郭文贵破产案 · TRANSCRIPT · ECF #3330

元数据

当事人: 郭文贵 (Guo Wengui / Miles Guo / Ho Wan Kwok)
法院: CTB
案号: 22-50073
ECF #: 3330
类型: TRANSCRIPT
立案日: 2024-07-22

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., . . (Jointly Administered) Debtors. . . . . . . . . . . . . . . . . . LUC A. DESPINS, et al., . Adversary Proceeding . No. 23-05028 (JAM) Plaintiffs, . . v. . . ACE DECADE HOLDINGS . LIMITED, et al., . . Defendants. . . . . . . . . . . . . . . . . . . LUC A. DESPINS, CHAPTER 11 . Adversary Proceeding TRUSTEE, . No. 23-05005 (JAM) . Plaintiff, . . v. . Courtroom 123 . Brien McMahon Federal Building GREENWICH LAND, LLC and . 915 Lafayette Boulevard HING CHI NGOK, . Bridgeport, Connecticut 06604 . Defendant . Tuesday, July 16, 2024 . . . . . . . . . . . . . . . TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Chapter 11 Trustee: James C. Graham, Esquire NEUBERT PEPE & MONTEITH, P.C. 195 Church Street 13th Floor New Haven, Connecticut 06510 Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 1 of 88

2 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- Luc A. Despins, Esquire PAUL HASTINGS, LLP 200 Park Avenue New York, New York 10166 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. APPEARANCES (CONTINUED): For the U.S. Trustee: Holley L. Claiborn, Esquire UNITED STATES DEPARTMENT OF JUSTICE OFFICE OF THE UNITED STATES TRUSTEE The Giaimo Federal Building 150 Court Street, Room 302 New Haven, Connecticut 06510 For Greenwich Land, LLC: Christopher J. Major, Esquire MEISTER SEELIG & FEIN, LLP 125 Park Avenue 7th Floor New York, New York 10017 For the Joint Liquidators of Ace Decade: David R. Roth, Esquire WIGGIN AND DANA One Century Tower 265 Church Street 17th Floor New Haven, Connecticut 06510 Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 2 of 88

| | Case 22-50073 Doc 3330 Filed 07/22/24 | Entered 07/22/24 08:19:00 Page 3 of 88 | | |----|---------------------------------------------|-------------------------------------------------------------------------|--| | | | 3 | | | 1 | APPEARANCES (CONTINUED): | | | | 2 | | | | | 3 | | -and- | | | 4 | | David Litterine-Kaufman, Esquire ORRICK, HERRINGTON & SUTCLIFFE, LLP | | | 5 | | 51 West 52nd Street New York, New York 10019 | | | 6 | For The Sherry | | | | 7 | Netherland, Inc.: | Sherry Millman, Esquire | | | | | HOGAN LOVELLS US LLP 390 Madison Avenue | | | 8 | | New York, New York 10017 | | | 9 | For the Official | | | | 10 | Committee of | | | | 11 | Unsecured Creditors: | Kristin B. Mayhew, Esquire PULLMAN & COMLEY, LLC | | | 12 | | 850 Main Street 8th Floor | | | 13 | | Bridgeport, Connecticut 06601 | | | 14 | | | | | 15 | | | | | 16 | | | | | 17 | | | | | 18 | | | | | 19 | | | | | 20 | | | | | 21 | | | | | 22 | | | | | 23 | | | | | 24 | | | | | 25 | | | | | | | | | | | | | | | | | | |

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 INDEX MOTIONS: PAGE Matter No. 1: Luc A. Despins v Greenwich Land, LLC et al Adversary Case no. 24-05005 Status Conference 6 Court's Ruling: 43 Matter No. 2: HO WAN KWOK, et al. Case No. 22-50073 #3259; Motion for Order / Joint Motion of Chapter 11 Trustee and Debtors Genever US and Genever BVI for Entry of Final Order, Pursuant to Bankruptcy Code Sections 363 and 364, Authorizing Amendment to Interdebtor Postpetition Financing Agreement Filed by Luc A. Despins on behalf of Luc A. Despins, Genever Holdings Corporation, Genever Holdings LLC, Chapter 11 Trustee, Debtors Trustee's Motion for Appointment of Special Process Server for Service Abroad 43 Court's Ruling: 49 Matter No. 3: #3301; Motion to Limit Service of Motion to Extend August 15, 2024 Deadline for Trustee to File Avoidance Actions Filed by Douglass E. Barron on behalf of Luc A. Despins, Chapter 11 Trustee Court's Ruling: 51 53 Matter No. 4: Luc A. Despins, Chapter 11 Trustee v Ace Decade Holdings Limited, et al. Adversary Case no. 23-05028 #40; Motion for Default Judgment pursuant to Fed. R. Civ. P. 55 (b)(2) and Fed. R. Bankr. P. 7055 against Ace Decade Holdings Limited and Yanping 'Yvette' Wang . Filed by Patrick R. Linsey on behalf of Luc A. Despins, Chapter 11 Trustee, Plaintiff 54 Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 4 of 88

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 (Proceedings commenced at 1:04 p.m.) THE CLERK: Adversary Number 23-05005. Luc A. Despins, Chapter 11 Trustee, versus Greenwich Land, LLC, et al., 22-50073, Ho Wan Kwok, and 23-05028, Despins, et al. versus Ace Decade Holding, Limited, et al. THE COURT: Good afternoon. If we could have appearances for the record, please. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. THE COURT: Good afternoon. MR. LINSEY: Good afternoon, Your Honor. Patrick Lindsay of Neubert Pepe & Monteith for the trustee. THE COURT: Good afternoon. MR. MAJOR: Good afternoon, Your Honor. Chris Major, Meister Seelig & Fein. We represent the defendants, Greenwich Land, LLC and Hing Shih Nak, who we refer to as Ms. Guo. THE COURT: Good afternoon. MR. MAJOR: Thank you, Your Honor. THE COURT: So this is the matter with regard to Greenwich Land is the first matter on today's calendar, so I assume we are handling that matter first? MR. DESPINS: Yes, Your Honor. THE COURT: Okay. Please proceed. MR. DESPINS: May I approach Your Honor? Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 5 of 88

| 1 | THE COURT: Yes, you may. Thank you. | |----|------------------------------------------------------------------| | 2 | MR. DESPINS: For the record, Luc Despins, Chapter | | 3 | 11 Trustee. We requested the status conference, Your Honor, | | 4 | based on the order you entered on July 2nd. That order not | | 5 | only granted the summary judgment but had some very specific | | 6 | language regarding the Greenwich parties must transfer | | 7 | control -- or I don't have the precise language, but the | | 8 | order speaks for itself -- as of July 22nd of this year. | | 9 | We reached out to counsel for the Greenwich parties | | 10 | right away on -- actually on July 4th, saying that there are | | 11 | a lot of logistical issues that need to be addressed to | | 12 | implement that order. You know, basic things like, you know, | | 13 | I know I have not been to the house, but I've seen it from | | 14 | the outside. There are two sets of electronic -- of gates. | | 15 | I'm sure there are elaborate alarm systems, all | | 16 | sorts of systems in the house like this that's worth between | | 17 | \$6 and 7 million or so. And so I can't -- it's not a case of | | 18 | just giving us the keys and, you know, good luck with it. We | | 19 | need to have an organized transfer of possession of that | | 20 | asset. | | 21 | And I've been trying to push that agenda with | | 22 | counsel for the Greenwich parties but without success. They | | 23 | are -- they filed a request for a stay, and I'm sure Your | | 24 | Honor is aware of that, although they have not filed a motion | | 25 | to shorten time to have that heard before July 22nd. | | | |

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 And I would say, footnote, I'm a little concerned that they will run to District Court saying, hey, we filed a motion for a stay. Judge Manning has not ruled, and therefore, you need to grant us a stay. But that's a different issue. But I think that there should be a stay hearing because there are complex issues here of potential damage to the estate to the extent we don't get the property now, in terms of, you know, the timing of selling this house, the risks to the house and the property generally, that would need to be addressed in a stay context, which is not the hearing today. I understand that, but I just want to point Your Honor to the fact that their stay request basically says, we'll wane on the merits, forget about a bond, we don't need

16 that, everything's fine.

17 18 19 20 21 But one of the Greenwich parties, the debtor's wife, you know, has been living there, frankly, rent free for months and months. And a house like this rents for about 30-, 35,000 a month, Your Honor. So there's value there that the estate is not -- would not be capturing.

22 23 24 25 So again, I don't want to argue the stay, but the point is the stay needs to be dealt with. But in the meantime, we have these -- we've asked for the status conference to deal with these logistical issues.

1 2 3 4 5 6 Today, counsel filed a request -- counsel for the Greenwich parties filed a request to extend the time of July 22nd by 90 days, saying that, well, there's all sorts of furniture in that house, we don't know who owns it. Therefore, we need to have time to resolve that issue. And I want to cut right through that.

7 8 9 10 11 12 13 One, she barely knew that she owned the house, okay? So meaning she didn't know which house she -- was which. This one she thought she owned it through this company, but barely. The concept that somehow she would have evidence that she owns furniture in that house is, you know, I'd like to see that, the evidence of any items other than her personal property or clothes and all that.

14 15 16 17 And we're not proposing to change that in any way. The furniture should stay in the house, and we can sort out the ownership issue of the furniture, and the artwork, and electronics, and all that later without any prejudice to her.

18 19 20 21 22 Again, I don't believe for a second that she owns anything in that house, but just to address the issue of we need -- she needs to stay 90 days, and they're rent free again, while the issue of sorting out who's the owner does, you know, that doesn't need to happen.

23 24 25 We need to put the house up for sale. We need to sell it as quickly as possible. Again, I talked to the broker. The broker I'm hiring is the same broker that sold

Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 9 of 88

| 1 | the house, Julie Burke from -- I forget which company. | |---|-----------------------------------------------------------| | 2 | Anyway, she sold the house to the Kwoks three years, four | | 3 | years ago or so. |

4 5 6 7 8 So she knows the house inside out, and she was very forceful about the fact that the market is now to sell this house, not in November, because then you're talking about selling it in the spring of next year. And this house costs a lot of money.

9 10 11 12 13 14 For example, there are taxes that are due on July 31st of \$27,000 and change. Who's paying that? And by the way, out of -- where is that money coming from that is being paid? I'd like to understand that, as well. But the point, Your Honor, is that this issue of we don't know who owns the furniture is a delaying tactic.

15 16 17 18 19 20 Their rights will not be prejudiced because we're not going to sell the furniture. We're not going to dispose of it. And we believe the Court should enter an order, and we have filed at Docket Number 143 a proposed order. And I - - look, Your Honor, I apologize. It was filed late, at 11:40 this morning.

21 22 23 24 25 But the order basically says it's the same issues that I've raised with counsel for the Greenwich parties on July 4th, which is, we need access to the control of the house, that means the remotes, the electronic system, the passwords, knowing who's providing services, who's taking

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 care of the pool, who's taking care of the landscaping, et cetera, et cetera. It's not onerous to provide that. I'm sure there's a person that takes care of that, meaning that pays these people, so that person could certainly provide that list to us very easily. And that's what this order says. And the order also says they shall not take anything out of the house other than their personal effects and, you know, family pictures and the like. And the trustee shall not sell or dispose of anything in the house without a further court order, again, to protect their alleged right that they own -- they being, you know, Ms. Guo -- own some of the furniture or anything along those lines. We, you know, the statement that was filed by counsel for the Greenwich party said that I will con -- I want to conduct a fire sale. No. I want to sell it at the best price possible, which is now. Also, broker told me that if you want to rent this, you need to rent it before the school season starts. And therefore, there's a very limited window to do that. So it may be that we are going to try to rent it, but that's -- that would be 30-, 35,000 a month in income for the estate. And therefore, you know, if we're going to capture that value, we need to do it now. There is a paragraph in there that says -- that

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 order -- that failure to comply with this order may lead the Court -- may lead the Court -- THE COURT: This is the order that you talked - that you -- that was filed at 11:14? MR. DESPINS: Yes. I -- THE COURT: Okay. I just want to make sure I understand what you're reading from. MR. DESPINS: Yes. That's -- THE COURT: Okay. Go ahead. MR. DESPINS: I have an -- may I -- THE COURT: Oh, go ahead. It's fine. I can find it. MR. DESPINS: Okay. I think it's Document Number 143. So basically it says, ordered that failure to comply with this order may lead the Court to direct the United States Marshal Service to assist the trustee. I know you're not big on that from prior events. And basically it says may; it doesn't say shall, but the point is that we need to get control of this property on July 22nd. This has been taking a long time to get here, and there's value to be realized by the estate, and that should happen now. I would point out as well, Your Honor, that Mr. Guo's wife is a defendant in \$800,000 plus adversary, you know, adverse proceedings that I filed against her where Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 11 of 88

1 we're seeking 800,000 plus from her now.

2 3 4 5 6 7 8 We're not implying that somehow you should assume that we're going to prevail on that. But the point is, there's a lot of issues here with her conduct. And in fact, in the opinion you entered, Your Honor, that you were very specific about the fact that they subverted these bankruptcy proceedings by doing all sorts of things that are inappropriate.

9 10 11 12 13 So when counsel for the Greenwich parties comes to court to say, hey, we need more time, we need to sort out who owns what, we just can't, you know, we can't rely on them to operate in a way in which they should have operated and which complies with the bankruptcy code, because they have not.

14 15 16 17 18 It's been established, and it could be very detrimental to the estate to leave a person that has no stake in the house, in control of that house. I don't even know if there's insurance on that house. You remember that Mahwah, there was no insurance at all.

19 20 21 22 23 24 25 And there's been no attempt by counsel for the Greenwich party to say, okay, I understand we lost, but we're willing to put up X amount of money to protect the estate, a bond or something like that, or we're willing to pay rental for this property while we're appealing. There's no effort of that. It's just give us a free ride and hope for the best.

13 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, Your Honor, we cannot support that. Thank you, Your Honor. THE COURT: Thank you. Attorney Major? MR. MAJOR: May I go to the podium, Your Honor? THE COURT: Certainly. Thank you. MR. MAJOR: Good afternoon, Your Honor, for the record, Chris Major, Meister, Seelig & Fein. We represent the two defendants in this adversary proceeding. So Your Honor, I think there are a couple of very important procedural issues that I think have to be addressed here, and we do address them in our motion for a stay, which we filed on Friday. And we filed it in this court in accordance with Rule 8007. You know, I do think, frankly, that we have a good argument that it's not practical to come, first to the Bankruptcy Court given the exigencies here, and the fact that the Bankruptcy Court, in your order, Your Honor, you said that there would be no stay. I realize that's under 7062, so in an abundance of caution we filed the motion in the Bankruptcy Court. I knew when we filed it on Friday afternoon that we had this status conference. I think one of the things to address at the status conference is whether and when the Bankruptcy Court can address that motion because we do have a tight clock here Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 13 of 88

1 2 3 4 5 with Monday. I mean, the trustee has just outlined, including in the proposed order they filed a few minutes before court started, what his intentions are. And I think, you know, the basis for our stay motion is multifaceted. But most importantly, we've had a

6 7 motion for withdrawal of the reference pending for more than a year now that has not been decided by the District Court.

8 9 10 11 And if things proceed the way the trustee just outlined, that motion wouldn't be decided until after Ms. Guo's home is sold, and she's evicted, and she's never gotten a ruling on her motion to withdraw the reference.

12 13 14 15 16 17 The Bankruptcy Court made a statement in the summary judgment memorandum of decision along the lines of if a court later adjudicates that the Bankruptcy Court didn't have jurisdiction to enter a final judgment, that this should be treated as proposed findings of fact and conclusions of law.

18 19 20 21 22 But if Ms. Guo has already been evict[ed, if Ms. Guo's home has already been sold at a time when the District Court decides that it has to enter the final order, well, the final order's already been entered and executed upon because the home is gone, and Ms. Guo has been evicted.

23 24 25 So that is, you know, I think an issue that has to be addressed by the District Court before we can execute on the Bankruptcy Court's judgment, because if we get into a

1 2 3 4 situation where the Bankruptcy Court's judgment has already been executed upon by the trustee, then that takes away our client's right to what we think should be a determination by the District Court of this case.

5 6 7 8 9 10 But more importantly, we don't even get to the stage where the District Court tells us whether or not the Bankruptcy Court has jurisdiction. So that's one of the main thrusts of our motion for stay, and I'm sure the other wouldn't surprise the Bankruptcy Court, but this is Ms. Guo's home.

11 12 13 14 15 16 I understand that, you know, there's been a lot of allegations and things that have happened in this greater bankruptcy case. But the facts of the matter are that Ms. Guo came here in 2017 and applied for asylum. She doesn't speak English. There's a jury deliberating in Manhattan right now about her husband's criminal trial.

17 18 19 20 21 22 23 24 25 She has a bad back. I can tell you I've sat with her, and when I say I sat with her, I was sitting, she's standing because she can't sit for a period of time, and she's in a foreign country. She's been here for a while, but she doesn't speak English. The culture's obviously very different, and you know, say what you want about whatever Mr. Kwok did in connection with this bankruptcy or anything else he's alleged to do, the fact of the matter is our client is in a really difficult position.

1 2 3 4 5 6 7 And so having her have to move out of her home, where she's been for four years in three weeks -- and there's never been litigation, let alone a determination, about who owns what in the house. I mean, the trustee says he has all these rulings. My understanding is several of them are on default judgments, but he has all these rulings in other cases about other entities.

8 9 10 11 12 13 14 And that may be, but that doesn't mean that there's been any determination that X item in the house is owned by those other entities. So she's being told, you have to get out. I, the trustee, am going to take possession of everything. And then, from what the trustee has said to us, we would then have the burden of proof of proving that the materials inside the house are not his.

15 16 17 18 But that's not the way it works. He's still on the plaintiff's side of the V here, and he chose to litigate this case in a way that didn't address the items that are in the house and who owns them.

19 20 21 22 23 24 25 That's a process that I think we don't need to go to, in my view, have a court, whether it be this court or the District Court, go item by item with us. I mean, that's not -- I don't think that's a good use of the Court's resources. But there has to be some period of time where we can go through this process because, I mean, I can tell you, from my client's perspective, she's being told in one sense,

| 1 | you have to be out on the 22nd. And in the other sense, I | |----|-----------------------------------------------------------------| | 2 | was told by the trustee that we should assume the house is | | 3 | being surveilled, and if they bring anything out of the house | | 4 | that the trustee is going to run into the Bankruptcy Court. | | 5 | So what's she supposed to do? Is she supposed to | | 6 | move or not move? And it's -- the fact of the matter is, she | | 7 | should be entitled to a stay because this involves her home. | | 8 | An eviction from your primary residence, the sale of your | | 9 | primary residence, is by definition irreparable harm. And I | | 10 | think that that's the most important factor. | | 11 | We argue this in our brief, and I don't want to go | | 12 | too deep into it. But I do think that the stay motion, | | 13 | whether it be the motion that's on file, or the one we file | | 14 | in the District Court, that that needs to get addressed. | | 15 | I've had to -- | | 16 | THE COURT: So what motion in the District Court? | | 17 | You mean the withdrawal to reference? Or you filed a motion | | 18 | for stay in the District Court as well? | | 19 | MR. MAJOR: We haven't filed a motion for stay in | | 20 | the District Court, but -- | | 21 | THE COURT: Okay. | | 22 | MR. MAJOR: -- and I'm just being completely frank, | | 23 | Your Honor, I acknowledge -- I'll say it this way. There's | | 24 | at least a risk that Your Honor is going to deny our stay | | 25 | motion given what's happened with prior stay motions, what | | | |

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 happened with the automatic stay in the Bankruptcy Court's, you know, current order. But more important than any of that, given the amount of time that we have -- THE COURT: Just so I'm clear for the record, just so other people are clear for the record, when you say the automatic stay, you mean the stay imposed by the rules with regard to the order granting the motion for summary judgment. MR. MAJOR: Yes. I don't -- THE COURT: Yes. MR. MAJOR: -- I'm not talking about a 362 -- THE COURT: I just want to be clear on that so people understand the distinction. That's all. MR. MAJOR: Yeah. I appreciate that, Your Honor. And I should have been -- THE COURT: No, that's fine. MR. MAJOR: -- more detailed. THE COURT: That's absolutely fine. I just want to make that note for the record. MR. MAJOR: But more important than anything, I mean, just given the timing of things, we have to be prepared for the contingency of going to the District Court, and so, you know, I think that the -- and that sort of precipitated filing the motion for extension, including discussions we've had with the trustee, which is --

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 THE COURT: So the motion for extension, was that filed -- that wasn't filed on Friday. The motion for stay pending appeal was filed on Friday. MR. MAJOR: Correct. And -- THE COURT: So what was -- when was the extension motion filed? MR. MAJOR: Sometime, I believe, between 9:30 and 10 o'clock this morning. THE COURT: Okay. So your motion for extension is seeking an extension of the date in the summary judgment motion? Is that what you're saying? MR. MAJOR: Yes, Your Honor. THE COURT: I mean, summary judgment ruling, I apologize. MR. MAJOR: Yes. THE COURT: Okay. And oh, it's what Trustee Despins said. Now I'm getting that. The 90 days. That's what you're asking for in your motion for extension of time. You're asking that the enforceability of the order granting summary judgment, that the date in that order be extended for 90 days. MR. MAJOR: Yes, Your Honor. That's what we seek in the motion. And I think what the motion for extension would assist with is, one, it would allow time for the stay motion or motions to be dealt with. It would allow time for Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 19 of 88

1 2 3 a process to determine the items in the house and whether or not they are -- who owns them, whether it's the trustee or is it Ms. Guo and so forth.

4 5 6 7 8 But I recognize what the trustee is going to -- I think, has told the Court today, and will tell the Court when he gets back up, is we're going to put the things in storage, we're not going to get rid of it, so your rights are preserved.

9 10 11 12 13 14 But really, at the end of the day, the extension of time is -- my client needs more time to move out of her home, if she -- if, in fact, she's going to have to move out. If we lose our stay motions and there are marshals knocking on the door, she's got to leave, but she has to have somewhere to go.

15 16 17 And I think that it's not too much to ask for the trustee, you know, to wait some period of time so these things can shake out.

18 19 20 21 22 23 24 Because as I started off at the top, I mean, the withdrawal of the reference motion, if that never gets decided before the trustee sells the home, well, our client's rights under the constitution have -- are gone at that point, because she would not have had the opportunity to have the District Court decide whether or not, you know, Greenwich Land is an alter ego of the debtor, Mr. Kwok.

And if the home is sold, then there's not going to

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 be a determination that would have much meaning because she's already lost her home and been evicted and so forth. And so the extension of time, if I could just sort of lay bare my request here, is we're just hoping that she can get a little more time. And I understand that our client doesn't paint a sympathetic picture for the trustee, but, you know, her husband is -- there's a jury deliberating. She's not in good health, and she's being asked to leave her home on extremely short notice at a time when I would have to tell her, I still don't have a ruling on your motion to withdraw the reference. I may or may not -- THE COURT: As you know, this court cannot control it. MR. MAJOR: Yes, of course, I understand that completely. And I don't know that I will have rulings on the stay motions. If you -- THE COURT: Well, let me ask you a few questions -- MR. MAJOR: Sure. THE COURT: -- based upon what both Trustee Despins said and what you have just said. And this is a status conference. And that's what the trustee asked for last week because of the -- I believe because of the date of July 22nd in the summary judgment order. Do you know whether there is insurance, property insurance, on the house? MR. MAJOR: I don't, Your Honor.

1 2 3 4 5 THE COURT: Okay. I think I'm going to need to know the answer to that question, all right? I think that's a legitimate question where we are. So I would like to know the answer to that question, whatever it is. Yes or no. I'd like to know.

6 7 8 9 10 11 12 13 With regard to the taxes, do you know, other than what Trustee Despins has said about the July payment, which I don't know if you live in Connecticut, but that is when it's due. I mean, it's due this month, either the 1st or the 31st, depending -- I don't know how Greenwich works, but I would assume that you have until the 31st of July to pay your, you know, one part of your annual taxes, okay? So do you know -- I'm not even asking about the

14 15 16 17 18 July 31st payment. I'm just trying to understand, and you probably don't know the answer, but I'd like to get an answer, of whether all the taxes prior to the taxes that are due and owing this month of July have been paid. I want to know, is it bleeding, essentially, okay?

19 20 21 22 Is the -- have the taxes been paid on this property? I have no idea. I don't know if you do, but I need to take all these facts into consideration, right? And so I would need to know the answer to those two.

23 24 25 With regard to the July payment, again, obviously it hasn't -- well, I shouldn't say obviously. According to what the trustee has stated, it hasn't been paid yet. But I

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 don't think that there's a negative ramification from that. I think you have until July 31st to pay your taxes. So I'd like to know if there's -- I mean Ms. Ngok is the managing member of Greenwich Land, according to the facts that we've found and what we've seen, right? So she should know if the taxes are going to be paid. I'd like to know that question as well. Because when -- and I heard you both say, and trustee Despins, I'm obviously going to give you an opportunity to respond, but I heard you both say the stay motion needs to be addressed, okay? The stay motion was filed on Friday. It hasn't been addressed yet, obviously. It hasn't been. If the Court is going to address that, and I am going to address that, but, I mean, if we're going to address that in connection with the concern that you raised about the 22nd, then I need to figure out whether or not the date in the summary judgment motion, excuse me, order should change or if I can have a hearing on the stay between now and Monday. I think the likelihood of that happening is not high, of having a hearing between now and Monday. But I can change the summary judgment order to a different date, given what the status of the proceedings are right now. Whether I change them to 90 days, I don't know. I haven't even read

1 your motion, of course, right?

2 3 4 5 6 7 You and Trustee Despins have both told me you filed things within the last few hours. We had hearings this morning. I obviously haven't read the motion, okay? I understand your concerns. I understand the trustee's concerns. I think you both have concerns that have to be weighed by the Court. There's no question about that, okay?

8 9 10 11 12 So a few things that I'd like you both to think about. I heard what the trustee said, and I don't know that you have a response to it. Although, I guess not a response is a response. There's no payment of rent. There's no nothing.

13 14 15 16 17 18 19 20 If you get to the -- if I get to the point where - and I'm going to determine the stay motion, right, one of the things I have to determine is whether a bond is appropriate. And as you know, I would have to determine an amount of the bond based upon what would be attributable to the harm to the trustee in not being able to exercise the judgment that was part -- that was set forth in the order granting summary judgment.

21 22 23 24 25 So there has to be some, at least in my opinion, some discussion about that issue. I would be surprised if you two came to an agreement on that, even just theoretically. But -- and that's not a problem. I'm not saying that's a problem.

| 1 | But I have to weigh that in consideration of all | |----|-------------------------------------------------------------------| | 2 | the -- whether -- if a stay is going to be granted, I have to | | 3 | weigh whether or not a bond should need to be posted. And, | | 4 | you know, I will tell you that I think most judges would say | | 5 | that when a stay is granted, a bond does need to be posted. | | 6 | It's rare. It's more the exception than the rule that a bond | | 7 | is not required. | | 8 | And I understand everything you've said. And as I | | 9 | said to you, I think your points are -- need to be addressed | | 10 | by this Court, just as Trustee Despins's points need to be | | 11 | addressed. But there does come a point where I have to do | | 12 | something, right? I have to do something. | | 13 | You've now filed a motion for extension time. I | | 14 | haven't read it yet. You filed a motion for stay pending | | 15 | appeal. I haven't -- I know it's filed. I know the | | 16 | arguments about irreparable harm when it comes to a | | 17 | residence. | | 18 | So I assume those are the arguments that you've | | 19 | made. I don't know. I mean, I know I -- you've told me that | | 20 | they are. I mean, I haven't looked at the cases or anything | | 21 | that you've cited. I haven't done any of that yet. | | 22 | So all those things would have to be taken into | | 23 | consideration, both the trustee's position that he's been | | 24 | successful and your position that you need a stay of that | | 25 | order for many reasons, including the fact that she, your |

1 2 client, is living in that house and that there's other issues going on.

3 4 5 6 7 8 9 10 And the issue about the withdrawal of reference, as we've already said, this Court can't control that. But the one thing that I would like to note for the record, and I understand why you've raised it, when -- in the summary judgment order, the language about proposed findings backed in conclusions of law all go to the United States Supreme Court case of Stern, and the fact that your client has not agreed that this Court can enter a final order, right?

11 12 13 14 15 And so under the Wellness decision, you're not consenting to that. So I have to stay -- the decision has to say that, so that the District Court, if the withdrawal of the reference is granted, can do with it what it feels is appropriate, right?

16 17 18 19 20 21 22 23 So I just want you to understand that it wouldn't matter whether it was this case or some other case where some party said that they don't consent to the entry of a final order by this -- or judgment by this Court, that that language would be there as well because it -- the Federal Rules of Bankruptcy Procedure require it, an acknowledgement of proposed findings of fact and conclusions of law, as do the Supreme Court cases in Stern and Wellness.

24 25 So there was nothing particular to this case by having that language in that summary judgment order. I just

| 1 | want you to understand that. I'm not saying you were making | |----|----------------------------------------------------------------| | 2 | an argument that it was, but I just want that to be clear. | | 3 | If any fact pattern that was brought before the | | 4 | court in any case where the -- where a party does not consent | | 5 | to the entry of a final judgment, you have to -- the | | 6 | Bankruptcy Court should be adding that language to the | | 7 | decision so that the District Court understands. | | 8 | MR. MAJOR: And I was not making that argument. | | 9 | And I've seen Your Honor put that language in other orders in | | 10 | this case, in other cases, and so forth, so I wasn't making | | 11 | that argument. The only point I was making is if Ms. Guo is | | 12 | evicted and the home is sold, it will be little solace to her | | 13 | for me to tell her, well, it's not a final judgment. | | 14 | THE COURT: I understand. | | 15 | MR. MAJOR: That was my only point. | | 16 | THE COURT: That's fine. That's more than fair. I | | 17 | understand. So as far as this, I'm going to let Trustee | | 18 | Despins respond to you, and then you respond to Trustee | | 19 | Despins, and then we'll see where things stand. But I think | | 20 | I understand both of your arguments -- oh, I believe I do | | 21 | understand both of your arguments to the best of my ability | | 22 | as I sit here right now, having not read what was filed | | 23 | today. | | 24 | MR. MAJOR: Thank you, Your Honor. | | 25 | THE COURT: Okay. Thank you. | | | |

28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. DESPINS: Briefly, Your Honor, I would point out, Your Honor ruled on July 2nd. They didn't file a motion for stay till July 12th. And so to say that there are exigencies, I mean, they're self-created in the sense that, you know, 20 days, they had 20 days' notice, and they sat on it for 10 days or so. Then, this argument that she's being evicted. She's not being evicted. They chose the corporate form, they chose to have this house owned by a company. That company has certain rights, and the Court has determined what those rights are. There's no -- she's not a tenant. She's not - she has no contractual right to be there. The issue, you know, about, you know, she has a bad back and, you know, et cetera, et cetera, and, you know, I'm not disputing that. The point is here, look at the amount of spending that went on with other people's money. Hundreds of thousands of dollars spent by her or for her. So the idea that somehow she's kind of an impoverished person that's going to have a hard time finding a place, there are millions of dollars behind that group. And I hope I'll find all those millions of dollars, but I'm not sure I will.

23 24 25 But, you know, there's the son hiding in the United Arab Emirates or in Switzerland. There's millions of dollars that were transferred there. So there's money. There are

1 ways for them to find money to take care of the mom.

2 3 4 5 6 I never argued that it's his burden to show what is owned. I'm saying I'm diffusing the issue by leaving -- by agreeing that I'm not going to touch the furniture and the artwork. I mean, I'm not going to sell it. So that diffuses the emergency of dealing with that completely.

7 8 9 10 11 12 Now, Your Honor, as to insurance, taxes, and all these things, the first thing on insurance, Your Honor, I'm a bit concerned about this argument. But the point is, there's already been an incident involving insurance, and Your Honor knows about that because you have a motion for summary judgment pending before you on that.

13 14 15 16 17 Can you imagine if there's another incident involving that house -- this house now, do you think that insurance company would voluntarily pay for that? I guarantee you there would be litigation, so that's Number 1, even if they have insurance.

18 19 20 21 22 23 24 25 Two, taxes. It's the same thing as insurance and all that. Who's paying for this? Is this me paying for their stay? In a sense, if they're going into pockets that you've already found that I own, for them to use that money to provide adequate -- not adequate protection in the sense of 363 or 362 adequate protection, but to provide adequate protection to our position while they're appealing -- Then it's illusory because there's no protection

30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 because it's the -- it's our -- not personally, but it's the money of the trustee that's being used to provide the protection to the trustee. So that's another thing we need to look at, which is if they say, yes, we'll pay the insurance. Where's that money coming from? If it's coming from this entity, then, again, I'm providing the protection to myself from my own funds. That makes no sense. Oh, of course, that needs to be addressed in the context of a stay pending appeal, but that's really critically important. And Your Honor, we'll get to that eventually, but, as I said, the rental value of this property is about 35,000 a month. And the value of this house is between \$6 and \$7 million, in that range. And that's a huge risk to the estate, to leave that in the hands of people that have not hesitated in violating court orders. She transferred money out of Greenwich Land after she consented to a preliminary injunction. You found that in

19 20 21 22 your opinion. So the equities here are just, you know, I don't want to exaggerate, but it's so clear that they have no leg to stand on because they violate a court order, they violate the bankruptcy code, and then some.

23 24 25 And therefore, any leeway that may be given, look, if we can't have a hearing before the 22nd, maybe we'll have it the 23rd, 24th. Fine. But to -- the concept that somehow

1 2 3 they will get a free ride for a while, while these issues shake out, is not appropriate unless there's real protection. And they have the ability to do that.

4 5 6 7 8 9 10 11 12 13 If they want to give us real protection, look at the yacht. At one point, you remember that somebody was moving to lift the stay to go back to Judge Ostrager. It could be the risk of imprisonment for the debtor in front of Ostrager. All of a sudden, \$37 million appeared in this courtroom. How did that happen? Maybe it can happen again. I'm all for that, if, again, it doesn't come from my own pocket. And the point is they have means to deal with that, and they need to be no different than any other defendant here. There's been a finding made, and if they

14 15 want to appeal, they can appeal all they want, but they need to protect the estate. Thank you, Your Honor.

THE COURT: Thank you. Attorney Major?

17 18 19 20 21 22 MR. MAJOR: Chris Major, for the defendants, Your Honor. So I just want to pick up on a procedural point that I was about to raise, but then when you said I'd get another chance I deferred it to now, which is, the trustee mentioned that we had not filed a motion to shorten notice in connection with our stay motion.

23 24 25 As I said in my first time up here, we had this status conference coming. I understand we did not file our motion for stay, you know, on the 2nd after getting the

1 2 3 4 Court's decision, but it was a 61-page decision. I think, filing on July 12th, notwithstanding the fact that there was a long holiday period in between there, which, of course, I worked over the holiday on the stay motion.

5 6 7 8 9 10 But that, I don't see how someone could question our diligence in filing a stay motion on July 10th after getting a decision on the afternoon of July the 2nd. We didn't take the arguments lightly. We did a, in my view, we did a very strong job on our research and our analysis of the decision.

11 12 13 14 15 16 17 18 But more importantly, I can't see any court saying that ten days is too long to seek the stay. We filed the motion. As to the motion's short notice, we knew we had the status conference, and I thought we could address that here. So I just want to make sure I get the Court's either guidance or just, you know, I can file a motion to shorten notice today if that's what we need to do to satisfy, of course, most importantly, the Court or the trustee.

19 20 21 22 23 24 But I wanted to address that with the Court, so that, if we end up in the District Court, I don't want to, you know, have the trustee say that we were not availing ourselves of the Bankruptcy Court, even though I do think we had a good argument under 8007 to go straight to the District Court.

But I wanted to make sure, you know, that we had it

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 on file with the with the Bankruptcy Court, so that if we have to go to the District Court when we do, we can say we've followed 8007 to a T. So that's one point I definitely wanted to address with the Court. THE COURT: 8007 doesn't require a party to seek an emergency hearing, as far as I know. I mean, I'll take a look at it. But to answer your question, you don't need to file a motion to shorten time and limit notice on the hearing. I will address it in the context of this being a status conference related to the enforcement of the order granting the motion for summary judgment. So you don't need to do that, okay? MR. MAJOR: Thank you, Your Honor. THE COURT: With regard to -- I was going to ask you a question, then I forgot. With regard to -- as you probably are aware, there were, you know, hundreds of adversary proceedings filed. And I, of course, may have seen the names and things, but I haven't looked at them unless and until it's necessary at the point. And not many of them have been necessary at this point yet. But Trustee Despins spoke about an adversary proceeding that was commenced against your client, Ms. Ngok,

24 represent her in that adversary proceeding?

individually, apparently, to recover monies. Do you

MR. MAJOR: So, yeah, Your Honor, I have entered an

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 appearance on behalf of Ms. Guo and Greenwich Land. Forgive me, there was a deluge of adversary proceedings and several against our clients -- so if my numbers are a little bit off. I believe there are seven adversary proceedings that may - other than the one we're in right now. THE COURT: Yes. MR. MAJOR: I believe there's seven that name Ms. Guo and/or Greenwich Land, two of which are stayed. I'm sure the Court's familiar. There's one adversary proceeding that is denoted as a RICO action. THE COURT: Yes. MR. MAJOR: That is stayed in favor of the criminal case. And then, there is, I guess -- THE COURT: The omnibus. Is that the other one? MR. MAJOR: There's two omnibuses. THE COURT: Yes. MR. MAJOR: So I don't want to confuse the record. There's -- THE COURT: There's the RICO, and then, there's the alter ego omnibus issue, I think. And so is that another matter which Greenwich Landing and Ms. Ngok listed as defendants? MR. MAJOR: I'm not sure about -- THE COURT: Well, it doesn't -- MR. MAJOR: -- I don't remember --

| 1 | THE COURT: -- all I wanted to understand, and | |----|-------------------------------------------------------------------| | 2 | you've answered the question, is she is being represented by | | 3 | counsel, and it's you in those adversary proceedings? | | 4 | MR. MAJOR: Yes, Your Honor. And the one, the | | 5 | omnibus, there's a footnote where the trustee basically says, | | 6 | and I'm paraphrasing here and probably being a little bit too | | 7 | colloquial, if he wins this case, he's going to drop that | | 8 | case, because he filed it under compulsion of the statute of | | 9 | limitations. | | 10 | And then, there are some fraudulent transfer, post | | 11 | petition transfer cases which are not stayed. | | 12 | THE COURT: Okay. Well, that was my question. I | | 13 | just didn't recall whether you had actually filed appearances | | 14 | on behalf of Greenwich Land and/or Ms. Ngok in those | | 15 | adversary proceedings. And your belief is that you have. So | | 16 | that's -- I just was curious. | | 17 | Again, I don't know everything that's going on in | | 18 | every -- | | 19 | MR. MAJOR: Sure. Of course. | | 20 | THE COURT: -- adversary proceeding. But in any | | 21 | event, so you don't need to file a motion to shorten time or | | 22 | limit notice on the motion for stay pending appeal. What I'm | | 23 | going to do is -- I've heard -- I think -- is there anything | | 24 | else? I don't want to cut you off, if there's anything else | | 25 | you'd like to say for the record. |

36 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. MAJOR: No, Your Honor. I think that covers it. THE COURT: All right. Well, thank you. MR. MAJOR: Thank you, Your Honor. THE COURT: Then, as Trustee Despins had requested last week, we have held a status conference in this adversary proceeding today. And since that request was made last Tuesday and granted, it was -- I think it was even granted on the record, but it -- Things have happened since last Tuesday, including the defendants filing a motion for stay pending appeal, and, apparently, the most -- the defendants filing today a motion for extension of time of the enforceability date of the judgment in the order granting summary judgment. I understand the trustee's concerns about timing, and I also understand the defendant's concerns about timing. What I'm going to do is within the next day or -- I'm going to change the July 22nd date in the summary judgment order. That's clear. I'm not going to be able to -- you haven't even filed a response yet, Trustee Despins. And I'm not saying you should have, but to the stay pending appeal, you haven't done that yet. And I know you're going to respond, and I was going to order you to respond, so that's going to happen, okay? And then, you'll have an opportunity, Attorney Major, for a reply to the trustee's Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 36 of 88

| 1 | response. | |---|-----------| | | |

2 3 4 5 6 7 8 And then, we'll have it -- whatever order I issue, we'll have all the dates and times in them. I'm not going to -- I don't know what the timing is as I sit here right now, but I'm not going to grant a motion for 90 days of extension of time. I don't see that as being productive at this point in time, but you can reserve your right to ask for additional time depending upon whatever I do.

9 10 11 But I don't see that just granting an extension of time for 90 days right now is the appropriate thing to do. So I have to go back and review certain things.

12 13 14 15 16 17 18 19 And my belief is that -- today's Tuesday, so my belief is before Thursday, if not sooner, some form of order will issue with regard to this adversary proceeding that will set up a schedule of time for the trustee to respond to the motion for stay pending appeal, the defendants to reply to that response, and setting a hearing, and also extending or modifying, I suppose, the date of July 22nd in the order granting summary -- motion for summary judgment.

20 21 22 23 So have I forgotten anything? Or is there anything else that you either of you would like to state for the record before we move on to the next matter? MR. DESPINS: No, Your Honor. The only concern is

24 25 whether things are getting paid for the house and -- but -- THE COURT: Well, that'll be all part of the order.

| 38 | |-----------------------------------------------------------------| | MR. DESPINS: Okay. | | THE COURT: Okay? I will -- and I already told | | Attorney Major on the record that I want him to be able to | | answer those questions. So that's going to be whether the | | question is yes or no -- whether the answer is yes or no, I | | don't know. But I need him to answer those questions. | | He's asking for a stay pending appeal, which he's | | absolutely entitled to do. I need to know some facts that I | | need to consider in connection with that motion for stay | | pending appeal. So that'll be all part of that order. | | I think that what we'll do is, as I said, I think | | we'll enter an order in the next few days, maybe sooner. I'm | | forgetting something, apparently, which is good that | | |

14 somebody's reminding me. Yeah.

15 16 17 18 19 Again, I think -- I talked about this issue already a little bit, but you all -- you have to think about whether or not a bond -- I know you've argued that a bond, or I don't know, but I believe you've argued that you shouldn't have to post a bond. Is that correct?

MR. MAJOR: Yes, Your Honor.

21 22 23 24 25 THE COURT: All right. So and I told you, I think, during this hearing that I think that's a rare occasion, that if a party is successful in obtaining a stay pending appeal, that there isn't a bond required. And I know -- I don't know, but I believe I'm accurate, that the trustee is going

1 to say you have to post a bond.

2 3 4 5 6 7 So there's going to be an argument about the bond, right? We've already talked about if there -- if we get to this stay, if the Court grants a stay, we've already talked about the harm to the trustee for not being able to execute on the judgment. And he's offered up some initial ideas about the harm, including the taxes, the rental.

8 9 10 11 12 13 14 But you all both have to think about what is it - what would be an appropriate bond and what would it be based on because it's not as if the Court is going to just make a determination of an amount of a bond. This isn't a money judgment, right? We don't have a money judgment that I can just say -- not that I, you know, that I could at least have a basis to formulate the amount of the bond.

15 16 17 18 19 20 21 22 So, you know, the value of the property and losing the property from the trustee's perspective is probably what he's going to focus on as an amount of bond. I don't know what you're going to focus on. You can continue to make the argument that you're not entitled -- I mean, you're not required, excuse me, to file a bond. But I think I've made it clear that I think that's unusual under these circumstances.

23 24 25 You do whatever you think. But I'm explaining to both of you that that has to be part of what's in your papers. And if there's something that you're relying on that

1 2 3 4 is factual, that relates to a dollar amount of a bond, then, I need to see that because I need to be able to consider that in connection with the possible need to post a bond of a stay pending appeal.

5 6 7 8 9 10 We're not going to do it in segments, right? We're going to do it all in one. I don't know if I'm going to grant, I have no idea. I have to look at your papers. I have to look at the response. I have to look at the reply. And then I have to figure out if the stay is warranted, what -- is there a bond? And if there is, what is it?

11 12 13 14 So we have to plan for all eventual possibilities. And so you have to think about that. And I -- and it's not going to be that we're going to raise a new issue about how we're going to get to the bond.

15 16 17 18 19 20 21 You're going to have to tell me in your papers. I think a bond should be -- like the trustee, I think the bond should be X because I can -- I got -- I have an affidavit of a real estate broker who says, which, by the way, doesn't mean that that's evidence, but it is an opinion that the value of the property is X, or the rental value is Y, or the taxes are due and owing is Z.

22 23 24 25 And if you add all those up, those are the harm that comes to me, Trustee, if you don't let me sell this property right now because you grant a stay pending appeal, right? And the same thing, you're going to have to tell me

41 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 why you think you don't have to, or if you do, why -- what the amount should be. And I understand -- I mean, I can anticipate somewhat of the arguments, right? It isn't anything we haven't talked about before in general. But I want it to be specific is the point. Does anybody have any questions about that? MR. MAJOR: No, Your Honor. THE COURT: Okay. I just -- I mean, you know, I'm not going to go through another round of briefing on what it is the information that you're both relying on as far as how does the Court set the amount of the bond. I have to consider that at this point, if there's going to be a stay pending appeal. We've just got to get everything done in one briefing schedule because failure to address that issue may result in a denial. And I don't want it to be -- I would prefer not to deny a motion because you didn't address an issue. I would like the address -- the issue should be addressed. I mean, the statute says, right? I mean, it's not a statute. The rule says that the bond -- I mean, it anticipates the bond. And as we all know, under general, you know, principles of litigation, the party against -- the party who is not able to execute on the judgment, arguably, is being

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 harmed. And that's the point of the bond. So anyway, I think that's -- I hope I've made myself clear. If I haven't, please, you know, ask me a question right now. I'm happy to try to make it more definitive. I'm not suggesting you have to have a specific piece of evidence. But you may want one, and you may need some. And I think you probably do. MR. DESPINS: Your Honor, my only question is regarding timing. And I -- it's a kind of a personal issue, I'm gone from the 30th for a little while. And please don't take that as the trustee saying, oh, let's schedule this later in August. That's not what I'm suggesting. We're willing to squeeze ourselves on terms of filing a response to what they filed in order to get this heard before or on the 30th. THE COURT: Yeah, I don't know if that can happen. MR. DESPINS: Okay. THE COURT: I have to say, I'm not sure that can happen. I understand your request, and I will take it into consideration. MR. DESPINS: Thank you, Your Honor. MR. MAJOR: Your Honor, I would just like to -- I, of course, understood everything the Court said about the bond completely. I just want to note for the record, I didn't want to just be silent and have it look otherwise. I

| 1 | mean, we do argue that the bond, under these circumstances, | |----|----------------------------------------------------------------| | 2 | are unnecessary. It's not a money judgment, and there's an | | 3 | unencumbered piece of real estate sitting there, subject to | | 4 | an injunction and things like that. | | 5 | I understand everything you said. I just didn't | | 6 | want my silence to be construed as us not continuing to make | | 7 | that argument. But we certainly understood everything that | | 8 | the Court has said. | | 9 | THE COURT: Okay. | | 10 | MR. MAJOR: And, you know, we'll take that under, | | 11 | obviously, heavy consideration. | | 12 | THE COURT: Okay. Thank you. | | 13 | MR. DESPINS: Thank you, Your Honor. | | 14 | THE COURT: All right, so with regard to the status | | 15 | conference in adversary 23-05005, we've conducted the status | | 16 | conference. We've discussed the issues that are relevant to | | 17 | the order granting the summary judgment, including the motion | | 18 | for stay pending appeal, and a motion for extension of time, | | 19 | and the trustee's request for immediate enforcement of the | | 20 | summary judgment order on July 22nd. | | 21 | And as I've stated, I'm going to extend that date | | 22 | of July 22nd, I don't know for how long, in accordance with a | | 23 | scheduling order that will be issued by the Court, and that | | 24 | should memorialize the issues we've discussed on the record | | 25 | today. And I hope to have that order issued by Thursday. | | | |

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 Anything further? MR. DESPINS: Thank you, Your Honor. MR. MAJOR: Thank you very much, Your Honor. THE COURT: Okay. Thank you both. And you don't have to stay, Attorney Major, if that was your question. MR. MAJOR: Yes. THE COURT: Okay. MR. MAJOR: Thank you very much, Your Honor. THE COURT: Thank you. All right. The next matter on the calendar is with regard to Genever and the DIP motion. Is that correct? MR. DESPINS: That's correct, Your Honor. THE COURT: Okay. Please proceed. MR. DESPINS: So Your Honor, this is relating to a motion filed at Docket 3259, it's a continuation of the inter-debtor DIP financing. It's to authorize an amendment of that financing, the financing by Kwok's estate of Genever US, and Genever BVI. And basically to make a long story short, you recall that you had authorized up to \$2 million of such inter-debtor borrowing. We have not fully used the \$2 million, but we know that the 2 million will not be sufficient to complete the work that has been done. So to date, we've used 1.3. And by the way, attached to the motion is a schedule of the types of usage Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 44 of 88

1 2 3 4 5 that have been made of the -- that's Exhibit B. It's the summary of borrowings to date. And we know that the 2 million will not be enough because we believe there's going to be an additional 1.1 million of repairs or, you know, renovation.

6 7 8 9 10 11 12 13 You're familiar with all -- you've approved all this work before, but it's being done right now. It should be completed, you know, God willing, by mid-August so we can put the property on the market to sell it, but we know we're going to run short on the 2 million, so we're asking for a million more, not -- the intent is not to use the full million, it's just that we don't want to come back to Your Honor, to the extent we need to do this.

14 15 16 17 18 Normally, AIG, that's our view, should pay for that, but they're refusing to pay it until they're ordered to do so. So that's why we need to advance the funds right now from the Kwok estate to the Genever Estate on a super priority basis.

19 20 21 22 23 Basically it's the same loan as before. It's just we're adding \$1 million incremental borrowing capacity. We filed a motion, no objections were filed. The Sherry-Netherland has consented to this financing, so unless Your Honor has questions, we -- that's what --

24 25 THE COURT: I don't have any questions, but I -- it might be that other people wish to be heard. Is there anyone

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 else wish to be heard? I see counsel for, I think, the Sherry-Netherland in the courtroom. Do you wish to be heard? MS. MILLMAN: Yes, Your Honor. THE COURT: Yes? MS. MILLMAN: If possible, yes. THE COURT: Yes, please. MS. MILLMAN: Good afternoon, Your Honor. Sherry Millman with Hogan Lovells US on behalf of Sherry-Netherland. As Mr. Despins indicated, we do consent to the funding because we believe the work previewed for the Court in the last hearing is necessary under the proprietary lease and the related agreements. We give our consent reluctantly, unfortunately, because we really do believe there's another source, being the insurance proceeds, and we recognize that every additional ounce of funding, particularly which is secured by the apartment, although junior to our position, raises the bar on the price that Mr. Despins will be seeking when he tries to sell this because he's just going to have to cover more. So we are where we are, and we do give that consent. But we wanted to provide that context to the Court. Really, we're hoping AIG would step up to the plate or be compelled to do so. Thank you, Your Honor. THE COURT: Thank you. I don't -- I might not have Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 46 of 88

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 heard Trustee Despins say this, so apologize. He may have already said it and I'd missed it. But do you know when this is going to be completed? I mean, what, you know, the work so that you can start to try to sell this property? MS. MILLMAN: He did indicate, and we have Sherry-Netherland has been working closely with Mr. Despins -- THE COURT: That's why I figured you'd know. MS. MILLMAN: -- his contractors and it -- THE COURT: Yeah. MS. MILLMAN: -- and, hopefully, it'll be completed in mid-August as he indicated. THE COURT: Mid-August, okay. All right. Well, I thank you for being present and making that -- your -- known on the record that your client consents to the entry of this order. MS. MILLMAN: Thank you. THE COURT: Thank you. Is there anyone else that wishes to be heard? MS. MAYHEW: Your Honor, Christine Mayhew, Pullman & Comley, on behalf of the committee. I just wanted to express the committee's support for the motion, as well, to allow the borrowing so that these -- the remediation can be completed. THE COURT: Thank you. MS. CLAIBORN: Good afternoon. Holley Claiborn for

| Case 22-50073 | Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 48 of 88 | |---------------|--------------------------------------------------------------------------| | | 48 | | 1 | the US Trustee. We have no objection to the motion. | | 2 | THE COURT: Thank you. | | 3 | MR. DESPINS: So Your Honor, just one | | 4 | clarification. Counsel for the Sherry-Netherland, you know, | | 5 | mentioned that they support this because it's necessary under | | 6 | the lease. I don't want to have a polemic over that, but | | 7 | whether that's necessary under the lease or not, or we're | | 8 | obligated legally to do it, I don't want to park that issue | | 9 | to decide. | | 10 | We're asking for the financing. We're doing the | | 11 | repairs, but I didn't want my silence to that to be, you | | 12 | know, looked at acquiescence that that's a viable legal | | 13 | theory. Again, we don't need to debate that, I just want to | | 14 | make sure my silence was not acquiescent to that point. | | 15 | Thank you, Your Honor. | | 16 | THE COURT: Understood. So I don't know how I | | 17 | missed you saying the middle of August, but obviously, I did, | | 18 | so I apologize. I wasn't sure when this would be completed. | | 19 | The findings of fact in the order that you've submitted, I | | 20 | didn't have an opportunity to completely compare, but I think | | 21 | they are the same findings that were made in the prior order. | | 22 | Is that correct? | | 23 | MR. DESPINS: That's correct, Your Honor. | | 24 | THE COURT: So give me one moment, please. So I'm | | 25 | just wondering if we shouldn't be referring, and maybe we | | | |

49 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 are, and again, I might not be seeing it because I'm looking at the proposed order, but referring to the order that already entered, right? Because this is just an amendment to the credit agreement. So the order that already entered has some effect, doesn't it? Or are you saying it doesn't because this is just with regard to an amendment to the credit facility? MR. DESPINS: We can make reference more clear - we can make clearer, Your Honor, if -- THE COURT: I think it would be helpful -- MR. DESPINS: Okay. THE COURT: -- to make that a little more clear, and to refer to the prior order. MR. DESPINS: Yeah. And basically saying that we're not modifying it. It's just additional -- THE COURT: Additional funding, right? That's the whole point. MR. DESPINS: That's the intent, Your Honor. I apologize if we didn't -- THE COURT: No, that's fine. And I understand the reason why you are seeking the amendment to the credit agreement. And under the code sections that you've cited in your proposed order, those sections authorize or supplement the authorization of entering into an amendment to the DIP credit agreement.

| 1 | I agree with your proposed order that no one has | |----|----------------------------------------------------------------| | 2 | filed any written objections to the motion. There is no one | | 3 | participating in this hearing that is objecting to the | | 4 | motion. The Sherry-Netherland has consented to the motion. | | 5 | The Committee and the U.S. Trustee -- well, the Committee | | 6 | supports the motion. The U.S. Trustee had no opposition to | | 7 | the motion. | | 8 | And for all those reasons, the motion is granted. | | 9 | And I would just ask for a revised proposed order. | | 10 | MR. DESPINS: Yes, Your Honor. | | 11 | THE COURT: And, you know, we will address that as | | 12 | soon as it is submitted to the courtroom deputy email box, | | 13 | okay? I would just ask that you cc counsel for the Sherry | | 14 | Netherland and the Committee and the U.S. Trustee when you | | 15 | submit that order, please. | | 16 | MR. DESPINS: Yes, Your Honor. | | 17 | THE COURT: Okay. So that motion is granted. And | | 18 | the revised proposed order, will you be able to submit that | | 19 | by Thursday? | | 20 | MR. DESPINS: We can do that tomorrow, Your Honor. | | 21 | THE COURT: Okay. Thank you. All right. Then | | 22 | that takes care of the issues with regard to Genever, I | | 23 | believe; is that correct? | | 24 | MR. DESPINS: That's correct, Your Honor. | | 25 | THE COURT: All right. So then, as the last matter | | | |

51 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 with regard to Ace Decade? No, we have one other matter. MR. DESPINS: There's a motion to limit notice. THE COURT: Oh, right. I apologize. I'm sorry. Go right ahead. MR. DESPINS: So Your Honor, this is Docket No. 3301. It's a motion to limit the service of the motion that has not been filed, but that will be filed soon, to extend the August 15 deadline to bring avoidance actions. And basically, very simply, we -- last time we did this we spent a lot of money with Federal Express and publication notice and all that, and a number of people objected. And what we're proposing this time is to serve all the people who objected, obviously, everyone that's on the 2002 service list and the Committee, the U.S. Trustee, etcetera. The only issue that we bracketed for your consideration is whether you also want us to provide service on the defendants and the adversary proceedings where -- and an email address has been provided by them because they've appeared. We're happy to do that because email service is cheap, doesn't take a lot of time. That's the only question mark because I -- we put that as a footnote to the motion on Page 6 Footnote 4 and in the order, Paragraph 2, there's a bracket under Roman Numeral V where we say all defendants that have appeared in pending Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 51 of 88

52 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 adversarial proceeding. THE COURT: Oh, okay, I see that. MR. DESPINS: So it's up to you whether, frankly, I think these people would be covered under some other theory, but we're happy to do it so it's really up to Your Honor as to whether we -- THE COURT: Well, I think since it's not burdensome, I would ask you to do it. MR. DESPINS: Okay, we will. So therefore, just these brackets would need to be taken out of the order, if Your Honor's otherwise okay with the order. THE COURT: I have a couple of my -- first of all, I'd like to make sure no one else wishes to be heard on the motion, excuse me, the motion to limit. MR. DESPINS: The objection deadline was Friday, but we didn't receive any objections. THE COURT: Exactly. I looked at that. So does any -- I'm hearing no one else wishes to be heard. So I would ask a few minor changes to the proposed order. I would like -- and it may seem overkill, but I think it's helpful in the future for other people that aren't in the room and haven't paid attention, possibly, because they didn't need to for whatever reason, and that's absolutely fine. I would like the proposed order to indicate that there was a motion to expedite hearing filed. That was Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 52 of 88

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 granted. The hearing was scheduled for today. No one filed any objection by the objection deadline of July 12th. Just be a little bit more specific on that. MR. DESPINS: Yes, Your Honor. THE COURT: And that's really all I -- that's the only issues that I see with the proposed order, okay? MR. DESPINS: Will do. THE COURT: The Paragraph 2, Number 5, I agree that I would like you to serve all the defendants that have appeared in the pending adversary proceedings because I think that will be fairly straightforward and not too burdensome to the estate. MR. DESPINS: Will do. THE COURT: Otherwise, the motion is granted, and the order will enter upon submission of the revised proposed order. So again, would you be able to get the revised proposed order to the Court by Thursday? MR. DESPINS: Yes, Your Honor. No problem. THE COURT: Okay. MR. DESPINS: Actually, probably by tomorrow. THE COURT: Okay. Well, I'll give you to Thursday just because it's easier for the clerk's office to track that way. So I'll just ask that -- I will note that the motion to limit notice, ECF 3301 is granted, and the revised proposed order will be submitted on or before 18th.

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. DESPINS: Thank you, Your Honor. THE COURT: Okay? All right. Thank you. The final matter on today's calendar is a continued hearing on the motion for default judgment in adversary 23- 05028. We've already taken Trustee Despins's appearance and Attorney Linsey's appearance. So if the defendants would note their appearances for the record, please? MR. LITTERINE-KAUFMAN: Yes, Your Honor. David Litterine-Kaufman from Orrick for the joint liquidators. THE COURT: Good afternoon. MR. LITTERINE-KAUFMAN: Good afternoon. MR. ROTH: David Roth of Wiggin and Dana for the joint liquidators. THE COURT: Good afternoon. And so when we were here last -- and then, I'm going to let you both argue -- I just want to make sure that we have no issue on this issue of the defendants. Trustee Despins, you seem to say there's no issue. And if that's fine with you, that's fine. You're just going to be bound by that. I'm not -- MR. DESPINS: Yeah. THE COURT: -- again, I've made clear what my concerns were about it, and I didn't see any change to the appearances. They're still listed as an appearance on behalf of the liquidators.

| 1 | MR. DESPINS: Yes, I believe my opposing counsel | |----|-----------------------------------------------------------------| | 2 | will address that, but I wanted to be clear. My point was I | | 3 | view this as a, like, standing issue. Often Your Honor will | | 4 | rule that someone doesn't have the standing, but nevertheless | | 5 | reach the merits to make sure the record is covered. And | | 6 | that was only my point. It's not that I -- not that I | | 7 | supported the fact that they didn't need to do certain | | 8 | things, but -- | | 9 | THE COURT: I didn't take it as a supporting issue. | | 10 | I took it as you decided that -- or not decide. I don't know | | 11 | if that's fair. You determined that it's a fight not worth | | 12 | fighting about because they've filed their motion. And I've | | 13 | already heard it, essentially. | | 14 | MR. DESPINS: That's correct, Your Honor. | | 15 | THE COURT: Okay. All right. Well, so when we | | 16 | were here last, I asked, well, I instructed there be another | | 17 | meet-and-confer, and that there be some kind of report made | | 18 | to the Court about what's happened with discovery and what | | 19 | the parties' positions are in connection with the default | | 20 | judgment at this continued hearing. | | 21 | MR. DESPINS: So if I may, Your Honor, I'll offer | | 22 | up my version of where we are. So Your Honor, first on the | | 23 | discovery, there were a few meet-and-confers, and they have | | 24 | provided us with some documentation. I would say that in | | 25 | terms of what's relevant to today, they produced documents |

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 showed that they, the JPLs, were contacted by counsel for Ace Decade in February. So for us that -- but no filing actually occurred until June of this year, but they were initially contacted in February. And for us, that bolsters the argument that Ace Decade, you know, you know, basically sat on their rights, and therefore, that's why default should be entered. But I don't think -- THE COURT: Default judgment. The default's already been entered. MR. DESPINS: Sorry -- THE COURT: Right. MR. DESPINS: -- the default judgment. So but other than that, I would say more importantly, there were several discussions between myself and the JPLs, the joint provisional liquidators, or one of them, and I would say that I think we've made some progress. I'm saying this cautiously, and that's going to lead to a kind of bifurcated approach, meaning progress in the sense that there may be a way working with them, them being the JPLs, to have me appointed in the BVI as the registered shareholder. That's not a done deal. That's a potential resolution, and it would be potentially a first step of a resolution. And as a result of that, I've agreed to -- you may

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 remember that we filed an amended revised proposed order last Friday, Docket Number 59. THE COURT: I don't remember. You mean after our hearing last week? MR. DESPINS: Yes. THE COURT: Okay. MR. DESPINS: It was filed Friday of last week and you -- THE COURT: I may have -- I may have looked at it; I may not. I don't recall. MR. DESPINS: We had added some language -- THE COURT: Okay. MR. DESPINS: -- asking you to enter some paragraphs in the order that would say that you're seeking the assistance from the BVI court. We had mentioned that we were going to do that, but we actually did that. THE COURT: Okay. MR. DESPINS: The liquidators were not happy with that. They actually filed something this morning that said that, and attached a letter saying, basically only BVI can deal with these issues. Bottom line on that is that I -- because there's a potential path to resolve our issues, I've agreed to, if Your Honor is inclined to grant the default judgment, I've agreed to take out of that order the request by you of the BVI court Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 57 of 88

1 to do certain things.

| 2 | I want to be very clear. It's not an | |----|-----------------------------------------------------------------| | 3 | acknowledgment that they were right on that. It's more an | | 4 | acknowledgment that there's maybe a path forward that would | | 5 | not involve heavy litigation over there, and we want to see | | 6 | if that's going to play out. If it doesn't play out, we will | | 7 | be back in front of Your Honor asking you to enter the same | | 8 | type of language that would say, please assist this Court, | | 9 | please, BVI court, assist this Court on providing all the | | 10 | relief to the trustee, including a declaration that the | | 11 | appointment of the JPLs was a nullity. | | 12 | But for now, we would take this out of the order. | | 13 | So the order would remain the same on that score as the order | | 14 | that you saw initially, the default judgment order. So | | 15 | that's what's happening. | | 16 | But you might say, okay, so does that resolve the | | 17 | issue today? Unfortunately, not. In a sense that we still | | 18 | want the Court to enter a default judgment order against | | 19 | Yvette Wang and Ace Decade, and we're ready to argue the | | 20 | merits of that or whatever remaining merits of that there may | | 21 | be. | | 22 | And I believe the counsel for the JPLs is also | | 23 | ready to argue whatever remaining merits there may be to that | | 24 | argument. And in connection with that I wanted to let you | | 25 | know, because they're challenging Your Honor having personal | | | |

1 2 3 4 5 jurisdiction over Ace Decade, Mr. Bassett last week mentioned that Ace Decade had filed a complaint in the U.S. in 2016 yeah, 2016, at which -- in which Ace Decade said that its principal place of business was New York City, where Mr. Kwok was located.

6 7 8 And we filed today a copy of that complaint, so it's in the record now, so you have it. It's in the -- the paragraph in question is Paragraph 10 of that complaint.

9 10 11 12 In addition to that, you already had in the docket, in this case, in the general case, the declaration of Mr. Kwok that was filed in support of that Southern District of New York action against Ace Decade.

13 14 15 16 17 18 And I believe that's -- actually, I'll come back with the actual number of that -- the actual docket number for that declaration. But that declaration, basically, Your Honor, I think you've seen many times before, he basically says, I moved to the U.S. in 2015, and I'm Ace Decade, and we were running meetings out of my apartment with my colleagues.

19 20 21 22 We were doing all the negotiations regarding Ace Decade and the investment with UBS out of New York, et cetera, et cetera. And so that's relevant obviously to the personal jurisdiction point.

23 24 25 I also wanted to point out, Your Honor, to bring to your attention two decisions because the argument was made, wait a minute, there's no reference to personal jurisdiction

1 2 3 4 5 6 over Ace Decade in the complaint. And I wanted Your Honor to have the two following cases which basically stand for the proposition that when personal jurisdiction is challenged, the Court may look outside of the four corners of the complaint. And the first case is, Xie, that's X-I-E versus

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Sklover, S-K-L-O-V-E-R, 260 F. Supp. 3d, Page 30, jump cite 3037, District Court of District of Columbia 2017, "In resolving the motion to dismiss for lack of personal jurisdiction, the Court is not limited to the four corner of the operative complaint, but rather may receive and weigh affidavits and other relevant documents, et cetera." The next case is Dicks v. Cooks Junction, Number 22-CV-6495. That's 2023 Westlaw, 2775830 at Page 2. THE COURT: You have to say that again. MR. DESPINS: Yeah. THE COURT: I'm sorry. MR. DESPINS: So the cite is 2023 Westlaw, 2775830 at Page 2, and it's a Southern District of New York April 4th, 2023, decision. And basically the Court is, in reviewing whether plaintiff has met this burden to establish personal jurisdiction, the Court "can consider materials outside the pleadings, including affidavits and other written materials".

And therefore, it's perfectly appropriate for Your

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 to look at the statements made by Ace Decade saying, our headquarter is in New York. And the key here is that there's no evidence from the joint provisional liquidators or anyone else that, in fact, that changed somehow. Even if you believe the theory of -- I'm putting myself in Yvette Wang's shoes now -- that she is the proper shareholder of Ace Decade, she was in New York at all times, as well. So was Kwok. And I would say, so am I, in the sense that if we are focusing on the time where this complaint was started and I was the person that should have been in charge of Ace Decade, I'm the only -- I'm located in New York, so is Mr. Kwok, so is Yvette Wang. So there's no argument that, oh, you know, there is a -- that there's -- that Ace Decade is being run out of the BVI, other than the fact that it's a BVI corporation. There's no argument that somehow management is located in BVI or operating a business in BVI. Not at all. None of that. And therefore, that is sufficient for Your Honor to find that there's personal jurisdiction over Ace Decade in your court because of nationwide service of process, and the fact that they were properly served, as well, in the BVI. There is a one last point I want to mention, Your Honor, which is the other defendant, the person located in Switzerland, who obtained the shares from Ms. Wang and then

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 authorized the JPL, the liquidation filing in the -- not filing, but the commencement of liquidation case in the BVI. We have filed -- this is Docket Number 61 in this case, in this adversary proceeding. We filed a notice of request of Chapter 11 Trustee for entry of default against Defendant Rui (phonetic) Hao. That's spelled H-A-O. We filed this on Friday, Your Honor. And basically, what we said there is that we received confirmation from Swiss counsel, who confirmed themselves with the Swiss authorities that are in charge of ensuring service under the Hague Convention, that this defendant was properly served at the latest on May 17, 2024. And 60 days after that date is July 16, 2024. That's today. And in this filing that we made, Your Honor, on the Docket Number 61 in this adversary proceeding, we told -- we said to Your Honor that we would ask for entry of default, not default judgment, but entry of default at the conclusion of this hearing against him. And ideally, again, if Your Honor is inclined to grant the default judgment against Ace Decade and Ms. Wang, we would -- we believe it would be beneficial to have a statement in there that default has been entered against Rui Hao. And you might say, well, today is 16th. He might still file something by the end of the day, and that's true. So what do we propose to do, Your Honor, is to file

1 2 3 4 5 6 a supplemental notice tomorrow morning, again, if Your Honor is inclined to enter the default judgment against Wang and Ace Decade, that would state that no response of any kind was filed by him. And based on that, we're asking that default be granted as to him and the order that you would enter would make a reference to that.

7 8 9 10 11 12 And you might say, well, I know the difference between default and default judgment, but from an international, you know, execution point of view, I think it's beneficial to have the order you would enter, again, if you're inclined to enter it, contain such a reference or finding.

13 14 15 So therefore, we would complete this item by filing tomorrow a statement confirming that by midnight tonight, nothing was filed by this gentleman.

16 17 18 19 So that's the status, Your Honor, and by the way, that was also my argument, why the default judgment should be granted, but that's the current state of play. So that's why I said this is kind of an imperfect, not complete solution.

20 21 22 23 24 25 You know, we believe that some progress has been made, but we're not, you know, it's like going from Point A to Point B. We're not at Point B yet, and therefore, out of abundance of caution and more than abundance of caution, we think it's important for Your Honor to enter the default judgment today, which I understand will be opposed by the

64 1 2 3 4 5 6 JPLs. But I'll be happy to an answer any questions you may have. THE COURT: I do not have any questions. MR. DESPINS: Okay. Thank you, Your Honor. MR. LITTERINE-KAUFMAN: Good afternoon, Your Honor. Just a couple brief points. First, as Your Honor observed Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 64 of 88

8 9 10 appearance. I should clarify the statements I made on the record last week. My clients are the JPLs, and only these JPLs, as

and as the trustee noted, we did not change our notices of

11 12 13 14 15 the individuals charged with management of the company's affairs under BVI law, at least for the time being. They instructed me to come here and make certain arguments on behalf of the company, but the company is not itself my client, and I don't represent the company here.

16 17 18 It's my understanding that the trustee, nonetheless, does not object to mine and the JPLs' participation in this motion.

19 20 21 22 23 As the trustee mentioned, we made a filing, I believe it was first thing this morning. I just wanted to explain briefly the context and reason for that filing. It's a response to the trustee's amended proposed order. We filed it for two reasons.

24 25 The first is to explain the issues from a BVI law perspective of the new language that the trustee had added to

1 2 3 the amended proposed order, which I understand the trustee is now willing to remove for the time being, so I won't belabor that point.

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 The other was Your Honor had expressed interest at the last hearing in hearing more about what the proceedings in the BVI might be to rectify the registry of members for Ace Decade. And there is some discussion in that letter of what that process looks like. And we, in our cover filing, we cite to where in the letter Your Honor can find that discussion. So that was the reason for filing that response. Finally, on the default judgment motion, I don't have much to add to what I said last week. I'll just briefly reiterate the JPLs do continue to object to personal jurisdiction with regard to when they were contacted. It is true, my understanding is that they were contacted in February or perhaps January of this year. But I just will note for the record that they were not formally appointed until I believe it was June 24th. And so they themselves could not act on behalf of the company

21 believe, two days before the opposition deadline.

until that appointment became effective, which was, I

22 23 24 THE COURT: Who contacted them? MR. LITTERINE-KAUFMAN: I believe they were contacted by counsel. I don't -- by BVI counsel.

THE COURT: And who's that?

66 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. LITTERINE-KAUFMAN: It is the firm, Walkers. I don't know which individual at Walkers. THE COURT: And who was Walkers representing? MR. LITTERINE-KAUFMAN: I believe Walkers was representing the shareholder listed on the registry. I believe Mr. Hao. THE COURT: So Mr. Hao? Rui Hao? MR. LITTERINE-KAUFMAN: I believe so, yes, Your Honor. THE COURT: But you're not sure? MR. LITTERINE-KAUFMAN: That's my understanding, Your Honor. THE COURT: Okay. And when they contacted them in February or possibly January. Let me step back. Walkers contacted your clients, the liquidators, the two gentlemen who serve as liquidators, in January or February on behalf of Mr. Hao or Ho. I'm sorry. I may be mispronouncing it. For what reason? MR. LITTERINE-KAUFMAN: I believe to inquire whether or not they could serve as joint liquidators. There's a conflict checking process similar to what attorneys do here that they have to go through. So I believe the outreach was to ask if they could clear conflicts on -- THE COURT: When did your clients tell Walkers that they cleared conflicts? Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 66 of 88

67 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. LITTERINE-KAUFMAN: I do not know, Your Honor. MR. DESPINS: In February. MR. LITTERINE-KAUFMAN: Was it in February? THE COURT: So your clients were just asked to wait until -- is that what you're telling me? That Walkers, who represented Mr. Rui Hao, who was the alleged holder of the share of stock, was contacted in February by Walkers, by the firm that represents Mr. Hao, and that then your clients were told not to do anything until then they -- in June, just a few days after the extension, the time to respond in the adversary, and then start the liquidation proceedings? Is that what you're representing to the Court? MR. LITTERINE-KAUFMAN: Your Honor, the trustee has all of the communications between the liquidators and Walkers. I do not -- THE COURT: Well, don't you have them? MR. LITTERINE-KAUFMAN: I do, as well. I have not personally read them, Your Honor. So I do not know the answer to this. THE COURT: Well, why don't you read them, and then we'll take a break, and you can answer those questions for me. You're their counsel. You just stood here and told me that you don't represent Ace Decade. You represent the liquidators, the gentlemen whose names I don't have in front of me, but I read them into the record at the last hearing. Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 67 of 88

| 1 | And you came here asking for an extension of a | |----|-----------------------------------------------------------------| | 2 | deadline, saying that you needed to protect Ace Decade. | | 3 | You're now telling me you don't represent Ace Decade. So why | | 4 | do you need to protect Ace Decade if you don't represent | | 5 | them? And now you're saying that you're agreeing that your | | 6 | clients were contacted in February, but you're asking this | | 7 | Court to not enter a default judgment because you acted as | | 8 | soon as you were appointed? That's the argument? | | 9 | MR. LITTERINE-KAUFMAN: Your Honor, I'm actually | | 10 | not even arguing on the good faith point. I was saying that | | 11 | merely to clarify the record. My argument is solely on | | 12 | jurisdiction. So I'm happy to move on to that, or I'm also | | 13 | happy to take a break and review the emails, if Your Honor | | 14 | would like. But I'm actually not | | 15 | THE COURT: Yeah. I'd like to take a break. I'd | | 16 | like you to review those emails. You're their lawyer. You | | 17 | should be able to answer those questions. So we'll be -- | | 18 | court will be in recess until 2:30. | | 19 | THE CLERK: All rise. The Court's in recess till | | 20 | 2:30. | | 21 | (Off the record at 2:11 p.m.) | | 22 | (On the record at 2:36 p.m.) | | 23 | THE COURT: Okay. We're back on the record at | | 24 | 2:35. And when we took a recess, counsel, you were going to | | 25 | go and read the emails that we were talking about with regard | | | |

1 2 3 4 5 to your clients being contacted by Walkers, who represents the defendant in this adversarial proceeding, one of the defendants, Rui Hao. And go right ahead and explain to me what you were reading during the recess. MR. LITTERINE-KAUFMAN: Yes, Your Honor. I

6 7 8 9 10 11 reviewed the emails that have been produced to the trustee, and it appears that there was just a long gap in communication after conflicts were cleared, and then, Mr. Hao's counsel provided the shareholder resolution appointing my clients on June 22nd. So there was, as I understand it, just a long gap waiting for that shareholder resolution.

12 13 14 15 16 17 THE COURT: Well, when you say waiting for that shareholder resolution, do you mean that there was an email in February 2024 or earlier that indicated that there would be a shareholder resolution that would suggest and -- not suggest -- that would resolve that the liquidators be appointed?

18 19 20 21 22 23 24 25 MR. LITTERINE-KAUFMAN: There was nothing quite so formal, Your Honor. There was a communication that the liquidators had cleared conflicts. There was some back and forth about scheduling a telephone call. This is all in late February, and then nothing after that until June 22nd when the email was sent with the shareholder resolution. THE COURT: When the email was sent by Walkers, Mr. Mr. Hao's lawyer, to your clients?

70 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. LITTERINE-KAUFMAN: That is my recollection of the email. THE COURT: On January -- June 22nd, did you say? I thought -- MR. LITTERINE-KAUFMAN: I -- THE COURT: -- for some reason, I thought it was the 21st. MR. LITTERINE-KAUFMAN: I believe -- I can look back at it, Your Honor. My recollection from looking at it a few minutes ago was that it was 22nd, but it -- THE COURT: That's fine. It's either one of those dates -- MR. LITTERINE-KAUFMAN: Yes. THE COURT: -- you're saying they're -- and that email from Walkers to your clients individually, is that who received it? Your clients individually? MR. LITTERINE-KAUFMAN: And likely others at their firm, Alvarez and Marsal, yes. THE COURT: Okay. So others at the firm in which they're employed as -- and where they act as these liquidators, correct? MR. LITTERINE-KAUFMAN: Yes. That's my recollection. THE COURT: So there was an email sent on June 21st or 22nd that had only -- that only said here's the Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 70 of 88

71 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 resolution? MR. LITTERINE-KAUFMAN: That's my recollection of the substance (inaudible) -- THE COURT: Well, why don't you grab that and let me see it, please? MR. LITTERINE-KAUFMAN: I only have it digitally, Your Honor. THE COURT: Oh, okay. Well, you know what I'll do? I'll have you produce all those emails as part of this hearing. So I will call that liquidator's exhibits. You're going to tell me they can't be produced? MR. LITTERINE-KAUFMAN: No, no. THE COURT: Okay. MR. LITTERINE-KAUFMAN: I believe that that document, the Rui Hao appointment, is attached to your objection or the request to adjourn -- THE COURT: The appointment is, but there's no email. There's -- MR. LITTERINE-KAUFMAN: No, no. THE COURT: -- no email communication that -- MR. LITTERINE-KAUFMAN: I'm sorry. THE COURT: -- me -- MR. LITTERINE-KAUFMAN: Yes, I'm sorry. THE COURT: -- that established -- I've seen the two documents. We read them into the record during the last Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 71 of 88

1 2 3 4 5 hearing. And there's -- and I have no idea when Mr. Hao signed them because they're not dated. And I have no record of a resolution of Ace Decade instructing or resolving that Mr. Hao could take that action, which normal corporate books and records would have.

6 7 8 9 10 11 12 13 And I have -- and you're telling me that you've now looked at emails that you didn't look at before that say that there was this contact in January and February of 2024 from Walkers, a BVI law firm, who represented Mr. Hao as the alleged sole shareholder, and said to your clients, whom you represent in this adversary proceeding, who are not named defendants, that we'd like you to clear contact conflicts and act as liquidators.

14 15 16 17 And then, there was no communication between sometime in February of 2024 until the date when the resolution was sent. And that's what you're telling me, correct?

18 19 MR. LITTERINE-KAUFMAN: Yes. That is what's reflected in these emails.

20 21 22 23 24 25 THE COURT: Okay. So I'd like all those emails to be filed on the docket of this adversary proceeding. And they can be filed under the Liquidator's 1, Liquidator's 2, Liquidator's 3, Liquidator's 4 in PDF format. And if you have any issues about how to do that, you can contact the Clerk's office. They can walk you through that. I'm not

| 1 | saying you will have any, but if you do, they can help you | |----|----------------------------------------------------------------| | 2 | with that. | | 3 | And I'd like those on the record by the close of | | 4 | business tomorrow. Actually, I'd like them on the record by | | 5 | 1:00 p.m. tomorrow. | | 6 | So there was a gap from February to June. And what | | 7 | you've told me is that your review just now in court was that | | 8 | the June, either 20 -- you believe it was the 22nd, doesn't | | 9 | matter, when you file it, it'll tell me whether it was the | | 10 | 21st or 22nd email-- solely had attached to it these two | | 11 | documents, and that's it? It said Act. Is that what it | | 12 | said? | | 13 | MR. LITTERINE-KAUFMAN: Your Honor, I have the | | 14 | email in front of me right now. I can read it to Your Honor | | 15 | if you would like. It's not very long. | | 16 | THE COURT: What's the date? | | 17 | MR. LITTERINE-KAUFMAN: It is the 22nd. It refers | | 18 | to the resolution which was passed on the 21st. So that -- | | 19 | or it says the resolution was passed on the 21st. | | 20 | THE COURT: Okay. Go ahead. Okay. | | 21 | MR. LITTERINE-KAUFMAN: It reads, Dear Wes and | | 22 | Barry, please find attached the qualifying member's | | 23 | resolution passed by Mr. Rui Hao on 21 June 2024, approving | | 24 | your appointment as liquidator of Ace Decade. We trust you | | 25 | will now, without delay, take the necessary steps to register | | | |

1 your appointment.

2 3 4 5 If you need anything further from us or our client, please do not hesitate to contact us. No doubt you will have various queries for our client in relation to the company and the ongoing litigation.

6 7 8 Please do let us know what information you require, and we will endeavor to respond as quickly as practicable. Kind regards, Andrew.

9 10 11 THE COURT: What litigation are they referring to? MR. LITTERINE-KAUFMAN: I interpret that as referring to the litigation in the UK against UBS.

12 13 THE COURT: All right. As I said, by 1:00 -- did I say 1:00 p.m.? Is that what I said?

MR. LITTERINE-KAUFMAN: Yes.

15 16 17 18 19 20 THE COURT: By 1:00 p.m. tomorrow, I'd like all of the emails that have been produced to the trustee docketed on this adversary proceeding docket in PDF format with the notate -- with the, you know, we don't use stickers anymore, but it would say, the Liquidator's 1, Liquidator's 2, Liquidator's 3, whatever.

21 22 23 24 25 I'd like them all with the attachments that were attached to each of those emails, to each and every one of those emails, even if the attachments are duplicative. I want the email to be -- I want the email filed to be the email that was sent and received.

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. LITTERINE-KAUFMAN: Understood, Your Honor. And Your Honor had asked whether -- how many documents there were attached to that email. There were two. One is the resolution, and one is a certificate of appointment. I believe those are the two documents that were filed with our motion to extend the deadline to oppose. THE COURT: Okay. That may be and we'll see when you file them. MR. LITTERINE-KAUFMAN: Okay. THE COURT: Okay? MR. LITTERINE-KAUFMAN: I have nothing else to add on personal jurisdiction, Your Honor, and I will just flag very briefly on subject matter jurisdiction. We argued in our motion to extend the deadline, and I described briefly at the last hearing our position that, as to Ace, there's no additional controversy, given the trustee's position that he controls Ace, and therefore stands on both sides of the V. And unless Your Honor has questions, that's it for me. THE COURT: Have you reviewed the documents that the trust -- not the documents. Excuse me. I misspoke. The law that the trustee cited in his argument about the ability of the Court to look beyond the complaint to determine personal jurisdiction? MR. LITTERINE-KAUFMAN: I am not familiar with

1 those cases, no, Your Honor.

2 3 THE COURT: Okay. Okay. Anything further, Trustee Despins?

4 5 6 7 8 MR. DESPINS: Just one point, Your Honor, on the issue of subject matter jurisdiction. Ace Decade needs to be a party because people are usurping my right to control it, and Ace Decade is involuntarily being used by people who have no right to use it, such as, for example, the JPL filing.

9 10 11 12 13 That is why it is a proper party that needs to be bound by the injunction, so that when I go to the UK, I can say there's an injunction against Ace Decade, that Ace Decade is bound by the finding that the trustee owns the shares and controls the company. Thank you, Your Honor.

14 15 16 17 18 THE COURT: Okay. Anything further, counsel? MR. LITTERINE-KAUFMAN: Just to reiterate my argument from last week that that is not a stand-in for subject matter jurisdiction. And I'm not aware of any cases so holding at least.

19 20 21 22 23 24 25 THE COURT: All right. I just need to take a look at something for a moment. So Trustee Despins, I do have a question, given what you've stated on the record this afternoon. You would like the Court, I think, and I want to make sure that I've heard you correctly, that if the Court enters a default judgment to indicate that an entry of default has also entered against the defendant, Rui Hao, that

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 obviously can't happen until tomorrow at this point, correct? MR. DESPINS: That's correct, Your Honor. THE COURT: All right. MR. DESPINS: And also the Clerk would have to - because sometimes there's a delay so that through your good offices, if there's no -- nothing filed, you know, the Clerk would need to enter it, and then, you could acknowledge that in your order. THE COURT: What do you mean if -- oh, if Mr. Hao doesn't file anything? MR. DESPINS: Doesn't -- THE COURT: I'm sorry. When you say -- MR. DESPINS: Yeah, because we're going to -- THE COURT: Yes, I understand. I just was trying to follow your thought process. MR. DESPINS: We're going to file an update tomorrow morning -- THE COURT: Right. MR. DESPINS: -- confirming or not confirming what has happened. THE COURT: Okay. So I'm just looking at what you both said and what I haven't looked at -- I guess, there was a letter filed today. I don't really know what the letter says. Is that correct, counsel? You said the first -- it first explains things from a BVI perspective, but you're not Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 77 of 88

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 concerned about that at the moment because the trustee is willing to not have, in the default judgment, this language about cooperation of the BVI courts, correct? MR. LITTERINE-KAUFMAN: That's correct, Your Honor. THE COURT: All right. Now what's your second - what's the second point of the letter? MR. LITTERINE-KAUFMAN: Your Honor, when I was here last week, you had asked about what the BVI proceedings would look like to rectify the registry of members for Ace Decade. And so there is a discussion of that process in the letter, as well. THE COURT: I'm not sure I asked that question. I think I asked whether you were going to cooperate and make the trustee be the shareholder. First, I asked whether you're going to turn over the share, and the answer was no. And then you kept talking about cooperation. And I said, well, how are you going to cooperate? Are you going to make him the share -- the registered holder of the share in the registry. And I don't think you ever answered that question. So I don't know. I haven't looked at your letter. I assume your letter still doesn't offer cooperation to have the trustee become the registered owner, although I guess you are having discussions about that possibly happening?

| 1 | MR. LITTERINE-KAUFMAN: That's correct, Your Honor. | |----|---------------------------------------------------------------| | 2 | So there have been discussions between the trustee and my | | 3 | clients. There is a process in the BVIs to amend the | | 4 | registry of members, and the joint liquidators have to then | | 5 | settle the registry. The current shareholder has an | | 6 | opportunity to object if the trustees amend it to list the -- | | 7 | excuse me, if the -- | | 8 | THE COURT: Well, there is no current shareholder. | | 9 | MR. LITTERINE-KAUFMAN: The -- | | 10 | THE COURT: Don't you -- doesn't your client have | | 11 | the rights of the shareholder now? | | 12 | MR. LITTERINE-KAUFMAN: They don't own the equity | | 13 | itself, though, Your Honor. They are not themselves | | 14 | shareholders. They're court-appointed liquidators. | | 15 | THE COURT: But what does the resolution say? | | 16 | Doesn't the resolution -- see, that was what my question was | | 17 | last week. | | 18 | MR. LITTERINE-KAUFMAN: Yeah. | | 19 | THE COURT: What are their powers? You're not -- I | | 20 | don't know what their powers are, okay? There's nothing in | | 21 | the documents that you've filed on their behalf as non | | 22 | appearing defendants and not-named defendants. There's | | 23 | nothing to answer any of these questions. | | 24 | So you filed an emergency motion, I think it was, | | 25 | wasn't it? | | | |

80 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. LITTERINE-KAUFMAN: To the extent -- THE COURT: An emergency motion -- MR. LITTERINE-KAUFMAN: Yes, Your Honor. THE COURT: -- to stop the default judgment from entering. MR. LITTERINE-KAUFMAN: I believe it was to extend the deadline for the judgment. THE COURT: Well, but there wasn't a deadline. The deadline had already expired. So that's what it was. It was a motion to stop the default judgment from entering. You can't extend a deadline that has expired. I think we had that conversation last week, okay? So let's look back at your document. You filed a motion to - -an emergency motion to extend time to respond to default judgment, which was late. So the time had already expired, so there's nothing to extend. And you've now admitted today that your clients knew this proceeding was going to happen at some point, and that they knew on June 22nd. And you -- and that's the day they were -- I think you just read, act accordingly. And then, they didn't file this motion till July 1st. Isn't that accurate? MR. LITTERINE-KAUFMAN: That is an accurate chronology, yes, Your Honor. THE COURT: Okay. So what's the purpose of the Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 80 of 88

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 liquidation, counsel? Tell me what the purpose is. If you're saying -- first of all, you don't represent Rui Hao. You've made that clear today. You only represent the joint liquidators. MR. LITTERINE-KAUFMAN: That's correct, Your Honor. THE COURT: So what's the purpose of the liquidation? MR. LITTERINE-KAUFMAN: My understanding of the purpose of the liquidation is it's similar to liquidation proceedings in the United States. The joint liquidators are charged with selling, and -- well, monetizing the company's assets, and then, you know, settling the company's liabilities, and then paying out what remains to creditors and equity holders. THE COURT: So what information do your clients have about the assets and liabilities of the company? MR. LITTERINE-KAUFMAN: The primary asset, as I understand it, is this litigation. THE COURT: That wasn't my question. My question is, what information do your clients have about the assets and liabilities of the company? What was given to them? Something had to have been provided to them. They're not just going to act as liquidators, or maybe they are, without any information. But that I'd like to know.

Because if it's a liquidation proceeding and

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| 1 | there's no equity in the company, then Mr. Rui Hao's share | |----|-----------------------------------------------------------------| | 2 | has no value. So what information were your clients provided | | 3 | about the assets and liabilities of this company? And who | | 4 | provided it to them? | | 5 | MR. LITTERINE-KAUFMAN: I believe that | | 6 | investigation is still underway, Your Honor. I am not aware | | 7 | of -- I don't believe they get, like, a packet of materials | | 8 | that is the assets and liabilities. | | 9 | THE COURT: But you don't know that. You can't | | 10 | answer that question. | | 11 | MR. LITTERINE-KAUFMAN: That's correct, Your Honor. | | 12 | THE COURT: Okay. | | 13 | MR. DESPINS: Your Honor, if I may -- | | 14 | THE COURT: Yes. | | 15 | MR. DESPINS: -- I know a little bit about this. | | 16 | There are two types of liquidation proceedings in the BVI, | | 17 | and this one that was started -- can be started by a | | 18 | shareholder without alleging or demonstrating insolvency. | | 19 | It's just -- they just sign -- as a shareholder, they sign | | 20 | the appointment and off they go. It's not a court | | 21 | proceeding. | | 22 | THE COURT: I understand that. I'm asking the | | 23 | question, though. What information, if any, have these | | 24 | liquidators been provided? | | 25 | MR. DESPINS: Yep. | | | |

1 2 3 4 5 6 THE COURT: They came here -- I'm looking at this motion that's dated July 1st. I'm listening to the argument that this default judgment shouldn't enter because there's no subject matter. Wait. They've abandoned the good faith. They've already basically admitted they're acting in bad faith.

7 8 9 10 11 And they've said that you can't do anything, Judge, because you don't have subject matter jurisdiction. But they can't explain why. They can't explain. There's no explanation as to why. It's just because that's how things work in the BVI.

12 13 14 15 16 17 18 You've just admitted that your clients knew about this since February. You've also admitted that your clients received the documents on June 22nd, which, by the way, was before the deadline to respond. And then you didn't file because the deadline to respond was June 25th. And then, you didn't file anything to July 1st. And you're not a defendant.

19 20 21 But you want this Court to not enter a default judgment because you're claiming this Court doesn't have subject matter jurisdiction/personal jurisdiction.

22 23 24 25 MR. LITTERINE-KAUFMAN: Your Honor, just for the clarity of the record, we're making no argument and taking no position on good faith one way or the other, but it's not our position that they were acting in bad faith. We were

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 limiting our arguments to jurisdictional arguments. THE COURT: Well, that's not what your motion does. Your motion says, second, the Ace liquidators have acted in good faith. The Ace liquidators identified and engaged U.S. counsel within six business days of their appointment and are filing this request on the same day they completed the engagement. That's what your motion says. So are you abandoning Paragraph 7 in your motion? MR. LITTERINE-KAUFMAN: As to the joint liquidators, no, Your Honor. Your Honor was asking about Mr. Hao and about the company. The joint liquidators only had the ability to act following their appointment. THE COURT: But they knew about this since February. So somebody had to tell them that don't act until we give you this, right? MR. LITTERINE-KAUFMAN: Well, they have no legal authority to act. THE COURT: I understand that. I understand that, counsel. MR. LITTERINE-KAUFMAN: Yeah. THE COURT: But somebody -- you've admitted already that these conversations happened maybe even in January of this year, and yet nothing happened in this Court until after the response date for default judgment -- to the default

1 judgment was -- has passed.

2 3 4 MR. LITTERINE-KAUFMAN: That's correct, Your Honor. THE COURT: Okay. And you're acting in good faith? Your clients are acting in good faith?

MR. LITTERINE-KAUFMAN: Yes.

6 7 8 9 10 11 12 THE COURT: Okay. Well, you say you filed the - you say in your motion, for the avoidance of doubt, the Ace Liquidators are filing this request solely to preserve Ace's rights to respond to the motion. Okay. You've responded, even though it was late, and I didn't grant you an extension of time nor should I have because your clients have not shown that they have acted in good faith.

13 14 15 16 17 This is -- you know, you came here. You weren't sure who you represented last week. Now, you're coming here today. You say you solely represent the liquidating agents or whatever their title is, the liquidators, who are not defendants in this adversary proceeding.

18 19 20 But you want me to consider your argument, that I have no subject matter jurisdiction or personal jurisdiction over Ace Decade, who is not your client, correct?

21 22 MR. LITTERINE-KAUFMAN: Ace Decade is not my client.

23 24 25 THE COURT: But isn't that what you're asking me? MR. LITTERINE-KAUFMAN: Your Honor, the joint liquidators wanted to participate in these proceedings to

1 2 3 4 that extent solely because if the trustee comes down to the BVI with a default judgment order that the BVI court determines was jurisdictionally defective, then, it's not going to be very useful.

5 6 7 8 9 10 11 So the trustees came here out of respect to this Court, to the trustee, and the process to try to flag this issue and figure out a way to address it. And my understanding is the trustee is now speaking to the joint liquidators to set out -- down a process in the BVI to do precisely that. So that that was the goal of the joint liquidators in coming here.

12 13 THE COURT: Well, that's not true. You asked me to stay this adversary proceeding. So that's not accurate.

14 15 16 MR. LITTERINE-KAUFMAN: For precisely that reason, Your Honor, to allow this process that the trustee and the joint liquidators are now moving down --

17 18 19 20 21 22 THE COURT: You don't need a stay to have that process move forward. You asked for a stay. That's a completely different argument, counsel. I think you need to be careful about that. You asked -- you affirmatively asked for a stay of these proceedings. You asked for this to be heard on an emergency basis.

23 24 25 Your client could have done all these things already with the trustee without having the Court involved. MR. LITTERINE-KAUFMAN: It was merely to raise

87 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 these issues with a default judgment, if it gets entered, so that they could be fixed at the front end. It really was an attempt to, in good faith, have the two jurisdictions coordinating together. THE COURT: Well, if that's the case then, why are you arguing that I should deny the motion for default judgment based on subject matter jurisdiction or personal jurisdiction, lack thereof? MR. LITTERINE-KAUFMAN: Because a jurisdictionally defective default judgment isn't going to accomplish much in the BVIs. THE COURT: You don't know that though, counsel. That's only what you've been told. MR. LITTERINE-KAUFMAN: That is correct, Your Honor. THE COURT: All right. Anything further on this motion for default judgment? MR. LITTERINE-KAUFMAN: Not for me, Your Honor. MR. DESPINS: No, Your Honor. Thank you. THE COURT: All right. I will review the pleading that the trustee will file tomorrow morning, and I will enter an order on the motion for default judgment following my review of the information submitted by the Chapter 11 Trustee plaintiff in this adversary proceeding. So the matter is essentially -- the matter will be Case 22-50073 Doc 3330 Filed 07/22/24 Entered 07/22/24 08:19:00 Page 87 of 88

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 ruled on after the filing by the trustee regarding the defendant, Rui Hao, and the request for entry of default. All right. That concludes all of the matters on today's calendar. Is there anything else we are need to address this afternoon? MR. DESPINS: No, Your Honor. THE COURT: Anything, counsel? MR. LITTERINE-KAUFMAN: No, Your Honor. THE COURT: Okay. All right. Thank you all. Court is adjourned. THE CLERK: All rise. Court's adjourned. (End of Proceedings.) CERTIFICATION I certify that the foregoing is a correct transcript from the electronic sound recording of the proceedings in the above-entitled matter to the best of our knowledge and ability. /s/ Wendy Sawyer July 18, 2024 Wendy Sawyer, CDLT Certified Court Transcriptionist For Reliable