郭文贵破产案 · TRANSCRIPT · ECF #3180

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., . . . Courtroom 123 . Brien McMahon Federal Building . 915 Lafayette Boulevard . Bridgeport, Connecticut 06604 Debtors. . . Monday, May 6, 2024 . . . . . . . . . . . . . . . 12:00 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Chapter 11 Trustee: Luc A. Despins, Esquire Alex Bongartz, Esquire PAUL HASTINGS, LLP 200 Park Avenue New York, New York 10166 Patrick R. Linsey, Esquire NEUBERT PEPE & MONTEITH, P.C. 195 Church Street 13th Floor New Haven, Connecticut 06510 Audio Operator: Electronically recorded Transcription Company: Reliable The Nemours Building 1007 N. Orange Street, Suite 110 Wilmington, Delaware 19801 Telephone: (302)654-8080 Email: gmatthews@reliable-co.com Proceedings recorded by electronic sound recording, transcript produced by transcription service. Case 22-50073 Doc 3180 Filed 05/13/24 Entered 05/13/24 08:10:47 Page 1 of 15

| | Case 22-50073<br>Doc 3180<br>Filed 05/13/24 | Entered 05/13/24 08:10:47<br>Page 2 of 15 | |----|------------------------------------------------|--------------------------------------------------------------------| | | | 2 | | | | | | 1 | APPEARANCES: | | | 2 | For the U.S. Trustee: | Holley L. Claiborn, Esquire<br>UNITED STATES DEPARTMENT OF JUSTICE | | 3 | | OFFICE OF THE UNITED STATES TRUSTEE<br>The Giaimo Federal Building | | 4 | | 150 Court Street, Room 302<br>New Haven, Connecticut 06510 | | 5 | For The Sherry | | | 6 | Netherland, Inc.: | Taruna Garg, Esquire<br>MURTHA CULLINA LLP | | 7 | | 107 Elm Street<br>Four Stamford Plaza, Suite 1101 | | 8 | | Stamford, Connecticut 06902 | | 9 | | Sherry Millman, Esquire<br>HOGAN LOVELLS US LLP | | 10 | | 390 Madison Avenue<br>New York, New York 10017 | | 11 | | | | 12 | For Pacific Alliance<br>Asia Opportunity Fund: | Stuart M. Sarnoff, Esquire | | 13 | | O'MELVENY & MYERS, LLP<br>Times Square Tower | | 14 | | 7 Times Square<br>New York, New York 10036 | | 15 | | Annecca H. Smith, Esquire | | 16 | | ROBINSON & COLE, LLP<br>280 Trumbull Street | | 17 | | Hartford, Connecticut 06103 | | 18 | | | | 19 | | | | 20 | | | | 21 | | | | 22 | | | | 23 | | | | 24 | | | | 25 | | | | | | | | | | | | | | |

3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 INDEX MOTIONS: PAGE Matter #3003: #3128; Motion for Order / Genever Holdings 6 LLCs Motion, Pursuant to Bankruptcy Code Sections 363(b) and 554 and Bankruptcy Rule 6007(a), for Entry of Order (I) Authorizing Genever Holdings LLC to Obtain Services Necessary to Clean Remaining Area of Sherry Netherland Apartment and (II) Granting Other Related Relief Filed by Luc A. Despins on behalf of Luc A. Despins, Genever Holdings LLC, Chapter 11 Trustee, Debtor Court's Ruling: 11 Case 22-50073 Doc 3180 Filed 05/13/24 Entered 05/13/24 08:10:47 Page 3 of 15

4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Proceedings commenced at 12:04 p.m.) THE CLERK: Case No. 22-50073, Ho Wan Kwok. THE COURT: Good afternoon. We have one matter on the calendar, 12 p.m. So, I ask the parties to please note their appearance for the record starting with Trustee Despins, please. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. MR. BONGARTZ: Good afternoon, Your Honor. This is Alex Bongartz of Paul Hastings for the Chapter 11 Trustee and for Genever Holdings LLC. THE COURT: Good afternoon. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey, Connecticut counsel for the Trustee and Genever Holdings LLC, debtor. THE COURT: Good afternoon. MR. SARNOFF: Good afternoon, Your Honor. Stuart Sarnoff, O'Melveny & Meyers, on behalf of the creditor. THE COURT: Good afternoon. MS. SMITH: Good afternoon, Your Honor. Annecca Smith, Robinson & Cole, Connecticut counsel for creditor Pacific Alliance. THE COURT: Good afternoon. MS. MILLMAN: Good afternoon, Your Honor. Sherry Millman from Hogan Lovells on behalf of Sherry-Netherland. Case 22-50073 Doc 3180 Filed 05/13/24 Entered 05/13/24 08:10:47 Page 4 of 15

5 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: Good afternoon. MS. GARG: Good afternoon, Your Honor, Taruna Garg of Murtha Cullina, Connecticut counsel for Sherry-Netherland. THE COURT: Good afternoon. MS. CLAIRBORN: Good afternoon, Your Honor. Holly Claiborn for the U.S. Trustee. THE COURT: Good afternoon. All right. Then on the calendar today is the Trustee's motion for an order authorizing Genever Holdings to obtain services necessary to clean remaining areas of the Sherry-Netherland apartment and other related relief and I saw on Friday that no objections to the motion have been filed. Obviously, there was a request made for this hearing to be held remotely which was granted. So, how would you like to proceed, Trustee Despins? MR. DESPINS: Mr. Bongartz will handle this, Your Honor, but before we jump into this, I wanted to advise the Court of the fact that on Friday morning of last week Yvette Wang plead guilty to two counts in the criminal case; one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Those two counts, you know, could have a maximum sentencing provision of ten years in total. My understanding, based on the written fee agreement we've obtained, is that she has agreed to not Case 22-50073 Doc 3180 Filed 05/13/24 Entered 05/13/24 08:10:47 Page 5 of 15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 oppose a sentence that would be 10 years or less. And, of course, this plea agreement means that she is not going to be involved in the trial going forward because there are no charges other then those charges that remain with respect to her. So, we want to make sure the Court knows that that's relevant to each decade because remember that there was a request to adjourn -- to extent the answer deadline because of the criminal trial that she was participating in or about to participate in. Of course, that is no longer the case, but I wanted Your Honor to be aware of that plea agreement. THE COURT: Thank you. MR. DESPINS: I will turn it to Mr. Bongartz to cover the motion that is before the Court. MR. BONGARTZ: Good afternoon, Your Honor. Alex Bongartz again on behalf of the Trustee and in particular also Genever Holdings LLC, who is the movant on the agenda today. So, the motion before the Court and the only matter on today's agenda is the motion to approve the cleaning of the remaining area in the Sherry-Netherland apartment. Its at Docket No. 3128. Specifically, the cleaning services would be spearheaded by Dry Fast DKI, they are the principal contractor on this project. Their proposal

1 2 3 was attached to the motion. Services include, primarily deconstructing the ceiling, cleaning the plenum, cleaning the walls, etc.

4 5 6 7 8 9 10 11 12 13 As indicated in the motion there is, obviously, a lot of ancillary work that needs to be done in connection with that including construction supervision which would be handled by the current general contractor for the remediation project, but also other companies and vendors would be required including to conduct asbestos abatement. All of this is further detailed in the motion and I would be happy to dive into any questions the Court has on these matters, but I wanted to make one or two initial observations and then we can certainly dive into details or address questions.

14 15 16 17 18 19 The first one is that the total cost, as indicated and detailed in the motion is approximately \$650,000. That cost will be funded under the existing inter-debtor DIP facility which, as Your Honor may recall, has a \$2 million borrowing capacity and we're not near that capacity even if you include the 650 under this project.

20 21 22 23 24 The other important point here, still on the DIP, is that the DIP obligations, as Your Honor will recall, are superpriority administrative expense claims made against Genever. So, there is certainty of repayment under that DIP obligation.

25

The next point I wanted to mention is that, as

1 2 3 4 Your Honor noted, there were no objections filed to the motion and so I am not going to -- I wasn't planning on walking through each and every item of service to be provided, but again happy to address any questions.

5 6 7 8 9 10 11 12 13 14 The third point I wanted to raise is a little bit of background as to how we got here because as Your Honor will recall, we had previously filed a motion over the summer seeking authorization to conduct remediation in what you referred to as the source area which is a source area where the fire that happened on March 15th originated and occurred; however, recently, as a result of testing that was done in the source area for soot, char and other combustion biproduct we also are -- testing was also conducted in the remaining area.

15 16 17 18 19 20 21 22 23 24 The remaining area we had not focused on in particular because initially, shortly after the fire, the insurance company had arranged for and agreed to pay for an initial cleaning of the apartment and we had been operating under the assumption that in light of the cleaning no further remediation was necessary at that time. And to the extent some remediation was still needed, our expectation was that an eventual buyer would take on that project in connection with a larger renovation which we also anticipate will happen if and when we identify an eventual buyer.

25

In light of these initial circumstances, we did

1 2 3 4 5 6 7 not press for further cleaning and also in order to save the estate, the general estate, money and resources, but as I mentioned in light of the testing that was conducted in February of this year we learned that there are soot and other CPB's in that remaining area and we engaged in discussions with The Sherry-Netherland as to what their position on this as a result of this testing.

8 9 10 11 12 13 14 They have informed us that request does not insist on the project -- the cleanup being conducted now because of the potential, as The Sherry-Netherland, believes that the CPB could affect other apartments and common areas in the building. Obviously, we share that concern somewhat but, obviously, we need to cooperate with The Sherry-Netherland here in light of that. We have determined to proceed now.

15 16 17 18 19 I should also note, of course, that completing the cleaning project will also benefit the sale process because it will allow us to market the apartment as having been cleaned as well which, obviously, saves any future buyer resources.

20 21 22 23 24 25 Final point on the sale process, because we mentioned it briefly in our motion, the outside date to conduct a sale process was extended with the consent of the parties to now October 31st. So, there is an additional six months beyond the prior April 30th deadline to which the parties have agreed.

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 Those are all the comments I prepared for now, but happy to address any questions Your Honor may have. Thank you. THE COURT: Thank you. I do not have any questions at this time. I did review the motion when it was filed for a few reasons including the fact that there was a request for an expedited hearing on the motion. So, I did review it. I note Trustee Despins has spoken about the relief sought in the motion even before today's hearing. So, I do not have any questions. So, thank you. Is there anyone else that would like to be heard in connection with the motion? MS. MILLMAN: Yes, Your Honor. Its Sherry Millman, again, with Hogan Lovells on behalf of The Sherry-Netherland. We fully support the motion. I wanted to clarify one aspect when we talk about The Sherry-Netherland requesting or insisting. Its really requesting assurance with proprietary relief to which the shareholder is obligated. The proprietary lease specifically requires that the apartment be kept clean, preserved and present a number of things, but orders or unnecessary harm to other occupants to the building. And because there is this risk, particularly as we get to the former months, and because there is no buyer on the horizon to undertake this work, you know, we have requested that it be done in accordance with the proprietary

| | 11 | | | | | | |----|---------------------------------------------------------------|--|--|--|--|--| | 1 | lease. | | | | | | | 2 | The other aside comment I just wanted to make, and | | | | | | | 3 | I know this is not before Your Honor today, is that we saw in | | | | | | | 4 | the papers the preservation of rights to go against the | | | | | | | 5 | insurance company and anecdotally this very work is being | | | | | | | 6 | done in apartments adjacent, above, below the 18th floor as a | | | | | | | 7 | result of the fire unfortunately.<br>Its just a result of it. | | | | | | | 8 | And that work is being covered by those insurance companies, | | | | | | | 9 | you know, of those shareholders. | | | | | | | 10 | So, it certainly, as a creditor of the Genever | | | | | | | 11 | estates, our hope and expectation is that should this Court | | | | | | | 12 | find (indiscernible) the insurance company is liable that it | | | | | | | 13 | will be taking on these costs.<br>Thank you, Your Honor. | | | | | | | 14 | THE COURT:<br>Thank you.<br>Does anyone else wish to | | | | | | | 15 | be heard? | | | | | | | 16 | (No verbal response) | | | | | | | 17 | THE COURT:<br>Okay. Attorney Bongartz, I've looked | | | | | | | 18 | at the proposed order that you have submitted -- that was | | | | | | | 19 | submitted, excuse me, with the motion and it looks fine. | | | | | | | 20 | There are some -- we would have to add the hearing date in | | | | | | | 21 | the order on page 2 of the order.<br>We can do that though, | | | | | | | 22 | Attorney Bongartz.<br>You don't need to do that, okay. | | | | | | | 23 | I am just looking.<br>Its fine, that is the only | | | | | | | 24 | thing that needs to change form the -- I mean, sometimes in | | | | | | | 25 | these orders I have deleted certain language.<br>I do think | | | | | | | | | | | | | |

1 2 3 that there are legal and factual basis, as set forth in the motion, to establish cause for the relief that you are seeking and that is being granted.

4 5 6 7 8 9 10 11 12 13 14 15 16 I do find that the relief that you are seeking is in the best interest of the Genever US estates and creditors especially because, obviously, without the work being performed the apartment, not only as Attorney Millman has stated, there is a proprietary lease in the -- there are provisions with regard to that lease regarding the condition of the apartment and it needs to be maintained as best as possible in that condition under the circumstances, but, obviously, the parties have talked about that, and obviously, because the Trustee is interested in trying to liquidate the apartment for the benefit of creditors then I have no further changes to the proposed order other then entering the date of today's hearing.

17 18 19 Is there anything else, Attorney Bongartz, that you need to tell me with regard to the proposed order or any other relief that was sought in the motion?

MR. BONGARTZ: No, Your Honor.

20

21 22 23 24 25 THE COURT: Okay. Thank you. Then for the reasons stated on the record and upon review of the motion authorizing Genever Holdings to obtain services necessary to clean remaining areas of The Sherry-Netherland apartment and granting other related relief, again, noting for the record

| 1 | no objections were filed to the motion, there is no party | | | | | | |----|---------------------------------------------------------------|--|--|--|--|--| | 2 | participating in this hearing today that is objecting to the | | | | | | | 3 | motion. The Sherry-Netherland apartment is represented by | | | | | | | 4 | counsel who has stated the position of The Sherry-Netherland | | | | | | | 5 | on the record which supports the motion, but also refers to | | | | | | | 6 | specific provisions of the proprietary lease which are, | | | | | | | 7 | obviously, the leases in effect and it was important to point | | | | | | | 8 | those out, I agree. | | | | | | | 9 | For all those reasons, the Court finds that under | | | | | | | 10 | Section 363(b) and 554 of the Bankruptcy Code that the motion | | | | | | | 11 | is granted and the proposed order will enter. | | | | | | | 12 | MR. BONGARTZ:<br>Thank you, Your Honor. | | | | | | | 13 | THE COURT:<br>Is there any other business we need to | | | | | | | 14 | attend to today? | | | | | | | 15 | Trustee Despins, I heard what you said and I | | | | | | | 16 | understand what occurred. I don't have the specifics | | | | | | | 17 | necessarily you have, but I don't think I need them.<br>Of | | | | | | | 18 | course, that is up to you to determine whatever you think | | | | | | | 19 | needs to be filed, if anything, in these jointly administered | | | | | | | 20 | cases.<br>I understand that you are -- that that will impact | | | | | | | 21 | certain matters in this Court, I suppose, including possibly | | | | | | | 22 | issues related to pending adversary proceedings and motions. | | | | | | | 23 | Any you will -- you and your counsel will, I'm sure, | | | | | | | 24 | highlight those for the Court. | | | | | | | 25 | MR. DESPINS:<br>Correct, Your Honor. | | | | | |

THE COURT: Anything further that we need to discuss today? MR. DESPINS: Not from our point of view, Your Honor. THE COURT: Anyone else wish to be heard this afternoon? (No verbal response) THE COURT: Thank you all. The motion is granted. The proposed order will enter. I think we have hearings next week as well in the case, I think on the 14th. MR. BONGARTZ: Yes, Your Honor. THE COURT: So, we will deal with those matters during the hearings next week. Thank you, all. That was the only matter on today's calendar. So, Court is adjourned. (Proceedings concluded at 12:21 p.m.) Case 22-50073 Doc 3180 Filed 05/13/24 Entered 05/13/24 08:10:47 Page 14 of 15

| Case 22-50073 | | Doc 3180 | Filed 05/13/24 | Entered 05/13/24 08:10:47 | Page 15 of 15 | | | | |---------------|------------------------------------------------------------|------------------------|----------------|-------------------------------------------|---------------|--|--|--| | | | | | | 15 | | | | | 1 | | | | CERTIFICATION | | | | | | 2 | | | | I certify that the foregoing is a correct | | | | | | 3 | transcript from the electronic sound recording of the | | | | | | | | | 4 | proceedings in the above-entitled matter to the best of my | | | | | | | | | 5 | knowledge and ability. | | | | | | | | | 6 | | | | | | | | | | 7 | | /s/ William J. Garling | | | May 9, 2024 | | | | | 8 | William J. Garling, CET-543 | | | | | | | | | 9 | Certified Court Transcriptionist | | | | | | | | | 10 | For Reliable | | | | | | | | | 11 | | | | | | | | | | 12 | | | | | | | | | | 13 | | | | | | | | | | 14 | | | | | | | | | | 15 | | | | | | | | | | 16 | | | | | | | | | | 17 | | | | | | | | | | 18 | | | | | | | | | | 19 | | | | | | | | | | 20 | | | | | | | | | | 21 | | | | | | | | | | 22<br>23 | | | | | | | | | | 24 | | | | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |