郭文贵破产案 · ORDER · ECF #3577

## **UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT**

)

)

)

HO WAN KWOK, *et al.*, ) (Jointly Administered)

Debtors.¹

In re: ) Chapter 11 ) Case No. 22-50073 (JAM)

) Re: ECF No. 3163

## **ORDER FURTHER AMENDING AVOIDANCE ACTION PROCEDURES ORDER AND SCHEDULING JOINT BRIEFING OF MOTIONS TO DISMISS AND MOTIONS FOR JUDGMENT ON THE PLEADINGS**

On May 2, 2024, the Court entered the Order Directing Parties to Mediation, Appointing the Honorable James J. Tancredi as Mediator, and Amending Order Approving Procedures Applicable to Avoidance Claim Adversary Proceedings (as amended, the "Avoidance Action Procedures Order"). (ECF No. 3163; *see* ECF No. 3465.) The Avoidance Action Procedures Order entered after all Avoidance Defendants² were served with the underlying motion (the "Mediation Procedures Motion") and order scheduling the hearing on that motion. (*See* ECF No. 3066). Several Avoidance Defendants filed objections and were heard during the Mediation Procedures Motion hearing. (April 23, 2024 Hr'g Tr., ECF No. 3150.)

¹ The Debtors in these chapter 11 cases are Ho Wan Kwok (also known as Guo Wengui, Miles Guo, and Miles Kwok, as well as numerous other aliases) (last four digits of tax identification number: 9595), Genever Holdings LLC (last four digits of tax identification number: 8202) and Genever Holdings Corporation. The mailing address for the Trustee, Genever Holdings LLC, and the Genever Holdings Corporation is Paul Hastings LLP, 200 Park Avenue, New York, NY 10166 c/o Luc A. Despins, as Trustee for the Estate of Ho Wan Kwok (solely for purposes of notices and communications).

² "Avoidance Defendant" is used herein as defined in decretal paragraph 2(b) of the Avoidance Action Procedures Order.

The Avoidance Action Procedures Order provides, with certain exceptions set forth therein, for automatic referral of claims ("Avoidance Claims") in Avoidance Actions³ to mediation upon the appearance of an Avoidance Defendant. (*See* Avoidance Action Procedures Order ¶¶ 2(j)–(aa).) Pending the conclusion of mediation, litigation of Avoidance Claims is stayed (the "Mediation Stay"). (*Id.* ¶ 2(j)(iii).) The Mediation Stay is, however, not applicable to Avoidance Claims that have not been referred to mediation or which are otherwise no longer in mediation. (*Id.* ¶ 2(j)(v).)

Certain Avoidance Defendants who were not referred to mediation or were excused from mediation (the "Non-Mediation Defendants") have filed motions to dismiss the Avoidance Claims brought against them. Three motions to dismiss have been scheduled to be heard on October 1, 2024:

i. Motion to Dismiss Adversary Proceeding, *Despins v. Mitchell (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05110 (JAM) (Bankr. D. Conn. May 24, 2024), ECF No. 19;

ii. Motion to Dismiss Adversary Proceeding, *Despins v. Francis Firm PLLC (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05168 (JAM) (Bankr. D. Conn. May 29, 2024), ECF No. 15; and

iii. Motion to Dismiss Adversary Proceeding, *Despins v. Lawall & Mitchell, LLC (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05199 (JAM) (Bankr. D. Conn. May 24, 2024), ECF No. 21 (collectively, the "October 1 Motions").

Other motions to dismiss and motions for judgment on the pleadings are fully briefed but not

presently set for hearing:

iv. Motion to Dismiss Adversary Proceeding, *Despins v. V.X. Cerda & Assocs. P.A. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05134 (JAM) (Bankr. D. Conn. June 5, 2024), ECF No. 16;

³ "Avoidance Actions" is used herein as defined in decretal paragraph 2(a) of the Avoidance Action Procedures Order.

v. Motion to Dismiss Adversary Proceeding, *Despins v. Weddle Law PPLC (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05188 (JAM) (Bankr. D. Conn. April 22, 2024), ECF No. 11;

vi. Motion to Dismiss Adversary Proceeding, *Despins v. Miller (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05219 (JAM) (Bankr. D. Conn. June 26, 2024), ECF No. 14; and

vii. Motion for Judgment on the Pleadings, *Despins v. Zeisler & Zeisler, P.C. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05208 (JAM) (Bankr. D. Conn. Aug. 8, 2024) (collectively, the "Fully Briefed Motions").

Other motions to dismiss will be fully briefed in the coming months:

viii. The following motion to dismiss will be fully briefed on or before October 9, 2024: Motion to Dismiss Adversary Proceeding, *Despins v. Harcus Parker Ltd. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05163 (JAM) (Bankr. D. Conn. July 11, 2024), ECF No. 12;

ix. The following motion to dismiss will be fully briefed on or before October 16, 2024: Motion to Dismiss Adversary Proceeding, *Despins v. Liberty Jet Mgmt. Corp. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05135 (JAM) (Bankr. D. Conn. June 20, 2024), ECF No. 19; and

x. Several motions to dismiss will be fully briefed on or before November 14, 2024:

a. Motion to Dismiss Adversary Proceeding, *Despins v. Amazon.com, Inc. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05057 (JAM) (Bankr. D. Conn. July 15, 2024), ECF No. 30 (filed on behalf of Avoidance Defendant Bernardo Enriquez);

b. Motion to Dismiss Adversary Proceeding, *Despins v. Apple Inc. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05060 (JAM) (Bankr. D. Conn. June 28, 2024), ECF No. 32;

c. Motion to Dismiss Adversary Proceeding, *Despins v. Apple Inc. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05060 (JAM) (Bankr. D. Conn. July 15, 2024), ECF No. 40 (filed on behalf of Avoidance Defendant Bernardo Enriquez);

d. Motion to Dismiss Adversary Proceeding, *Despins v. B&H Foto & Electronics Corp. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05060 (JAM) (Bankr. D. Conn. July 15, 2024), ECF No. 23 (filed on behalf of Avoidance Defendant Bernardo Enriquez); and

e. Motion to Dismiss Adversary Proceeding, *Despins v. Meta Platforms Inc. (In re Kwok)*, Case No. 22-50073 (JAM), Adv. P. No. 24-05117 (JAM) (Bankr. D. Conn. June 28, 2024), ECF No. 18

(collectively, with the October 1 Motions and the Fully Briefed Motions, the "Non-Mediation Defendant Motions").

On September 6, 2024, twenty-four Avoidance Defendants (the "Joint Defendants", listed on Exhibit A) who are participants in mediation and subject to the Mediation Stay filed a joint request for Status Conference (the "Request"). (ECF No. 3511.) The Request states that the Joint Defendants wish to have an opportunity to brief some of the issues raised in the Non-Mediation Defendant Motions before those motions are adjudicated and are seeking a process to do so while remaining in mediation. On September 16, 2024, the Court granted the Request and, on September 24, 2024, a Status Conference was held. The Trustee, the Joint Defendants, and several other Avoidance Defendants, including the filers of the October 1 Motions, were in attendance.

During the Status Conference, the Trustee and the Joint Defendants represented to the Court that there is a consensus on how the Joint Defendants should proceed with specific legal issues they assert should be decided while the mediation is pending. The Joint Defendants also described the manner and timing they believe should be implemented by the Court with respect to five specific legal issues. The Joint Defendants provided the Court with the proposed terms of an Order. The filers of the October 1 Motions stated on the record that they did not oppose an adjournment of the hearing on the October 1 Motions.

Upon review and consideration of the statements made during the Status Conference and the proposed terms of an Order, it is hereby **ORDERED:**

1. At or before 5:00 p.m. on October 2, 2024, any Avoidance Defendant not listed on Exhibit A who wishes to participate as a Joint Defendant in the process outlined below shall file a Notice of Joinder on the docket of the cases jointly administered under the caption *In re Kwok*, Case No. 22-50073 (JAM) (the "Main Case"). The Notice of Joinder shall be no longer than one page and shall not include legal argument. As used below, "Joint Defendants" includes any Avoidance Defendants who file such a Notice of Joinder in addition to those on Exhibit A.

2. At or before 5:00 p.m. on October 18, 2024, the Joint Defendants shall file only:

a. each, a Motion to Dismiss or Motion for Judgment on the Pleadings in its respective Avoidance Action(s), which motion(s) shall be no longer than two pages and shall not include legal argument; and

b. collectively, a Memorandum of Law in support of their motions (the "Joint Brief") in the Main Case, which Joint Brief shall be no longer than 35 pages. The Joint Brief shall not contain standards on motions to dismiss and motions for judgment on pleadings, which are not in dispute, and shall address only the following four legal issues the Joint Defendants assert are common legal issues in the Avoidance Actions:

i. whether the Trustee can avoid an initial transfer by a non-debtor entity;

ii. whether applicable law allows for reverse veil piercing or *alter ego* determinations;

iii. the effect under applicable law of a reverse veil piercing or *alter ego* determination; and

iv. whether a determination of reverse veil piercing or *alter ego* may be applied retroactively.

This Order does not determine that these issues are presented by the Avoidance Claims.

3. The fifth asserted common legal issue of the Joint Defendants, namely, that certain Avoidance Complaints⁴ fail to state a claim upon which relief can be granted because the Trustee, in complying with the Protective Order, as amended and supplemented, (ECF No. 923, *see* ECF Nos. 2460, 3264) and decretal paragraph 2(d) of the Avoidance Action Procedures Order, filed those Avoidance Complaints with transfer information under seal, shall not be included in the Joint Brief. The Joint Defendants shall comply with the Protective Order and the failure to do so may result in appropriate relief entering.

4. All other bases for a Motion to Dismiss and/or Motion for Judgment on the Pleadings are reserved for further motion practice after a decision is rendered on the issues addressed in the Joint Brief.

⁴ "Avoidance Complaint" is used herein as defined in decretal paragraph 2(b) of the Avoidance Action Procedures Order.

5. The Joint Brief will not relate to any Stayed Avoidance Claims or Partially Stayed Avoidance Claims⁵ . (*See* Avoidance Action Procedures Order Exs. 3-A, 3-B.)

6. At or before 5:00 p.m. on November 8, 2024, the Trustee shall file a response or objection to the Joint Brief in the Main Case, which response or objection shall be no more than 35 pages.

7. At or before 5:00 p.m. on November 22, 2024, the Joint Defendants shall file a joint reply, if any, in the Main Case, which joint reply shall be no more than 10 pages.

8. At the conclusion of briefing, the Court will determine whether a hearing on the issues raised in the Joint Brief is necessary.

9. Hearings currently scheduled on the October 1 Motions shall not be held as scheduled. No further hearings on motions to dismiss and motions for judgment on the pleadings filed in Avoidance Actions, including the Non-Mediation Defendant Motions, shall be scheduled at this time.

10. Other than as set forth herein, the Avoidance Action Procedures Order remains in full force and effect, including with respect to the Mediation Stay.

11. This Order does not apply to Motions to Dismiss and Motions for Judgment on the Pleadings filed in adversary proceedings other than Avoidance Actions. Among other things, the Status Conferences scheduled in *Despins v. ACA Capital Group Ltd. (In re Kwok)*, Case No. 22- 50073 (JAM), Adv. P. No. 24-05249 (JAM) and *Despins v. Ngok (In re Kwok)*, Case No. 22- 50073 (JAM), Adv. P. No. 24-05273 (JAM) regarding Motions to Dismiss filed in those adversary proceedings shall be held as scheduled on October 15, 2024.

12. On or before September 26, 2024, the Joint Defendants shall serve this Order on all Avoidance Defendants. On or before October 1, 2024, the Joint Defendants shall file a Certificate of Service demonstrating compliance with this Order in the Main Case.

Dated at Bridgeport, Connecticut this 25th day of September, 2024.

*Juli* **'L'Mr** *IN1.ning\_ '/J11ite,{ S ptcy Judge 'lJistr t {cut*

⁵ "Stayed Avoidance Claims" and "Partially Stayed Avoidance Claims" are used herein as defined, respectively, in decretal paragraphs 2(e)(i) and 2(e)(ii) of the Avoidance Action Procedures Order.

## **EXHIBIT A**

| Joint Defendant | Avoidance Action | |--------------------------------------------|-------------------------------------------| | Ohtzar Shlomo Solomon Treasure LLC | 24-05082 | | | Despins v. Ohtzar Shlomo Solomon Treasure | | | LLC | | Anthem HealthChoice Assurance Inc. | 24-05112 | | | Despins v. Empire Blue Cross Blue Shield | | Anthem Health Plans, Inc. | 24-05058 | | | Despins v. Anthem Health Plans, Inc. | | Sedgwick Realty Corp. | 24-05222 | | | Despins v. Sedgwick Realty Corp. | | Federal Express Corporation | 24-05059 | | | Despins v. Fed. Express Corp. | | Direct Persuasion LLC | 24-05010 | | | Despins v. Direct Persuasion LLC | | Putnam's<br>Landscaping<br>LLC | 24-05211 | | | Despins v. Putnam's Landscaping LLC | | Morvillo Abramowitz Gran Iason & Anello PC | 24-05196 | | | Despins v. Morvillo Abramowitz Gran Iason | | | & Anello P.C. | | Arri Americas Inc. | 24-05031 | | | Despins v. Arri Americas Inc. | | DJD Creative, LLC | 24-05063 | | | Despins v. DJD Creative LLC | | Cloudflare, Inc. | 24-05115 | | | Despins v. Cloudflare, Inc. | | Cirrus Design Corporation | 24-05225 | | | Despins v. Cirrus Design Corp. | | Indium Software<br>Inc. | 24-05122 | | | Despins v. Indium Software Inc. | | Target Enterprises, LLC | 24-05138 | | | Despins v. Target Enters., LLC | | Jamestown Associates, LLC | 24-05147 | | | Despins v. Jamestown Assocs., LLC | | Mark Gundersen | 24-05048 | | | Despins v. Gundersen | | Miller Motorcars Inc. | 24-05128 | | | Despins v. Miller Motorcars Inc. | | 3 Columbus Circle LLC | 24-05120 | | | Despins v. 3 Columbus Circle LLC | | Bering Yachts, LLC | 24-05207 | | | Despins v. Bering Yachts, LLC | | ModSquad, Inc. | 24-05114 | | | Despins v. ModSquad Inc. | | 270 W. 39th St. Co. LLC | 24-05055 | | | Despins v. 270 W. 39th St. Co., LLC |

| Joint Defendant | Avoidance Action | |------------------------------------------|-----------------------------------------| | Agora Lab, Inc. | 24-05005 | | | Despins v. Agora Lab, Inc. | | Clayman Rosenberg Kirschner & Linder LLP | 24-05202 | | | Despins v. Clayman Rosenberg Kirshner & | | | Linder LLP | | McManimon, Scotland & Baumann,<br>LLC | 24-05194 | | | Despins v. McManimon, Scotland & | | | Baumann, LLC |