could -- he could require the client representatives to be there. But I think a client representative could make a request from the start not to be there as long as that client representative clearly states that they have the authority to settle the matter.

21 22 23 24 25 MR. BASSETT: That's fine with us, Your Honor. THE COURT: I mean, I think you need to - especially if it's -- again, I don't know what buckets are always are going to be put into. But if there is a defendant that is then described as an ordinary course defendant,

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1 2 3 4 right, that might be a completely different type of mediation than some of the other avoidance concerns. So in any event, I think if you add that language -- and Attorney Signor, does that address your concern?

5 6 MS. SIGNOR: Yes, Your Honor. I believe that that would address our concern.

7 8 9 10 11 12 THE COURT: And I do think you can request that in your letter initially, even with the language that's in this order right now, and I think that would be the time to do it because Judge Tancredi would be reading that letter and making a determination of how he would be handling the mediation.

MS. SIGNOR: Yes, Your Honor.

14 15 16 17 THE COURT: So I think that's fair. I don't think that's unreasonable, Attorney Bassett, and you don't seem to think it's unreasonable. Or I should say in the affirmative that you seem to agree that it is not unreasonable.

MR. BASSETT: That's correct, Your Honor.

19 20 21 22 23 THE COURT: Okay, good. All right. So that takes care of the remote attendance issue. But with regards to the cost, what is your response at this point, Attorney Bassett, with regard to the (indiscernible) there and the cost of mediation.

24 25 MR. BASSETT: So my response, Your Honor, is that the Trustee hears the issue that's being raised. But we also

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1 2 3 4 think it is one that does not need to be decided today because, frankly, it's not presently an issue. One of the things that we discussed earlier was that the mediation panel may or may or may not be created.

5 6 7 8 9 Initially, all mediation is going to be under the supervision of Judge Tancredi, and there will be no fees involved in his oversight of the process. If and when there's a mediation panel, that will be subject to the approval of the Court.

10 11 12 13 14 15 And as stated and as the revised order indicates, any defendant at that time can raise an objection, including, if they want to raise the objection at that time to both the cost or fee arrangements involved with the proposed mediators for the panel and the requirement that they share in those costs. We're happy to put in a reservation of rights.

16 17 18 19 20 21 THE COURT: I think that would resolve the issue, a reservation of rights for now. And because that's why I asked about the mediation panel originally, Attorney Bassett, which was there might not be a panel. And if there isn't a panel and Judge Tancredi handles these matters, then there is no cost to handle them.

22 23 24 25 But I also understand the concern about if there is a mediation panel, those people that get appointed will want to be paid. So I think if you put in language reserving rights, I think that's an acceptable resolution that turns

92 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 more of your -- your other basis for objections. MS. SIGNOR: Yes, Your Honor. I think that we can put that over for another time should it become an issue in the future. THE COURT: Okay. Great. Then I think with regard to the objections of Art Wolf in ECF 3083 and Anthem Healthcare Assurance Inc. in 3084, that those objections are resolved as noted on our record. MS. SIGNOR: Thank you, Your Honor. THE COURT: Okay. Thank you. MR. DESPINS: Your Honor, if I may, just want to make sort of a global statement in this. It is not my intention to have a panel. It makes no sense for every such -- for example, I always use Federal Express as an example because they are actual defendants. It makes no sense to have a separate mediation for Federal Express and UPS. All these potentially (indiscernible) to be determined whether they're in the course or not should be bucketized in the same especially if they're post-petition transferees or pre-petition transferees. The idea is to create buckets. And that way, Judge Tancredi could work with them as a group. But if we have 290 individual mediation, this process will not have been working well. So I really want to make sure the Court knows directionally. Of course, Judge Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 92 of 186

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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 Tancredi will determine that, but directionally, we're not in favor of having individual mediation. That would be time consuming, costly, and not necessary in most of the cases. THE COURT: Okay. Thank you. And I mean, I think from our prior hearings, I don't think anyone thought we were going to have 275 separate mediations. Okay. But we need to make sure that the procedures are clear enough that they can be while still providing some flexibility and control to Judge Tancredi as the mediator. Okay? All right. So the next matter, the next objecting party is Markham LLP, which is ECF number 3088. MR. GOTTESMAN: Good afternoon, Your Honor. THE COURT: Good afternoon. MR. GOTTESMAN: Again, Andrew Gottesman from Mintz and Gold representing Markham, LLC. We had just filed a substantially similar objection, if not almost the same objection for Fox News Network. I think they were filed on the same day. So like they're just done together if possible. THE COURT: Yes. You're right. The Fox News objection is 3089. So go right ahead. You can certainly address them both together. MR. GOTTESMAN: Thank you, Your Honor. Your Honor, as we said before at the last status conference, we have no problem with mediating (indiscernible) mediation.

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1 It's a good thing in a situation like that.

2 3 4 5 6 7 8 9 However, the procedures that had been promulgated by the Trustee leave out some important -- some important procedural protections for all of the avoidance defendants. Specifically, we believe and we put in our objection and we also provided a markup of the procedures with our objection, we believe that any recommendation made by Judge Tancredi or the mediators with respect to the process should be subject to notice and an objection period.

10 11 12 13 14 15 16 17 18 19 20 And the reason for that is twofold, Your Honor. Number one, there could be substantive issues that could (indiscernible) recommendation that could impact the rights of our clients, but all of the dependents, all of the avoidance defendants. For example, buckets are fine. There might be an objection to being in one bucket as opposed to another bucket, especially when it comes to claimants. There may be information that gets disclosed in a mediation that certain clients and certain defendants don't want disclosed in a group setting. There might be a business ramification for doing so.

21 22 23 24 25 So all that we're asking is that before any kind of recommendation gets approved that we -- and when I say we, I don't just mean my side -- I mean all of the defendants have an opportunity to come to the Court and object to whatever it is in those recommendations that they believe

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1 2 prejudice them from a business perspective or from a legal perspective.

3 4 5 6 7 8 9 10 11 I also think, and this is also in our case, but I believe that that kind of procedure would make it infinitely easier for this Court to make determinations with respect to that procedure. The way it is currently -- the way the procedures are currently drafted, if an individual avoidance defendant has an issue with something in the recommendation from Judge Tancredi or one of the other mediators, the burden is then on the defendant to make an affirmative motion to the Court in order to address that.

12 13 14 15 16 17 18 19 20 I mean, I think it is pretty obvious where that could go, which is 270 defendants, 270 various motions about different issues, all on different calendars. If there was a mechanism where there was a recommendation made by a mediator and that recommendation was subject to an objection period, you know, it could all get knocked out at once. Very clean, at one hearing, and then everything will move on without significant delay of multiple motions in front of the Court on different days and different issues.

21 22 23 24 So we think both from a procedural perspective and from a technical perspective, all of the avoidant defendants should be allowed to have a notice of the recommendation, which they do in the -- in the procedures.

But then, the opportunity, some level, some amount

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1 2 3 4 5 6 7 8 9 10 of time, and it doesn't have to be a very long amount of time, but some amount of time for them objection to specific things in those procedures to bring those before the Court. If the parties can't work it out, then there's going to be (indiscernible) before Your Honor, and Your Honor can decide what you believe is the right thing to do. And we think that that is an infinitely better procedure when requiring the defendants to come to the order with an affirmative motion for things that they object to in the recommendation made by one of the mediators. So that is

11 that is really what our first point and I think --

12 13 THE COURT: Well, let me ask you a question about the first point.

MR. GOTTESMAN: Certainly.

15 16 17 18 19 20 21 THE COURT: I think I understand your point, but I'm not sure if it really should apply to people who haven't already objected to the mediation procedures. That's just the point of putting this -- making this procedure and these orders be served out and have another hearing on it. Right? I mean, I think you could make that argument. You've objected. Right?

22 23 24 25 And I -- and I understand your objection. But when you say on behalf of all the other defendants, I'm not sure that that's accurate, given the process that we've gone through at this point.

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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 If someone had your concern, the argument, I think, would be they should have filed an objection from the timeframe that was set forth in the order that this Court entered some time ago to get to where we are today. So I'm not saying I disagree with your point fully in any way, but I'm saying I don't think you can make it on behalf of other people. You may disagree with me on that, but that was the whole point of having another hearing. I mean, the point was to, just like we do in many situations in a bankruptcy case, flesh out who has a problem with the situation. And you have rightfully filed your objection. So I have no problem with that, your objection for your two parties. But I think your argument with regard to you, your clients, I understand, but I think it could be more chaotic if you then say -- you apply it to everybody who didn't file an objection. MR. GOTTESMAN: (indiscernible) I mean, I am here to argue for my two clients, and I agree with your assessment. We will obviously because it's here, we will still object to something that the Trustee put forward. I

22 23 24 25 just think that kind of if you put it into the procedures, it will have a broader application. And I think the deal today is mostly about procedures where I think the recommendation frankly would be about more about substance. Right?

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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 So if the mediator says, as an example, we want to litigate all these kinds of claims together. That's going to affect a list of people. But those people might have specific reasons why they object to that from a substantive perspective. Now, if Your Honor wants to say they should be there now, I don't know that I disagree with that. But I just think it's the only -- I think that there is a potentially broader application, and I was trying not to be overly provincial in my concerns. THE COURT: Well, I think the problem is having a process for someone who hasn't already objected then being able to object to the -- it'll go on forever. And that's not what the mediation is supposed to do. It's a mediation. Right? It's not binding. It's not what it says. It's not binding. MR. GOTTESMAN: Absolutely not, Your Honor. THE COURT: So, I think -- I'm not sure I'm persuaded with regard to any one other -- obviously, with regard to your argument, with regard to any other parties than the clients you represent. But go ahead. I just wanted to make that point. Okay. Go ahead. MR. GOTTESMAN: Fair enough, Your Honor. If it only applies to my clients if you think (indiscernible) I can completely live with that.

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| | 99 | |----|---------------------------------------------------------------| | 1 | THE COURT: Okay. Go ahead. | | 2 | MR. GOTTESMAN: Another point that we raised in | | 3 | our objection is that the procedures currently link the | | 4 | reason to object to a particular mediator being assigned to a | | 5 | particular case to a conflict of interest. Typically, in | | 6 | mediation, the parties get together and, obviously, this is a | | 7 | different scenario. But as the Court well knows, in a | | 8 | typical mediation, the parties get together. And usually, | | 9 | there is a list of three or four mediators that is discussing | | 10 | (indiscernible) authorities and they have to consent to who's | | 11 | actually going to do the job. And there's a number of | | 12 | reasons why someone might be acceptable and someone might not | | 13 | be acceptable other than the conflict of interest. | | 14 | Here, all the defendants are allowed to object to, | | 15 | under the procedures, is whether a particular mediator has a | | 16 | conflict of interest. We think that should be broader, and | | 17 | we should be allowed to object to the mediator mediating our | | 18 | particular case on any grounds. For any reason, | | 19 | THE COURT: Well, what other grounds would there | | 20 | be? | | 21 | MR. GOTTESMAN: Typically, I have seen, you know, | | 22 | situations where, let's say, there is a particular mediator | | 23 | that's written an article, and particularly, let's say, I | | 24 | don't want to call it -- | | 25 | THE COURT: On avoidance actions? |

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1 2 MR. GOTTESMAN: Sure. Who knows? There's lots of law reviews all across the country.

3 4 5 6 7 8 9 10 11 12 13 14 THE COURT: That's true. That's true. MR. GOTTESMAN: And so if a particular mediator is someone who has taken a position that is particularly hostile to one of my client's positions, I would at least like the opportunity to say I would prefer to have somebody else mediating this so we make sure we have -- we get a fair shake and have the best chance to have a successful mediation. We don't want to do this, butt our head up against the wall, and I'm sure that's not what the Trustee wants to do. We would like to have the mediation (indiscernible) our clients. Also, (indiscernible) everybody's goal is to have a defensible mediation.

15 16 17 18 19 20 21 22 So if there is a panel of mediators, we would like to be able to choose. So if it's Judge Tancredi is the only mediator, then that is actually not a concern that would end up mattering because Judge Tancredi is the guy, then he is. But if there's a panel of mediators, we would like the opportunity to say, we would like this particular one as opposed to that particular one or another one other than a particular one.

23 24 25 And at least raise the concern so Your Honor can have it before the Court and make the decision as to whether our concerns are valid, are not valid, are well grounded or

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1 2 whether you're going to overrule our concerns. But that is the other point.

3 4 5 6 7 8 The last point that we note in our objection is also about attendance by our clients, but not on -- not solely in person. The way I get the feeling, and I can be wrong, but the way I feel about this, this is especially if you're going to lump claims together, these mediations are going to be a process, not one shot mediation.

9 10 11 12 13 14 And in order for our clients, some of the numbers we're talking about and some of the issues we're talking about could sit through days of mediation. And, you know, a lot of them have pretty big jobs and have a lot of other things to do. We believe that that ultimately is a burden they shouldn't need to bear.

15 16 17 18 19 20 Now, I do agree that somebody needs to have authority to settle, but that can be the lawyer. It's not that uncommon. And there can be something in the -- in the procedures to say as we see in every courtroom, I'm sure in front of Your Honor (indiscernible) waiting to call back on to get additional authorization to make changes.

21 22 23 That shouldn't slow things down sufficiently. Whereas the other way around, the burden is all on the process.

24 25 THE COURT: Well, I don't think the -- I think you've already heard me say that I don't think that the

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clients necessarily have to physically be there and can make the request, number one. But we all -- I've also been involved in mediations where the lawyer says I need to go call my client to get additional authority, and I hear something eight hours later. That's not how it's going to work. There has to be someone available with authority. Otherwise, it's -- you know.

8 9 10 11 12 13 14 15 I understand people don't like mediation sometimes, and they don't like to make that determination. But you started off by saying that your clients are not adverse to mediation, then that's part of mediation. They have to be available, and they have to be ready. And I don't want to have somebody waiting a day or two or three or four for whether they have authority to resolve the issue. That's not how it's going to work.

16 17 18 19 So, otherwise, there's no point. There's just no point. We'll just start setting pre-trial conferences. It's not a problem. We can do that. And we can just proceed in a normal course of a civil litigation.

20 21 22 23 24 25 So while I think that your issue -- I think your client doesn't need to be available and appear. It may be two different people with two different days. I don't know. But as long as they have authority from someone in authority and they combined your clients to a -- as far as if there's a resolution, then I think that's part of mediation.

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1 2 3 4 5 6 Otherwise, we're just not going to get very far. So while I understand your argument about remote appearances, I don't think your clients should be excused from mediation. I think that if you start off by saying clients are excused, then why bother? There's no point. And Judge Tancredi can take things into consideration as a mediation progresses.

7 8 9 10 11 That's what he can do. Part of what we're trying to do here is not have every single step be determined because he's the mediator. Right? He's got to have flexibility. He has to control it in the way that he thinks is appropriate.

12 13 14 15 16 17 18 19 20 21 So but I don't agree that a client should be automatically excluded. And if that's a position that's being taken, then I -- then, you know, maybe you could opt out, because it doesn't make sense to me. A client has to understand what's going on. They have big jobs, and they have -- I understand that. So does Judge Tancredi, but he's making himself available to do this or to hopefully help the process along so your clients don't have to spend the money that they might have to spend defending this litigation. And maybe they will have to spend money.

22 23 24 25 I'm not suggesting that it's a given, but that's the point. Right? The point is to try to provide an ability to resolve these matters without having a trial two or three years from now. And it wouldn't be that long anyway.

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| 1 | But I'm just saying, you know, if you took the | |----|-------------------------------------------------------------------| | 2 | worst case scenario. Right? So I think with regard to what | | 3 | I've already said about the remote appearance of clients, I | | 4 | think the time to make that request is in that mediation | | 5 | letter that goes to Judge Tancredi. And -- but I don't -- I | | 6 | would be surprised. I've never seen a mediator say from the | | 7 | start of a mediation that a client is excused. Never seen | | 8 | that. Maybe I'm -- maybe I'm just, you know, that's the kind | | 9 | of mediations I've been involved in, but I've never seen | | 10 | that. And to me, that just doesn't support the process. | | 11 | Now it might get to a point where you could make | | 12 | that request from Judge Tancredi. My client's been here for | | 13 | nine days. Nothing's happened. You know? He needs to be | | 14 | here or there. I don't know. Maybe there's a way to do | | 15 | that. | | 16 | But I don't -- I don't think that's a way to | | 17 | start. So I'm not in support of that -- of that position. I | | 18 | am in support of a defendant being able to ask the mediator | | 19 | if the client representative who has authority to settle may | | 20 | be able to be remotely available. But, again, that means | | 21 | available. That doesn't mean I'm in a meeting for five | | 22 | hours, and I can't respond to you. | | 23 | That means that person is obligated to be | | 24 | available. So that's my -- I guess I'm ruling on that one | | 25 | for you. I've given you half of what you want, but not the | | | |

105 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 other half. Okay? MR. GOTTESMAN: Fair enough, Your Honor. THE COURT: All right. And I apologize. Are there any other grounds that you'd like to assert before I hear from Attorney Bassett? MR. GOTTESMAN: Those are the three of our objections. I will stick with those, Your Honor. THE COURT: Thank you. MR. GOTTESMAN: Thank you, Your Honor. THE COURT: Attorney Bassett? MR. BASSETT: Yes, Your Honor. So, I guess, on my account, there are two issues remaining. The first issue, that counsel has related to and I don't know -- THE COURT: There's a conflict issue. Right? Like, he wants to be able to say, I don't want that mediator, not just because there's a conflict of interest, but because there's some other issues that he feels is prejudicial for his client. MR. BASSETT: That's correct. THE COURT: (indiscernible) mediation panel. MR. BASSETT: Right. And as to that issue, I think the way that this is designed is, again, they can object. There may not be a mediation panel. If there is a mediation panel, that panel will be presented to the Court for approval. And then at that time, if there's a proposed Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 105 of 186

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1 2 3 4 member of the panel that particular party thinks is not a good mediator because that person is biased in terms of the past views or articles they've been written, et cetera that's the time in which they can raise objections.

5 6 7 8 9 10 THE COURT: But the order doesn't say that. Right now it only says conflict of interest. So maybe you need to just expand that to address this concern so you don't have to worry about it. While at the same time, I agree that that issue would be raised if and when there's a mediation panel. MR. BASSETT: So that -- we're happy to make that

11 change, Your Honor.

THE COURT: Okay.

13 14 15 16 17 18 19 MR. BASSETT: The other issue that I wanted to address was -- and I apologize, it was not entirely perfectly clear to me as to the extent of the issue counsel is raising, but what I heard him say was that, anytime the -- anytime Judge Tancredi would make a recommendation as to the way the mediation should proceed in terms of bucketing or other mechanics within the mediation process.

20 21 22 23 24 25 Now there should be a motion filed with the Court, and everybody, including the client, should have the opportunity to object. That, we don't think is workable at all for reasons I will talk about in just a second. THE COURT: Well, I don't think that's workable either. I think I've already said that.

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| 1 | MR. BASSETT: Understood, Your Honor. To the | |----|-----------------------------------------------------------------| | 2 | extent, however, what counsel is saying is that to the extent | | 3 | Judge Tancredi makes a recommendation to this Court as to how | | 4 | adversary proceedings should be litigated as some being | | 5 | stayed, et cetera, and we've already went through this. We | | 6 | have added a change that specifically does allow parties to | | 7 | be heard on that because those types of recommendations that | | 8 | affect the path forward for litigation are ones that have to | | 9 | be proposed to the Court for the defendants having the | | 10 | opportunity to respond. | | 11 | I won't go further addressing the other issues, | | 12 | the Court I think agrees with me on, but that is this is | | 13 | designed to be a framework, right? A framework that the | | 14 | Trustee, the defendants, Judge Tancredi can work together on | | 15 | to try to, as efficiently as possible and hopefully as | | 16 | productive as possible, mediate these plans. | | 17 | And there has to be some flexibility both into the | | 18 | procedures or by the mediator can decide how that process is | | 19 | going to be run. And if you had to come back to Your Honor | | 20 | every time there's a proposal for how particular, you know, | | 21 | mediation processes may be structured, and then give | | 22 | everybody an opportunity to object, that would just not be | | 23 | workable. We would back here actually be having this kind of | | 24 | hearing constantly. | | 25 | So I don't think that change is acceptable to the |

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108 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Trustee. But, again, I think the other one, as it relates to litigation going forward, there's Court approval there. I'll make the change as to mediators and the ability to object. And I think that would resolve all the remaining issues. THE COURT: Do counsel agree that that resolves your issues? MR. GOTTESMAN: Except for the first one, Your Honor. THE COURT: Except for the issue about Judge Tancredi's recommendation. MR. GOTTESMAN: Right. Those are specific recommendations to Your Honor as to how mediations should go forward. In other words, it wouldn't be recommendations. There would be an order of Judge Tancredi or order of this Court. So I think in that instance -- and maybe it is and it's not for everybody, but it's anybody that's in this here. We don't believe Judge Tancredi or the Trustee should have to file a motion every time they want to do something. But if there is a recommendation that says, all of

20 21 22 23 24 25 these particular adversaries, here are all the numbers, they're all going to proceed this way, we should at least get notice before that becomes -- and an opportunity to be heard -- before that becomes the law of the case in the -- in our adversary proceedings. So what about everybody else's adversaries? At least in our adversary proceedings, we would

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 like and we believe that it's right to have at least the opportunity to move Your Honor to say too bad, so sad. Well, I hear your objection. I don't agree with you. And I'm going to accept Judge Tancredi's recommendation. Go with that. That's obviously -- that's what you do. Right? You do it every day. So what we're saying is we want the opportunity to at least be heard, especially on things that could have a substantive impact on our client, like bucketing, like, typical claims billing, claim-based bucketing and having joint mediations with 2, 3, 4, 5, 10, 50 different defendants. All these kinds of things are things that at least we should be heard on and not be dictated to and allow Your

15 Honor to make the ultimate decision.

THE COURT: Attorney Bassett.

17 18 19 20 21 22 23 MR. BASSETT: Your Honor, again, this is designed to be a framework. To the extent that Judge Tancredi wants to recommend how particular mediations will proceed, whether that's bucketing or otherwise, it's contemplated that he needs the flexibility to do that. It is not contemplated that he would come back to the Court every single time he wants to propose a --

24 25 THE COURT: I don't think that's what counsel is saying. I think what counsel is saying is that if a

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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 recommendation is made, that impacts -- because it's only going to be with regard to your clients -- impacts the adversary proceedings in which he represents his client. He gets to see what that recommend -- he gets to determine whether he can object to that recommendation. Meaning, I'm going to --- but I have to be -- have to be careful about that because it has to be a recommendation about process. Right? I mean, he's not going to make a recommendation about substance, he's going to make a recommendation about process. He's going to say -- Judge Tancredi's going to say, if we take the example, these 20 adversary proceedings all have the same -- I'm just making an example. Okay? The same issue of law, and I'm going to clear them all in the next three weeks during these mediation sessions. What counsel is saying is he wants to know that and he wants to be able to object to that. That's what he's saying. MR. DESPINS: Your Honor -- THE COURT: Is that what you're saying? MR. GOTTESMAN: That's absolutely correct, Your Honor. MR. DESPINS: There's a difference between Judge Tancredi making a recommendation to Your Honor about -- I think you would advance the case if you decided whether defendants who didn't know who Mr. Kwok was can be held

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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 liable. Okay? I'm making that as an example. That should be heard on all day long. But if Judge Tancredi says, I just -- I think that the way I should handle my mediation is to create these buckets and all that, you shouldn't have to come to Court to seek approval of that. That's his mediation. THE COURT: Well, but he's not going to seek approval of that. MR. DESPINS: Okay. THE COURT: No way that I'm going to ask Judge Tancredi to seek approval of that. MR. DESPINS: Exactly. So that's why -- THE COURT: The only thing I'm hearing from counsel is he wants an opportunity to say, I don't agree with what Judge Tancredi's doing. And I may agree or disagree with him. I don't know. I'm not even sure if I'm there yet. But I -- just to be clear, I'm not going to approve or disapprove whatever Judge Tancredi decides is the way to proceed with mediation. That's not going to happen. Okay? He'd have to have a valid reason if I'm going to go there, which I haven't -- we're talking about this right now. Right? I have -- I'd have to have a valid reason why you think you shouldn't be in that process. And as I said, when you talk about other things, maybe you just opt-out.

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| 1 | I don't know. But the point is I'm not going to | |----|------------------------------------------------------------------| | 2 | get into a lot of hearings about whether or not you have a | | 3 | basis to say I don't want to be included in that bucket. And | | 4 | it's a hard -- it's hard for me to come up with a thought as | | 5 | to why you wouldn't -- what would be your reason to not be | | 6 | included in that bucket other than the issue you've already | | 7 | raised about a mediator, in particular, which I understand. | | 8 | Okay? And I think that's been resolved by we're going to | | 9 | change the language in the order, and it's not just going to | | 10 | be based on a conflict of interest. | | 11 | It could be based on other issues. What would be | | 12 | the reason? Can you come up with an example? | | 13 | MR. GOTTESMAN: Well, as I said in my papers, Your | | 14 | Honor, there is a -- in a group setting, especially when you | | 15 | -- | | 16 | THE COURT: But that's a protective order issue. | | 17 | That's you don't want to disclose something about what your | | 18 | client does. Right? Is that your -- isn't that what you're | | 19 | talking about? You don't want to -- you don't want to have | | 20 | any of their business dealings or processes or policies and | | 21 | procedures become of the party -- become part of a mediation | | 22 | of a group mediation. | | 23 | I think Judge Tancredi can handle that. He can | | 24 | handle that. He can say, you know, counsel, I hear you. We | | 25 | don't want Markham's internal policy and procedures talked |

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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 about in front of this whole group. I'm going to have a separate session just with you. MR. GOTTESMAN: I agree, Your Honor. I think although -- THE COURT: And that's what he's going to do. So you tell him that. You don't need to tell the Court that. You can tell him that. You can say, Judge Tancredi, I understand that this is how you want to proceed, but I can't get into specifics about my client's business practices in this mediation because we think that information is protected and privileged, whatever else you want to call it, from our business operations. And we don't think that that should have to be shared with the group. I honestly -- I can't imagine Judge Tancredi would disagree with you. MR. GOTTESMAN: Your Honor, I'm -- THE COURT: He'd have the conversation with you. Right? I think that -- this session -- just because there could be group sessions doesn't mean there isn't going to be a time when he takes you into a room and says, I'm going to talk only to this person. That's -- it happens all the time. MR. GOTTESMAN: I agree. And I -- and I think I'm and we are obviously hopeful that Judge Tancredi will do exactly that and expect that that (indiscernible). THE COURT: He's a seasoned mediator. MR. GOTTESMAN: Absolutely.

114 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: He will -- he will be able to -- MR. GOTTESMAN: (indiscernible) -- THE COURT: It won't be his first complex mediation. MR. GOTTESMAN: That is absolutely undoubtedly true. All I'm saying is that the way the procedures are currently written, there is no way to address something that Judge Tancredi does not agree with us on, and we would want to take it to the -- THE COURT: Then I'll let you do whatever you think is appropriate. I don't think we need to put it into this motion. If you want -- or order. If you want to come before me and say he's doing something inappropriate, you know, it'll get -- probably get heard. I don't know. But we can't -- we can't doom the process from the start, which is the -- I understand and I think your concern is a valid concern from a lawyer's perspective with regard to your client's business operations. I'm not -- I don't have any -- I don't think that that is an unfounded concern, but I don't think there should be a process set up because that might occur. It might not occur. Right? MR. GOTTESMAN: I would hope that we don't ever have to get there. We can have a conversation with Judge Tancredi. I'm sure we can. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 114 of 186

115 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: I'm sure you can. MR. GOTTESMAN: And able to resolve that, but there is a scenario where that doesn't happen. And all I'm saying -- THE COURT: And you'll have to assert whatever you have to assert at that point. MR. GOTTESMAN: And what I'm trying -- what I'm saying is that while we would then have an affirmative burden to come before Your Honor as well with any other -- THE COURT: You're going to have an affirmative burden to come before me anyway. MR. GOTTESMAN: But if there was this -- if there was an objection period, if there was a seven-day objection period, you could knock them all out of once. THE COURT: I'll tell you what. I'll tell you what. The Trustee and his lawyers have, at least in my experience in this case, when people have brought issues before them and the lawyers who have brought issues before them have been very reasonable and have worked out the overwhelming majority of issues, even in very, very, very contested situations. This is a mediation. I think you can work it out. I don't think it needs to be part of this order. If you -- I just don't. And if -- but if you feel that you're not being treated properly, then file the motion. You Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 115 of 186

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1 2 3 4 5 6 7 know, what's Trustee Despins going to do if you don't show up at mediation because you feel that he didn't take into consideration your concern about your client's business policies? He's not going to -- I mean, what can he do? He's got nothing. It's a -- it's a nonbinding mediation. What do -- you can't be sanctioned. We've already gone through that. Right?

116

8 9 10 11 You can't be sanctioned. You can't be found to have acted in bad faith. You can't -- I think it's an issue that I expect lawyers should be able to address without the need for Court intervention.

12 13 14 15 16 17 MR. GOTTESMAN: Your Honor, I completely agree, I just want to point out two things. Number one, before we filed an objection, we did send comments to the Trustee and never did heard back. So while I think that the Trustee's counsel is usually reasonable, I don't think I can rely on it.

18 19 20 21 22 THE COURT: Well, I think that's a strong statement, so just hold on there. Okay? I think that's a strong statement. There's -- I don't want to get into -- I don't want to -- if we're starting there, you should carve yourself out right now.

23 24 25 Okay? Because that is not how you start a mediation. There are 275 adversary proceedings, like it or not. I understand you don't care. You only care about your Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 117 of 186

1 2 3 two. And that's a fair point too. That's a fair point. But I have to look at the whole. Right? And I don't think it's fair to say you can't rely on them.

4 5 6 7 That's a strong statement. I think what you could say is, you know, we made comments. We didn't hear back. So I feel like I have no choice but to tell you, Judge, that that's where we stand.

8 9 10 11 12 13 Okay. You told me. I'm telling you that lawyers should be able to work it out. You have a -- and if you can't, then do whatever you think is appropriate. And the Court will act in any way the Court thinks it's appropriate under the process. But I think it's an issue that is not an issue.

14 15 16 17 It's not an issue from this Court. And I can't imagine it's going to be an issue from Judge Tancredi's standpoint. I just can't imagine that. And maybe I'm wrong. So you know what?

18 19 20 21 22 23 24 Wouldn't be the first time, won't be the last time, but this is a mediation. This is not a litigation. This is not I'm going in, and I'm going to make an argument to Judge Tancredi about why I shouldn't have to pay a dime and why they're wrong on everything they said. If that's the position, then carve yourself out because that's not what a mediation is. That is not what a mediation is.

This is mediation is designed to come to a result.

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1 2 3 4 5 6 7 We're not going to make arguments about, you know -- well, you know what I'm saying, counsel. I don't mean to go on that. But I think -- I think your issue can be and should be resolved by Judge Tancredi as the mediator. If there's a mediation panel and you have any of those other concerns, I think that's valid, and we can address that if and when that happens.

8 9 10 11 12 But otherwise, I think you have the right to opt out. I mean, you have the right to say, I don't want to be part of it. But if you're going to be part of it, you have to be part of what it is (indiscernible) mediation. Okay? That's my ruling on that issue.

13 14 15 16 17 18 19 20 21 22 23 I'm not going to set up a process where Judge Tancredi makes some recommendation and then it has to be a notice to everybody and then you get to -- first of all, it wouldn't be on notice to everybody. It would just be on notice to be objecting party. I've already made that ruling. But with regard to what you would -- what you can and cannot do, every party in an adversary proceeding or a main case has a right under the Bankruptcy Code to request a conference of the Bankruptcy Court. Now the Court may not agree, may not grant you the conference, but you've got that right.

24 25 So I think your rights are preserved with regard to those issues. So I'm not going to change the order along

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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 those lines. Okay? I just -- I don't see it being something -- and then you can prove me wrong. You can come in and show me why whatever everything I just decided was wrong. And if you do that, then I will reconsider. But I'm not going to reconsider until you're able to do that. Okay? MR. GOTTESMAN: Fair enough, Your Honor. I hope it never happens. THE COURT: I hope -- I hope not too. I really think Judge Tancredi can handle that. I really do. You can handle it by telling Judge Tancredi you need that issue to be handled. Right? So I think it will be fine. MR. BASSETT: Your Honor, wanted to just correct the record at one point. THE COURT: Okay. Go ahead. MR. LINSEY: We have engaged in well more than a dozen telephone conferences with the avoidance defendants regarding their objections. We received from Mr. Gottesman written objections sent in the red line. There was no phone conference requested. I responded to Mr. Gottesman on April 10, 2024, saying here is a further revised proposed order that is acceptable to the Trustee, which considers your client's feedback. That further version of the order specifically excepted many of the revisions that were in the red line that Mr. Gottesman sent to me and then invited him that if he wished to further discuss the matter with us, he

120 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 could do so or should not avail -- (Overlapping voices) MR. LINSEY: So certainly, we have -- THE COURT: I understand. I understand. I do understand, and I don't want to spend any more time on it. Okay? I think we need to get to the meat of the issues. But I understand. MR. LINSEY: (indiscernible). THE COURT: I understand. All right. So with regard to Markham and Fox News Network's objections, the objection regarding of time to be provided with notice and object to recommendations of Judge Tancredi, I'm overruling that objection right now, with the understanding that if you truly believe during the mediation process that that occurs, then you have a right to seek relief from this Court. Whether the Court will agree with you or not depends upon the relief that you seek. Okay? With regard to the issue about the conflict of interest, Attorney Bassett agreed to change that order. Attorney Bassett -- that it's not if there is a panel of mediators, the only -- the ability for a defendant to object to a mediator is not solely limited to a conflict of interest. If they're showed -- if they're able to show some bias or some other, you know, they're in competition with Fox Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 120 of 186

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1 2 3 News or Markham or something, I don't know, then that could be -- form a basis as well. So you'll change that language, Attorney Bassett?

MR. BASSETT: Correct, Your Honor.

5 6 7 8 9 10 11 12 THE COURT: Okay. And then with regards to the clients being able to attend remotely and/or be excused, I've already ruled the clients are not excused unless and until they are by the mediator. And that in that meet -- that letter that's sent to Judge Tancredi, the referral letter, that is the time for your client to request to be available remotely and not have to necessarily attend the mediation session in person.

13 14 Okay? So I think that addresses all of your concerns. Is that correct?

15 16 17 18 19 MR. GOTTESMAN: It does. Thank you, Your Honor. THE COURT: All right. Thank you very much. The next is Blueberry Builders, which is ECF number 3091. Good afternoon. Will you just state your name again for the record, please?

20 21 MS. ODEN: Yes. Amy Oden, O-D-E-N. THE COURT: Thank you.

22 23 MS. ODEN: Pashman and Stein on behalf of Blueberry Builders LLC.

24 THE COURT: Thank you.

25 MS. ODEN: We filed our limited objection for the

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| 1 | procedure's motion at Docket No. 3091. And we had | |----|-----------------------------------------------------------------| | 2 | discussions with the Trustee last week, and we were able to | | 3 | resolve almost all of our objections with the clarifying | | 4 | language and the revised the proposed order. | | 5 | The only issue that remains, which is not for | | 6 | today, but we just want to reserve our rights regarding the | | 7 | sealed complaint. We reserve the right to -- we don't think | | 8 | we should be required to sign on for this extensive | | 9 | protective order just to find out what we'll (indiscernible) | | 10 | for which in our client's case is really just a schedule of | | 11 | transfers. But we understand that's an issue for the parties | | 12 | to the protective order. | | 13 | And it's again, it doesn't prevent, you know, any, | | 14 | procedures from being approved today. But just want to | | 15 | reserve our rights on that. | | 16 | THE COURT: Understood. Thank you. | | 17 | MS. ODEN: Thank you. | | 18 | THE COURT: Attorney Bassett, do you have any | | 19 | response? | | 20 | MR. BASSETT: Yes. No issue, Your Honor. In | | 21 | fact, we are preparing a motion to modify certain aspects of | | 22 | the protective order, which we'll present to your Court in | | 23 | due course. But I think we can work out any issues that the | | 24 | parties may have regarding confidentiality. But certainly, | | 25 | there needs to be some form of protective order that remains |

123 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in place for the mediation. THE COURT: So I just had one question about that. I think that's fine. So have you not seen the schedule of payments? Is that what you're saying? MS. ODEN: Correct. THE COURT: Okay. So you'll need to address that Attorney Bassett. MR. BASSETT: That's correct, Your Honor. And I guess the only issue is it can't be to the extent of what counsel is suggesting. It can't be that they can just receive matter -- or materials that have already been produced and designated confidential pursuant to the existing protective order without themselves agreeing -- without either themselves agreeing to be bound by it or this Court modifying the existing protective order to remove the designation. And we are planning to address, in particular, in our forthcoming motion, which I mentioned, the issue of many banks and other parties, designating highly confidential bank statements, which we don't think should be designated highly confidential because obviously the principals or clients on the other side need to see those transactions. We do intend to address that, but there obviously has to be a protective order in place. The current one is in place until it's modified by the Court. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 123 of 186

124 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: Understood. So counsel, that addresses your issues for now. And obviously, depending upon what's filed, you'll be able to reply or respond to that. But I understand your point. MS. ODEN: Yes. THE COURT: Okay? And that's why I asked the question. Have you seen your schedule? You haven't seen it. So that has to be fixed somehow, and I'll let the lawyers fix that. Is there anything else that you'd like to be heard on with regard to your objection? MS. ODEN: No, Your Honor. THE COURT: Okay. All right. Then that's - again, the objections that I've talked about already have either been overruled and/or resolved through what will be further changes to the order regarding the mediation procedures and/or the protective order that's in place in the main case. MS. ODEN: Thank you, Your Honor. THE COURT: Thank you. The next matter, Lester Hill Informatics has been withdrawn by the objecting party. It was withdrawn today. There -- that objection was 3093, and it was withdrawn at 3116. The next matter is Nardello and Company LLC, which is ECF number 3095. And Attorney Baer, that appears to be -- oh, do you have another one as Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 124 of 186

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 well? MR. BAER: Yes, Your Honor. Actually, two others as well. We filed on behalf of Nardello and Company, (indiscernible) Phoenix, and then Post Oak Motors and there substantially identical. So I believe the Court can handle all of them. THE COURT: So we'll handle ECF numbers objections 3095, 3096, and 3097 altogether. So go ahead, Attorney Baer. MR. BAER: Thank you, Your Honor. And a lot of the issues that we raised have been addressed by the Court and by counsel already. There are just a few additional issues. Some of which might be actually (indiscernible) raised. I think perhaps it makes the most sense to talk about just, I think, which is a housekeeping matter first. One of the issues raised by this Court at the beginning of this hearing, which deals with exactly which matters are being referred to mediation. The way that I read the order, and I think it's simply a drafting issue, is that there's 3-A and 3-B, 3-A being the matters that are I think it's called state avoidance claims. And there's 3-B, which are partially stated avoidance claims. And Exhibit 4 are the matters that are not being referred to mediation at all. But I think as I understand it, the intent is that 3-A and 3-B are also not being referred to mediation. Right? They're being stayed independently but not

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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 actually done mediation. The 3-D portions are not being stayed are but the stayed portions of 3-D and all of 3-A are not going to mediation. Correct? MR. BASSETT: That's correct. So all of 3-A would not go to mediation, but I think parties could obviously elect into it if they wanted to -- would be to the extent that there is a part of that adversary proceeding and claim that adversary proceeding is not stayed that will go to mediation unless it is also on Exhibit 4. MR. BAER: Okay. And to be clear, I think the way it's drafted right now, and I'm sure it's unintentional. But the clean version, I'm looking at the bottom of Page 4 and paragraph J, it says upon appearance of any avoidance defendant in the avoidance action, it would be automatically referred to mediation. I think that does not apply to 3-A and 3-B. Later in that paragraph, it excepts out Exhibit 4. I think it can be resolved by just saying anything on 3-A (indiscernible) 3-B and 4 are not referred to mediation. MR. BASSETT: We can look at that drafting issue, Your Honor. THE COURT: I see where Attorney Baer -- what the language he's looking at on J that starts not within notwithstanding anything to the contrary. That's what you're talking about. Right?

127 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. BAER: Yes, Your Honor. THE COURT: No claims, but a Trustee against avoidance set forth on attached Exhibit 4 shall be subject to referral. But I -- you know? Yeah. You look at it. MR. BASSETT: Yeah. We -- I'm sure that we can resolve this. (Overlapping voices) THE COURT: That's one of the reasons I did ask the question at the beginning of the hearing. So go ahead. So actually, you go ahead, Attorney Baer. So that seems, you'll work out that issue. Go ahead. MR. BAER: Thank you, Your Honor. Our other objections, the remaining objection probably fall within one of two different buckets, one of which is going to be a simple objection to the -- to the extent that the mediation procedures are not even or not necessarily the same as well as to the plaintiff and to the defendant. To the extent that the mediation procedure is put in place and pretty much every single -- I shouldn't say pretty much -- in every single other mediation I have ever been involved in, the rules of them, people aren't (indiscernible) both parties the same. There are several cases in the mediation procedures in which the rules were applicable to the Trustee are different than the rules applicable with the defendants. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 127 of 186

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| 1 | I don't think that that's appropriate, and I also don't think | |----|-----------------------------------------------------------------| | 2 | it's entirely necessary at all in this case. | | 3 | For example, and it's probably important to point | | 4 | out with respect to some of the procedures we've already | | 5 | talked about. I understand that the idea that there will not | | 6 | be fact be a mediation panel, but that there will only be a | | 7 | panel to the extent necessary. But the way the procedure is | | 8 | currently drafted, it says that the Trustee would then | | 9 | appoint a mediation panel to the extent necessary. | | 10 | THE COURT: I don't think that -- well, if it | | 11 | does, I miss that because I thought it was Judge Tancredi did | | 12 | that. But I could be wrong. | | 13 | MR. BAER: So looking at paragraph K, why that's | | 14 | the definition of mediation panel, it's the Trustee | | 15 | determined in consultation with the Trustee that | | 16 | (indiscernible) to create. The members of the mediation | | 17 | panel shall be selected by the Trustee in consultation with | | 18 | Judge Tancredi. And as well, there are two objections to | | 19 | that. First of all, entirely inappropriate to have one of | | 20 | the parties to mediation picking the panel. I think Judge | | 21 | Tancredi is more than able to pick any panel members | | 22 | necessary. | | 23 | I think second of all, I don't think it's | | 24 | appropriate to have ex parte communications between one of | | 25 | the parties and Judge Tancredi to the extent (indiscernible). | | | |

| | Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 129 of 186 | |----|------------------------------------------------------------------------------------------------| | | 129 | | 1 | MR. DESPINS: Mediation is all about ex parte. | | 2 | We're talking to different judges all the time in mediation, | | 3 | and you should too. | | 4 | MR. BAER: Right. And to the extent that both | | 5 | parties are -- | | 6 | THE COURT: I think what he's saying is -- I think | | 7 | what Attorney Baer is saying is you just can't tell the | | 8 | Trustee who is he going to pick and they're going to pick the | | 9 | panel. That's the point. Right? | | 10 | MR. BAER: Exactly. Yeah. And I don't think -- | | 11 | and to the extent that it says that the Trustee in | | 12 | consultation with even the -- if Judge Tancredi is picking | | 13 | the panel, which I think it sounds like we're all in | | 14 | agreement would happen, it shouldn't just be in consultation | | 15 | with the Trustees, it should be in consultation with the | | 16 | other parties or it could simply be that Judge Tancredi does | | 17 | it. And that type of consultation (indiscernible). | | 18 | MR. BASSETT: The issue -- we understand the | | 19 | point. But again, we're dealing with the practicalities of | | 20 | the situation. So, ultimately, Judge Tancredi is going to be | | 21 | the one who presents a panel, if there is a panel necessary | | 22 | for this Court for approval. The procedures contemplate that | | 23 | the Trustee will consult with Judge Tancredi regarding that. | | 24 | I have no problem of concept with other defendants | | 25 | also being able to consult. The issue is, I don't know how | | | |

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| 1 | that is practically workable with 270 plus parties. It can't | |----|-------------------------------------------------------------------| | 2 | be that there has to be a process in place where -- | | 3 | THE COURT: There wouldn't be. | | 4 | MR. BASSETT: -- feedback is solicited from -- | | 5 | THE COURT: It would only be with regards to | | 6 | objecting parties. I'm not going to -- because that's not | | 7 | going to happen. So that -- you don't have to even go down | | 8 | that road. All right? But I think the point is that there's | | 9 | -- there can be a process for objecting parties if there's | | 10 | going to be a panel to suggest people to be on the panel. | | 11 | Okay? That's what you're asking for, isn't it? | | 12 | MR. BAER: Yes, Your Honor. To the extent -- | | 13 | THE COURT: And I think that Judge Tancredi has to | | 14 | determine the panel, not the Trustee and Judge Tancredi. | | 15 | MR. BAER: Yes, Your Honor. And I would suggest | | 16 | to the extent that any party is proposing the mediator for | | 17 | the panel that it should be done on notice of the other | | 18 | parties. I think in this case, as I said, directing will be | | 19 | the Trustee and the other objecting parties, which I think is | | 20 | fine. Just so that everybody has an opportunity to see | | 21 | what's being proposed and give input potentially as a | | 22 | panelist. I don't think it has to be on all parties. I | | 23 | don't think we need any procedure for it. | | 24 | THE COURT: We're not going to do that. | | 25 | MR. BASSETT: I don't agree. The Trustee does not |

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| 1 | agree to that aspect of the request, Your Honor. There's | |----|----------------------------------------------------------------| | 2 | going to lots of ex parte communications. There has to be a | | 3 | communication between the Trustee and Judge Tancredi or | | 4 | between the defendants and Judge Tancredi about, hey, here's | | 5 | the suggested mediator. If that person's proposed, then you | | 6 | have an opportunity to object. | | 7 | MR. BAER: That's actually my point, Your Honor. | | 8 | And I'm fine with that if the person's proposed, we have an | | 9 | opportunity to object, that no issues at all. | | 10 | THE COURT: Okay. So you might be saying the same | | 11 | thing. | | 12 | MR. BAER: Yes. I believe that's fine, Your | | 13 | Honor. | | 14 | MR. BASSETT: Good to hear. | | 15 | MR. BAER: The other issues in the procedures that | | 16 | are unnecessarily one-sided include allowing the location of | | 17 | the mediation to be in the office of the Trustee. Again, | | 18 | | | | it's appropriate to have it be in one party's office. | | 19 | THE COURT: I didn't see that. | | 20 | MR. BAER: Yeah. That's included in paragraph 2- | | 21 | O. That's an automatic allowed location to the extent the | | 22 | parties can't agree, able to agree that it can be in the | | 23 | Trustee's office in one of the possible locations. | | 24 | MR. BASSETT: Your Honor, we're trying to be |

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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 locations. It's not a mandatory requirement that mediation occur in our offices. We're just trying to be helpful in offering space. Judge Tancredi -- (Overlapping voices) THE COURT: I think Judge Tancredi is going to decide where the mediation is going to be. So I think we don't have to worry about that. And if he can -- if there's a need to delete that language or just modify it, I think let's do that so we can move on MR. BAER: Okay. That's fine, Your Honor. In paragraph 2-F and I'm not sure if this is intentional -- THE COURT: 2-F? MR. BAER: 2-F. Yes, Your Honor. I'm not sure if this is intentional or not, but there have already been some discussion with the Court about the attendance of parties at the mediation, and I very much heard the Court's point that clients are mandatory to be there. The only issue would be that the way that it's drafted, the Trustee does not have to have a representative there, but the defendant does. And again, that's an unnecessary inequality. I think that the Trustee, obviously, Mr. Despins is not going to show up at every single mediation. We expect that counsel, the settlement authority is acceptable for the Trustee, should be counsel the settlement authority is

25 acceptable to the defendant.

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| 1 | THE COURT: I disagree. I'm sorry. I disagree | |----|-------------------------------------------------------------------| | 2 | with you on that point. The Trustee is in a different | | 3 | position than the defendants are in this case. The Trustee | | 4 | has statutory duties to resolve -- to try to resolve issues. | | 5 | And the Trustee is not going to be at every | | 6 | adversary proceeding, but one of his representatives as | | 7 | lawyer is going to be there. He has to be available just | | 8 | like any of your clients who aren't going to be at the maybe | | 9 | physically at the mediation have to be available. So I don't | | 10 | agree that that's an issue. And so I don't -- I don't think | | 11 | we need to discuss it. The Trustee is not going to be at | | 12 | every -- at every mediation session. | | 13 | MR. BAER: Your Honor -- | | 14 | THE COURT: To be clear. Neither are your | | 15 | clients. | | 16 | MR. BAER: Yeah. And I'm sorry, Your Honor, I | | 17 | didn't mean to interrupt you. I apologize. But just to make | | 18 | that -- I'm not suggesting that the Trustee should be there. | | 19 | I'm aware that that's just practically not possible. What | | 20 | I'm suggesting is whatever the rules are, should be the rules | | 21 | for both of them. | | 22 | To the extent that it can be a representative, | | 23 | that's fine. To the extent that it's counsel, the settlement | | 24 | authority, that's fine. To the extent that it's simply | | 25 | available -- | | | |

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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: I disagree with your client. The defendants are going to be there. Even if they're remote, they're going to be -- what I said at the beginning of the hearing was that the defendants have to be available. They're not going to be excused from mediation. And when I say available, I'm not saying that they necessarily have to be on a video screen. It's up to Judge Tancredi how he's going to handle that, but they have to be available. It's not -- I'm not going to have a situation, and I've already described it, I think, three times in the record, where a lawyer says, yes. I have a settlement authority, but now I have to go call Mr. Smith because I need more settlement authority, and Mr. Smith isn't available until tomorrow. That's unacceptable. MR. BAER: I agree. I agree completely, Your Honor, but I believe that that applies equally to the Trustee. To the extent that the Trustee is not available to -- THE COURT: The Trustee is going to be available. I'm so -- MR. BAER: That's all I'm asking. That the Trustee is available the same way that if the Trustee or his representative is -- THE COURT: There is no question that the party - the plaintiff is going to be on the same level playing field

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as the defendant, which is the plaintiff has to be available with authority, not -- I'm not going to hear that Attorney Lindsey had authority up to this amount, and then he had needed to get involved with the Trustee, and he couldn't get him for three days. If I hear that, I'm not going to be happy.

7 8 9 10 MR. BAER: Your Honor, that resolves my issue. I think there's probably language that could make it better, but I think that resolves my issue, Your Honor. I think that makes sense.

11 12 13 14 15 16 17 18 19 20 21 My other issues, Your Honor, are with the consolidation and categorization, and I think that is in a couple of different ways. As a starting point, just to be clear, I think as a conceptual matter it makes a lot of sense for all the reasons that have been addressed by the parties. I think that there is going to be a lot of similarities conceptually that make sense to deal with if not at or around the same time, possibly, even if it's from the same mediator, whether that's Judge Tancredi or somebody else. So, I understand the concept of it and I agree with it. I think that I have a couple of issues with it.

22 23 24 25 First of all, is that it says in the procedures only that, as I said before about the ex parte, it says that the trustee cannot run up negotiations with the trust, with the Judge Tancredi about those categorizations. And I think

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1 2 3 4 that is necessarily substantive, but, again, it should not necessarily be an ex parte communication substantively about those procedures unless everybody is going to be a legal basis for them.

5 6 7 8 9 10 11 But My larger concern about the categorization - again, again, I should also say upfront the procedures talk about categorization in a couple of places and it talks about consolidation in, at least, one place. I am not sure if that is supposed to be the same claim or if it's a different claim. I would address them just the same just for ease of reference.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 My concerns about the categorization, and I guess I should also say, I think, the procedures talked about categorization in a couple of places and it talks about consolidation in at least one place. I'm not sure if that's supposed to be the same thing or if they're different things. I'll address them as if they're the same, just for ease of reference. Buy my concerns about the categorization is all it says is that that might happen and it doesn't actually say what the impact of that is. And I think that means that they are one of two different things. One is they have a substantive impact and I think we have talked about ways that it might be. In other words, if they are 10 defendants that are all -- I think the terminology they've used before were ordinary course defendants and all 10 of them are going to be

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1 2 3 4 5 6 together, I am not entirely sure what that means. Does that mean that I only get one-tenth, then, of the pagination? Does it mean I only get one-tenth of the time to make the argument? Does that mean that I have to sit in the conference room and listen to nine other -- nine hours of other arguments until I get to my one?

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 The point is I think I have all the faith in the world that Judge Tancredi will be able to create procedures that make sense for everybody and that "categorize" adversary proceedings that are similar, but I don't think that necessarily has to be in this order. That can simply be done as a process of scheduling. That can be which is already embedded in there. But to the extent that Judge Tancredi believes, and it can be on consultation with the trustee as long as it's in the open and parties have an opportunity to say, hold on, I don't want to be a part of that bucket or I don't want to be a part of the consolidated proceedings for those reasons, as long as that is the case, and Judge Tancredi wants to propose a procedure that he thinks makes the most sense, I have all the faith in the world that the procedure will make sense and that that will be (indiscernible).

23 24 25 But I think including it in this order, especially to the extent that it says the trustee can have ex parte communications about that categorization, it just brings on

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1 2 3 4 5 6 7 8 the danger of an order that we don't know that it means, because we don't know the implication is. We don't know that it's going to have substantively. We don't know what the impact is going to be. If Judge Tancredi wants to categorize, he has that authority. We don't need to include that in this order. What I would suggest is if there's something very specific that we need from this Court to authorize Judge

9 10 11 12 Tancredi to do, we need to be specific as to what that is. If it's something -- nothing more than scheduling, talking views of logic and tactical purpose, Judge Tancredi does not need that to be in this order.

13 14 THE COURT: What paragraph is the language that you are speaking about? Do you recall, because I --

15 16 17 MR. BAER: I think the most obvious one -- it's in a couple of different places -- but I think it's the last paragraph, Your Honor, (indiscernible) is paragraph (y):

18 19 20 21 "To facilitate the mediation process and minimize any burden of Judge Tancredi, the trustee shall endeavor," not Judge Tancredi, but, "the trustee shall endeavor in consultation to divide categories of avoidance actions."

22 23 24 25 That should be done by Judge Tancredi and if the authority of Judge Tancredi doesn't meet -- this is a -- if it's purely a scheduling issue for logic and for practicality that doesn't need to be in there. We already have Judge

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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 Tancredi has the ability to make scheduling decisions and then to schedule them as necessary. To the extent there's any substantive point to that, we need to know what that is. MR. DESPINS: Your Honor, it's very substantive. There's a (indiscernible) of different claims. There are post-petition claims, prepetition claims. There are some that I clearly know who they're dealing with. Others may not. So, that is the whole point about buckets. But we can change the language to say that we are free to propose that to Judge Tancredi and he's free to reject them, but that's -- MR. BAER: To the extent they're going to propose it to Judge Tancredi, you know, I would suggest that it should be proposed with notice to the parties that will be in the bucket. MR. DESPINS: No, we're not going to do that for the mediation. The fact that he's a sitting judge -- it's not very productive unless we can have direct ex parte communications with him about the merits of the claims. We're going to tell him, We think these claims are stronger than those claims or not, and I'm not going to share that with the defendants. MR. BAER: Oh, well, that's understandable, Your Honor; they're not going to share all of the discussions about that. But again, that's exactly what I am talking

140 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 about, it's a substantive conversation with Judge Tancredi that will have an impact over the -- THE COURT: But he's not acting as a judge; he's acting as a mediator. MR. BAER: Pardon? THE COURT: He's not acting as a judge; he's acting as a mediator. You always have substantive conversations with a mediator depending upon who you -- what side of the fence you are on. I mean that's what you do, right? MR. BAER: Which means it doesn't need to be in the order because they already have that authority. You know, Judge Tancredi already has the authority to bucket, as necessary, because the trustee already has the authority to have -- THE COURT: Then what about Trustee Despins' language that they can propose and he can reject? That does not address your issue? MR. BAER: That addresses my issue as long as to the extent that they propose, and Judge Tancredi were to consider it, we would be on notice and have an opportunity to -- THE COURT: But you wouldn't be on notice if you propose -- you're not going to provide him with any notice of what you suggested to Judge Tancredi. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 140 of 186

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1 2 3 4 5 6 7 MR. BAER: I am not suggesting that we have to be on notice or propose it, but this goes back to an earlier conversation I believe that the Court had with one of the other objectors around what would happen to the extent that they make a proposal and Judge Tancredi approves it? We shouldn't have to go back at that point and file a motion to be heard by this Court and an objection.

8 9 10 11 12 There should be some process to the extent -- and Judge -- and Trustee Despins made clear that he believes it's very substantive, which (indiscernible). I believe, Your Honor, it's very substantive. That should not be done without the participation of the defendants.

13 14 15 16 17 18 19 20 21 22 MR. BASSETT: But no. Your Honor, I think they are spinning our wheels because, as counsel just said, we absolutely addressed this exact same issue with counsel for Fox News and Marcum and the way it was resolved was to say if somebody gets to the point where there's been something proposed throughout the mediation process that they don't agree with, and they think they need to file a motion with this Court to be heard to have something changed, it is up to them to decide whether to do that. I don't think we need to keep revisiting the same issue, Your Honor, respectfully.

23 24 25 MR. BAER: Your Honor, I actually came up with it in the middle of it, but I thought it might make sense to be heard on it. But I wasn't heard on the issue

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1 2 3 4 5 6 7 (indiscernible); although, I don't need to continue spinning wheels on it. I understand the Court's position. I understand the Trustee's position. I do think it would be inappropriate to suggest that something substantive can be done without the defendants knowing and then put them, to the point that they have no choice but to file a motion in front of this Court to undo what has been done.

8 9 10 More importantly, again, I would think we can take out the paragraph entirely, to the extent that they say that they had this authority.

11 12 13 14 15 16 17 18 19 20 21 22 THE COURT: Well, I think that Trustee Despins' language solved the problem, okay. They can propose and Judge Tancredi can reject, and then you can do whatever you think is appropriate. We have to remember, and I know you all are remembering, but I am going to say it again anyway, he is not acting as a judge; he's acting as a mediator. That's what he's doing. This isn't an ex parte communication because he is not acting as the Court. It's a mediation. That's what happens all the time. Everybody is going to come in and tell the mediator their side of the story and expect that the mediator is not going to share the whole thing with the other side. That's not how it works.

23 24 25 And Judge Tancredi is going to want an order that basically, you know, holds him harmless from all -- what you're talking about because he's not going to do it

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1 2 3 otherwise. Why would he? As we already talked about, he's got a big job all day and he's expecting to spend a lot of time trying to help this process forward.

4 5 6 7 8 9 10 So, I do understand your point, but I am not going to strike the -- I am not going to strike the paragraph (y), but I am going to ask Attorney Bassett for you to put in Trustee Despins' language about you have the right to -- you can propose, but Judge Tancredi can reject, okay. Just like you could propose something and Judge Tancredi could object -- I mean -- excuse me -- reject.

11 12 13 14 15 16 17 18 So, I understand your point, but I am not going to -- I don't agree with the argument that either the language should be stricken or that there be some kind of notice provided to the objecting parties that then has some series of hearings. That's just going to derail the process in my opinion with the understanding that if you truly believe there's a problem, you have a right to come to the Court and seek relief.

19 20 21 22 23 24 25 MR. BAER: Thank you, Your Honor. Perhaps just a last issue, and I don't know if this is a substantive one. I think it is, but just to be clear, the Court -- we've talked before -- I've heard the Court say that to the extent that some objected and didn't like the way these things were coming along, they had an opportunity to opt out. Just to be clear, the way that the language works right now, they don't

144 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 actually have an opportunity opt out. THE COURT: Well, they have to file a motion. MR. BAER: But it has to be a motion on good cause. THE COURT: Well, everything has to be a motion on good cause, doesn't it? MR. BAER: I think that's the legal standard, Your Honor. I think it has to be -- THE COURT: It is the legal standard, but you can't just move and say, I don't want to be part of it, because I don't want to be part of it. MR. BAER: I believe that -- I would actually, to the extent (indiscernible) that doesn't have names to our mediation should be able to opt out, if you simply decide in your own best interests that it doesn't make sense to put this to mediation. I also think it should be if you file a motion, good cause is different that cause. THE COURT: I -- you know, you can make that argument. I understand. I sometimes -- I understand the difference between cause and good cause, and sometimes the statute says cause and sometimes the statute says good cause. MR. BAER: I will also propose that you should simply be able to file a notice saying you're opting out of the mediation procedures. I don't think it should be Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 144 of 186

| 1 | mandatory. | |----|-------------------------------------------------------------------| | 2 | THE COURT: Well, has anyone actually raised -- | | 3 | did you -- I apologize if you did, I just don't recall -- did | | 4 | you actually raise that as an objection in your -- oh, you | | 5 | did, that you should be able to opt out by notice, rather | | 6 | than motion. So, that was in the objection. | | 7 | So, what is your response to that, Attorney | | 8 | Bassett? | | 9 | MR. BASSETT: My response, Your Honor, is that we | | 10 | think it is very important for parties to be bound to | | 11 | participate in the mediation process, subject to the ability | | 12 | that they can demonstrate, again, a good reason why they | | 13 | should not participate, should be part of the process. We | | 14 | think that's the only way this is going to work. There are a | | 15 | number -- I mean, numerous examples of -- | | 16 | THE COURT: Well, let me just say something about | | 17 | that. If I were to allow that, to opt out, it would only be | | 18 | with regard to parties who have objected; I'm not going to | | 19 | open the flood gates. So that's not going to happen. I just | | 20 | want you to understand that. | | 21 | That was the whole point of making you, the | | 22 | Trustee, serve this order on everyone and set up this hearing | | 23 | and establish an objection date, was to have parties object. | | 24 | MR. BASSETT: That's fine, Your Honor. If he | | 25 | wants a carve-out saying that this one particular, or two | | | |

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| 1 | particular clients that he's representing here today, that | |----|-----------------------------------------------------------------| | 2 | they could have the right to opt out, sure. | | 3 | THE COURT: So, you will work that out. | | 4 | MR. BASSETT: But not to any other parties that -- | | 5 | THE COURT: No. I mean, if no one has raised that | | 6 | as an objection, they don't get it; that was the point. The | | 7 | point was you have a right to object to these procedures, you | | 8 | need to make your objections in writing, and the Court will | | 9 | consider them. | | 10 | And Attorney Baer's objection do have an objection | | 11 | that they should be allowed to opt out via notice, rather | | 12 | than motion, so I forgot -- there's a lot of them, okay -- | | 13 | but it does say that. So, if you could put in the order that | | 14 | those two objections, those parties, or actually, there's | | 15 | probably three, there's three of them. There's Nardello & | | 16 | Co., Teris-Phoenix, and Post Oak Motors; those are the three | | 17 | that have talked about, at least up to this point, that have | | 18 | put in their written objections that they would like to opt | | 19 | out by notice rather than motion. I think that, actually, | | 20 | the last objection may have the same thing, but we haven't | | 21 | gotten to those yet. | | 22 | Okay. I am not agreeing that this means anyone | | 23 | can do that. That was the whole point; otherwise, what's the | | 24 | point of today and the whole process? The point was do what | | 25 | we've done. So it sounds like that issue will be resolved, | | | |

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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 Attorney Baer, where your clients, your three clients, with regard to those three objections will be carved out and have a right to file a notice to opt out versus the motion, okay. MR. BAER: Thank you, Your Honor. THE COURT: Okay. Thank you. So, I think that addresses all of your objections; is that correct? MR. BAER: I believe so, yes. Thank you, Your Honor. THE COURT: Okay. All right. Thank you. Then final objections, I think, are Attorney Sklarz, are your objections: G Club Operations and Weddle Law, 3098 and 3100 are the two objections that I -- are the remaining -- that's the last I have, anyway. MR. SKLARZ: Yes, Your Honor. I'll handle G Club and -- THE COURT: Oh, I'm sorry, someone else is standing up. Did you have another -- no, I apologize, right behind you, behind the bench. Did you have an objection, too, counsel? MR. PESCE: I have 3087. THE COURT: Which one? MR. PESCE: 3087. THE COURT: For some reason I don't have 3087. So, can you just hold on and then -- I appreciate that.

148 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. PESCE: No problem. THE COURT: Okay. I'm sorry. Thank you. MR. SKLARZ: Yes, thank you, Your Honor. I will handle G Club and (indiscernible) and Attorney Corbi, who are local counsel for us, will handle Weddle. THE COURT: That's fine. Good afternoon. MR. SKLARZ: And I'll let him go first because he'll probably take all the wind out of my sail and then you won't have to hear from me. THE COURT: Okay. That's fine. Thank you. All right. Counsel, would you just state your name for the record please? MR. CORBI: Yes, Your Honor. Richard Corbi on behalf of Weddle Law PLLC. My pro hac was drafted last week. Also, we filed our objection to the mediation procedures and we also filed our motion to dismiss the adversary proceeding yesterday. (Indiscernible) deadline, working off a different order that was entered several weeks ago. Given that I'm one of the last few people to speak today, I think a lot of this has been addressed, but I think to my objection, to the extent necessary, on stuff that has not been resolved, the first point in the mediation (indiscernible) -- and I'll just go through my objection, I'm looking at page 4, Paragraph 13 -- the fist point of the objection, there's a provision in Paragraph 2(d) that Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 148 of 186

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| 1 | provides for the service of the redacted avoidance complaint | |----|---------------------------------------------------------------| | 2 | as being good service of process; that's inappropriate in the | | 3 | mediation. Your Honor, we actually got to the point -- we | | 4 | actually briefed our motion to dismiss we filed yesterday, so | | 5 | to the extent the Court wants to make any decision about | | 6 | whether that's deemed -- it can't be deemed a waiver of any | | 7 | defendants by any avoidance action (indiscernible), Your | | 8 | Honor. | | 9 | THE COURT: Okay. Did you -- not any defendants. | | 10 | Your defendant. | | 11 | MR. CORBI: Yes, my defendant. I actually don't | | 12 | care about everyone else, I just care about my client. | | 13 | THE COURT: I would assume that's the case. | | 14 | So, I didn't look at your motion to dismiss. You | | 15 | raised an insufficiency of service to process in your motion | | 16 | to dismiss? | | 17 | MR. CORBI: Yes. | | 18 | THE COURT: Okay. I didn't know that you filed a | | 19 | motion to dismiss, but that's fine. | | 20 | MR. CORBI: Well, what -- | | 21 | THE COURT: S, you are saying you want, at least | | 22 | with regard to your defendant, that's subparagraph -- that | | 23 | paragraph 2, you're carved out because you don't agree with | | 24 | it and you've already filed a motion to dismiss that raises | | 25 | an insufficiency of service of process defense. | | | |

150 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. CORBI: Yes. THE COURT: Okay. MR. CORBI: Inappropriate for a mediation procedures order. THE COURT: Well, I don't know if I even need to get there, right. If you have already raised it as a defense in your motion to dismiss, then you're protected, as far as raising it, correct? MR. CORBI: Yes. THE COURT: And you can't be found to have waived it if you've raised it as a defense. MR. CORBI: Yes, that's correct. Yes, Your Honor. THE COURT: All right. Go ahead. MR. CORBI: The next one was Paragraph ii(e), little two, that was the partial stay (indiscernible). We spoke about that earlier, about an hour ago. THE COURT: Are you -- do you believe the way that we've discussed Exhibits 3-A, 3-B and 4 address your concerns? MR. CORBI: I think it does. It's written clearer, but I don't want to -- THE COURT: I think that there is -- there was a suggestion -- and maybe it was by Attorney Baer, I don't remember now -- that that paragraph (l) maybe, that only refers to Exhibit 4, should also include Exhibit 3-A and 3-B? Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 150 of 186

151 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. CORBI: Yes. MR. BASSETT: J, Your Honor. THE COURT: J. Exhibit J. I think, Mr. Bassett, you said that you were amenable to that. MR. BASSETT: That's correct; we'll make a change to (indiscernible). THE COURT: Okay. So, that takes care of that. MR. CORBI: That should deal with that. THE COURT: All right, go ahead. MR. CORBI: The next -- and I know you're going to hate this, too -- but it's talking about the mediation panel. I raised it, because you've seen in our objection, paragraph 2(k) -- yeah, paragraph 2(k) -- I understand where the Trustee's counsel is coming from, (indiscernible), but if you have 270 defendants, it is actually more manageable if everybody who actually objected gets a say because (indiscernible). We want a law proposed that was actually similar to what we've done in the Diocese of Buffalo case where if there's a mediation panel, we suggest it be Judge Tancredi and that's it because -- THE COURT: Who determines the panel, you mean? MR. CORBI: Who determines the panel. It should just be Judge Tancredi to avoid unnecessary motion practice, costs for my client, and costs to the Trustee by having Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 151 of 186

152 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 another hearing like this on whether person A or person B is appropriate for the panel. It should really just be Judge Tancredi making that decision as it was done in the Diocese of Buffalo case. THE COURT: Okay. MR. BASSETT: I thought we resolved that, Your Honor. THE COURT: I thought we did too, but I could be wrong because there's a lot of things we've been talking about -- MR. CORBI: I just want to be fair and -- THE COURT: -- which is that you can propose, but he can reject. MR. DESPINS: Your Honor, he's picking. THE COURT: Yes, he's picking the panel MR. CORBI: Your Honor, it just wasn't clear in the draft that was filed. THE COURT: That's true, but they've agreed to modify and amend the language. MR. CORBI: Yeah. THE COURT: Okay. MR. CORBI: The next issue we have is Paragraph 2(r). This has been addressed a couple of times, but I just wanted to say it for my own client's benefit, again, this dovetails into the mediation panel and ex parte Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 152 of 186

153 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 communications. If it's just -- THE COURT: It's not an ex parte communication. You are not talking to a Judge. It's a Judge, but he's acting as a mediator. MR. CORBI: I understand, but it should work both ways that not only the Trustee, but also the defendants should be able to speak to Judge Tancredi in his capacity as a mediator. THE COURT: They are going to be able to. Judge Tancredi is going to run the mediation like he would any mediation. I'm sure there are -- I mean there's going to be times when he is going to speak just to you, right? MR. CORBI: Agreed, yes. THE COURT: So then you can have whatever communication you want to have with him when he speaks just to you. That is not an ex parte communication. That is your statement or representation of how you believe the case should be held, the adversary proceeding should progress, or what the mediation is, right. That is going to happen. So, I guess my point is on the ex parte, it isn't ex parte, number one, because he's not a judge for these purposes; he's a mediator, number one. Number two, as I said, he's going to want everybody to hold him harmless anyway or he's not going to do it. Number three, you are going to have that opportunity. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 153 of 186

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| 1 | MR. CORBI: The next part was actually just raised | |----|-----------------------------------------------------------------| | 2 | with the opt-out. We had actually made that point in our | | 3 | objection that it should be an opt-out without having to file | | 4 | a motion. Considering that we've already filed our motion to | | 5 | dismiss yesterday and my clients received payments from the | | 6 | non-debtor that is not in bankruptcy, my client's already | | 7 | spent over \$100,000 in legal fees in this case; he shouldn't | | 8 | have to spend more. | | 9 | THE COURT: In this adversary proceeding? | | 10 | MR. CORBI: Well, and the mediation procedures | | 11 | and -- | | 12 | THE COURT: A \$100,000 in the last month? | | 13 | MR. CORBI: Yes. | | 14 | THE COURT: Wow, okay. | | 15 | MR. CORBI: That is also our motion to dismiss | | 16 | that we filed yesterday, but they've spent over \$100,000 in | | 17 | fees, you know, objecting to mediation and (indiscernible) as | | 18 | a matter of law. | | 19 | The next point I have is in paragraph 2(q). This | | 20 | may be -- I do recall having a conversation with United | | 21 | States Attorney (indiscernible), Your Honor, regarding the | | 22 | documents produced at mediation are not subject to discovery. | | 23 | It should be -- we're not looking for testimony | | 24 | from any mediator or settlement offers that were made | | 25 | (indiscernible), documents that were produced (indiscernible) | | | |

155 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 as bank statements, if we could get that through the normal avenues of discovery we should be able to get that and it should be -- THE COURT: Why? It's mediation. MR. CORBI: If somebody produced bank statements that go to the core of the issue and we don't settle and we have to go to trial, I need to see those bank statements and if somebody hides behind the shield that they're covered by the mediation privilege, that's not what we're supposed to do. THE COURT: Why? MR. CORBI: Because the -- mediation doesn't - mediation rules aren't meant to cover documents -- THE COURT: Right, but you can get them in discovery in your adversary proceeding. MR. CORBI: Okay. I just wanted that -- I wanted -- THE COURT: You can ask, right. I mean that's the whole point. If you don't resolve this and you go through your trial, your case, you have a right to discovery. MR. CORBI: That's true, and I was trying -- THE COURT: So what's your point? You want to not have to make the discovery request? MR. CORBI: No, we will make the discovery requests. We just don't want to stonewalled because there Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 155 of 186

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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 was a bank statement was produced in mediation; therefore, the other side, the Trustee doesn't have to give it to me. MR. BASSETT: Your Honor, the documents that already exist that happens to be shared with the mediator, if that document was already discoverable prior to being shared, it doesn't all of a sudden become cloaked in a mediation privilege because we have mediation; we agree on that. But he can't use the mediation process to short circuit the discovery process. THE COURT: I don't think that is what he is saying. That's why I asked him that question. He is saying he would still make a discovery request. MR. BASSETT: Sure. THE COURT: All he's saying is you can't say I don't have to give it to you because you saw it in the mediation. Isn't that what you are saying? MR. CORBI: Yes, exactly. MR. BASSETT: But to be clear, the discovery requests can't be, Give me those documents that you showed in mediation. Just request them the way you would request them. THE COURT: He will. MR. CORBI: Yes, and that's what -- THE COURT: That's what you all get paid for.

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| 1 | MR. BASSETT: But, Your Honor, the other point -- | |----|----------------------------------------------------------------| | 2 | I'm a little confused because he made a very clear point | | 3 | about saying his client is ligating, not mediating, and if | | 4 | he's opting out, which we'll give him that right, as we did | | 5 | the last party, I don't know why he has an issue. | | 6 | THE COURT: You don't know why what? | | 7 | MR. BASSETT: I don't know why we are looking to | | 8 | these other issues. | | 9 | THE COURT: Well, because he had to raise them. | | 10 | He had to raise them. It's fine. Don't worry, it's all | | 11 | fine. It'll all work out one way or another. | | 12 | MR. CORBI: I thought the Court directed that if I | | 13 | wanted to be heard, I had to file an objection. | | 14 | THE COURT: Right. | | 15 | MR. CORBI: But if I didn't resolve something -- | | 16 | THE COURT: No, I agree. I agree. | | 17 | MR. CORBI: Thank you, Your Honor. | | 18 | THE COURT: That's fine. Go ahead. | | 19 | MR. CORBI: The final point, this is the | | 20 | reservation of rights on the legal fees. It's inappropriate | | 21 | for the Trustee to seek equal sharing of the legal fees. I | | 22 | know you'd reserve that -- | | 23 | THE COURT: You mean not legal fees, but the costs | | 24 | of the mediation? | | 25 | MR. CORBI: Costs of the mediation, yes. | | | |

158 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: Yes. That issue has been reserved -- MR. CORBI: Yes, so -- THE COURT: -- because it may not be an issue. MR. CORBI: I wanted to have it for the record. THE COURT: Understood. MR. CORBI: The last point that is really troubling and I don't know if its intentional by the Trustee, but Paragraph 2(v), it's these bespoke sanctions procedures that are put in place, via the order. Now, I understand a non-mediation order is if you act in bad faith or if you send someone who doesn't have settlement authority or whatever to mediations, it should be subject to automatic sanctions. I think 2(v) should be just -- THE COURT: Well, it doesn't say, "automatic." Where do you say -- it doesn't say, "automatic." It says: Where a mediator's report or an interim report indicates non-compliance with mediation procedures the Court may, without the filing of a motion by any party, schedule a hearing to consider the appropriateness of sanctions against a non-compliant party. And it says that even -- and then it goes even further: Additionally, in cases of willful persistence or egregious non-compliance, the Court may enter a default Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 158 of 186

159 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 judgment. So, I don't think there's any -- maybe I am missing something, but I don't see anything that is automatic here. MR. CORBI: The way it reads is without having to file a motion by any party, if they're going to -- THE COURT: No, that says, "the Court." It says, "the Court may"; it doesn't say a party may. It presumes that I read some report, right, a mediator's report or an interim report that says somebody failed to comply with the mediation procedures. And then I could say, you know, what, I think I am going to schedule a hearing on that. That's what it says. MR. CORBI: Okay. THE COURT: That's how I read it. MR. CORBI: The way I read it, it was selfeffectuating. THE COURT: Am I wrong? Was that your intention? MR. BASSETT: It requires a hearing, Your Honor. THE COURT: No, but what I'm saying is you're not telling -- you're not filing a motion. This section is based upon the Court determining that I could make that determination myself; no one has to file a motion for sanctions. MR. BASSETT: Based on the mediator's report, Your Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 159 of 186

160 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 Honor could determine there's grounds to hold a hearing -- THE COURT: Right. MR. BASSETT: -- and then make a determination based on the hearing. THE COURT: Right. There'd be no sanctions before a hearing. MR. BASSETT: Or parties could file a motion, which -- THE COURT: Sure, the parties could file a motion, but there'd be no sanctions before a hearing. MR. CORBI: It should be clearer in the order, then. It shouldn't be -- the way I read it is -- THE COURT: Well, it says schedule a hearing to consider the appropriateness. It doesn't say impose sanctions. It says consider a hearing -- schedule a hearing. So, I don't think -- I think I'm fine with that -- MR. CORBI: Okay. THE COURT: -- the way it's worded. I don't -- I mean, I hear what you're saying, but I'm not persuaded that that needs to be changed. Okay? MR. CORBI: Okay. MR. CORBI: And those are all my points, Your Honor. THE COURT: Okay. Thank you. Then I think what -- with regard to Weddle Law, Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 160 of 186

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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 ECF 3100, you want to be carved out like -- and I apologize, but Attorney Baer's three clients, I don't remember all their names -- to file a notice to opt out, as opposed to a motion? MR. CORBI: Yes. THE COURT: And so, Attorney Bassett is going to do that because he's going to do that with regard to Attorney Baer's three clients. And you put it in your objection, so that will happen. With regard to the insufficiency of service of process, that's been addressed by the fact that Paragraph 2(v) won't apply to this defendant, Attorney Bassett, because they've already raised insufficiency of service of property. I didn't read the motion to dismiss, but that's what counsel is telling me. MR. LINSEY: So, Your Honor, I just want to be clear, Paragraph 2(v) was already in effect as part of the avoidance action procedures that this Court previously ordered, and governs the way that the Trustee served all avoidance defendants. THE COURT: But it didn't say that it was a waiver of raising an insufficiency of service of process; that couldn't be. MR. LINSEY: No, the only -- my understanding is the only version that counsel is taking issue with is that

162 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 Trustee served the redacted complaints rather than -- THE COURT: No -- MR. LINSEY: -- the sealed complaints. THE COURT: -- no, no. His issue is this -- at least this is my understanding of it. MR. LINSEY: Right. THE COURT: I haven't read his motion to dismiss -- he just told me he filed a motion to dismiss yesterday -- and one of the grounds for seeking dismissal was insufficiency of service of process. And he's saying, if 2(v) stays in place, then you can argue that he's waived that right to claim -- to assert an affirmative defense of insufficiency of service of process in his motion to dismiss. Isn't that what you're saying, Counsel? MR. BASSETT: Well, I think what Attorney Linsey was saying, Your Honor, is that this exact language was already -- THE COURT: It may be, but he raised in his motion to dismiss insufficiency of -- I don't believe that we had an order in place that said no one can ever raise an -- MR. BASSETT: No, of course not -- THE COURT: -- insufficiency of service of process. MR. BASSETT: -- of course not, Your Honor. All the provision clarifies is that because we have this Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 162 of 186

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| 1 | challenge of this protective order being in place, which | |----|---------------------------------------------------------------| | 2 | required us -- we had no choice -- but to serve our | | 3 | complaints with certain of these -- just the exhibit that | | 4 | lists the (indiscernible) is redacted -- all the prior order | | 5 | that was in effect says is that it is -- it is sufficient to | | 6 | serve that redacted version of the complaint -- | | 7 | THE COURT: Right. | | 8 | MR. BASSETT: -- in accordance with the rules. | | 9 | So, to the extent that -- and I honestly have not reviewed | | 10 | his motion to dismiss, but to the extent that the argument in | | 11 | the motion to dismiss is that service is insufficient because | | 12 | of the redactions, then I think that has already been -- | | 13 | THE COURT: Well -- | | 14 | MR. CORBI: Then I would move to reconsider | | 15 | under 60(b). | | 16 | THE COURT: Well, hold on, wait a minute. So | | 17 | you're moving for insufficiency of service of process because | | 18 | the exhibit was under seal, not because they didn't serve you | | 19 | properly? | | 20 | MR. CORBI: Yes. You have to know it and -- | | 21 | MR. BASSETT: (Indiscernible) - | | 22 | MR. CORBI: -- well, there are many things on why | | 23 | we're looking to dismiss a complaint -- a 549 complaint | | 24 | against a non-debtor. | | 25 | MR. BASSETT: I figured we might be talking past | | | |

164 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 each other. MR. CORBI: But that's one of the points, you have to put some on notice. You have to see the schedule that they're being subject to. THE COURT: That's not insufficiency of service of process, that's -- you're saying -- that's a 12(b)(6) motion, you failed to state a claim upon which relief can be granted because you don't even know what the relief is. That's a different motion than insufficiency of -- that's different grounds under 12 -- Rule 12 -- MR. CORBI: Well, we have a lot of (indiscernible) -- THE COURT: -- that's insufficiency of service of process. Insufficiency of service of process means you didn't get served. You did get served. MR. CORBI: You have to get served the whole complaint, you have to -- THE COURT: You did get served with a whole complaint, but it was redacted because of a prior order. You have a ground under 12(b) to argue that that still doesn't state a claim, but that doesn't state a claim because you can't grant relief on something -- you can't respond, you can't respond to the complaint because you don't even know what it is that they're alleging your client got. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 164 of 186

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| 1 | That's a different -- that's not insufficiency of service of | |----|-------------------------------------------------------------------| | 2 | process, I don't think. I mean, that could be -- that's new, | | 3 | if it is, I'll have to see, but, you know, maybe it is. | | 4 | MR. BASSETT: Your Honor, and the other point I | | 5 | would just make is that any time a defendant -- and we've had | | 6 | this conversation with a number -- I mean, hundreds, maybe, | | 7 | of defendants -- if they've had a redacted exhibit, they got | | 8 | served with a complaint, the first thing they did is they | | 9 | reached out to us and said, hey, how do I get a copy of that | | 10 | unredacted exhibit? | | 11 | I'd say, Hey, no problem. Here's your copy of the | | 12 | protective order. Sign that and we'll send it to you. We've | | 13 | done that, and now they're evaluating it and they'll respond | | 14 | accordingly. | | 15 | His tactic apparently was to make the service -- | | 16 | THE COURT: Well, I don't -- I don't -- it's not a | | 17 | tactic, don't -- I don't want to go there, it's not | | 18 | necessary, okay? | | 19 | But I don't think you're going to win on that, if | | 20 | it's insufficiency of service of process because -- well, | | 21 | maybe you have a case that says that, I don't know. | | 22 | MR. CORBI: Well, there's a myriad of issues as to | | 23 | why this complaint needs to be dismissed -- | | 24 | THE COURT: Yeah, but that's a different -- the | | 25 | insufficiency of service of process issue, what was in 2(v) | | | |

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1 2 3 4 5 6 7 is what Attorney Linsey and Attorney Bassett are saying you can't come before the Court and say because you've got a complaint with a redacted exhibit, you didn't get service. That's a different -- that's a different argument than what you're making, which is you've got a complaint to which you can't respond because you don't even know what the allegation is.

8 9 10 11 12 13 MR. CORBI: I'd just like to give one comment on the protective order. When we asked for a protective order -- again, I think another objector said it was overreaching -- we had to do several rounds of revisions for our markups like this order in order to eventually -- to eventually (indiscernible) a protective order.

14 15 16 17 THE COURT: And you know why? Because there's 275 adversary proceedings and there's been a protective order in place for a year and a half or more. Okay? MR. CORBI: I understand.

THE COURT: And I hear you, I understand your

19 20 point. Okay? But there's a way we can all figure it out. Okay?

21 22 23 24 25 But I think you have to -- Attorney Bassett, with regard to 2(v), I think we just need to acknowledge on the record at some point that 2(v) was meant to address an issue that, if someone claimed that they weren't served properly because the exhibit was redacted, that's not an argument

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1 that's going to win in this court. Okay?

2 3 4 5 6 What would win, an insufficiency of service of process, is if Weddle Law was served at the Smith Law Group. Okay? And then they never got service. That would win, right? That's not what -- we're talking about two different things.

7 8 9 10 11 12 13 So I think 2(v) is different, Counsel, than what you're arguing. I think you have -- you know, a court can take a Rule 12 motion and decide it how it thinks appropriate. If you are saying the case should be dismissed because you can't even respond, there's other parts -- it's not just 12(b), there's other parts of Rule 12 you could rely on --

14 15 16 MR. CORBI: We've argued many grounds to dismiss the complaint. I just didn't want to have any waiver arguments thrown in my face. That's really the point.

17 18 19 20 21 22 23 24 25 THE COURT: Well, I think the waiver argument is -- your way that you're talking about two different things being waived. He's -- Attorney Bassett is saying you can't come in and say to me -- you can't say to the Judge you should dismiss my cause of action because you attached a redacted exhibit; that's what he's saying. You're saying, yeah, I shouldn't be bound by that because I don't even know what I'm being sued for. Those are two different things. Insufficiency of service of process means you weren't

168 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 properly served; it doesn't mean that you can't respond to the complaint. MR. CORBI: And we've made several (indiscernible) -- THE COURT: Okay. MR. CORBI: As to the 549, I'm not getting a payout from the non-debtor. THE COURT: So I'm just letting you know, okay, with regard to 2(v) -- MR. CORBI: Okay. THE COURT: -- the purpose of that provision was that it would not be a successful ground to defeat the complaint in a motion to dismiss to say that what you were served with included a redacted exhibit. If that's your basis, you lose. Okay? MR. CORBI: Okay. THE COURT: But you seem to have other bases, you're telling me. So -- MR. CORBI: We have a lot -- THE COURT: -- we'll address those in the ordinary course. Okay? MR. CORBI: That's a little hard hearing it. THE COURT: All right. Then I think everything else has been addressed with regard to your objection. We - do you think there's anything else that needs to be -- Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 168 of 186

169 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. CORBI: No. I have the reservation of rights on the fees; we've already discussed that. THE COURT: So the costs of -- MR. CORBI: Yeah, and the costs -- THE COURT: -- and that's going to be addressed with prior -- with new language -- MR. CORBI: Yes. THE COURT: -- okay? All right. Attorney Bassett, do you have anything further with regard to Weddle Law? I think we've addressed all of the bases of objections set forth in Counsel's objection. MR. BASSETT: No, Your Honor. I did have a question before Attorney Sklarz starts, but nothing further with -- THE COURT: Go ahead. MR. BASSETT: So I believe -- and Attorney Sklarz can correct me if I'm wrong -- but I believe he said he was here representing G Club and Pillsbury, and, given the hour of the day, I just wanted to make two observations. The first is, both G Club and Pillsbury are on Exhibit 4, which means they are excluded from mediation. So I'm not, therefore -- unless he's going to say he wants back in, I'm not sure why we would -- and we don't want them back in. The Trustee has affirmatively put them on Exhibit 4 because we Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 169 of 186

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1 2 3 4 don't intend to mediate with them, so there's not going to be an agreement on mediation, so I don't know why we would - you know, why these clients would have issues with the procedures, number one.

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5 6 7 8 Number two, I don't believe Pillsbury -- I could be wrong -- but I don't believe Pillsbury filed an objection. I think the objection was only filed on behalf of G Club, which again, is part of Exhibit 4.

9 10 11 12 13 THE COURT: I didn't see an objection filed by Pillsbury either. I could have missed it, so Attorney -- I think that you're all set right now on Weddle Law. You can stay at counsel table, you don't have to move, but I think we're going to talk about these other --

14 15 MR. BASSETT: I didn't want to be rude while these guys were talking --

THE COURT: Thank you, I appreciate that.

17 18 19 20 21 22 23 24 25 MR. SKLARZ: We've had so many -- we've had so many filings and, honestly, Your Honor, I've been on trial for a bit, so I'm not a hundred percent sure of everything that's involved, but I take Attorney Bassett's statement that there hasn't been a Pillsbury motion filed. Again, we filed objections because we were ordered to file objections, and I commend counsel, we spent a lot of time negotiating through this, and I think there's been a lot of changes, but one of the items in here that if the parties want to mediate, these

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| 1 | are the orders that will apply to a mediation. | |----|---------------------------------------------------------------| | 2 | Everything we've raised in our objection has | | 3 | been -- has been raised, so I'm not going to go over | | 4 | everything again. All I wanted to point out is that in | | 5 | paragraph D -- 2(v), which is the sanctions provision that | | 6 | Attorney Corbi pointed out, it does -- it is very different | | 7 | than any of the mandatory mediation orders or any of the | | 8 | mediation orders I've seen, particularly out of Delaware, | | 9 | Southern District -- I've seen a lot of these mediations -- | | 10 | and on -- I'm looking specifically at page 76. | | 11 | And this language has been in there since the | | 12 | beginning, it's the second-to-last sentence -- or, I'm sorry, | | 13 | the second- and third-to-last sentence before the redline. | | 14 | It just makes me -- again, it makes me queasy that if a party | | 15 | wants -- in mediation and reaches a point where they don't | | 16 | want to settle for any reason other than they want to | | 17 | litigate, that there seems to be ability to go to court and | | 18 | say, We didn't resolve the mediation and now we're having a | | 19 | fight over the meaning of good faith. | | 20 | THE COURT: Now we have to fight over what? | | 21 | MR. SKLARZ: The meaning of whether -- whether the | | 22 | negotiation itself was in good faith. | | 23 | I don't have an issue with -- if Judge Tancredi | | 24 | issues a report saying the party didn't act in good faith, | | 25 | yeah, Your Honor should have a show-cause hearing, but to | | | |

172 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 have an adversarial type between the two parties saying, You didn't negotiate in good faith. Yes, I did. How do we ever resolve that? It's just -- again, these issues don't come up frequently. I don't want to -- I don't think it needs too much -- THE COURT: But what are you looking at? I don't know what language you're looking at (indiscernible) -- MR. SKLARZ: It says, "Additionally, if any party to the mediation proceeding is not attempting to schedule or resolve the mediation in good faith." Okay, if there's a mediation order and you're refusing to schedule it; yeah, you should be sanctioned. But I don't know what "resolved in good faith" means. Does that mean I say I know you're suing me for \$100 million, but I will offer you a thousand dollars because that's -- because I want to go to trial here? I don't think that would be bad faith, but I don't know. That's -- that's the concern. THE COURT: Attorney Bassett, do you have any response to that; other than, I know what you're going -- I understand your point that they're not going to be subject to mediation, so -- MR. BASSETT: So, yes, Your Honor, they're not going to be subject to mediation, but taking the argument at face value, I think it's addressed by the last sentence, Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 172 of 186

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| 1 | which, frankly, is one of the other comments I believe that | |----|-----------------------------------------------------------------| | 2 | Attorney Sklarz had raised, is just to make clear that | | 3 | failure to reach a settlement in and of itself cannot be | | 4 | grounds for sanctions. If there is a lack of good faith that | | 5 | has been exhibited by a party in mediation, then, yes, the -- | | 6 | another party can move the Court for sanctions. | | 7 | And as Attorney Linsey just pointed out to me, | | 8 | this identical language was just entered by the Southern | | 9 | District of New York Bankruptcy Court in the Revlon case just | | 10 | law month. So this -- | | 11 | THE COURT: The "failure to achieve settlement"; | | 12 | is that what you're talking about, or the "Additionally, if | | 13 | any party" language? | | 14 | MR. LINSEY: No, it's the mediator shall | | 15 | (indiscernible) party in the mediation is not attempting to | | 16 | schedule or resolve in good faith (indiscernible) -- | | 17 | MR. BASSETT: Right, the language that he read | | 18 | saying that if there's an issue with a party not attempting | | 19 | to schedule or resolve in good faith; that language was | | 20 | entered in that order, correct? | | 21 | MR. LINSEY: Correct. | | 22 | MR. BASSETT: And I guess I don't understand -- | | 23 | THE COURT: Well, you know what I think about that | | 24 | actually, honestly -- I understand your point, okay, and I | | 25 | understand what your point is, Attorney Bassett, but the | | | |

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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 Court will address it in and when -- if and when it comes forward to the Court, right? And you'll be able to raise any issues you think are appropriate, assuming you're even part of this, which you're not at this point. MR. SKLARZ: Yeah, and I'm just trying to make the Court aware of this -- THE COURT: Understood -- MR. SKLARZ: -- issue, Judge, -- THE COURT: -- understood. MR. SKLARZ: -- and that's all I have. THE COURT: Okay, all right, that's fair. So with regard to -- now, we just have one more objection that I didn't have for some reason and I'm not sure why, but I just probably missed it because there were so many. It was 3087, Counsel, did you say? MR. PESCE: 3087, Your Honor. THE COURT: By Attorney Pesce, yes. All right. Let me just take a look at it -- I apologize -- because I don't have it at the moment, so you'll have to give me a moment, if you don't mind. And I'll just have you note your name for the record and whom you represent for the courtroom deputy, please. MR. PESCE: Yes, Your Honor, Matthew Pesce, 3 Columbus Circle. (Pause)

175 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: Is 3 Columbus Circle one of the parties that is on 3(a) or 4? No? I don't know. I have no idea, I'm just -- MR. PESCE: It is not. THE COURT: Okay. So are you just the landlord; is that what you're telling me? MR. PESCE: Yes -- THE COURT: I don't mean "just the landlord," but -- MR. PESCE: -- the tenant. THE COURT: I haven't read this until now, so I apologize. (Pause) So one of your issues is the costs borne by the estate, and that issue, I think, Counsel, has been addressed today insofar as everyone is going to have a reservation - all objecting parties are going to have a reservation of rights with regard to cost of mediation and there may -- it may not become an issue if Judge Tancredi is able to mediate all of the matters without any other mediators being involved. MR. PESCE: Yes, Your Honor, that would be the ideal scenario. The only thing I would want to flag for the Court and for the Trustee's consideration with respect to 2(u), which I believe is the relevant provision that deals Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 175 of 186

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 with the mediation fee, is that the current paragraph deals with a process for objecting to the initial mediation fee, which I believe kind of pertains to the reservation of rights, but it does not contain a procedure for objecting to any subsequent fee associated with the mediation, which could become relevant in the scenario where there's bucketing, and say a defendant who's dragged along into a bucket where the mediation pertained to that specific defendant, may be much shorter and discrete, but because of its placement within a larger group, could result in a longer period of mediation regarding those issues that are pertinent to the group, in which case we'd hope that the Trustee might (indiscernible) come up with a procedure that could deal with the allocation issue in that scenario, but, again, understanding that it's entirely dependent on their being --

16 17 18 19 THE COURT: Okay, I understand your point. So I think it's noted for the record and I think the Trustee will consider that if and when we get to that point, but I understand your point, I do.

20 21 22 23 24 MR. PESCE: With respect to their first point regarding the Trustee's designation and whether or not the action against 3 Columbus Circle should be stayed, that has been resolved and after a conference with the Trustee. So we will withdraw that on the record today.

THE COURT: Okay. Thank you, Counsel, I

177 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 appreciate that. MR. PESCE: The only -- THE COURT: Anything else that you raised in your objection? MR. PESCE: Nothing raised in the objection, but this issue has come up in various ways throughout the day today regarding 2(m), the opt-out provision, and the corresponding kind of other side of the coin regarding sanctions. We're hoping just to get clarification that 2(m), which I just will (indiscernible) the opt-out provision, it doesn't seek to act as some kind of waiver of rights in the event that a party elects not to try to -- or elects not to terminate the mediation procedures, essentially reserving all rights to challenge the validity of the action and whether it should have been brought in the first place if the mediation is ultimately unsuccessful. THE COURT: Well, I don't -- I don't read paragraph M as -- and I'll ask Attorney Bassett -- as limiting any rights that a defendant would have to raise in accordance with a responsive pleading to a complaint. Can you, Attorney Bassett? MR. BASSETT: Certainly not, Your Honor, and if the mediation process terminates, I think it's very clearly contemplated that a party may move to dismiss and raise any and all arguments for dismissal that it deems appropriate. Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 177 of 186

178 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: I think that's -- so that's clarification, I hope. MR. PESCE: Yes, that is, Your Honor. Thank you. THE COURT: And then is there any other matter that you would like to have clarified? MR. PESCE: Those are the only ones. THE COURT: All right, then I appreciate that. Thank you. So with regard to all of the objections we've heard today, I've tried to be very careful on the record about what was either overruled or going to be resolved by the parties, or that is not essentially ripe yet, until the mediation procedures are in place and Judge Tancredi starts the mediation process. It does seem to me, Attorney Bassett, that you're going to have to make some changes to this second revised order. How much time would you like to do that? MR. BASSETT: Well, I think, unless somebody else at my table corrects me, we've tried as fast as possible to capture everything, but if we could get the transcript first, that might be helpful. I think, after we've seen the transcript, we could very quickly turn the comments. It wouldn't take a long -- THE COURT: The reason I asked the question is not Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 178 of 186

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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 so much that I need to know a time, per se, it's does it change the May 15 deadline in your order, which I think was in paragraph -- I forget what paragraph it was in now -- if you give me a second -- when you would start making mediation referrals, I believe. I guess it doesn't because it's -- it's keyed off of appearances, I think. MR. BASSETT: I don't think it would, Your Honor, but we may need to think about that on our side. THE COURT: I'm just trying to find it and see if I think it does, but -- (Pause) THE COURT: It probably doesn't, but if you need to change that date, I would assume you'd be only changing it by a few days or a week. MR. BASSETT: I think that's right, Your Honor. My initial reaction is that it wouldn't need to change given that we have plenty of time, but we'll consider that further. THE COURT: All right. Well, today is Tuesday. Do you think you will have the revised order in before the end of this week or next week? Again, I'm not - whatever works, I'm just asking the question. MR. BASSETT: So my understanding for the transcript, it usually takes 48 hours, so I think it would be helpful for us to just have that in hand when we're making

# 180 Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 180 of 186

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 other revisions to make sure we don't miss anything. THE COURT: So, well, how about a week from today, if not sooner? You can always get it in sooner. MR. BASSETT: Yeah, that would be -- THE COURT: Okay? MR. BASSETT: -- that would work, Your Honor. THE COURT: All right. There's nothing stopping that from happening, and sometimes it actually does happen, so then I -- then what I would note for the record is that with regard to the Trustee's motion for an order to modify avoidance action procedures, to include procedures for mediation of avoidance actions, which is ECF Number 3003, and then the order that the Court entered setting today's hearing on the mediation procedures and setting the dates by which objections were filed, all of the objectors that were timely filed were heard, the Court made rulings in accordance with the objections that needed to be ruled on, many of which - some of which were resolved by the parties and will be set forth in the revised proposed order that will be submitted on or before May 7, then the Court believes all the objections have been either overruled, resolved by agreement, or are not ripe at this time and will be addressed when and if they become ripe. And, for all those reasons, the motion for an order modifying procedures is granted. Then the revised proposed order will be submitted on or before May 7th.

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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 Is there anything else we need to address this afternoon? MR. DESPINS: Your Honor, if I may, just a twominute update. And may I approach? THE COURT: Certainly. MR. DESPINS: So, Your Honor, I just wanted to tell the Court that there should be a motion coming in -- if not tomorrow, the day after tomorrow -- regarding the Sherry Netherland. This never ends, but, as you know, there's an affected area where the fire was. The work is ongoing there to clean that up and to deal with all that, but it was discovered that even though there was a major cleanup of the rest of the apartments probably seven months, eight months ago, which was paid by AIG, consensually, it's apparent that there is soot or ash in between the ceiling and the cement, I guess, part of the ceiling, and where the wires are or the pipes are, and we need to bring down the ceilings and clean all of that up. And so, therefore -- THE COURT: The co-op is not responsible for that? MR. DESPINS: Pardon me? THE COURT: The co-op is not responsible for that? MR. DESPINS: Well, the co-op -- this is just

24 25 really technical, but we're responsible for the ceiling and everything above the ceiling until we reach the concrete.

| | 182 | | | | | | | |----|-----------------------------------------------------------------|--|--|--|--|--|--| | 1 | THE COURT: Oh, okay. | | | | | | | | 2 | MR. DESPINS: They're responsible for the concrete | | | | | | | | 3 | and they're going to pay something like \$250,000 for their | | | | | | | | 4 | part of that job, but we have to -- we're trying to reduce | | | | | | | | 5 | the costs. We have to pay a substantial amount of money to | | | | | | | | 6 | get that work done; otherwise, we'll always be in a cycle | | | | | | | | 7 | where it keeps being re-circulated in the apartment. | | | | | | | | 8 | In addition to that, we need to move all the | | | | | | | | 9 | furniture out of the apartment and to get rid of bedding, | | | | | | | | 10 | sheets, and all the soft goods because there's still soot in | | | | | | | | 11 | there. Because there's no point in cleaning up if this stuff | | | | | | | | 12 | is still there. We need to really clean house. | | | | | | | | 13 | So, therefore, we're going to file a motion and | | | | | | | | 14 | we're going to ask for expedited consideration of that, Your | | | | | | | | 15 | Honor, because the idea is that that process should take | | | | | | | | 16 | place at the same time that the other work is being | | | | | | | | 17 | undertaken, so that we're able to actually come to a point | | | | | | | | 18 | where we can sell this apartment and as soon as possible. It | | | | | | | | 19 | still will take a few months, several months. So that's the | | | | | | | | 20 | report on -- it's a complicated process. | | | | | | | | 21 | THE COURT: Obviously, the parties that have -- | | | | | | | | 22 | claim an interest in the apartment will have to have notice | | | | | | | | 23 | and an opportunity to be heard. | | | | | | | | 24 | MR. DESPINS: Yes. So we're obviously -- | | | | | | | | 25 | THE COURT: You're talking about furniture and | | | | | | | | | | | | | | | |

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| 1 | anything -- | | | | | | | | |----|---------------------------------------------------------------|--|--|--|--|--|--|--| | 2 | MR. DESPINS: Yes, so -- but we're not -- | | | | | | | | | 3 | THE COURT: You're going to store it somewhere? | | | | | | | | | 4 | MR. DESPINS: Yeah, we're going to store it. | | | | | | | | | 5 | So the furniture itself -- the bedding, I think | | | | | | | | | 6 | it's just going to be -- and the sheets are going to be | | | | | | | | | 7 | thrown out, but -- and the mattress is going to be thrown | | | | | | | | | 8 | out, but the furniture is going to be moved to a warehouse | | | | | | | | | 9 | that we're already occupying with the HCHK equipment and | | | | | | | | | 10 | other furniture that was in the New York City place. And | | | | | | | | | 11 | we're going to segregate the two so that we know that this | | | | | | | | | 12 | came from the Sherry Netherland, this HCHK, so there will be | | | | | | | | | 13 | like a -- not a real wall, but there will be like a partition | | | | | | | | | 14 | there to make sure that we keep track of that, but that | | | | | | | | | 15 | furniture will be moved to that area. | | | | | | | | | 16 | The reports we're getting is that the furniture is | | | | | | | | | 17 | not -- this is not real antiques; it is like -- | | | | | | | | | 18 | THE COURT: Well, isn't it damaged by the fire? | | | | | | | | | 19 | MR. DESPINS: Well, no. Some of it was completely | | | | | | | | | 20 | destroyed by the fire, but the rest is not damaged, but the | | | | | | | | | 21 | value of that would not be more, let's say, than a hundred | | | | | | | | | 22 | thousand, \$200,000. It's not real antiques; it's like | | | | | | | | | 23 | antiques that you can buy, you know, regular people can buy. | | | | | | | | | 24 | So, but we're going to move the furniture, but, | | | | | | | | | 25 | obviously, we're giving notice to AIG. They already know | | | | | | | |

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| 1 | because we're going to seek -- we're going to tell them that | | | | | | | | |----|---------------------------------------------------------------|--|--|--|--|--|--|--| | 2 | we want them to pay for that because we're -- I'm talking now | | | | | | | | | 3 | about the clean-up process because it's, you know, caused by | | | | | | | | | 4 | the fire, and, you know, to be continued on that. | | | | | | | | | 5 | THE COURT: Okay. Thank you. | | | | | | | | | 6 | MR. DESPINS: Thank you, Your Honor. | | | | | | | | | 7 | THE COURT: All right, I believe, unless someone | | | | | | | | | 8 | feels otherwise, that concludes the hearing today in the Kwok | | | | | | | | | 9 | matter and in the adversary proceeding 23-05013. | | | | | | | | | 10 | Anyone disagree with that? | | | | | | | | | 11 | (No verbal response) | | | | | | | | | 12 | THE COURT: Okay, thank you all. Then Court is | | | | | | | | | 13 | adjourned. | | | | | | | | | 14 | COUNSEL: Thank you, Your Honor. | | | | | | | | | 15 | (Proceedings concluded at 5:02 p.m.) | | | | | | | | | 16 | | | | | | | | | | 17 | | | | | | | | | | 18 | | | | | | | | | | 19 | | | | | | | | | | 20 | | | | | | | | | | 21 | | | | | | | | | | 22 | | | | | | | | | | 23 | | | | | | | | | | 24 | | | | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | Case 22-50073 Doc 3150 Filed 04/30/24 Entered 04/30/24 08:17:20 Page 185 of 186 | | | | | | | | | |----|------------------------------------------------------------------------------------------------|--|--|--|--|--|--|--|--| | | 185 | | | | | | | | | | 1 | CERTIFICATION | | | | | | | | | | 2 | We certify that the foregoing is a correct | | | | | | | | | | 3 | transcript from the electronic sound recording of the | | | | | | | | | | 4 | proceedings in the above-entitled matter to the best of our | | | | | | | | | | 5 | knowledge and ability. | | | | | | | | | | 6 | | | | | | | | | | | 7 | /s/ Mary Zajaczkowski April 29, 2024 | | | | | | | | | | 8 | Mary Zajaczkowski, CET-531 | | | | | | | | | | 9 | Certified Court Transcriptionist | | | | | | | | | | 10 | For Reliable | | | | | | | | | | 11 | | | | | | | | | | | 12 | /s/ Tracey J. Williams April 25, 2024 | | | | | | | | | | 13 | Tracey J. Williams, CET-914 | | | | | | | | | | 14 | Certified Court Transcriptionist | | | | | | | | | | 15 | For Reliable | | | | | | | | | | 16 | | | | | | | | | | | 17 | /s/ Coleen Rand April 25, 2024 | | | | | | | | | | 18 | Coleen Rand, CET-341 | | | | | | | | | | 19 | Certified Court Transcriptionist | | | | | | | | | | 20 | For Reliable | | | | | | | | | | 21 | | | | | | | | | | | 22 | | | | | | | | | | | 23 | | | | | | | | | | | 24 | 1 | | | | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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