--- type: court_doc id: "court_ctb_316_0" court: "CTB" case_no: "22-50073" doc_number: 316 doc_type: "MOTION" filed_date: "2022-05-03" lang: "zh" url: "https://mubeitech.com/court/court_ctb_316_0" json_url: "https://mubeitech.com/api/court/court_ctb_316_0" --- # UNITED STATES BANKRUPTY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION --------------------------x In Re: : Case No. > 原始法庭文件为英文；下方为英文全文，顶部为中文摘要。 UNITED STATES BANKRUPTY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION --------------------------x In Re: : Case No. 21-50073 : HO WAN KWOK, : Chapter 11 Debtor. : --------------------------x March 1, 2022 Brien McMahon Federal Bldg. 915 Lafayette Street Bridgeport, Connecticut MOTION TO EXTEND TIME TO FILE SCHEDULES (Transcription from Electronic Recording) Held Before: THE HON. JULIE A. MANNING United States Bankruptcy Judge Transcription Services of FALZARANO COURT REPORTERS, LLC 4 Somerset Lane Simsbury, CT 06070 860.651.0258 [www.falzaranocourtreporters.com](htt) 2 A P P E A R A N C E S (via telephone): For the Debtor: BROWN RUDNICK, LLP Seven Times Square New York, New York 10036 212-209-4800 BY: BENNETT SILVERBERG, ESQ. BROWN RUDNICK, LLP 185 Asylum Street Hartford, Connecticut 06103 860-509-6500 BY: DYLAN KLETTER, ESQ. For Pacific Alliance Asia Opportunity Fund, LP (PAX): O'MELVENY & MYERS, LLP Times Square Tower 7 Times Square New York, New York 10036 212-326-2000 BY: STUART M. SARNOFF, ESQ. AISLING MURRAY, ESQ. O'MELVENY & MYERS, LLP 1625 Eye Street, NW Washington, DC 20006 202-383-5300 BY: PETER FRIEDMAN, ESQ. DAVID HARBACH, II., ESQ. ROBINSON & COLE 280 Trumbull Street Hartford, Connecticut 06103 860-275-8275 BY: PATRICK BIRNEY, ESQ. For the Creditor Logan Cheng: RANDAZZA LEGAL GROUP, PLLC 100 Pearl Street - 14th Floor Hartford, Connecticut 06103 702-420-2001 BY: JAY M. WOLMAN, ESQ. (Via videoconference) Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 2 of 57 3 For the U.S. Trustee: OFFICE OF THE UNITED STATES TRUSTEE The Giaimo Federal Building 150 Court Street - Room 302 New Haven, Connecticut 06510 203-773-2210 BY: HOLLY L. CLAIBORN, ESQ. (Proceedings commenced at 4:04 p.m.) COURTROOM DEPUTY: Number 22-50073, Ho Wan Kwok. THE COURT: Okay. Good afternoon. If we could have appearances for the record starting with the Debtor's counsel please. MR. SILVERBERG: Good afternoon, your Honor. It's Bennett Silverberg of Brown Rudnick. I'm joined by my sponsoring attorney, Dylan Kletter. THE COURT: Good afternoon to both of you. And I think, Attorney Silverberg, there may have been an order entered allowing your admission *pro hac vice* is it? MR. SILVERBERG: Yes, yes, your Honor, and we thank you for that. THE COURT: Okay. Thank you. MR. BIRNEY: Good afternoon, your Honor. Patrick Birney, Robinson & Cole on behalf of Pacific Alliance Asia Opportunity Fund, LP or PAX. With me in the courtroom, your honor, to my right is Attorney Peter Friedman, to my left is Attorney Stuart Sarnoff. THE COURT: Good afternoon. MR. BIRNEY: And couple of other folks, Attorney David Harbach and Aisling Murray all from O'Melveny. Your Honor, the motions for *pro hac vice* have been filed and granted by your Honor and Mr. Friedman will Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 4 of 57 be taking over with lead argument today. THE COURT: Okay. Thank you. Thank you all. Welcome everyone. Go ahead, Attorney Claiborn. MS. CLAIBORN: Good afternoon, your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon. Attorney Wolman? MR. WOLMAN: Good afternoon, your Honor. Jay Wolman of Randazza Legal Group, for the creditor Logan Cheng. THE COURT: Good afternoon. Okay. MR. WOLMAN: Thank you very much, your Honor, for permitting me to appear remotely. THE COURT: Yes. As I noted -- oh, I forgot to put the camera on, sorry, Attorney Wolman. We're doing different kinds of hearings today so I don't even know if you can -- if that works, but in any event it's there. As I noted, you know, this was an expedited hearing so you're allowed to participate today remotely. We are back in court, there are a number of us in the courtroom but people are masked and apparently, you know, comfortable with distancing and so we'll proceed today. Now, before we talk about anything specifically I got a message that there's an interpreter here today for the Debtor. MR. SILVERBERG: Yes, your Honor. THE COURT: And before we talk anything about that I just want to -- do other counsel understand that the Debtor has an interpreter today? MR. FRIEDMAN: Yes, your Honor. Peter Friedberg from O'Melveny & Myers on behalf of PAX. We do understand. We do understand. THE COURT: Okay. And do you have an opposition to the interpreter? MR. FRIEDMAN: No, your Honor. I have no opposition to the interpreter. THE COURT: Okay. And you believe the interpreter is qualified to interpret whatever the Debtor is saying? MR. FRIEDMAN: I don't have any basis one way or another, your Honor. THE COURT: Okay. I understand from the Office of the United States Trustee's pleadings that were filed I think yesterday, I think I'm correct, that there was an interpreter for the Debtor at the initial Debtor interview that your office conducted; is that correct? MS. CLAIBORN: Yes, your Honor. The U.S. Trustee used the services of an interpreter over the telephone and then the Debtor had his own personal | 1 | interpreter who was present physically with the Debtor. | |----|-----------------------------------------------------------------| | 2 | THE COURT:
So is the gentleman that's here | | 3 | today --
I shouldn't even say, I assume it's a gentleman | | 4 | because I'm looking in the back of the courtroom, but is | | 5 | the gentleman here today the same gentleman that was with | | 6 | the Debtor during the initial Debtor interview? | | 7 | MR. SILVERBERG:
No, your Honor.
The | | 8 | interpreter's name is John Lao. | | 9 | THE COURT:
Okay.
Okay.
I just need to | | 10 | understand at some point if Mr. Lao is going to be | | 11 | interpreting anything that the Debtor says I want to | | 12 | understand Mr. Lao's qualifications, if we get to that | | 13 | point, okay?
We obviously were not prepared to have an | | 14 | interpreter but that's not necessarily
a problem.
All I'm | | 15 | suggesting to you is I don't want there --
I'm not going | | 16 | to have a hearing continue and be held if there's going to | | 17 | be any controversy over the interpreter.
That's my point, | | 18 | okay? | | 19 | MR. SILVERBERG:
Yes, your Honor. | | 20 | THE COURT:
Okay.
Thank you. | | 21 | All right.
Now -- | | 22 | MS. MURRAY:
Judge, I'm sorry, we didn't pick up | | 23 | what Attorney Claiborn is saying --
said before, I'm | | 24 | sorry.
She's a little far from the mic. | | 25 | THE COURT:
Yeah, it's not your fault, Attorney | | 1 | Claiborn.
The problem is with all of us with masks and, | |----|--------------------------------------------------------------| | 2 | you know, distancing, and sometimes we might have to ask | | 3 | you to talk a little more loudly. | | 4 | MS. CLAIBORN:
I'll do my best to
speak louder. | | 5 | THE COURT:
Thank you.
Even just that angle | | 6 | unfortunately picks up your voice better in the | | 7 | microphone.
And as I think you're all aware our record is | | 8 | audio, so we have to be very careful about the microphones | | 9 | and if there's times when I ask you or someone asks you to | | 10 | repeat yourself it's because we need to make sure we have | | 11 | a clear record.
Okay? | | 12 | All right.
So
a week or so ago, and I can pull | | 13 | it up, you probably all know it better than I at this | | 14 | point, the Clerk's Office entered a docket entry in this | | 15 | case regarding certain deficiencies with regard to the | | 16 | petition and other documents that are required to be filed | | 17 | in a bankruptcy case by a voluntary debtor.
The amended | | 18 | petition was filed, I saw that, that corrected
that | | 19 | deficiency.
There is a --
I understand, you know, the | | 20 | office is thinking that they can sometimes use other | | 21 | people's numbers but we don't allow that and so that was | | 22 | why there was a need for the filing of the amended | | 23 | petition.
So I understand that's been done. | | 24 | I understand there was a notation about a | | 25 | creditor who didn't have an appropriate attention line and | that's been corrected as well. So the Court appreciates that. What the order that I believe the Debtor's counsels are -- not the order but the deficiency notice that the Debtor's counsel is concerned about that resulted in this motion to extend time to file the schedules is because -- and I'm telling you both something I know you already know, this isn't any news to you. The Bankruptcy Code requires and the rules and schedules and statements be filed within 14 days of the filing of the case. For as many reasons as all of us in this room know that's an important issue because a case can't be properly administered if a debtor hasn't met its duties, his duties, in this case his duties, of preparing and filing the schedules and statements of affairs. That's an essential requirement that this Court and I think all courts take very seriously. The deficiency notice said that the case may be dismissed. It didn't say shall, but I understand the Debtor's counsels desire to then get a hearing quickly held so that you would -- because you don't want to have your case dismissed and I understand that. So in any event, that was the reason that the motion for an expedited hearing was granted and is set today on the motion to extend time to file the schedules. | 1 | Now, I understand what you're looking for. | |----|------------------------------------------------------------------| | 2 | You're looking for 60 days.
You know that you've got two | | 3 | written objections to that already.
I can tell you you're | | 4 | not going to get 60 days.
That's not going to happen. | | 5 | But what I want to know is have you had any discussions | | 6 | with counsel for the creditors or the U.S. Trustee's | | 7 | Office about your request and their objections. | | 8 | MR. SILVERBERG:
Yes, your Honor.
As a
matter | | 9 | of fact we had our --
I'm not sure if your Honor can hear | | 10 | me. | | 11 | THE COURT:
That's perfect, thank you. | | 12 | MR. SILVERBERG:
Your Honor, we had our initial | | 13 | Debtor interview with Ms. Claiborn in her office | | 14 | yesterday.
It was a 3-hour interview.
At the
conclusion | | 15 | of the interview we asked Ms. Claiborn what the Office's | | 16 | position was on the extension request.
She made clear | | 17 | that 60 days was going to be met with an objection and she | | 18 | strongly admonished that we consider requesting an | | 19 | extension that expired
in advance of the section 341 | | 20 | meeting and creditors sufficient time to review the | | 21 | schedules and statements so that they can ask informed | | 22 | questions at the 341 meeting. | | 23 | Last night after consulting with the client who | | 24 | happens --
sorry, did we make any introduction to our | | 25 | client, Mr. Ho Wan Kwok? | Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 11 of 57 | 1 | MR. KWOK:
Good afternoon, your Honor. | |----|---------------------------------------------------------------| | 2 | THE COURT:
Good afternoon, sir. | | 3 | MR. SILBERBERG:
He goes my Miles. | | 4 | THE COURT:
Good afternoon.
Thank you.
You can | | 5 | have a seat, sir.
Thank you. | | 6 | MR. SILVERBERG:
So
yesterday, last evening, | | 7 | sorry, we made a proposal to the U.S. Trustee to extend | | 8 | the deadline to file the schedules and the statements | | 9 | until March 16th, which is the Wednesday before the Monday | | 10 | 341 meeting.
The reason why we didn't go exactly a week | | 11 | prior is that we're dealing with some of the logistics of | | 12 | translating the schedules and statements into Mr. Kwok's | | 13 | native Chinese.
So we want to make sure that when he | | 14 | certifies and attests to the accuracy under penalty of | | 15 | perjury that he completely understands in his own language | | 16 | what the schedules and statements are saying so that | | 17 | there's absolutely no question as to what the words are on | | 18 | the page. | | 19 | THE COURT:
I understand.
Okay.
So are you | | 20 | saying that you are prepared --
and I'm going to hear from | | 21 | other
parties, but I just want to ask you this question. | | 22 | You are prepared on behalf of the Debtor to agree to an | | 23 | extension of time that would expire on March 16th; is that | | 24 | correct? | | 25 | MR. SILVERBERG:
That is correct, your Honor. | THE COURT: Okay. All right. Thank you. I appreciate that. Now, Attorney Claiborn, you filed the first objection to this motion, you've now heard counsel and his agreement to limit the extension of time if it's granted to March 16th. What else would you like to add to the record of what other thoughts do you have with regard to the extension request? MS. CLAIBORN: Your Honor, I think it might be helpful if I could ask the Court to listen to the PAX presentation before the U.S. Trustee. THE COURT: Oh, that's fine. Okay. MS. CLAIBORN: And I make that suggestion because there is a long history of the Debtor and PAX that I think would be informative to the analysis of what kind of an extension of time makes sense for this case. THE COURT: That's fine. Counsel? MR. SILVERBERG: And your Honor, if PAX is going to go into a gory detail of what led us here I think -- I have a presentation I can make as well if you want to hear it, otherwise you can hear -- THE COURT: Well, are you suggesting you'd like to make your presentation first; is that what you're saying? Or do you want to respond to their presentation? Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 13 of 57 MR. SILVERBERG: I'd like to make our presentation first if that -- THE COURT: And your presentation is going to be about why the case was filed and why you need the extension of time? MR. SILVERBERG: That is correct. THE COURT: All right. I'll let them go first, Counsel, and then I will absolutely hear from you. MR. FRIEDMAN: Thank you, your Honor. THE COURT: Go ahead. MR. SILVERBERG: Do you want me to do it from here or from the podium? THE COURT: You can do it right from there, Counsel. MR. SILVERBERG: Perfect. So your Honor, what I was proposing to do is first give a background of Mr. Kwok and then follow it up with the events leading to the commencement of this Chapter 11 case and provide the justification for the extension request. Your Honor, by way of background, Mr. Kwok was born in Shandong Province in China. He currently resides in Greenwich, Connecticut with his wife of 35 years, Hing Chi. He has two adult children, together they have a son, Mr. Qiang Guo, and a daughter, Ms. Mei Guo. The son lives | 1 | in the United Kingdom, the daughter splits her time | |----|--------------------------------------------------------------| | 2 | between New York City and Connecticut, hopefully more time | | 3 | out of the parents' house now that Covid is receding. | | 4 | He grew up in a large but poor household which | | 5 | inspired his entrepreneurial spirit.
At the age of 13 Mr. | | 6 | Kwok dropped out of middle school and began selling | | 7 | clothing and electronics to help support his family.
In | | 8 | May 1989 was detained and tortured for his support of the | | 9 | Tiananmen Square protest.
While detained for | | 10 | approximately 20 months he created key relationships with | | 11 | political activists, intellectuals, business people and | | 12 | religious leaders.
One of these contacts will later | | 13 | introduce him to a Ms. Ping Xia, a successful business | | 14 | woman and investor from Hong Kong. | | 15 | In 1991 Mr. Kwok began to work with Ms. Xia in | | 16 | Yuda property company, a company which focused on | | 17 | commercial real estate development in the Henan Province | | 18 | of China.
Shortly after its launch Yuda successfully | | 19 | developed and constructed the high end Yuda International | | 20 | Trade Center in Henan Province's capital city of | | 21 | Zhengzhou.
The commercial complex includes what was at | | 22 | the time the tallest skyscraper in Henan Province and | | 23 | China's 5th
tallest building.
Upon completion of its | | 24 | construction the complex had a then value of 300 million. | | 25 | The trade center was financially successful and | Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 15 of 57 established Mr. Kwok's presence in China's world of real estate developers, particularly in Henan Province where Yuda continued to develop high end residential and commercial projects. Around 2000 building on his success in Henan Province Mr. Kwok shifted his real estate aspirations to the Chinese capital Beijing where he expanded his business to include private financing for his projects in which his six siblings participated. Through success in Henan Province Mr. Kwok's immediate and extended family members were lifted out of poverty. In Beijing Mr. Kwok helped establish Beijing Morgan Investment Company and Beijing Zenith Holdings Company, a real estate development and investment management consulting company, entities in which Mr. Kwok's and extended family were shareholders and employees. In 2002 these businesses acquired two parcels spanning approximately 2 million square meters of undeveloped land in northern Beijing. The value of these parcels increased dramatically after China was named to host country for the 2008 Olympics and the government announced its plans to build the Olympic venue adjacent to these land parcels. The increased value of these parcels spawned Mr. Kwok's longstanding political fight with the Chinese Communist Party. Deputy Mayor Zhihua attempted to improperly appropriate Morgan Investments property, Mr. Kwok fought back, reporting this corruption to the Government, and after a lengthy fight ultimately recovered Morgan Investments land parcels. Mr. Kwok then oversaw the successful construction and timely completion of the Beijing Pangu Plaza and Jhihuan Plaza. The Pangu Plaza has become a Beijing landmark adjacent to the Olympic venue. Mr. Kwok however with his criticism of the CCP's corruption drew a harsh response. When it became clear his life was in jeopardy he fled to the United States in 2015. In absentia the CCP froze or seized his assets in China, including assets held by companies in which he held an interest. The CCP also caused the seizure of his assets elsewhere including Hong Kong and caused Interpol to issue a red notice for his arrest. In September of 2017 he claimed political asylum in the United States and his application remains pending to this day. He continues his criticism of the CCPs corruption and human rights abuses to this day. Over the years he has amassed a following on various digital and media platforms such as YouTube, GTV, Twitter and Getter -- I had to look Getter up, I didn't know what it was -- Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 17 of 57 where he shares his personal views and opinions concerning the CCP and the need for democracy in China. He has over one million followers across the various social media platforms. Notably he has not monetized his social media presence. Mr. Kwok is not employed and he relies on the support of family, principally his son, to cover his daily living expenses. Through Mr. Kwok's son's family office in Golden Spring New York, his on advances his monthly expenses. Brown Rudnick's retainer was paid by another entity own by Mr. Kwok's son, Lamp Capital, LLC as set forth our attorney compensation declaration at docket number 54 which was filed shortly before this hearing. THE COURT: Okay. I haven't seen that but that's fine. MR. SILVERBERG: Turning to the PAX litigation, though he left China he didn't leave all his troubles behind. We suspect the Court will hear quite a bit from PAX's counsel during this case. We won't get too much into this litigation but a high level interview might help put things into context. PAX, a Hong Kong investment fund commenced actions against Mr. Kwok in New York and BVI. The New York action commenced in 2017 is before Justice Ostrager in New York Supreme Court. In the New York action Mr. Kwok is represented by BakerHostetler. These are principally collection actions related to a 30 million dollar loan made to a Chinese entity called Spirit Charter back in 2008. PAX claims that Mr. Kwok provided a personal guarantee of the PAX debt and reaffirmed that guarantee multiple times over the years, most recently in 2011. Mr. Kwok agrees that he provided a personal guarantee in 2008 but asserts that the loan was fully repaid thereafter and that the subsequent documents are forgeries. And that's the crux of the dispute, your Honor. Without a hearing Justice Ostrager entered summary judgment in PAX's favor. Mr. Kwok has appealed this judgment to the Appellate Division and the appeal remains pending though stayed as a result of the commencement of this case. In the meantime Pax sought to enforce a restraining order issued by Justice Ostrager on Mr. Kwok prohibiting him from transferring or dissipating assets and moving them outside the jurisdiction of the New York courts. PAX became laser-focused on a yacht name the Lady May. PAX wanted the yacht back in New York so that it could arrest the boat and levy on it. Mr. Kwok denied owning the board and asserted that he couldn't order the boat back to New York. Justice Ostrager directed Mr. Kwok to return the boat to New York by May 15, 2021 or face a massive daily fine of \$500,000 for every day the boat remained outside its jurisdiction. On February 9th Justice Ostrager found that Mr. Kwok beneficially owned and controlled the Lady May, issued a final order of civil contempt against him and ordered him to pay a 134 million dollar fine to PAX within just 5 days or risk jail time. The February 9th decision is also on appeal to the Appellate Division. Mr. Kwok lacked the means to satisfy the fine. He retained our firm on February 14th and filed for Chapter 11 the very next day. He filed for Chapter 11 not just to obtain the benefit of the automatic stay but to resolve all his claims in a single forum in an orderly manner. He is hopeful that he can agree with his creditors on the terms of a Chapter 11 plan. Counsel for PAX is in the same building as our firm, just an elevator bank away. His principal assets are litigation claims. Assuming he prevails on these claims he may be able to fund full recovery to his creditors. He will also approach his family members for support to fund the plan. All options are on the table. Further, as your Honor noted in the objections, much has been made of supposed shell games and allegations of squirreling assets away. If the allegations are true, and we say they're not, then the bankruptcy case may be the best thing that could have happened for them. There may be a Creditors Committee appointed in the case, the U.S. Trustee has solicited creditor interest in the participation. If one is appointed then they'll have their work to do. Chiefly we suspect they'll investigate the allegations that PAX made in their papers, which brings us to the motion for the request for the extension for the deadlines. We had very little time to work with Mr. Kwok to prepare his filing, that's why the papers were so skinny, that's why the deficiency notice ended up on the order. If we had more time we would have made sure that the schedules were filed on time. Or certainly maybe in advance of the -- contemporaneous with the filing. It was far from ideal circumstances. We have a considerable amount of work to do on our end to assist Mr. Kwok with the preparation of the schedules and statements. On February 23rd we advised the United States Trustee's Office of Mr. Kwok's intention to seek an extension. On February 24th as your Honor noted at docket 27 we filed Mr. Kwok's request for an extension of approximately 60 days. The rationale for the extension was the need for us to work with counsel who had been representing Mr. Kwok for years to ensure that litigation-related assets and liabilities were accurately captured on the schedules and statements. Also since Mr. Kwok does not read or write English he requested a Chinese translation of the official forms. Mr. Kwok is also going to retain a service provider to assist him with the generation of the schedules and statements. This morning we began discussions with Stretto who your Honor may be familiar with. As I noted, your Honor, we discussed Mr. Kwok's extension request yesterday afternoon with the U.S. Trustee. Yesterday two parties filed objections to the extension motion, the U.S. Trustee and PAX. Both pretty much make the same point, the requested extension was too long and they want to get on with the case. Your Honor, it bears mentioning that even though the requested extended deadline was after the scheduled 341 meeting we thought maybe we can work with the U.S. trustee to commence the 341 meeting and adjourn it to make sure that folks had an opportunity to review them and ask informed questions. We recognize it would be unacceptable to deny the creditors the opportunity to ask informed questions. Mr. Kwok agrees that it's best to work harder to get the schedule statements on file sooner. The sooner the schedules are on file the soon he can established a bar date for claims, start reconciling them, and see if he can propose a feasible Chapter 11 plan. And your Honor, I already mentioned the proposal that we extended to the United States Trustee and should we get there I'm prepared to make a short proffer of what Mr. Kwok's testimony would be if he were called to testify. THE COURT: Okay. Thank you. Let me just think if I have a -- oh, yes, I do have a question or two. It's not really a question. As I mentioned and you all know we have audio for our record. There's some names that you recited during your presentation that I think it would be helpful to get to the Clerk's Office so that the Clerk's Office can make sure they're properly spelled and accounted for in the record in this case. MR. SILVERBERG: Absolutely, your Honor, and we're happy to provide the English spelling and I guess my phonetic transliteration. THE COURT: Whatever, whatever, yes, that would be very helpful because we do want the record to be accurate and so I would like you to do that. MR. SILVERBERG: Absolutely, your Honor. THE COURT: I'll speak with the courtroom deputy but we could probably have the Clerk of the Court reach out to you, Counsel, and figure out a way to get that information so that we clearly have it for our record and have it accurate. MR. SILVERBERG: It will be our pleasure. THE COURT: Okay. Thank you. I just want to think if I had any other though when -- I mean I had other thoughts but anything I wanted to say when you were speaking. With regard to the 341 meeting and whatever happens here today I think the U.S. Trustee's Office -- I think it would make sense even if your extension is granted to the 16th to not close that 341 meeting after the first meeting. I think that this is a fluid case with a lot of issues and that's the U.S. Trustee's Office's call but I would urge them to consider, and of course I'm talking to you now, Attorney Claiborn, to consider that the Debtor does not seem to have any issue with that 341 meeting taking place more than one day, and I would urge the U.S. Trustee's Office to consider doing that given many issues, including the fact that we're apparently going to have to have an interpreter there and there may or may not be a lot of creditors that have interest and questions but I want to make sure that they're provided with that opportunity. Keep it timely and with enough notice that when the documents are filed they have enough time to intelligently review them. Okay? Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 24 of 57 So I urge you to -- you would communicate that with the U.S. Trustee and explain that the Debtor's counsel has no problem with that. MS. CLAIBORN: I will do that, your Honor. Thank you. THE COURT: Okay. Thank you. All right. Counsel for PAX, you may proceed. MR. FRIEDMAN: Your Honor, Peter Friedman from O'Melveny & Myers. I actually gave -- Mr. Silverberg? MR. SILVERBERG: Yes. MR. FRIEDMAN: -- Mr. Silverberg a copy of my declaration. I have it in binder form. I actually have two binders if I can hand them up to you. THE COURT: Sure. MR. FRIEDMAN: It may be helpful for you, you and your Clerk, we may refer to some things -- THE COURT: Sure. Thank you. MR. FRIEDMAN: -- that are in them. Thank you, your Honor. THE COURT: Mr. Friedman, you have no problem with me looking at this binder while counsel is speaking. MR. SILVERBERG: Your Honor, was that -- THE COURT: Did I say the wrong name? MR. SILVERBERG: That's okay. THE COURT: I apologize. I'm looking at two things at the same time. Yes, you have no problem; is that correct? MR. SILVERBERG: I have no issue, your Honor. THE COURT: All right, thank you. I appreciate that, Attorney Silverberg. And Attorney Friedman, go right ahead. MR. FRIEDMAN: Your Honor, Peter Friedman of from O'Melveny & Myers on behalf of PAX. So your Honor, there are many, many, many different things that are worth responding to but let me start with just the straightforward issue of what Justice Ostrager found. Justice Ostrager found that Mr. Kwok couldn't claim that the documents were a forgery because they were inconsistent -- that was inconsistent with everything he had done -- THE COURT: Hold on one second, Attorney -- THE INTERPRETER: (Indiscernible) I cannot possibly translate anything -- THE COURT: Hold on a second, sir. Just hold on a second, okay? He has a right to make his presentation and you can listen to it later because we record it and we put it on docket and you can then talk to the Debtor and interpret it if you can't do it simultaneously, but we have to go on with the hearing. THE INTERPRETER: I understand. Do you think he can use the mic, at least we can all hear back here? THE COURT: Can you just pull the microphone a little bit closer to you, Counsel? MR. FRIEDMAN: Sure, your Honor. I have serious doubt as to the good faith of that request. THE COURT: I understand. I understand, but I'm not -- MR. FRIEDMAN: These are the kinds of antics, your Honor -- THE COURT: I completely understand but we're not -- we're going to proceed. Okay? MR. FRIEDMAN: Absolutely, your Honor. THE COURT: And as is true in every bankruptcy case in Connecticut and in most of the country this recording will be placed on the docket of the case after -- it will be on there by tomorrow morning I think, right? It's pretty -- it's very quick. It's within 24 hours and anybody can listen to it but -- and it's not your fault but the microphones -- MR. FRIEDMAN: Yes. THE COURT: -- sometimes work well and sometimes don't, and for whatever reason that one today has not worked well. MR. FRIEDMAN: Your Honor, should I try that one up there? Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 27 of 57 | 1 | THE COURT:
Maybe it might be better.
Let's see | |----|----------------------------------------------------------------| | 2 | how we do, okay?
There's been a problem with that | | 3 | microphone today.
I can't tell you why. | | 4 | MR. FRIEDMAN:
So your Honor, Justice Ostrager | | 5 | held, and I believe tab 4 of your binder is the opinion, | | 6 | that Mr. Kwok couldn't claim the documents were forgery | | 7 | for a litany of reasons.
Estoppel, that he had made | | 8 | representations in the past, that he had actually produced | | 9 | those documents.
So the claim is just on its face not a | | 10 | meaningful claim and not one that this Court should | | 11 | ultimately be able to sit in judgment over the reasoned | | 12 | findings of Justice Ostrager. | | 13 | THE COURT:
May I ask you
a
question about | | 14 | Exhibit 4? | | 15 | MR. FRIEDMAN:
Yes. | | 16 | THE COURT:
The exhibit you just pointed me to. | | 17 | So of course I haven't reviewed anything -- | | 18 | MR. FRIEDMAN:
Yes. | | 19 | THE COURT:
--
before today, but I'm looking at | | 20 | Exhibit 4 and it appears that Justice Ostrager issued this | | 21 | --
let me just see what it --
I apologize.
Let me see | | 22 | what it is entitled.
It's a Decision and Order on Motion, | | 23 | that he issued this on September 15, 2020; I'm correct in | | 24 | that? | | 25 | MR. FRIEDMAN:
Yes, your Honor.
This is his | | 1 | summary judgment motion finding that Kwok in fact did owe | |----|--------------------------------------------------------------| | 2 | money to PAX on a personal guarantee. | | 3 | THE COURT:
And then what happened after the | | 4 | summary judgment decision?
Was there an appeal or is this | | 5 | considered interlocutory or what is the situation with | | 6 | regard to this specific ruling that you're appointing me | | 7 | to right now? | | 8 | MR. FRIEDMAN:
So it is on appeal, it is outside | | 9 | of -- | | 10 | THE COURT:
It is.
Okay. | | 11 | MR. FRIEDMAN:
So it's not an issue that this | | 12 | Court could review -- | | 13 | THE COURT:
Okay.
I just want to make sure I | | 14 | understand because as you can see there's a lot of | | 15 | documents here -- | | 16 | MR. FRIEDMAN:
There are. | | 17 | THE COURT:
--
and I just want to make sure and | | 18 | I want to understand the status and I do now.
I | | 19 | understand that he made these findings and that's still on | | 20 | appeal at the moment. | | 21 | MR. FRIEDMAN:
Yes.
But your Honor asks a great | | 22 | question, what happened after that.
Well, what happened | | 23 | after that, the first thing that happened is that Mr. Kwok | | 24 | filed a company called Genever New York for bankruptcy in | | 25 | the Southern District of New York. | | 1 | THE COURT:
And you mention that in your papers | |----|-------------------------------------------------------------| | 2 | so I have that name correct.
I've seen it. | | 3 | MR. FRIEDMAN:
Yeah.
So it was very upsetting | | 4 | that that was not listed as an affiliated bankruptcy | | 5 | because Mr. Kwok owns a hundred percent of the equity of a | | 6 | company called Genever, Genever British Virgin Islands, | | 7 | it's Genever Holdings British Virgin Islands, which in | | 8 | turns owns a hundred percent of the equity of a debtor in | | 9 | the Southern District of New York.
That is of course the | | 10 | classic case of an affiliate, it wasn't listed on the | | 11 | petition.
Really troubling, and one of the animating | | 12 | forces behind why we think no extension should be given | | 13 | beyond the 14 days that Congress provides statutorily. | | 14 | That entity in the Southern District of New York | | 15 | is now the subject of --
it's too long to get into, | | 16 | eventually we will be seeking relief from this Court to | | 17 | permit us to pursue --
to vindicate Mr. Kwok's ownership | | 18 | rights of that entity and to object to bogus claims | | 19 | asserted by his family members.
That's been part of his | | 20 | effort to frustrate our efforts to have that judgment | | 21 | satisfied. | | 22 | Your Honor, Congress listed 14 days for a | | 23 | reason.
We think it's important.
I will say of course | | 24 | oftentimes I am in a position of asking for an extension | | | | and to be honest I'm not sure I've ever seen anybody object because ordinarily there's a good reason. It's an operating business, it may have hundreds of subsidiaries, it's an entity that may have to deal on its first couple of days with vendors and creditors and employees and can't pay immediate and prompt attention. None of that is true here. Mr. Kwok isn't an operating business. He claimed in his IDI and in his petition he has no assets at all which of course raises the question of how could there possibly be a reorganization purpose here? How could there be a Chapter 11 purpose? Given all of his asset shuffling and -- not my word for it, everything you heard from opposing counsel is his word. I have Justice Ostrager's opinions and those opinions and findings of fact show that Mr. Kwok uses a maze of entities and family members and trusted confidants to shift around assets. That kind of person can't be a fiduciary in a Chapter 11 for creditors. He'll never pursue claims against family members and other related entities. It raises really serious questions about the purpose of this case. I want to add on top of that, your Honor, there is 134 million dollar contempt fine, and that's just not Justice Ostrager imposing that, that was unanimously affirmed by the Appellate Division in New York State. THE COURT: I did see that. MR. FRIEDMAN: It was Mr. Kwok's doing. He waited 268 days, that's why it got so large. Mr. Kwok cannot challenge in this court the state court's ruling that Mr. Kwok owns -- has a beneficial interest in the Lady May. Frankly, any responsible debtor would have already filed a turnover motion to require the person who is in custody of the yacht to return it completely to Mr. Kwok. That obviously hasn't happened. I will note, your Honor, that later tonight we will be filing a motion asking you to hold the automatic stay does not apply to a civil contempt order against Mr. Kwok, as well as a motion in the alternative asking you to hold that if it does apply that the automatic stay be modified to permit Justice Ostrager to require that -- to the return of the Lady May to New York Harbor. I'm not asking to be able to levy on it or collect on it right now, but Mr. Kwok should not be permitted to keep such a valuable asset outside of the United States, to be brought here where it can be properly monetized eventually and liquidated. Again, Justice Ostrager's findings I don't believe will ultimately be reviewable by this Court and order that's already on appeal. Mr. Kwok lost a motion should not be second guessed because they are part of an for an interim stay in New York. He could not even provide any -- the slightest level of confidence to anybody that he would have a likelihood of success on that appeal. Now, the reason we believe that civil contempt order is not subject to the automatic stay leads to another issue which is we also believe it's going to give raise to 135 million dollar non-dischargeable claim. We noted that in the footnote. We will also be commencing an adversary proceeding to hold that debt non-dischargeable which also gives right o the question how could there ever be a feasible Chapter 11 plan when Mr. Kwok will be facing 134 million dollar debt if he ever got a discharge. And I think those kinds of issues call into question everything in paragraph 15 of the Debtor's motion. They talk about retaining counsels and retaining financial advisors and proposing plans using other people's money. I realize, your Honor, that we will have to prove a lot of things to you but we have the evidence, many of those issues have already been established by Justice Ostrager. This is not a Debtor who comes to you with anything even remotely approaching clean hands. For the life of me I can't understand how if a judge has held that you have a beneficial ownership in something worth 30 million dollars you don't even footnote it in your petition. It's just astonishing. It's astonishing that somebody wouldn't list an affiliate as a debtor when there's a specific box. It's astonishing that the entity Mr. Kwok uses as his family office is listed as the second largest creditor when the instructions specifically say don't list insiders. A company controlled by his son that funds his living expenses is the paradigmatic example of a non-statutory insider. That petition, your Honor, which was verified, signed under penalty of law is so rife with dishonesty it's astounding. I would add even what Brown Rudnick filed this afternoon which says that they will be paid based on a loan that as made from Lamp, also Mr. Kwok's family office to Mr. Kwok. So if you look at the schedule -- the petition, Lamp turns up as a million dollar creditor for that loan. But even though that loan it's still -- it's at Brown Rudnick as a retainer, it's still Mr. Kwok's property, so I don't know how they could assess or assert that he has zero assets. He has the \$998,000 of assets that he came into the case with under that loan, as a prepetition loan. Again, just the lack of candor to this Court already is what impels us to believe that no quarter should be given. Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 34 of 57 I want to note in our brief we cited virtually everything Justice Ostrager said, but I didn't cite one portion that I think is really important and it comes on page 7 of Justice Ostrager's opinion. THE COURT: Which opinion would you like me to look at? I want to make sure -- MR. FRIEDMAN: This is the contempt order, your Honor. THE COURT: So attached to your objection. MR. FRIEDMAN: Yes, as well as the U.S. Trustee's. THE COURT: But it's also in the book here? MR. FRIEDMAN: Yes. It's also attached to the U.S. Trustee's objection. That might be the easiest way to find it. THE COURT: Okay. If you give me a second I will locate it. (Pause.) THE COURT: I think I have it here but let me make sure. A Decision and Order on Motion dated February 9, 2022 that is 10 pages. Is that correct? MR. FRIEDMAN: It is, your Honor. THE COURT: Okay. Go right ahead. I have it. MR. FRIEDMAN: So before I get to the quote I want to point out this came after a live trial and this | 1 | came after Mr. Kwok's daughter, who counsel referenced, | |---|--------------------------------------------------------------| | 2 | was basically held to be a liar by Justice Ostrager.
When | | 3 | you read the opinion you'll see the lack of credibility | | 4 | that Justice Ostrager referenced with her testimony.
He's | | 5 | not the only judge to do that.
Judge Liman in a case in | | 6 | the Southern District of New York also cast extreme doubt | | 7 | over the credibility of her testimony relating to the | | 8 | interfamily transfer of funds. | | | | Your Honor, on page 7 it says the machinations associated with the shell game Kwok has orchestrated with respect to the Lady May are of a piece with every other invasive and contemptuous act Kwok has taken during the 5 years this litigation has been pending, which is why there are 1,180 docket entries in this case. I implore your Honor not to let this case turn out like that case. Kwok has taken so many extraordinarily evasive and dishonest steps that cannot be squared with the good faith requirements to be a Chapter 11 debtor. Congress require disclosures be made within 14 days. The request for 60 days was, to put it mildly, outrageous. We request the Court deny the motion in the entirety, but I'm going to say something else, your Honor. Ultimately I realize that, you know, your job is to balance a variety of factors. We believe strongly that no extension should be given. But if an extension were given for a few days, until the end of the week because it's going to be run out today, we of course aren't going to say he didn't file something by the end of the day today, the case should be dismissed automatically. So as passionately as I feel about these issues which I think you can tell, I would not object to it being extended, our client would not object to it being extended until Friday, and we think given the fact that Mr. Kwok has said in his IDI that he has no assets that part of it should be easy. If there are these contingent lawsuits it seems impossible to believe they aren't known to him already and they should be scheduled as soon as possible so that we can frankly dig in. We may even seek Rule 2004 discovery between his 341 if necessary depending on what's disclosed in there, but we believe we need a full and fair chance to continue our pursuit of his assets in order to take an appropriate 341 examination and, you know, that's I think -- I don't know if the Court has any questions for me but those are the key issues that I thought were worth addressing with respect to our objection. THE COURT: I'm not sure I have any questions. I have looked at your objection, although I will say I didn't look at it until today and we did have hearings today. And so I looked at the United States Trustee's Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 37 of 57 objection yesterday, I had more time when that was filed. I definitely looked at your objection, however I'm intending on looking at it again, as I would the U.S. Trustee's objection, as I will the motion for motion for extension of time. So but I think I was fairly clear at the start of this hearing there will be no extension of time for 60 days. If there's an extension of time it will not be for 60 days. Counsel has stated that he's made an offer to the United States Trustee's Office to go to March 16. You're stating that you would not object if the Court entered an order extending the deadline to March 4th. We're not that far apart in some ways but I understand your position. If the two of you don't want to talk about that and see if you can agree on something, that's fine. The Court will rule. I have no problem doing that. But if you want to take time to talk about it we can do that too and you can all -- we can take a 5-minute recess. We don't have to take a recess, we can do whatever you want. But right now today the issue is, is there going to be an extension of time granted. You, the two objecting parties and I think I have been I think clear that I obviously find merit to the objections when I said already there will not be a 60-day extension of time. It's not going to happen. It's not appropriate. In very Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 38 of 57 few cases I could ever think that it would be appropriate, and this is not one of them. Okay? So that's clear. The United States Trustee's Office seems to be fine with March 16th. You'd like March 4th. The 341 meeting is what day? MS. CLAIBORN: Your Honor, I apologize for interrupting the Court. THE COURT: That's okay. MS. CLAIBORN: I didn't yet opine as to what the U.S. Trustee's position was with respect to the date -- THE COURT: Oh, I'm sorry. MS. CLAIBORN: -- and I didn't know whether or not counsel wanted to take the Court up on the opportunity to discuss for a minute before we do that or -- 15 THE COURT: I can take a 5-minute recess. It won't -- MS. CLAIBORN: I just don't know whether or not the parties were interested in discussing it. THE COURT: Or yeah, and if there isn't an interest in discussion that's fine too. I'm not forcing anyone to do anything. I'm giving you an opportunity if you'd like to take it. If you don't want to take it, that's fine. You know, I have no problem with that. MR. SILVERBERG: Your Honor, if PAX is going to dig in their heels on the 4th that's just not going to be | 1 | workable from a logistics standpoint so -- | |----|--------------------------------------------------------------| | 2 | THE COURT:
And that may be true on the | | 3 | negotiation standpoint but I might order it.
So, you | | 4 | know, that's where we go and that's fine.
You are -- | | 5 | every
single --
you've all made your positions and I | | 6 | haven't even asked Attorney Wolman what his position might | | 7 | be yet because he is participating in this hearing, but | | 8 | you've made your positions clear.
It's not a complex | | 9 | issue for the Court to decide.
I do want to look back at | | 10 | the papers for a few minutes and I can do that now.
I can | | 11 | take a 5, 10, 15-minute recess, doesn't matter.
And then | | 12 | I can come back and rule today or I can rule tomorrow. | | 13 | It's not complex.
I'm not worried about issuing a ruling, | | 14 | that I can tell you. | | 15 | And so however you'd like to proceed.
I'm | | 16 | trying to give you an opportunity to suggest to me what | | 17 | you think makes some sense.
If you'd like a recess to | | 18 | talk about it, that's fine.
If you don't we can conclude | | 19 | this hearing and I can rule tomorrow or we can take a | | 20 | recess and I can try to come back and rule tonight.
I | | 21 | have no problem with either one of those ways of | | 22 | proceeding. | | 23 | MR. SILVERBERG:
I'm always in deal-making mode | | 24 | so if PAX wants to speak so -- | | 25 | THE COURT:
Well, why don't
we take --
it's 10 | Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 40 of 57 | 1 | of 5:00.
Why don't we -- | |----|--------------------------------------------------------------------| | 2 | MR. WOLMAN:
Your Honor? | | 3 | THE COURT:
Yes.
Oh, Attorney Wolman. | | 4 | MR. WOLMAN:
Can I be heard? | | 5 | THE COURT:
I'm sorry, go ahead. | | 6 | MR. WOLMAN:
That's all right.
I just wanted to | | 7 | be brief but I feel like
this should be heard.
We did not | | 8 | file anything but we do join generally Mr. Cheng
in the | | 9 | objections both by the U.S. Trustee and by PAX. | | 10 | A little background.
Mr. Cheng
was a victim in | | 11 | Nevada of Mr. Kwok's serial campaign of defamation | | 12 | lawsuits.
Mr.
Cheng
himself opposes the Chinese Communist | | 13 | Party and he took issue with how Mr. Kwok was addressing | | 14 | that movement as it were, and after Mr. Kwok made a | | 15 | defamatory video about Mr. Cheng
my client had a few | | 16 | tweets and then found himself a subject of a SLAPP
suit. | | 17 | Now the Court is aware about lawsuits that are | | 18 | called strategic lawsuits against public participation. | | 19 | Nevada has a very strong anti-SLAPP
statute and my client | | 20 | litigated -- | | 21 | (Alarm in building.) | | 22 | THE COURT:
Hold on a second, Attorney Wolman, | | 23 | hold on a second.
The alarm is going off.
Glen, do you | | 24 | think we need to --
okay. | | 25 | I'm sorry but the alarm is going off in the | building. MR. WOLMAN: Okay. THE COURT: So you just need to wait one second. I mean you can try to talk -- can you hear, Attorney Wolman, even when the alarm is going or -- the United States Marshal is going to go check right now to see if we need to evacuate. MR. WOLMAN: If you need to evacuate, your Honor -- THE COURT: Well, I don't know that yet. I'm waiting to find out. MR. WOLMAN: I'm fine where I am. THE COURT: They'll let us know. If we have to evacuate then I would assume that you'll all have to go back out the front door, okay? And stand out in the front of the building. But they'll tell you, someone should tell you. (Pause.) THE COURT: John, do we need to evacuate? JOHN: Stay for now. THE COURT: Stay for now? JOHN: Stay for now. We got a problem with the alarm system. We're rewiring everything. THE COURT: Okay. JOHN: If there's anything we'll let you know ASAP. THE COURT: All right. Right. We're in the middle -- John, we're in the middle of a hearing so I'm going to keep talking and people are going to keep talking, okay? Oh, there, okay. We'll see. Okay. JOHN: The last time (indiscernible). THE COURT: Is that right? Not when we were in court through, but yeah. But okay, thank you so much for checking. I appreciate that. All right. Attorney Wolman, why don't you if you could -- and I'm sorry, I don't remember exactly where you left off but you were talking about a defamation suit and some other issues. MR. WOLMAN: Right Yes, your Honor. Mr. Cheng was the victim of Mr. Kwok's serial campaign of litigation in Nevada and we prevailed on an anti-SLAPP motion and the case was dismissed because Mr. Cheng thought Mr. Kwok was unable to show that his case had any merit. The Nevada anti-SLAPP statute has what's called a SLAPPback provision because although it awards attorney's fees for the successful defendant, that is not the end-all and be-all of the victimization of being sued. And so a suit was brought in the Southern District of New York to enforce the judgement of fees because originally Mr. Kwok did not pay until funds came in from Golden Spring New York to pay that judgment and we sued to enforce the judgment and we sued under the SLAPPback theory under the Nevada statute for compensatory damages. And in fact that case has been keyed up for summary judgment with Attorney Gavenman who was representing Mr. Kwok at the time accelerating his reply memorandum to get in just before the bankruptcy petition was filed, and otherwise been (indiscernible). Now, this litigation has been ongoing for quite some time and in fact a year ago I had the opportunity to take Mr. Kwok's deposition and there were actually some interesting things even here today that I was unaware of before such as Mr. Kwok now residing in Connecticut with his wife. And so these are facts that -- that are facts that come out abut Mr. Kwok that he states but then does not back up that is of concern. His complaints in Nevada listed a litany of things about his background that his counsel here today recited some of, and yet when we sought discovery on in the Southern District of New York because certainly it must have been germane and relevant, he resisted. He objected. He refused to back any of that up. We sought certain discovery as to his financial well-being and he refused. He resisted and in fact he pleaded the Fifth Amendment in terms of not having to produce that information, and he did so successfully. Judge Failla felt that the invocation of the Fifth Amendment was well- placed and we were to get an adverse inference as a result. This man holds himself out as a billionaire. That's how he presents himself globally. In fact, on February 9th the news was all aflutter not only with the sanctions award in the PAX case but with the fact that Mr. Kwok, and spoke specifically about his name, won a venue motion in London on a 500 million dollar claim against UBS, but he is the plaintiff and maybe it's through one of his entities. We don't know. And that means the Court should take everything that is said and, you know, Brown Rudnick, I've got no objection to them, they're trying to poke a -- pick a fight, but they are new. They do not know Mr. Kwok. And they need to take and this court needs to take everything that he says with a grain of salt. And so I do actually think that March 4th is perhaps too soon because they need to verify for themselves that they are going to be submitting to the Court materials that have previously not been verified and so, you know, that is going to go under their imprimatur and they need to do their due diligence. And so we want to make sure certainly that counsel has time to do that but also strike a balance here that we have time before the 341 meeting to review. And while we're, you know, listed as a creditor I should note that we put in our motion we believe ourselves actually to be one of the 20 largest creditors but that was not stated in the petition and in fact Golden Spring as PAX noted, the insider, is listed as a creditor and one of the 20 largest. So there's already some improprieties in the filings here and we just want to make sure we have enough time. I would prefer a week before the 341 meeting rather than just a few days because I need to compare to other production certainly that we've received in the New York case and we may have to address a governing proactive order in that case and how it applies here but, you know, we do otherwise join in the objections of the U.S. Trustee and in PAX to that 60-day extension and do request that it be something with at least a week before the 341 meeting. THE COURT: Okay. Thank you. All right. I'm going to take a 10-minute recess. We'll be back at 5:10 and then I'll hear from the parties if there is anything they would like to report and then I will rule. So court is in recess. (Recess: 4:58 p.m. to 5:09 p.m.) THE COURT: Okay. We took a short recess after Attorney Silverberg and Attorney Friedman, Attorney Claiborn and Attorney Wolman made their statements in connection with the Debtor's motion for extension of the deadline to file documents required by the Bankruptcy Code and Rules. I don't know, Attorney Silverberg, Attorney Friedman if you had any discussions. I see heads shaking no. MR. SILVERBERG: Unfortunately -- your Honor, Bennett Silverberg, Brown Rudnick for the Debtor. Unfortunately those discussions were not productive. We offered to give a couple of days -- THE COURT: That's all right. I don't need to know. Thank you. MR. SILVERBERG: Okay. THE COURT: That's okay. I appreciate it but I don't need to know. I just need to know that there is no agreement. MR. SILVERBERG: There is no agreement, your Honor. THE COURT: Okay. Thank you. Attorney Claiborn? MS. CLAIBORN: Your Honor, if I could now weigh in on the extension motion and I also wanted to make some other comments to the Court. THE COURT: Yes. Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 47 of 57 MS. CLAIBORN: I'll start with the comments. THE COURT: Hold on just one section, Attorney Claiborn. Something is echoing here. (Pause.) THE COURT: I don't know why it's echoing. I can hear you, Attorney Claiborn, then I can hear you again. MS. CLAIBORN: Oh, that's great. THE COURT: So we just want to make sure we can hear you properly. (Pause.) THE COURT: Yeah, I think we're going to have to proceed. Will you be able to record or do you need to have that resolved? COURTROOM DEPUTY: It's still recording but I don't know if it's going to pick up this echo. THE COURT: I think we'll be okay. Let's try it anyway, okay? And then if it's really bad you tell us and we'll stop. Should we alert anyone in our IT Department? COURTROOM DEPUTY: Well, I sent a message to Pierre and hopefully to will send a message to Will. THE COURT: Okay. All right. Let's see how this goes -- MS. CLAIBORN: Does it make any difference as to which microphone I use? Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 48 of 57 | 1 | THE COURT:
No, it's coming from in here | |----|-----------------------------------------------------------------| | 2 | unfortunately.
So go right ahead and let's see how we do, | | 3 | okay? | | 4 | MS. CLAIBORN:
Thank you. | | 5 | Your Honor, I wanted to touch
briefly on a | | 6 | couple of items, first of which was the petition and the | | 7 | comments that were made by Mr. Kwok's counsel today about | | 8 | his residence in Greenwich, and they were followed by Mr. | | 9 | Wolman's comments about not being aware that Greenwich is | | 10 | a residence. | | 11 | I wanted to point out to the Court that on the | | 12 | petition the Debtor's address in response to the question | | 13 | of where do you live is listed as being Golden Spring.
It | | 14 | does not list his residential address.
We had been under | | 15 | the impression that the Debtor was going to take some | | 16 | steps to protect that information as to where he actually | | 17 | resides due to some concerns that were expressed.
That | | 18 | hasn't yet happened, but I do want to make a connected | | 19 | point which is that yesterday's initial
dinner
(phonetic) | | 20 | interview covered in brief the topic of where does Mr. | | 21 | Kwok get his mail and the issue about where to send | | 22 | information was broached and the concern expressed was | | 23 | that perhaps the mail wouldn't reach the right place if it | | 24 | went to the Golden Spring address which is the only | | 25 | address that the court has to reach the Debtor. | Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 49 of 57 And so I bring that up because I want to make sure that the Debtor does get proper notice in this case of all the appropriate pleadings and that all parties are aware what is the appropriate address to be using to contact the Debtor. The other comment I wanted to make is about the fact that in general based upon the presentations that have been made today and based upon the information that was learned yesterday at the initial dinner interview this case presents an interesting combination of no assets, large debt and a need for an explanation. The U.S. Trustee at this point in time believes it may be appropriate to seek the appointment of an examiner and I wanted to preview that for the Court. We have made that comment to the Debtor's counsel and they are aware. 16 And so I wanted to make those couple of points to your Honor and then I want to follow up by saying that with respect to the extension request today the U.S. Trustee thinks that the date of -- sorry, March 9th makes the most sense. It is in between the dates that have been offered by the opposing parties and it does provide over a week of advanced time for parties to take a look at it and digest it and be prepared to conduct a meaningful meeting of creditors. THE COURT: Okay. Thank you. | 1 | Does anyone else wish to be heard? | |----|-----------------------------------------------------------------| | 2 | Attorney Silverberg, the issue that was raised | | 3 | about the address is an important one.
The address on the | | 4 | petition is different from the address that you --
well, | | 5 | you didn't give an address but you said that he resided in | | 6 | Greenwich.
If there's a change
of address we have a local | | 7 | rule about that and we have a local form and that needs to | | 8 | be completed because obviously notice has and service has | | 9 | to be properly made. | | 10 | So I don't know how you're going to proceed on | | 11 | that but I'm telling you that that is something that I | | 12 | will be paying attention to then because if the Debtor | | 13 | resides in Greenwich that's not what the petition says. | | 14 | So I'm not going to say anything further.
I'm telling you | | 15 | what my thought is on that at the moment, okay? | | 16 | MR. SILVERBERG:
We understand the issue with | | 17 | respect to the New York address.
There was some desire to | | 18 | keep his Greenwich, Connecticut address private given his | | 19 | experiences with the CCP and so on, so I think when we | | 20 | prepared the petition we didn't realize how much that | | 21 | address is already in the public domain. | | 22 | THE COURT:
Okay. | | 23 | MR. SILVERBERG:
We've since learned that there | | 24 | may not be as much sensitivity to that address being out | | 25 | there and once we confirm that with the Debtor we'll | | 1 | complete the appropriate paperwork to amend the address to | |----|-------------------------------------------------------------| | 2 | make sure that he gets those. | | 3 | THE COURT:
Okay.
All right.
Thank you. | | 4 | Does anyone else wish to be heard on the motion | | 5 | for the extension of the deadline to file documents | | 6 | required by the Bankruptcy Code and Rules?
And our local | | 7 | rules as well. | | 8 | Okay.
As I indicated earlier today during the | | 9 | beginning of this hearing over the course of the last few | | 10 | days I've reviewed documents filed in this case including | | 11 | the Debtor's motion to extend the deadline to file | | 12 | schedules or provide required information seeking an | | 13 | extension to May 2nd, 2022, which is ECF number 27. | | 14 | I've also reviewed and again looked at during | | 15 | the recess the objection filed by the --
to that motion | | 16 | filed by the Office of the United States Trustee, ECF | | 17 | number 49, and the objection of PAX, if I may use PAX for | | 18 | short, filed
to that motion for extension of time, ECF | | 19 | number 50. | | 20 | I've also listened to the presentations and | | 21 | arguments of Attorney Silverberg, Attorney Friedman, | | 22 | Attorney Claiborn, Attorney Wolman and I've taken those | | 23 | arguments into consideration with regard to the
request | | 24 | made by the Debtor. | | 25 | As I've indicated and I know you all know the | Bankruptcy Code, in particular section 521 of the Bankruptcy Code requires the Debtor as part of the Debtor's duties to file a series of documents in order to assist and help to complete the administration of a Chapter 11 case. Those documents are extremely important and they are necessary to provide appropriate notice and information to creditors in order for creditors to have the ability to determine whether or not they would like to have a meaningful questioning of the Debtor at the section 341 meeting which the Debtor is required under the Bankruptcy Code not only to attend but to testify at under sections 341, 42, 43 of the Bankruptcy Code. In addition to the code sections that require the Debtors to provide -- excuse me, to perform specific duties as part of the burden of coming before the Court, Federal Rule of Bankruptcy Procedure 1007 requires that definite documents be filed including the statements of financial affairs and schedules of assets, liabilities and other schedules, (a) through (g) and (h) and (i) in the individual case. And Federal Bankruptcy Procedure 1007(c) says the time for him to do that is with the petition or within 14 days thereafter. 14 days thereafter with regard to this Debtor's case would be today because the case was filed on February 15, and the Court has considered all the requests that the Debtor has made and the arguments advanced in opposition to the request and the Court rules as follows: In accordance with 11 USC Sections 521 and other applicable sections of the Bankruptcy Code that set forth the duties of a Debtor, Federal Rule of Bankruptcy Procedure 1007(c) and our Local Rule of Bankruptcy Procedure 1007-1, the Debtor's motion for extension of time is granted in part. The Debtor must file all required statements and schedules including all documents required to be filed in accordance with those bankruptcy sections that I've just recited and the Federal Rules of Bankruptcy Procedure and our local bankruptcy rules on or before March 9, 2022. That is the ruling of the Court. Does anyone have any questions? MR. SILVERBERG: No, your Honor. Thank you. THE COURT: Okay. That was the only matter that we had to address today. Attorney Birney, did you have something else that you wanted to address with the Court? MR. BIRNEY: No, your Honor. Just thank you, it's glad to be back, we're glad to be back in person. THE COURT: It's nice to be in person. Yes. Did somebody else have any questions or anything that you wanted to address today? MR. KLETTER: Oh, your Honor, may I be excused from future hearings. Mr. Silverberg can attend any further -- THE COURT: Yes. You've been admitted *pro hac*, so yes, you can be excused, Counsel. MR. KLETTER: Thank you. MR. SILVERBERG: Thank you, your Honor. The *pro hac* -- THE COURT: Now obviously for service purposes though, service can still be made at the local address and that's service. Even if you're excused, which is fine. MR. KLETTER: Yep. THE COURT: If someone makes service on the Debtor only at your office, your local office address that's still deemed appropriate service under the rules. Okay? MR. KLETTER: Yes, thank you. THE COURT: Okay. The only other thing I would say is as I've ruled the 341 meeting is already set, I've already spoken to Attorney Claiborn about my urging with regard to the 341 meeting, but that is in the hands of the Office of the United States Trustee. There is nothing further on the calendar today in this case. Did you have something you wanted to add, Attorney Friedman? Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 54 of 57 Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 55 of 57 | 1 | MR. FRIEDMAN:
I did, your Honor, just because | | | | | | | |----|----------------------------------------------------------------|--|--|--|--|--|--| | 2 | I'm unfamiliar with your general practice.
Will you also | | | | | | | | 3 | issue an order or is the transcript so ordered? | | | | | | | | 4 | THE COURT:
I could to --
if you would prefer me | | | | | | | | 5 | to --
what I would normally do if you would like and I'm | | | | | | | | 6 | happy to do it, is I'll just do a virtual order, okay? | | | | | | | | 7 | But that won't get most likely put on the docket until | | | | | | | | 8 | tomorrow morning.
It is so ordered
as of right now, 5:23 | | | | | | | | 9 | p.m. on March 1st, 2022, okay? | | | | | | | | 10 | MR. FRIEDMAN:
Thank you, your Honor. | | | | | | | | 11 | THE COURT:
And when the virtual order enters it | | | | | | | | 12 | will say as of whatever I just said, 5:23 p.m. on March | | | | | | | | 13 | 1st, 2022.
Okay?
And then you at least have something | | | | | | | | 14 | other than the transcript of this hearing. | | | | | | | | 15 | I understand there may be other pleadings filed, | | | | | | | | 16 | parties have mentioned that.
The reason that the Court | | | | | | | | 17 | chose the date that I chose is because I do think it's | | | | | | | | 18 | important to give a meaningful opportunity to creditors to | | | | | | | | 19 | review the information and determine whether or not they | | | | | | | | 20 | want to participate in the 341 meeting which as I often | | | | | | | | 21 | say the section of the Bankruptcy Code 341 is entitled | | | | | | | | 22 | Meeting of Creditors.
And that's its point.
And so that | | | | | | | | 23 | is why I ruled as I have ruled.
And if there's nothing | | | | | | | | 24 | further for the Court to attend to this afternoon unless | | | | | | | | 25 | I'm forgetting something. | | | | | | | Case 22-50073 Doc 316 Filed 05/03/22 Entered 05/03/22 12:26:47 Page 56 of 57 | 1 | | Okay. | Thank you. | | | And that's the last matter on | | |----|-----------------------------------------|----------------------------------|------------------------|--|--|-------------------------------|--| | 2 | todays' calendar so Court is adjourned. | | | | | | | | 3 | | ALL: | Thank you, your Honor. | | | | | | 4 | | (Hearing adjourned at 5:34 p.m.) | | | | | | | 5 | | | | | | | | | 6 | | | | | | | | | 7 | | | | | | | | | 8 | | | | | | | | | 9 | | | | | | | | | 10 | | | | | | | | | 11 | | | | | | | | | 12 | | | | | | | | | 13 | | | | | | | | | 14 | | | | | | | | | 15 | | | | | | | | | 16 | | | | | | | | | 17 | | | | | | | | | 18 | | | | | | | | | 19 | | | | | | | | | 20 | | | | | | | | | 21 | | | | | | | | | 22 | | | | | | | | | 23 | | | | | | | | | 24 | | | | | | | | | 25 | | | | | | | | | | | | | | | | | | 1 | CERTIFICATE | | | | | | | |----|----------------------------------------------------------|--|--|--|--|--|--| | 2 | | | | | | | | | 3 | I hereby certify that the foregoing 56 | | | | | | | | 4 | pages are a complete and accurate transcription to the | | | | | | | | 5 | best of my ability of the electronic recording of
the | | | | | | | | 6 | Motion to Extend Time to File Schedules in re:
HO WAN | | | | | | | | 7 | KWOK, Debtor, Case No. 22-50073, held before the Hon. | | | | | | | | 8 | Julie A. Manning, U.S. Bankruptcy Judge, in Bridgeport | | | | | | | | 9 | Connecticut on March 1, 2022. | | | | | | | | 10 | | | | | | | | | | | | | | | | | | 11 | ___
___ | | | | | | | | 12 | Suzanne Benoit, Transcriber
Date: 03/05/2022 | | | | | | | | 13 | | | | | | | | | 14 | | | | | | | | | 15 | | | | | | | | | 16 | | | | | | | | | 17 | | | | | | | | | 18 | | | | | | | | | 19 | | | | | | | | | 20 | | | | | | | | | 21 | | | | | | | | | 22 | | | | | | | | | 23 | | | | | | | | | | | | | | | | |