Guo Wengui / Miles Guo — bankruptcy case · ORDER · ECF #1420

METADATA

Defendant: Guo Wengui / Miles Guo / Ho Wan Kwok
Court: CTB
Case No.: 22-50073
ECF #: 1420
Type: ORDER
Filed: 2023-01-31

FULL TEXT

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \* Case No. 22-50073 (JAM) \* HO WAN KWOK, GENEVER HOLDINGS \* Bridgeport, Connecticut CORPORATION and GENEVER \* January 24, 2023 HOLDINGS, LLC, \* \* Debtor. \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* TRANSCRIPT OF MOTION FOR ORDER FURTHER EXTENDING SALE PROCESS OF SHERRY-NETHERLAND APT AND RETENTION OF SOTHEBY'S INT'L. REALTY AS BROKER; APPLICATION TO EMPLOY PAUL HASTINGS LLP AS COUNSEL TO DEBTOR GENEVER HOLDINGS CORP AND GENEVER HOLDINGS LLC; MOTION TO QUASH THIRD-PARTY SUBPOENA DIRECTED TO IVEY, BARNUM & O'MARA LLC BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Creditor, Pacific ANNECCA SMITH, ESQ. Alliance Asia Opportunity Robinson & Cole Fund L.P.: 28 Trumbull Street Hartford, CT 06103 STUART SARNOFF, ESQ. O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, NY 10036 For the Chapter 11 Trustee: PATRICK LINSEY, ESQ. Neubert, Pepe and Monteith 195 Church Street New Haven, CT 06510 Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166 Proceedings recorded by electronic sound recording, transcript produced by transcription service.

APPEARANCES: (Cont'd) For the Creditors Committee: IRVE GOLDMAN, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For the Sherry Netherland, PATRICK N. PETROCELLI, ESQ. Creditor: Stroock & Stroock & Lavan 180 Maiden Lane New York, NY 10038 ROBERT E. KAELIN, ESQ. Murtha Cullina 280 Trumbull Street Hartford, CT 06103 For Bravo Luck, Interested FRANCIS J. LAWALL, ESQ. Party: Troutman Pepper Hamilton Sanders, LLP 3000 Two Logan Square Philadelphia, PA 19103 DAVID SHAIKEN, ESQ. Shipman, Shaiken & Schwefel 433 South Main Street Suite 319 West Hartford, CT 06110

Ho Wan Kwok-January 24, 2022 3 (Proceedings commenced at 1:01 p.m.) THE COURTROOM DEPUTY: Case no. 22-50073, Ho Wan Kwok, and Genever Holdings Corporation, and Genever Holdings, LLC. THE COURT: Good afternoon. If we could have appearances for the record starting with the Chapter 11 Trustee, please. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey, Neubert Pepe & Monteith, for the Trustee. MR. SARNOFF: Good afternoon, Your Honor. Stuart Sarnoff, O'Melveny & Myers, on behalf of Creditor PAX. And with me is local counsel Annecca Smith. THE COURT: Good afternoon. MR. GOLDMAN: Good afternoon, Your Honor. Irve Goldman, Pullman & Comley, for the creditors committee. MR. PETROCELLI: Good afternoon, Your Honor. Patrick Petrocelli, from Strook & Strook & Levan, on behalf of Sherry-Netherland. MR. KAELIN: Good afternoon, Your Honor. Attorney Robert Kaelin, of Murtha Cullina, also on behalf of the Sherry-Netherland. MR. LAWALL: Good afternoon, Your Honor. Fran Lawall, Trout man Pepper, on behalf of Bravo Luck. Also,

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Ho Wan Kwok-January 24, 2022 4 local is here, David Shaiken. MR. SHAIKEN: Good afternoon, Your Honor. THE COURT: Good afternoon. And there's nobody here for the debtor? Didn't they object to this? MR. DESPINS: I don't believe they objected, Your Honor. THE COURT: Oh, I thought they had filed an objection to this motion. I'm sorry. All right. Go right ahead, Trustee Despins. This is your motion. MR. DESPINS: Thank you, Your Honor. May I remove the mask? THE COURT: Yes. MR. DESPINS: Okay. THE COURT: Yes. Go right ahead. MR. DESPINS: Thank you. For the record, Luc Despins with Paul Hastings, Chapter 11 Trustee. So the motion, Your Honor, is -- was filed, and it's at docket 1257, and it's a motion to continue the sale process regarding the Sherry-Netherland, but without some of the I guess bells and whistles of the -- of the prior sale process. So I think given this is your -- I believe it's your first exposure to the Genever case, I think it's worth,

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Ho Wan Kwok-January 24, 2022 5 you know, going through the history there. So Genever is the title owner to the lease or, you know, to make -- to make this simple, to the apartment. Of course the way it's structured, because it's a co-op, there's a lease agreement, et cetera, but conceptually the title owner is Genever. And that entity filed for Chapter 11 in 2020, October, I believe, 2020. At that time, Mr. Kwok was controlling that entity and controlling the Chapter 11 case of Genever. And the other parties to the case at that time included PAX, because they had been in litigation with Mr. Kwok in front of Judge Ostrager in the New York Supreme Court and had either obtained or were on the verge of obtaining a summary judgment decision against Mr. Kwok and they were alleging or asserting alter-ego claims. PAX does not have a direct contractual claim against Genever, but they're asserting an alter-ego claim and that's what they asserted in that case. So that's one party. In addition to that, in that case, the Sherry- Netherland, you know, the owner of the building, is a party. They're a creditor and they were involved in that case. And the U.S. Trustee obviously, but there was no creditors committee appointed in that case.

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Ho Wan Kwok-January 24, 2022 6 And also the other party that was involved was Bravo Luck, an entity that is now apparently controlled by the son of Mr. Kwok. So right at the outset of the case, of that case, there were a lot of what I would call hostilities between PAX, Genever, and Bravo Luck, and basically in the nature of PAX saying let's lift the automatic stay so I can continue my action to prosecute alter-ego claims against Genever. Obviously Bravo Luck opposing that. And then eventually in 2021 PAX also filed a motion to convert the Genever case to Chapter 7 or to appoint a trustee. So all this was happening in late 2020 and also during 2021. There was no fiduciary in the case at that time. No creditors committee. Obviously no trustee. Eventually the parties were able to reach agreement on something, namely that the apartment should be put up for sale, and that's memorialized into an agreement that we -- that we cited in our papers. And that agreement gave various rights to Bravo Luck and PAX. It also -- and I'll come back to that obviously. And also it called for the appointment of a sales agent, which is an unusual structure, because neither side trusted each other obviously. The idea was why don't we have a third party, a former bankruptcy judge, Judge Cyganowski, have this role of sales agent so that she can

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Ho Wan Kwok-January 24, 2022 7 retain a broker and make the ultimate decision of whether, you know, when and whether to sell and at what price. And that was all memorialized in that agreement. And in that agreement, I said generally that Bravo Luck and PAX had some rights sort of in the sale process as they -- they have consulting rights, meaning that the sales agent is supposed to consult with them regarding the sale process. And also there is a provision in paragraph 5 that says, of the settlement agreement, that says draft of motion to sell, eventual motion to sell, needs to be provided to Bravo Luck and PAX for review and approval prior to filing. You know, we were not around. Obviously we didn't exist at that time. But there's a real issue here, which is what does that mean approval? Approval as to form? Approval as to substance? Unclear. It doesn't say. So that agreement, also in paragraph 4.E, provided that the sale process will be limited initially to a 180-day period from the retention of the broker, the broker being -- I forgot, sorry, I have it -- the broker being Sotheby's, I'm sorry. And so 180 days from the retention of the broker subject to extension upon written agreement of the debtor, Bravo Luck and PAX, so all of these have to consent, or by further order of the Court for cause shown. And, in fact, that apartment has been on the

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| | Ho Wan Kwok-January 24, 2022 8 | |----|----------------------------------------------------------------| | 1 | market for I'm not sure if it's a year. Or if it's not a | | 2 | year, it's close to a year. Maybe it's a little bit more | | 3 | than a year. But that apartment has been on the market and, | | 4 | therefore, the 180 days has come and has gone. | | 5 | And, in fact, the parties have agreed to extend | | 6 | the process with the last extension, not entered by Your | | 7 | Honor, but entered by Judge Garrity in that case, in the | | 8 | Genever Holding case, at docket no. 222, which said that | | 9 | that period, that extended period, would expire on October | | 10 | 31st without prejudice to further extension upon the consent | | 11 | of the parties I just mentioned. | | 12 | So October 31st of this year, you know, has | | 13 | occurred. There was no agreement to extend. Our belief, | | 14 | because we control Genever through the trustee position we | | 15 | have, is that the sale should continue. | | 16 | I don't believe anyone disputes that the sale | | 17 | should continue, at least I've not heard any objection to | | 18 | that. And so we wanted to continue the sale process. | | 19 | We also thought, and I reflected on for not a long | | 20 | time, maybe for five minutes, about, well, now that there's | | 21 | a trustee, does it make sense to continue the role of Judge | | 22 | Cyganowski, and I decided that it made sense. The reason | | 23 | being the current atmospherics in the case it can't hurt to | | 24 | have a third party, such as a former bankruptcy judge, | | 25 | making these decisions and I decided to keep her in that | | | |

Ho Wan Kwok-January 24, 2022 9 role. And also I'm saying this a little bit in a cynical way, but she hasn't been accused of being a member of the CCP yet so, therefore, it looks like for now she's still proceed as independent. And that's why -- and that's what we're doing. Basically, we're seeking to continue the continued role of Judge Cyganowski, the continued role of Sotheby's as the broker. The apartment is on the market. It's right now on the market for 32,500,000. Remember, that that apartment was acquired for, you know, there are various references by the debtor of how much he paid, but around 60 or 70 million. It doesn't matter. It's still at 32. It's still half of what was paid. And it's on the market. But it's important to understand that although the debtor is using the apartment from time to time, the debtor's is not paying rent, and nobody is paying rent on that apartment. And the maintenance is shocking. But the maintenance on the apartment is something like 80, I want to say 82, maybe I'm off by a few thousand dollars, but 80,000 or 82,000 a month. That's just on maintenance. And what's happening is that there was an account funded pre-petition to cover the Sherry-Netherland for that maintenance. That account had a million and change on the

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| | Ho Wan Kwok-January 24, 2022 10 | |----|----------------------------------------------------------------| | 1 | petition date. And of course it's been depleted since then. | | 2 | To be honest with you, I've not done the math as to when | | 3 | that will be exhausted, but it will be exhausted eventually. | | 4 | And, therefore, one of the reasons we are moving | | 5 | in this direction is that if the apartment doesn't sell we | | 6 | may have to pivot into a different direction. For example, | | 7 | renting. And I don't want to get into an issue of you're | | 8 | proposing to stop the sale process? No, we want to sell. | | 9 | That's the goal, et cetera, et cetera. But at one point, | | 10 | unless somebody's willing to write a check for \$82,000 a | | 11 | month, the Sherry-Netherland is going to say who's paying | | 12 | that? | | 13 | So obviously we need to start thinking about that. | | 14 | That's not part of the relief we're seeking, but I want to | | 15 | make sure Your Honor knows part of the thinking here is that | | 16 | we may have to go in that direction. | | 17 | And of course I want to be clear, the Sherry | | 18 | Netherland has whatever rights they have. We're not trying | | 19 | to say that we have the right to rent it to anyone or to | | 20 | rent it at all. Whatever the documents provide, they | | 21 | provide. We're not trying to go in that direction at all. | | 22 | We just want to mention that we need -- we may | | 23 | need flexibility here, but we're not seeking that | | 24 | flexibility in this order right now. We want to continue | | 25 | the sale process, but I want to flag for Your Honor that | | | |

Ho Wan Kwok-January 24, 2022 11 these consulting rights and all that may cause conflict issues. So if we talk about Bravo Luck for a second, Bravo Luck is the company that apparently is controlled by the debtor's son. Of course, they're doing Mr. Kwok's bidding. Mr. Kwok uses the apartment for free. And if we told them that he needs to leave so we can rent it, I guarantee you that they would not support that. Although I'm happy to hear a contrary view on that. But, again, that's not before the Court. But it goes to the issue continuing the sale process and with -- in a different posture. So the argument here is that let's talk about PAX. It pains me to be adverse to them because they've been very supportive of the trustee's work. And I hate this. But on the other hand, we have to be clear, PAX is an unsecured creditor of Genever, at least as alleged, an unsecured claim. It's an alter-ego claim. Don't want to go there, but it's unclear as to whether the trustee owns that claim or they do. We don't need to go there. But the point is that they're an unsecured creditor. They're not a fiduciary. And by the way, they were carrying the banner of unsecured creditors before the appointment of a trustee. They did that in the Genever case. And, you know, all unsecured creditors should thank Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 11 of 50

Ho Wan Kwok-January 24, 2022 12 them for that. But at the end of the day, they're not a fiduciary. I'm not saying anything negative about them, but they have a business to run. They're going to do -- make decisions to the extent it's in their own economic best interest to do that and, therefore, we don't believe that they should have a veto or consulting rights. And as I said, it pains me to say that because they've been very supportive of the process. And we intend to continue to cooperate with them to the extent we can, but just given the circumstances it's a different landscape and they should not have consulting rights or veto rights regarding the sale motion. And as far as Bravo Luck is concerned, you know, we'll talk about this at 2 o'clock, but, you know, they're a defendant in that adversary proceeding because their argument is that they own this apartment through a trust agreement which was, quote/unquote, "A secret trust agreement," never disclosed in litigation for years. And we think it's a fraudulent transfer in any event and we don't believe they should have any consulting rights. One of the reasons being is that they're doing their debtor's bidding here. And, for example, if we need to pivot to something Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 12 of 50

different than a sale, we don't want them to have any say

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| | Ho Wan Kwok-January 24, 2022 13 | |----|---------------------------------------------------------------| | 1 | other than -- that they can have a say in court, but they | | 2 | shouldn't have any contractual say in that decision. | | 3 | Again, we're not asking the Court to approve | | 4 | anything other than the continued role of Judge Cyganowski | | 5 | as the sales agent and the continued role of Sotheby's as | | 6 | the sale broker. | | 7 | And so for these reasons, Your Honor, we believe | | 8 | that this should be approved. We believe -- | | 9 | You know, Bravo Luck is arguing that this is a | | 10 | 60(b), that if there's a settlement, you're trying to undo | | 11 | the settlement, you need to seek court relief on that. | | 12 | That's not the case. | | 13 | The document itself had an expiration provision, | | 14 | the 180 days. It was extended several times. But it was | | 15 | not extended on October 31st and, therefore, the agreement | | 16 | regarding a sale process is no longer in effect. And, | | 17 | therefore, we believe that there's no need to move under | | 18 | 60(b) or other forms of relief. | | 19 | We're not undoing the settlement agreement or the | | 20 | sale process that is governed by that agreement, expired by | | 21 | its own terms, but we are continuing some features of it, | | 22 | namely, Judge Cyganowski and Sotheby's. | | 23 | And for these reasons, Your Honor, we would ask | | 24 | Your Honor to approve the motion, but happy to answer any | | 25 | questions you may have. | | | |

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| | Ho Wan Kwok-January 24, 2022 14 | |----|---------------------------------------------------------------| | 1 | THE COURT: I do not have any questions at the | | 2 | moment. I might as the hearing progresses. | | 3 | MR. DESPINS: Thank you. | | 4 | THE COURT: Thank you. | | 5 | MR. SARNOFF: May I be briefly heard? | | 6 | THE COURT: Yes. Sure. Certainly. | | 7 | MR. SARNOFF: May I remove my mask? | | 8 | THE COURT: Yes. Yes. Thank you. | | 9 | MR. SARNOFF: Good afternoon, Your Honor. I'm | | 10 | Stuart Sarnoff from O'Melveny & Myers on behalf of Creditor | | 11 | PAX. Mr. Friedman was not able to be here today, so I will | | 12 | do as good a job as I can to replicate his skills. | | 13 | As Mr. Despins said, this may be an unusual | | 14 | situation we're we've sort of had a disagreement with the | | 15 | trustee on the prosecution of the case. | | 16 | And it's also an unusual situation in this dispute | | 17 | where PAX's view is it wasn't broken, it doesn't need to be | | 18 | fixed. | | 19 | As we said in our papers, PAX, which is by far the | | 20 | largest creditor, objects to Trustee Despins' motion only to | | 21 | the extent that it seeks to eliminate PAX's consultation | | 22 | rights with respect to the marketing and sale of the Sherry | | 23 | Netherland apartment. | | 24 | We're not objecting to the continuation of the | | 25 | approved sale process, whether it's the continuation of the | | | |

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Ho Wan Kwok-January 24, 2022 15 agreement or the entry into a new agreement, we are fully supportive of the sale process with Judge Cyganowski and with Mr. Despins' role.

But PAX, like the trustee, and like Bravo Luck, and like the debtor, are aligned in that our primary motivation here is to maximize the sale proceeds from the apartment. That benefits all of the creditors as well as the debtor in a sense. We're aligned on this.

But recognizing that the sale of the Sherry- Netherland is one of the means to achieve the estate maximizing the objective of maximizing value PAX bargained for these consent rights. It gave up its -- and resolved its lift-stay motion in consideration for having the right to weigh in effectively, not to have a veto right. It doesn't have a veto right. In fact, the agreement provides -- the existing agreement expressly provides that the sales officer has final authority in the event of any dispute.

PAX's rights was to be -- were to be consulted and to have a view and to weigh in, and we don't see any reason having bargained for that right and resolved the lift-stay to be cut out of that process where we don't have veto rights.

We have consultation rights and consent rights, the rights to review the sale motion prior to filing, the right to be kept informed regarding the sales process,

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Ho Wan Kwok-January 24, 2022 16 offers received, materials relating to the negotiation of the sale of the apartment, the right to be consulted regarding the bank that's going to hold the proceeds. These are not draconian rights. These are rights to be kept in the loop, and we don't -- and, again, we'd like that status quo preserved. The sales process creates a status quo and is really in this case one of the few examples of the parties working together and reaching a consensus. It's creating defining -- it's creating defined rights and allowing the parties to participate in the process which is a positive. It reduces the potential for conflict by giving the parties an opportunity to voice their concerns. It additionally creates a process by which there's no dispute that the apartment is going to be sold and liquidated so that there's assets for the creditors of the estate. There's no need for the equilibrium here to be disrupted. It's a little strange that in the Sherry- Netherland's reply in support of the trustee's motion, they point out at page -- at paragraph 8 of their reply brief -- or their brief in support -- that PAX and Bravo Luck somehow hindered the sales process. But you'll note, Your Honor, there's absolutely no evidence or argument supported other than that blanket statement, and it's just not true.

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Ho Wan Kwok-January 24, 2022 17 In fact, you heard Mr. Despins a few minutes ago and he didn't make the argument that we've been obstructive or we've hindered the sales process. And god knows, Trustee Despins is a talented guy and he's not shy. If he thought we had been hindering the process, he would have told you. So I don't think that allegation that somehow we or Bravo Luck for that matter has been hindering the sales process is valid and it's certainly not supported by anything. And, you know, obviously the Sherry-Netherland is a secured creditor, but they are the one party who probably doesn't care what price the apartment gets sold as long as it's enough to cover their security. And so they may be the one party least aligned in terms of maximizing value, but that's not an issue before Your Honor today. I'm just making the point that we haven't been hindering the sales process. There's no argument. And Trustee Despins, you know, with whom we have a pretty good working relationship, wouldn't even make that suggestion to you. So, in summary, you know, as I said at the outset, we were the largest creditor. We negotiated for the consent right. And it's not a (indiscernible) right. We're not being obstructive. And we want to preserve the status quo. And we support the ongoing sales process, but we shouldn't be stripped of the rights that we bargained for.

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| | Ho Wan Kwok-January 24, 2022 18 | |----|---------------------------------------------------------------| | 1 | And just to wrap it up, we don't think it's | | 2 | broken. We don't think it needs to be fixed. | | 3 | If you don't have any questions, I'll sit down. | | 4 | THE COURT: I do not have any questions at this | | 5 | time. Thank you. | | 6 | MR. SARNOFF: Thank you, Your Honor. | | 7 | MR. GOLDMAN: Your Honor, may I be heard on behalf | | 8 | of -- | | 9 | THE COURT: Did you file a response? | | 10 | MR. GOLDMAN: We did not. | | 11 | THE COURT: Okay. I'm going to take the people | | 12 | that filed responses first. Okay? | | 13 | MR. GOLDMAN: Sure. | | 14 | MR. PETROCELLI: May I be heard next, Your Honor? | | 15 | THE COURT: Yes. Go right ahead. | | 16 | MR. PETROCELLI: Good afternoon. Again, for the | | 17 | record, Patrick Petrocelli on behalf of the Sherry | | 18 | Netherland. I'll be very brief. | | 19 | The settlement agreement was signed over a year | | 20 | ago. The apartment, as far as we're aware, is no closer to | | 21 | being sold than when the settlement was agreed -- was | | 22 | originally entered into. The Sherry-Netherland is the only | | 23 | direct creditor of Genever, the titled owner of the | | 24 | apartment at issue, who has filed papers in support or in | | 25 | opposition to this application. | | | |

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Ho Wan Kwok-January 24, 2022 19 Certainly the trustee believes that something in the process needs to be fixed or changed, whether you want to call it hindered, whether you want to say it's broken, something needs to be changed or else the trustee would not have filed the application. I heard reference before to we don't have a veto right, we have a consent right. If someone has the right to consent to something and they withhold their consent, that is by definition a veto. And the Sherry-Netherland does believe that when you have a sales officer, you have a real estate broker, you have a trustee, you have Bravo Luck and PAX, that's five people who are making decisions, who are being listened to in terms of any decision that is going to be made, we, therefore, really have nobody who's making decisions and we do believe that that is a hindrance. The Sherry-Netherland, as a secured creditor, as the trustee noted, the security deposit, which is a finite source of funds, is being used to cover certain post- petition claims of the Sherry-Netherland on a month-by-month basis. You know, if the sales process continues to drag out and that fund is exhausted, there is going to be an open question as to what then needs to happen in terms of being able to cover the maintenance costs. And so we support the trustee in his application

Ho Wan Kwok-January 24, 2022 20 today. You know, whatever bargained-for rights were contained in the settlement agreement, those bargained-for rights had an expiration date and that expiration date has since passed. And so we think that given where we are today and the circumstances that are here, again, the Sherry- Netherland as the only direct creditor of Genever, the titled owner of the apartment, we support the application that the sales process should continue and that the best way to achieve a value maximizing sale of the apartment under current marketing conditions is for that sale process to continue without whatever consent or consultation rights were previously in place. Unless the Court has any questions, we'll -- THE COURT: I don't have at the moment. Thank you. MR. PETROCELLI: Thank you very much. THE COURT: Counsel for Bravo Luck? MR. LAWALL: Thank you, Your Honor. And good afternoon. First of all, I am Fran Lawall on behalf of Troutman Pepper and on behalf of Bravo Luck. And thank yo for executing our pro hac vice motion, Your Honor. This is the first time I've been able to be before Your Honor. THE COURT: You're welcome.

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Ho Wan Kwok-January 24, 2022 21 MR. LAWALL: Your Honor, I have a copy of the settlement agreement which might be informative. I don't know if Your Honor has a copy in front of you or whether you'd like to have a copy. THE COURT: I do. I mean, if I'm looking at the right thing, I do have a copy of the settlement agreement, which I believe is the right thing. MR. LAWALL: Great. THE COURT: Let me just -- let me just make sure though. And we could always pull it up so everyone can see it at the same time, but I think it's attached to the trustee's motion as Exhibit C or B. Here it is. The settlement -- second, amended and restated settlement agreement, is that what you're looking at, Counsel? MR. LAWALL: That is correct, Your Honor. THE COURT: Okay. Then I'm on the same page with you. MR. LAWALL: Thank you, Your Honor. And, Your Honor, just a couple of things up front. And I'm not going to make a big deal of this, but suggestions by the trustee that Bravo Luck is doing Mr. Kwok's bidding is simply not the case. There is litigation that's pending. There are three complaints against my client. A couple of things just from the top. It's undisputed that a Bravo Luck account funded

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Ho Wan Kwok-January 24, 2022 22 the purchase of the Sherry, so the suggestion that the Sherry is the only creditor of Genever New York, which is how I refer to it, which is the direct owner of the Sherry, that's not correct, in effect, because PAX is not a direct creditor at this point of Genever. Bravo Luck is actually the largest creditor if it turns out that it's not the owner of the property under the trust agreement. And we've recognized from the beginning that there was an issue with respect to this trust agreement. In fact, Your Honor, the entire settlement agreement was negotiated in New York as a pathway to provide a sensible way of resolving those issues while at the same time allowing the sale of the Sherry. And, by the way, something that I think the Sherry has not taken into account was that there was a major concession with respect to that deposit that was not funded by the debtor, which was allowed through lift-stay to pay the maintenance fee throughout the course of this settlement agreement. So, in effect, it's not simply that this settlement agreement resolved either a trustee motion or lift-stay motion, it resolved a myriad of issues including it provided a pathway for the sale of this property and the funding of an escrow once those monies -- once it was

Ho Wan Kwok-January 24, 2022 23 liquidated so that the dispute with respect to ownership could be resolved. This negotiation went on for several months, several hearings in front of Judge Garrity, substantial participation by the United States Trustee, so this was not simply a document that was thrown together. And I agree with Mr. Sarnoff and I'm hoping this action creates a bridge at some point for some kind of a resolution in this case that this has worked all the way through. In fact, participation has been by all the parties, giving suggestions to the sales officer with respect to how to proceed. And, in fact, there hasn't been any major disputes. There have been sharing of information to try and get to the endpoint, which we all agree on is the highest and best price. Now, a couple of important things with respect to the settlement agreement. There's been a suggestion that there is a veto right. There's anything but that. It is a consultation right. And, in fact, in several places within the settlement agreement it makes clear that the sales officer has the final say. And if there is a dispute at all, it comes before Your Honor. Neither PAX nor us, Bravo, has a veto right here. It is simply a consultation right to weigh Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 23 of 50

Ho Wan Kwok-January 24, 2022 24 in. And, in fact, that's the way Chapter 11 is supposed to work. You're supposed to bring the major parties in, try and reach an agreement, and then file your papers. And that's all this was intended to do. Had the Genever case proceeded and the Connecticut cases not been filed, what would have happened is this property would have been sold and there would have been litigation, which the settlement agreement provides, for an ultimate determination with respect to the trust agreement. We recognize there's an issue. We're not trying to hide it. We're prepared to litigate it. We have three complaints against us right now which we're prepared -- to which we'll respond. And I pledge to Your Honor we are going to do this in an orderly fashion with as little fanfare as possible. We're going to do it by the numbers. We'll develop the facts. We'll try the case if it becomes necessary. We've been fine with that from the very beginning. And we knew that this was an issue, allegations that the settlement agreement -- the trust agreement was hidden or what have you, we'll deal with that. I don't believe that's the case, but we'll deal with that. And, again, we're looking at the four corners of a settlement agreement which was done by final order of Judge

Ho Wan Kwok-January 24, 2022 25 Garrity more than a year ago that provides for a comprehensive resolution with respect to the disposition of this property in an orderly fashion. And there are no veto rights. One of the things that we raised with respect to the trustee's motion is there seems to be an awful lot of inconsistency. And if I may, Your Honor, I'm going to start with the relief requested in the original motion. In paragraph 24 -- THE COURT: Let me catch up with you though. MR. LAWALL: Sure, Your Honor. THE COURT: I'd like to follow you. So let me pull the motion up. (Pause.) THE COURT: So paragraph 24, did you say? I'm not quite there yet. MR. LAWALL: Sure, Your Honor. Whenever -- THE COURT: Paragraph 24, but I'm in the document. Is that the document? Is that the paragraph you just noted? MR. LAWALL: That is correct, Your Honor. And specifically I'm looking at the third line in the middle of the sentence where it says in accordance with the terms of the settlement agreement except that -- well, let me go back. It says movant's requests for authorizations to Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 25 of 50

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| | Ho Wan Kwok-January 24, 2022 26 | |----|---------------------------------------------------------------| | 1 | continue the now-expired sale process of the Sherry | | 2 | Netherland under the auspices of the sale officer -- I'm | | 3 | skipping some words -- through February 1, 2023 in | | 4 | accordance with the terms of the settlement agreement. | | 5 | So the initial motion was we want to -- we want to | | 6 | continue the settlement agreement in place, but we want to | | 7 | make this change. | | 8 | And then when you go to paragraph 27 of the same | | 9 | motion it further says while the sale and marketing process | | 10 | will continue to be conducted by the sales officer and | | 11 | Sotheby's in accordance with the terms of the settlement | | 12 | agreement, movants propose that the order extending the sale | | 13 | marketing process not continue any of PAX's and Bravo Luck's | | 14 | consultation and consent rights. | | 15 | So my point on this right now, Your Honor, is that | | 16 | what the trustee was trying to do was to amend the | | 17 | settlement agreement, but yet stay within the four corners | | 18 | of all the other terms and conditions and benefits of it, | | 19 | which is why in our response we said this is, in effect, a | | 20 | Rule 60 motion. | | 21 | Then, Your Honor, when you go to their omnibus | | 22 | opposition -- | | 23 | THE COURT: Okay. Let me get there too please so | | 24 | I can follow you. What's the document number on the top of | | 25 | that document you're looking at right now? | | | |

Ho Wan Kwok-January 24, 2022 27 MR. LAWALL: Yes, Your Honor. It's document 1359. THE COURT: Okay. If you give me one second, please. (Pause.) THE COURT: All right. And where in this document would you like me to focus on? MR. LAWALL: Yes, Your Honor. Page 3. Paragraph 3, page 3, it's the last sentence at the end of paragraph 3. THE COURT: Okay. MR. LAWALL: It says instead movant seeks authorization to continue to attempt to sell the Sherry- Netherland apartment outside the ambit of the settlement agreement. So on the one hand the initial motion is we want to stay within the terms of the settlement agreement. Then the omnibus motion says, no, actually we want (indiscernible) outside the terms of the settlement agreement. I assume that was somehow to try and escape the Rule 60 issue. Put that aside, Your Honor, from our perspective, what we want is clarification. If the trustee's going to blow up the settlement agreement, well, then so be it, but that will have consequences which may not be good for the estate. And we are prepared to honor the settlement agreement, move forward

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| | Ho Wan Kwok-January 24, 2022 28 | |----|----------------------------------------------------------------| | 1 | with the sale, put forth our consultation rights, and be | | 2 | cooperative and constructive in connection with the sale, | | 3 | and then we'll litigate with respect to the issue of the | | 4 | ultimate ownership. | | 5 | And if, in fact, it is determined that we somehow | | 6 | don't own this property under the trust agreement, there is | | 7 | still a 65 to \$70 million of cash that was put into this | | 8 | property for the acquisition. One way or the other, both of | | 9 | those issues are going to have to be resolved and we | | 10 | recognize that. | | 11 | But, from the top, Your Honor, again, it's still | | 12 | unclear whether the trustee's trying to keep the settlement | | 13 | agreement in place or whether he's trying to go outside the | | 14 | settlement agreement and says it doesn't exist. | | 15 | I will point out under the terms of the settlement | | 16 | agreement itself the provision that deals with the sale of | | 17 | the property, the extension, if I can just find this, it's | | 18 | paragraph 4 of the settlement agreement, Your Honor. And I | | 19 | apologize for jumping back and forth -- | | 20 | THE COURT: That's all right. I've got it. I | | 21 | just have to get to paragraph 4. Okay. The marketing | | 22 | terms, is that what you're saying, that paragraph? | | 23 | MR. LAWALL: Yes, Your Honor. | | 24 | THE COURT: Okay. | | 25 | MR. LAWALL: It says, and let me have the exact | | | |

Ho Wan Kwok-January 24, 2022 29 words, I have it written down in my own left-handed chicken scratch -- Your Honor, I'm sorry. I have the wrong paragraph. I'm looking for the paragraph that deals with duration. And I may have -- THE COURT: Hold on. I might be able to find it. Actually 4.E says, at the top of page 5, notwithstanding anything contained herein to the contrary of the duration of the sales process shall be limited to 180 days from the retention of the broker. Is that what you were looking for? MR. LAWALL: Yes. Thank you, Your Honor. I appreciate that. Your Honor, the one thing I'll just point out there is the extension of the sales process. You'll notice it's not a defined term. It's a capital -- it's a small S, small O. This process, the sales process, this entire settlement agreement, dealt with the sale of this property. Everybody had hoped that it would sell within 180 days, but people understood that it could be extended. But it was extended within the four corners of this settlement agreement, not some third-party sale process. I appreciate the fact that Mr. Despins is the trustee of the Kwok Estate, but the Genever New York is Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 29 of 50

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| | Ho Wan Kwok-January 24, 2022 30 | |----|----------------------------------------------------------------| | 1 | still a debtor in possession under the auspices of the | | 2 | trustee indirectly through Genever BVI. This was an | | 3 | agreement that was reached with Genever New York after a | | 4 | long period of time which was beneficial to the estate. | | 5 | And, respectfully, we see no reason why it should be changed | | 6 | at this point. | | 7 | We're simply asking the trustee to allow the major | | 8 | parties to continue to consult, to be part of the process, | | 9 | to be productive, and move towards the sale of this | | 10 | property. | | 11 | If the trustee is going to move outside of this | | 12 | sales and start a different sales process with respect to | | 13 | Genever New York, then what we're suggesting is then that | | 14 | may call into question whether this settlement agreement is | | 15 | still valid or not or whether it has now been terminated as | | 16 | a result of their actions. | | 17 | I don't want to go there, Your Honor. We'd rather | | 18 | just continue the settlement agreement as is, as a prior | | 19 | entered court order, and to move forward with this estate. | | 20 | I'm sure we're going to have enough fights. This is not one | | 21 | we necessarily need to have. | | 22 | That's all I have, Your Honor, unless you have any | | 23 | questions. | | 24 | THE COURT: I don't at the moment. Thank you. | | 25 | MR. LAWALL: Thank you, Your Honor. | | | |

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Ho Wan Kwok-January 24, 2022 31 THE COURT: Mr. Goldman, you wanted to be heard? MR. GOLDMAN: Yes. Thank you, Your Honor. I'll be brief. I just wanted to express the committee's support for the trustee's position in this case. I'll take him up on his invitation to thank PAX which I think is deserving of thanks. They certainly served as a protectorate so to speak of the interests of all unsecured creditors, although it may have been unwittingly and for their own interests. But the bottom line is they really have no special or priority interest in this asset, vis-a-vis other unsecured creditors of the Kwok Estate. They assert an alter-ego claim which is a claim that is common to all creditors of Kwok's Estate and, therefore, it's our position that that type of claim is held by the trustee in accordance with controlling Second Circuit authority, most recent of which was the *In re: Tronics* case from the Second Circuit. The case now is obviously in a completely different posture than when this settlement agreement was entered into and approved. At that time, you had ostensibly Mr. Kwok who was the indirect equity owner of Genever Holdings through his 100 percent interest in Genever BVI.

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Ho Wan Kwok-January 24, 2022 32 Since that agreement was entered into, Mr. Kwok has filed a voluntary Chapter 11 case, a trustee has been appointed. The trustee now controls the corporate authority that exists in both Genever Holdings and Genever BVI, which in turn controls Genever Holdings, so the whole reason for the procedures that were established in that case no longer exist now that the trustee is serving as the protectorate for the unsecured creditors. And the agreement itself, although it may be a technical reading, it does state that it's establishing procedures for the sale of the property in the Chapter 11 case. And the Chapter 11 case is defined as the case that was pending in New York. The case is now pending in Connecticut under a completely different set of circumstances. So, with that, I'll just conclude, and again express our support for the trustee's position. THE COURT: Okay. Thank you. Mr. Despins, do you have any response? MR. DESPINS: Yes, Your Honor. Very briefly. The first thing that needs to be corrected is this concept that somehow the son paid for the apartment or some of it. The money all came from Hong Kong from Mr. Kwok. It did go through a Bravo Luck account, but Mr. Kwok had

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| | Ho Wan Kwok-January 24, 2022 33 | |----|----------------------------------------------------------------| | 1 | control with the son over the account. He's the one who | | 2 | authorized the transfer for the funds. | | 3 | So this concept that somehow the son, who as far | | 4 | as we know -- they don't like it when we say that -- but has | | 5 | never had a let's put it this way a job that would support | | 6 | paying \$60 million for an apartment. You know, that | | 7 | concept, is just -- it's heresy. But that's for another | | 8 | day. | | 9 | Now, as far as -- there's a fundamental issue | | 10 | here. The document says that they have approval rights over | | 11 | a motion. They're saying we just have consulting rights. | | 12 | Frankly, I'm not that concerned about them having | | 13 | consulting rights as long as they don't have approval | | 14 | rights. But the document says approval right and they skirt | | 15 | that. They don't even mention that. | | 16 | But as the counsel for Sherry-Netherland said if | | 17 | you have consent rights, you have a veto right. | | 18 | So the estate cannot be in a position where anyone | | 19 | can veto the sale and that's really the crux of the issue | | 20 | here and we can't hide that through the reference to | | 21 | consulting rights. | | 22 | And both sides, you know -- and, again, I'm saying | | 23 | this with all due respect to Mr. Sarnoff, but also Bravo | | 24 | Luck -- you know, completely ignore that language, | | 25 | notwithstanding anything contained herein. Notwithstanding | | | |

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Ho Wan Kwok-January 24, 2022 34 anything contained herein that the duration of the sale process shall be limited to 180 days unless everyone agrees or the Court orders for cause shown. And these conditions are not present. They were not present on November 1st when the prior extensions expired and that's the state of play, that that agreement ended. And it's important to look at the extensions that were agreed to, Your Honor. For example, you've never extended it and that's why we wanted to raise the issue before you actually put an order in this case. But there were extensions in the case when it was before Judge Garrity before. And I'm looking, for example, at the one where there's an expiration date of October 31st, which is document 222 in case 22-50592. And in there it says whereas the parties, that includes Bravo Luck and PAX, would like to further continue the sales process of the residence, number one. Two, the debtor's -- I say two, there's no two there, but, you know, comma, the debtor's employment of Ms. Cyganowski as sales officer, and the retention of Sotheby's as the debtor's broker to market and sell the residence. So these are the three aspects that the parties

Ho Wan Kwok-January 24, 2022 35 realized that needed to be continued otherwise they would end by their terms. And it clearly says order that pursuant to the settlement agreement the sale process of the residence is extended from September 12 through October 31st, 2022, without prejudice to further extension upon the consent of the parties. That never happened. So we can ignore that provision. But that provision said notwithstanding anything contained herein the sale process shall end at that time. So, therefore, there's no breach or termination of that agreement. It's by it's own terms it terminated. And the question is should we continue the same consent rights that they have? We believe that's imprudent because we don't want to be in a position where somebody can veto that. So that's why we moved for that relief and we're asking the Court to enter the order. Thank you. THE COURT: Thank you. MR. SARNOFF: May I just be very, very briefly heard, Your Honor? THE COURT: Yes. MR. SARNOFF: Stuart Sarnoff, O'Melveny & Myers on behalf of PAX. I do find myself slightly in the unusual position Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 35 of 50

Ho Wan Kwok-January 24, 2022 36 of arguing a contrary position to the trustee and that will happen sometimes. I would just point Your Honor to paragraph 6 of the settlement agreement, approval powers. The sales officer shall have the final approval power after consultation with the debtor Bravo Luck and PAX and subject to the Court, bankruptcy court approval with right to object by Bravo Luck and PAX regarding -- and then it goes on -- the marketing and sale of the residence including. I don't know why we're tripped up over consultation versus veto. I think Mr. Lawall and I have represented that we don't believe we have veto power or rights. I think paragraph 6 of the agreement, and I understand there's a question about whether it continues or this is a new agreement, but I think we could agree that we don't have veto power and I think that's what paragraph 6 says. We have the right to be consulted and informed, express our views, and then the sales officer shall have the final authority with bankruptcy approval to reach its decision. So, I mean, if the Court wants to make it clear in an order that we're to be consulted, but we don't have veto Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 36 of 50

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Ho Wan Kwok-January 24, 2022 37 power, I think we would -- I can't speak for Mr. Lawall -- I think PAX would consent to that. But I think it's consistent with what PAX and Mr. Lawall on behalf of Bravo Luck always thought we did have and didn't have. So I just -- I don't want us -- and I know that the Sherry-Netherland lawyer stood up and said there must have been something wrong with it, or Mr. Despins, I don't think that's true. I don't think Mr. Despins has said one sentence in support of a notion that we've been obstructive or we've hindered this. And I just don't see any reason to deprive us of a right which we bargained for when it is not veto power. It is consult. It is consultation power. That's all I had. Thank you. THE COURT: Thank you. MR. PETROCELLI: Very briefly, Your Honor? THE COURT: Certainly. MR. PETROCELLI: Just two things quickly. I want to -- I could have misheard, but I thought I heard counsel for Bravo Luck suggest that the Sherry- Netherland's ability to use the security deposit for post- petition maintenance was somehow tethered to the settlement agreement or the terms in the sale process or anything of that nature. That's incorrect. 25 The consent order allowing the Sherry-Netherland

Ho Wan Kwok-January 24, 2022 38 to use the security deposit speaks for itself. It's at case 22-50592, docket no. 107. And, you know, to the extent any compromise or anything is hammered out here today, the Sherry-Netherland would just ask that it be crystal clear that you're talking about consent, I'm sorry, consultation only, because I think there is hangup there about certain instances in the agreement refers to consent. And, again, consent and veto, I don't what the difference is between those two (indiscernible). THE COURT: When you say the agreement, do you mean ECF 107 that you just spoke about? MR. PETROCELLI: I'm sorry. I switched back to the settlement agreement for that point. THE COURT: Okay. Okay. MR. PETROCELLI: There has been some suggestion here that, you know, and I take counsel for PAX at his word, that they don't believe that they have a veto right. You know, I would like to hear him say they don't believe they have a consent right either. Because, again, I don't see a distinction between those two. And, otherwise, again, the Sherry-Netherland as a secured creditor of the titled owner of the apartment is interested in an expeditious, volume maximizing sale of this apartment, you know, given the market conditions, and we Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 38 of 50

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| | Ho Wan Kwok-January 24, 2022 39 | |----|---------------------------------------------------------------| | 1 | support that application. Thank you. | | 2 | THE COURT: Thank you. | | 3 | Counsel? | | 4 | MR. LAWALL: Your Honor, may I be heard briefly? | | 5 | THE COURT: Yes. | | 6 | MR. LAWALL: The settlement agreement itself does | | 7 | specifically address in paragraph 7.E the deposit. It says | | 8 | stay relief is confirmed to allow the Sherry-Netherland to | | 9 | apply all accrued and owing post-petition maintenance fees | | 10 | and assessments. | | 11 | So I think what was said earlier is incorrect to a | | 12 | point, that the use of that deposit was part and parcel of | | 13 | this overall agreement. In fact, to the point where the | | 14 | parties felt it necessary to put that in there. | | 15 | Your Honor, there are also other provisions in | | 16 | this settlement agreement which further confirm the veto | | 17 | rights that Mr. Sarnoff had pointed out. | | 18 | One, for example, Your Honor, discusses the fact | | 19 | that the trustee -- the sales officer under the operating | | 20 | agreement -- and that's a document that's not before Your | | 21 | Honor -- as part of what happened here, there was an | | 22 | operating agreement that was put in place and it confirmed | | 23 | that the sales officer has all of the authority under the | | 24 | operating agreement -- and the operating agreement | | 25 | (indiscernible) the sales officer the ability to run this | | | |

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Ho Wan Kwok-January 24, 2022 40 whole process. And, again, I think, Your Honor, you can get the flavor of this. We all agreed that there was going to be an independent sales officer, a well-recognized, reputable lawyer, who was going to run this. And in the event there was a dispute, she ultimately had the final say subject to now Your Honor's final approval. And that's how the process was going to work. It was nothing fancier than that. Thank you, Your Honor. THE COURT: Thank you. MR. DESPINS: Your Honor, if I may? I apologize, Your Honor. Just one minute. (Pause.) MR. DESPINS: Your Honor, I'm happy for them to have consulting rights as long as they agree they don't have a veto right. It's not like this issue just came up today. I raised it and I said I cannot live with the consent provision that allows you to consent. I didn't raise it with Mr. Lawall, but I raised it with PAX. I cannot live with the provision that says you have consent right over the motion. If that -- if they're saying we don't have that

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Ho Wan Kwok-January 24, 2022 41 consent right, and if Bravo Luck agrees they don't have the consent right, that's the end of it. They can have -- they can continue to have the same consulting rights. So I'm not trying to pick a fight here, but we can't -- the point here is we cannot give -- continue to give people consent rights which in our mind means veto right. If they're willing to confirm on the record that they don't have that right, then I think that's the end of the process. THE COURT: Well, do you want to take a recess and go chat? MR. DESPINS: Sure. Sure, Your Honor. THE COURT: Because it sounds -- I thought I heard Mr. Sarnoff say he thinks PAX would consent to that, although I may have misheard. Attorney Sarnoff? MR. SARNOFF: Your Honor, that is my understanding and belief. But if Your Honor would allow me the opportunity just to confirm -- THE COURT: Yes. That's why I think we need to -- either we can take a recess right now or we can continue with the matters at 2 o'clock and we can discuss it later. You know. Whatever, however, the parties want to proceed.

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Ho Wan Kwok-January 24, 2022 42 MR. SARNOFF: Your Honor -- THE COURT: We have other matters on at 2 o'clock though. MR. SARNOFF: Your Honor, my only time consideration with respect to this is the 13-hour time difference that I have in trying to reach my client who is 13 hours ahead. Would it be something that we could consult and get back to you tomorrow and -- THE COURT: Yes. Yes. MR. SARNOFF: -- and give you an answer on? At least on behalf of PAX. I can't speak obviously for Bravo Luck. THE COURT: I think that's fine. Is that fine with you, Counsel? MR. LAWALL: It is, Your Honor. I can't imagine this is going to be an issue. THE COURT: Okay. So I think that makes a lot of sense. Let's see what happens. You may not know, Counsel, but the way we communicate -- Attorney Shaiken would know -- is when and if you all agree, or don't agree, a communication comes through the courtroom deputy email box in Bridgeport. It's a generic email box. But everybody's got to be on the same email. So

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| | Ho Wan Kwok-January 24, 2022 43 | |----|--------------------------------------------------------------| | 1 | whoever sends it, doesn't matter, but they have to make sure | | 2 | they CC everybody else. Otherwise the Court won't take it | | 3 | into account. Because I need to know that everybody is on | | 4 | the same communication. | | 5 | MR. LAWALL: Thank you, Your Honor. And I | | 6 | appreciate you letting me know that. | | 7 | THE COURT: Okay. Thank you. | | 8 | MR. DESPINS: Your Honor, does that mean that this | | 9 | motion is adjourned until Thursday? | | 10 | THE COURT: Well, maybe not Thursday. Maybe | | 11 | tomorrow if you're all in agreement. I mean, maybe it | | 12 | doesn't have to be -- | | 13 | MR. DESPINS: Well, short of an agreement. | | 14 | THE COURT: What I can do is I can say that the | | 15 | hearing -- you know, I can continue the hearing until | | 16 | tomorrow or Thursday. But if you're all in agreement on | | 17 | what an order would say, then we don't have a controversy. | | 18 | MR. DESPINS: I meant short of an agreement that | | 19 | it would be adjourned until Thursday? | | 20 | THE COURT: That's fine. We can do that. Because | | 21 | we have other matters scheduled for Thursday. | | 22 | Counsel for the Sherry-Netherland, I would ask you | | 23 | one thing. | | 24 | At some point, even if this is an agreed issue, | | 25 | ultimately if you all have an agreement, the Court is going | | | |

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| | Ho Wan Kwok-January 24, 2022 44 | |----|----------------------------------------------------------------| | 1 | to need to be aware at some point what the amount of the | | 2 | security deposit is that you still have, if any, and what's | | 3 | being paid on a monthly basis just so the Court is aware. | | 4 | Right? | | 5 | At some point, hopefully, there will be a sale of | | 6 | this property and I would want to know in advance of that | | 7 | sale is this a situation where the security deposit was | | 8 | exhausted four months ago or is it going to be exhausted in | | 9 | four months? You know, that kind of -- I would want to know | | 10 | that. | | 11 | MR. PETROCELLI: Understood, Your Honor. And we | | 12 | can certainly provide that specific information. | | 13 | My rough understanding is that the security | | 14 | deposit was initially in the neighborhood of \$3 million. | | 15 | And it's something lower than that, but it has not been | | 16 | exhausted. | | 17 | THE COURT: Okay. | | 18 | MR. PETROCELLI: It has not been exhausted yet. | | 19 | THE COURT: All right. Well, that's hopeful to | | 20 | know. Thank you. | | 21 | MR. PETROCELLI: Thank you, Your Honor. | | 22 | THE COURT: All right. So then what we'll -- | | 23 | Oh, Attorney Shaiken? | | 24 | MR. SHAIKEN: What time Thursday? | | 25 | THE COURT: Well, I was just about to get there. | | | |

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| | Ho Wan Kwok-January 24, 2022 45 | |----|---------------------------------------------------------------| | 1 | Because we have some other things on Thursday. But I'm | | 2 | hoping that we actually won't see any of you on Thursday on | | 3 | this issue because you're all going to resolve it it sounds | | 4 | like. So give me one moment, please. | | 5 | (Pause.) | | 6 | THE COURT: We're scheduled at noon on Thursday. | | 7 | So we can continue this matter to noon on Thursday with the | | 8 | understanding that it's highly likely there will be no | | 9 | continued hearing because there will be an agreed-upon | | 10 | order. Okay? | | 11 | Does that -- does anyone have any questions? | | 12 | (No response.) | | 13 | MR. SHAIKEN: Thank you, Your Honor. | | 14 | THE COURT: Okay. Great. Thank you all then. | | 15 | This matter is continued until the 26th at noon. | | 16 | And there are other matters on at noon, so it | | 17 | doesn't mean that we'll get heard right away. But actually | | 18 | I'm convinced that there won't be anything to hear because | | 19 | there will be a consensual order before that date. All | | 20 | right? | | 21 | So that concludes the matter at 1 p.m. | | 22 | Now we have matters at 2 p.m. And it happens to | | 23 | be 1:58 p.m. So we can proceed with the 2 o'clock matters | | 24 | as far as the Court is concerned. | | 25 | MR. DESPINS: Actually, Your Honor, there was a |

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| | Ho Wan Kwok-January 24, 2022 46 | |----|--------------------------------------------------------------| | 1 | housekeeping matter I've been asked to raise with Your Honor | | 2 | by friends of the Zeisler firm, which is that we -- they | | 3 | submitted last week, that's docket no. 1340, a consent order | | 4 | regarding the Lady May expense reserve. They're using -- | | 5 | THE COURT: Yeah. We didn't get to it yet, but I | | 6 | know it's there. | | 7 | MR. DESPINS: They've asked me to remind you and | | 8 | that's all I'm doing. Thank you, Your Honor. | | 9 | THE COURT: Thank you. | | 10 | All right. So the first matter on the calendar | | 11 | today at 2 o'clock is an application to employ Paul Hastings | | 12 | as counsel to the debtor. | | 13 | Trustee Despins, do you want to proceed or is | | 14 | someone else proceeding on your behalf? | | 15 | MR. DESPINS: I was going to handle that because | | 16 | there's no objection. That's what I do best. | | 17 | THE COURT: Go right ahead. | | 18 | MR. DESPINS: So, Your Honor, we filed this at | | 19 | docket 1293. Our understanding is that no objections have | | 20 | been filed, so we would ask that the order be entered. | | 21 | THE COURT: I'm looking. I just want to look at | | 22 | the proposed order again. | | 23 | Attorney Claiborn, did you wish to be heard on | | 24 | this matter? | | 25 | MS. CLAIBORN: Thank you, Your Honor. Holley | | | |

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Ho Wan Kwok-January 24, 2022 47 Claiborn for the U.S. Trustee. I just wanted to report that the U.S. Trustee has no objection. THE COURT: And have you reviewed the proposed order, Attorney Claiborn? MS. CLAIBORN: Yes. THE COURT: Okay. Thank you. You know, I -- it's not really at all important, but in the proposed orders that have been submitted in this case they often include the standing order of reference from the United States District Court for the District of Connecticut and then have in parentheses as amended, but it's not amended. It's never been amended. So I just -- I'm probably going to delete that so it doesn't confuse someone. There's only -- as of September of 1984, there's only one order of reference from the United States District Court for the District of Connecticut. Now, that doesn't mean they couldn't amend it sometime in the future, but they haven't amended it. So on the proposed order, the proposed order doesn't have page numbers at the bottom of it, which is fine, but -- oh, maybe it does on page 2. I'm sorry, it does on page 2. So on page 2 at the -- I'm talking to the

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| | Ho Wan Kwok-January 24, 2022 48 | |----|---------------------------------------------------------------| | 1 | courtroom deputy -- at the top of page 2, third line, in the | | 2 | top of page 2, third line, there's a standing order of | | 3 | reference from the United States District Court for the | | 4 | District of Connecticut, onto line 4, do you see that? | | 5 | THE COURTROOM DEPUTY: I do not. Maybe I'm | | 6 | looking at the incorrect order. Sorry. | | 7 | THE COURT: It's the order, proposed order for | | 8 | 1293. | | 9 | THE COURTROOM DEPUTY: Oh, I am. That's what it | | 10 | is. I apologize. | | 11 | THE COURT: That's okay. Well, we don't have to | | 12 | discuss it now. We can do it later. | | 13 | THE COURTROOM DEPUTY: Okay. | | 14 | THE COURT: We're just going to delete that word. | | 15 | THE COURTROOM DEPUTY: Okay. | | 16 | THE COURT: It's not really that important as I | | 17 | said when I started talking. | | 18 | I think most other jurisdictions, or a lot of | | 19 | other jurisdictions, have revised that reference order, but | | 20 | Connecticut has not. | | 21 | I have no problem with any other -- or no concerns | | 22 | or questions with regard to any other terms and conditions | | 23 | of the order. | | 24 | So no one has filed a written objection to the | | 25 | motion. There's no one participating in this hearing today | | | |

Ho Wan Kwok-January 24, 2022 49 that is objecting to the motion. The United States Trustee's Office supports the motion. And for all those reasons, the motion -- oh, I'm looking at the wrong document right at the moment. Sorry. Give me one second. The application to employ Paul Hastings is granted and the proposed order can enter. MR. DESPINS: Thank you, Your Honor. THE COURT: There was another matter on the calendar today, a motion to quash a third-party subpoena. That has been withdrawn by Ivey, Barnum & O'Mara. UNIDENTIFIED: Correct, Your Honor. The issue has been resolved. THE COURT: So we don't need to address that. That's moot. (Pause.) THE COURT: Then the final motion is really, it's in three separate proceedings, but it's a motion to consolidate all three of the adversary proceedings into one adversary proceeding. MR. DESPINS: That's correct, Your Honor. THE COURT: Who's going to proceed with that motion? THE COURTROOM DEPUTY: Judge, could I just call the case? Case 22-50073 Doc 1420 Filed 01/31/23 Entered 01/31/23 18:43:28 Page 49 of 50

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Ho Wan Kwok-January 24, 2022 50 THE COURT: Oh, yes. Go right ahead. I'm sorry. Let her -- my apologies. She just needs to call the adversary proceeding numbers. Although this recording's going to be -- THE COURTROOM DEPUTY: Right. But we still need it. THE COURT: Yeah. (Proceedings concluded at 2:03 p.m.) I, CHRISTINE FIORE, Certified Electronic Court 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. 15 January 31, 2023 16 Christine Fiore, CERT