Guo Wengui / Miles Guo — bankruptcy case · ORDER · ECF #1063-2

Case 22-50073 Doc 1063-2 Filed 11/02/22 Entered 11/02/22 20:38:32 Page 2 of

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \* Case No. 22-50073 (JAM) \* HO WAN KWOK, \* Bridgeport, Connecticut \* August 30, 2022 Debtor. \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* TRANSCRIPT OF ORDER SCHEDULING STATUS CONFERENCE; MOTION FOR ORDER ESTABLISHING REPAIR RESERVE FOR LADY MAY; MOTION TO EXPEDITE HEARING; MOTION TO STAY PENDING APPEAL ESTABLISHING REPAIR RESERVE FOR THE LADY MAY; MOTION TO STAY SECS.523/727 ADVERSARY PROCEEDINGS; MOTION FOR ORDER PROVIDING THAT CONTROL OF PRIVILEGES PASSED TO TRUSTEE UPON APPOINT AND FOR RELATED RELIEF BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Debtor, STEPHEN M. KINDSETH. ESQ. HK International and AARON ROMNEY, ESQ. Mei Guo: ERIC HENZY, ESQ. Zeisler & Zeisler, P.C. 10 Middle Street, 15th Floor Bridgeport, CT 06604 For the Creditor, Pacific LAURA ARONSSON, ESQ. Alliance Asia Opportunity STUART M. SARNOFF, ESQ. Fund L.P.: O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, NY 10036 PATRICK BIRNEY, ESQ. Robinson & Cole 28 Trumbull Street Hartford, CT 06103 Proceedings recorded by electronic sound recording, transcript produced by transcription service. Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992 11

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> APPEARANCES: (Cont'd) For the Creditors Committee: IRVE GOLDMAN, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For the U.S. Trustee: HOLLEY CLAIBORN, ESQ. Office of the United States Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT 06510 Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 Counsel for the NICHOLAS BASSETT, ESQ. Chapter 11 Trustee: Paul Hastings LLP 200 Park Avenue New York, NY 10166 PATRICK R. LINSEY, ESQ. Neubert, Pepe & Monteith, P.C. 195 Church Street, 13th Floor New Haven, CT 06510 For Verdolino & Lowey: WILLIAM BALDIGA, ESQ. Brown Rudnick Seven Times Square New York, NY 10036

1 are limiting that. 2 If you look at the request for release section of 3 our motion, which we cited again in our reply, we're looking 4 specifically for assets of the estate, his financial 5 condition and matters relating to administration. 6 The debtor identifies his concerns about 7 potentially privileged documents related to criminal issues 8 such as allegations of rape and false imprisonment and other 9 things that have been made against him as well as his asylum 10 application. We are not, in our investigation at this time, 11 seeking any documents related to those issues. 12 Again, we're focused on assets and an 13 investigation that hopefully be used to augment this estate. 14 Second, Your Honor, we're not asking for a waiver 15 or any control over privileges that belong to other parties. 16 And, in fact, I don't know how one could even read our 17 motion to be requesting that relief. 18 We are, to be clear, seeking a determination that 19 the trustee has succeeded to any privileges that the debtor 20 holds with other parties in terms of a common interest or a 21 joint defense privilege.

22 our motion. And I don't think that's contested, frankly. 23 But what we're not seeking, what the debtor seems 24 to suggest we are seeking, but we're not, is an order from 25 the Court that the trustee now controls any privilege that

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Ho Wan Kwok - August 30, 2022 107 that very specifically seek documents related to assets of the estate, other transactional matters involving the debtor prior to the bankruptcy, and other things that simply do not implicate the types of concerns regarding criminal liability, et cetera, that this debtor is worried about. So there's nothing in the approach that the Foster case was concerned about that we're trying to ask the Court to do here. And frankly, if you look at other cases, there are plenty of other cases that have issued the type of order that we're asking this court to issue, including one of the cases we cite is the In re Tarkington case from the Eastern District of North Carolina in 2010. There, there was an investigation into potential estate assets. The trustee wanted to depose an attorney who represented the debtor prior to the bankruptcy, and what the Court ended up doing was, all right, I'm going to let the deposition go forward, here is what I consider to be within the scope of the privilege. All of the privilege related to assets of the estate, et cetera, has passed to the trustee. Anything that could go under criminal liability or those things could still be covered by a privilege. So you can go take the deposition, and counsel to the debtor can interpose objections consistent with that,

Ho Wan Kwok - August 30, 2022 110 These are cases where the issue was the trustee was trying to investigate assets of the estate that would potentially relate in, you know, augmenting the estate, of the value of those assets. And what the courts held in those cases is that this is a situation where the debtor would benefit from that. These are -- when the debtor's estate is augmented by additional -- the location of causes of action or the identification of other assets he benefits. He's not harmed by that. So, you know, the debtor contends, well, as I said before, there's a concern that, you know, it's possible documents that the trustee is seeking to have access to could involve potential criminal liability, whether it's the rape allegations that he mentioned, false imprisonment, or completely unrelated issues like his asylum application, but, again, as I said before, we're not seeking to get those documents through our discovery requests. The debtor has identified one request in our subpoena directed to the debtor's former law firms and professionals, Request 17, that asks for information about legal disputes which could be read to include criminal actions against him, to the extent there are any, or his asylum application, we're willing to make clear on the Case 22-50073 Doc 1063-2 Filed 11/02/22 Entered 11/02/22 20:38:32 Page 6 of

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1 record that we're not seeking to get that type of 2 information and we'll limit that request accordingly. 3 I mean, the only plausible scenario where the 4 debtor could say that he has a document that is responsive 5 to our subpoena, but also could result in harm to him, is 6 that there's some document that relates to his assets, 7 relates to the topics that we're seeking to explore, and 8 also somehow implicates his criminal liability. 9 But the debtor has not even offered one hint of 10 what that could be.

11 suggest other than, as he said in his opposition, 12 allegations of false imprisonment and the like. 13 There is no reason to believe that he's given of 14 that we have that I could even imagine as to why the 15 documents we're seeking related to, for example, his 16 interest in the New York condominium, the Lady May, to all 17 the other private jets and things like that that he's talked 18 about, there's no conceivable scenario where those documents 19 would relate to these types of issues. 20 So this idea that the balancing test would weigh 21 in favor of not passing control over of these privileges to 22 the estate is just -- I think there's no weight to that. 23 The debtor also raises, Your Honor, the non 24 dischargeability actions that have been filed against him. 25 And he says that while there's a concern there I could be

1 all. So there's just no legitimate concern at all that 2 somehow we're going to get information related to these 3 actions. 4 And by the way, we're not going to share the 5 documents we get with the plaintiffs to those actions, so 6 this idea of a concern on the 523 actions, again, I think is 7 just -- it's really nonexistent. 8 A couple -- a couple more points, Your Honor, 9 before I wrap up. At least on my opening remarks. 10 The debtor in his objection, although he initially 11 says the Court shouldn't issue any ruling here, he says, 12 well, if the Court does, it could issue certain guidance. 13 And the way I think the debtor frames that 14 guidance is to say that the Court could direct the 15 recipients -- and this is in paragraph 33 of the objection - 16 - the Court could direct the recipients of the subpoenas to 17 withhold documents on the basis of privilege, quote, "Only 18 documents that they believe potentially implicate harm to 19 the debtor such as criminal allegations, facts relating to 20 non-dischargeability, or facts that have nothing to do with 21 the debtor's estate, such as his pending asylum application. 22 Now, some of that actually sounds consistent with 23 the remarks I've given today, but I think it also highlights 24 sort of what we're also worried about and the mischief that 25 could result if an order specific to that language is

1 questions. Thank you. 2 MR. ROMNEY: Thank you, Your Honor. 3 MR. BASSETT:

4 response. I think I might stay here this time if that's 5 okay. 6 THE COURT: That's fine. 7 MR. BASSETT:

8 proposed changes to the language, I think his position was 9 that, well, we're still not providing for the application of 10 a balancing test because if what we're saying is that 11 privileges related to the debtor's assets, financial 12 condition, or the administration of his estate, pass to the 13 trustee, it doesn't account for the possibility that there's 14 some other personal, individual interest, criminality or 15 otherwise that the debtor might have. 16 And I think the fallacy in that logic is that 17 there is no basis that's been provided as to why documents 18 would relate to assets, financial condition, or the 19 administration of the estate, would have anything to do with 20 the debtor's asylum application, with criminal allegations 21 that are made against -- that have been made against him for 22 rape or false imprisonment. 23 I mean, if the debtor's concern is that there 24 could be hypothetically a document where the debtor was 25 having a conversation with his counsel about both false

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Ho Wan Kwok - August 30, 2022 139 unrelated criminal liability or, you know, the particular things, again, that he's mentioned, his asylum application, things like that, in his objection, I think we could work out language to put in the proposed order to again make clear that we're not seeking that. I think there are other tweaks we would need, including to reserve our right to the extent of any withheld documents that we think might be relevant to the trustee's investigation on a crime-fraud exception to the attorney- client privilege, for example, but I do think there is a way to work out some language that could address some of the debtor's concerns. But, again, it cannot be a situation where the debtor gets to decide when he's harmed by the disclosure of a document because that is an open invitation for him to just withhold documents that he doesn't want us to see. Thank you, Your Honor.

THE COURT: Thank you.

MR. ROMNEY: Your Honor, if I may? THE COURT: Yes.

MR. ROMNEY: Very, very briefly. I've already said creating a privilege log is not deciding.

But I do want to make one perhaps significant clarification, which is, these order -- the proposed order

Ho Wan Kwok - August 30, 2022 150 MR. BASSETT: Thank you, Your Honor. THE COURT: Is there anything else that we can address today in the case? (No response) THE COURT: Okay. This was the last matter on today's calendar, so we will see you next Tuesday at 1:00 p.m., and court is adjourned. (Proceedings concluded at 4:29 p.m.) I, CHRISTINE FIORE, court-approved transcriber and certified electronic reporter and transcriber, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above- entitled matter. 16 September 10, 2022 17 Christine Fiore, CERT Transcriber Case 22-50073 Doc 1063-2 Filed 11/02/22 Entered 11/02/22 20:38:32 Page 11 of