Guo Wengui / Miles Guo — bankruptcy case · TRANSCRIPT · ECF #1434

METADATA

Defendant: Guo Wengui / Miles Guo / Ho Wan Kwok
Court: CTB
Case No.: 22-50073
ECF #: 1434
Type: TRANSCRIPT
Filed: 2023-02-02

FULL TEXT

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION IN RE: . Chapter 11 . Case No. 22-50073 (JAM) HO WAN KWOK AND GENEVER . HOLDINGS CORPORATION AND . GENEVER HOLDINGS, LLC, . Brien McMahon Federal Building . 915 Lafayette Boulevard . Bridgeport, Connecticut 06604 Debtor. . . Tuesday, January 31, 2023 . . . . . . . . . . . . . . . 2:38 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Chapter 11 Trustee: Patrick R. Linsey, Esquire NEUBERT PEPE & MONTEITH, P.C. 195 Church Street 13th Floor New Haven, Connecticut 06510 -and- Luc A. Despins, Esquire PAUL HASTINGS, LLP 200 Park Avenue New York, New York 10166 (APPEARANCES CONTINUED) Audio Operator: Electronically recorded Transcription Company: Reliable The Nemours Building 1007 N. Orange Street, Suite 110 Wilmington, Delaware 19801 Telephone: (302)654-8080 Email: gmatthews@reliable-co.com Proceedings recorded by electronic sound recording, transcript produced by transcription service. Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 1 of 32

| | | 2 | | |----|--------------------------------------------|------------------------------------------------------------------------------------------------|--| | 1 | APPEARANCES (CONTINUED): | | | | 2 | For Pacific Alliance | | | | 3 | Asia Opportunity Fund L.P.: | Annecca H. Smith, Esquire | | | 4 | | ROBINSON & COLE, LLP 280 Trumbull Street | | | 5 | | Hartford, Connecticut 06103 | | | 6 | For The Sherry Netherland, Inc.: | | | | 7 | | Julie A. Lavoie, Esquire MURTHA CULLINA, LLP | | | 8 | | 280 Trumbull Street 12th Floor | | | 9 | | Hartford, Connecticut 06103 | | | 10 | | -and- | | | 11 | | Patrick N. Petrocelli, Esquire Sherry J. Millman, Esquire STROOCK & STROOCK & LAVAN, LLP | | | 12 | | 180 Maiden Lane New York, New York 10038 | | | 13 | | | | | 14 | For the U.S. Trustee: | Holley, L. Claiborn, Esquire OFFICE OF THE UNITED STATES TRUSTEE | | | 15 | | Robert N. Giaimo Federal Building 150 Court Street | | | 16 | | Room 302 New Haven, Connecticut 06510 | | | 17 | | | | | 18 | For the Official Committee of Unsecured | | | | 19 | Creditors: | Kristin B. Mayhew, Esquire PULLMAN & COMLEY, LLC | | | 20 | | 850 Main Street 8th Floor | | | 21 | | Bridgeport, Connecticut 06601 | | | 22 | For Bravo Luck | | | | 23 | Limited: | Francis J. Lawall, Esquire TROUTMAN PEPPER HAMILTON SANDERS LLP | | | 24 | | 3000 Two Logan Square Eighteenth and Arch Streets | | | 25 | | Philadelphia, Pennsylvania 19103 | | | | | | |

| Case 22-50073 | | Doc 1434 |---------------|--| | | | | | | | 1 | | | 2 | 3 | | | 4 | | | 5 | | | 6 | | | 7 | | | 8 | | | 9 | | | 10 | | | 11 | | | 12 | | | 13 | | | 14 | | | 15 | | | 16 | | | 17 | | | 18 | | | 19 | | | 20 | | | 21 | | | 22 | | | 23 | | | 24 | | | 25 | | | | | | | | | Filed 02/02/23 | | Entered 02/02/23 13:08:14 | | Page 3 of 32 | -----------------|--------------------------|--------------------------------|---------------------------------------------------------|--|--------------| | | | | | 3 | | | | | | | | APPEARANCES (CONTINUED): | | | | | | | For the Debtor: | | | Stephen M. Kindseth, Esquire ZEISLER & ZEISLER, P.C. | | | | | 10 Middle Street 15th Floor | | | | | | | Bridgeport, Connecticut 06604 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 INDEX MOTIONS: PAGE Matter No. 1257: Motion for Order Further Extending the Sale 8 Process of Sherry-Netherland Apartment and Retention of Sotheby's International Realty as Broker Filed by Douglas S. Skalka on behalf of Luc A. Despins, Genever Holdings Corporation, Genever Holding Court's Ruling: 22 Matter No. 1297: Order Establishing Deadlines for Filing 26 Proof of Claim and Approving Form and Manner of Notice Thereof (Re: 1191) Court's Ruling: 31 Matter No. 1298: Order (I) Approving Retention and 23 Appointment of Epiq Corporate Restructuring, LLC as Claims and Noticing Agent, effective as of December 1, 2022, and (II) Granting Related Relief (Re: 1198) Court's Ruling: -- Matter No. 1303: Motion to Compel JPMorgan Chase Bank, N.A. 31 to Comply with Rule 2004 Subpoena Filed by Douglas S. Skalka on behalf of Luc A. Despins, Chapter 11 Trustee Court's Ruling: -- Matter No. 1362: Motion to Compel Compliance with Bk. Rule 31 2004 Subpoena by USB AG Filed by Patrick R. Linsey on behalf of Luc A. Despins, Chapter 11 Trustee Court's Ruling: -- Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 4 of 32

| Case 22-50073 | | Doc 1434 | Filed 02/02/23 | Entered 02/02/23 13:08:14 | Page 5 of 32 | | |---------------|---------------------|----------|--------------------------------|----------------------------------------------|--------------|------| | | | | | | | 5 | | 1 | | | | INDEX | | | | 2 | MOTIONS: | | | | | PAGE | | 3 | Matter No. 1328: | | | Motion to Seal Filed by Patrick R. Linsey on | | 31 | | 4 | | | | behalf of Luc A. Despins, Chapter 11 Trustee | | | | 5 | | | Court's Ruling: | | | -- | | 6 | | | Transcriptionist's Certificate | | | 32 | | 7 | | | | | | | | 8 | | | | | | | | 9 | | | | | | | | 10 | | | | | | | | 11 | | | | | | | | 12 | | | | | | | | 13 | | | | | | | | 14 | | | | | | | | 15 | | | | | | | | 16 | | | | | | | | 17 | | | | | | | | 18 | | | | | | | | 19 | | | | | | | | 20 | | | | | | | | 21 | | | | | | | | 22 | | | | | | | | 23 | | | | | | | | 24 | | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Proceedings commenced at 2:38 p.m.) THE COURTROOM DEPUTY: Case Number 22-50073, Ho Wan Kwok, and also Adversary Number 22-5027 [sic], Despins v Bravo Luck Limited. THE COURT: If we could have appearances for the record -- hold on one second, though. MR. DESPINS: Yeah. THE COURT: So, Bravo Luck is not on until 3:00. We have a number of matters in the Kwok case at 2:30. THE COURTROOM DEPUTY: Oh, I'm sorry, Your Honor. I called it out of turn. THE COURT: That's okay. That's okay. So right now, we're just calling the matters that are scheduled for 2:30 -- THE COURTROOM DEPUTY: Yes. THE COURT: -- okay? THE COURTROOM DEPUTY: Okay. THE COURT: And then we can schedule -- we can call the adversary at 3:00. THE COURTROOM DEPUTY: Okay. THE COURT: All right. Could we have appearances for the record, please, starting with the Chapter 11 trustee. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 trustee. I'm here with Mr. Linsey, our Connecticut counsel, but he's in the hallway trying to cut Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 6 of 32

7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 deals to avoid a protracted hearing, so he will be back soon. THE COURT: Okay. Thank you. MS. SMITH: Good afternoon, Your Honor. Annecca Smith, Robinson & Cole, on behalf of PAX. THE COURT: Good afternoon. MR. PETROCELLI: Good afternoon, Your Honor. Patrick Petrocelli from Stroock & Stroock & Lavan, on behalf of The Sherry-Netherland. THE COURT: Good afternoon. MS. LAVOIE: Good afternoon, Your Honor. Julie Lavoie of Murtha Cullina, on behalf of The Sherry-Netherland. THE COURT: Good afternoon. MS. CLAIBORN: Good afternoon, Your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon. MS. MAYHEW: Good afternoon, Your Honor. Kristin Mayhew, Pullman & Comley, on behalf of the Creditors' Committee. THE COURT: Good afternoon. MR. LAWALL: Good afternoon, Your Honor. Fran Lawall, Troutman Pepper, on behalf of Bravo Luck. THE COURT: Good afternoon. MR. KINDSETH: Good afternoon, Your Honor. Stephen Kindseth, Zeisler & Zeisler, on behalf of the debtor, Ho Wan Kwok. Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 7 of 32

8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Good afternoon. Okay. Let's just take a moment and let me catch up where I was there, and I lost my place so just bear with me for a moment, please. (Pause) THE COURT: All right. The -- we're going to - maybe you're going to tell me this is why Mr. Linsey is out in the hallway, Trustee Despins, but I was going to start with The Sherry-Netherland. Is that Mister -- no? MR. DESPINS: No, he's -- THE COURT: Okay. MR. DESPINS: -- dealing with UBS matters. THE COURT: Okay. I think, counsel from Murtha, I don't see your appearance on -- in the case yet. Have you filed a notice of appearance? MS. LAVOIE: No, Your Honor. THE COURT: Okay. You need to do that when you get back to your office, okay? MS. LAVOIE: Absolutely. Yep. THE COURT: That's required under our Local Rules. All right. So, what is -- I'm sorry, Trustee Despins, I saw, but I'm not saying I studied, the issues. The only issue with The Sherry-Netherland sale process is the issue about renting the apartment? Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 8 of 32

9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. DESPINS: Having the ability to market -- THE COURT: To rent it, yes. MR. DESPINS: -- to -- but subject to coming back to court to rent it. It's not authority to rent, but authority to market for rent. THE COURT: Okay. But there's still a dispute on that, correct? MR. DESPINS: That's correct, Your Honor. THE COURT: All right. And, counsel, you've disputed that, correct? MR. LAWALL: We have, Your Honor. Thank you. THE COURT: Okay. So your dispute is that, I think -- and, please, I mean, I think things were just filed today. We had hearings this morning, so I could be wrong, but I think your argument is that that was not part of the original motion filed in the Holdings case and that if that's what the trustee wants, he needs to file a new motion? MR. LAWALL: Yes. Again, Your Honor, good afternoon. Fran Lawall for Bravo. Your Honor, yes, that's exactly the issue. When we left court last week, the only issue was with respect to eliminating the consent right with respect to the sale agreement and having everything else to be a consultation right. That evening, both PAX, as well as Bravo, notified the trustee that we were good with that and so we had thought Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 9 of 32

1 the matter was done.

| 2 | The following day, we got a proposed sale order | |----|----------------------------------------------------------------| | 3 | which inserted the requested rental language in it, which was | | 4 | not within the original request that was before Your Honor | | 5 | and the issue which we thought had been resolved at the | | 6 | hearing, where I thought everyone had pretty much confirmed | | 7 | on the record that's where we were. The proposed order that | | 8 | the trustee has submitted, Your Honor, with the rental | | 9 | language, we, this morning -- and I apologize, I don't have | | 10 | the docket number because I was in transit on the way up -- | | 11 | we adopted the -- | | 12 | THE COURT: I think I do, so hold on a second. | | 13 | Because I was in court this morning, so -- but I had tried to | | 14 | look at it really quickly, so I think I have it, where you | | 15 | have your marked-up order, as well. | | 16 | Is that what you were going to refer to, counsel? | | 17 | MR. LAWALL: That is correct, Your Honor. | | 18 | And if it makes it easier, Your Honor, we have | | 19 | adopted the trustee's proposed order in every way, but for | | 20 | the rental language. And, Your Honor, our -- we have | | 21 | concerns at this point: number one, it hasn't been noticed | | 22 | up; and number two, we think that there has to be some | | 23 | additional consideration before the rental issue is finally | | 24 | resolved; and then, ultimately, we will have an issue with | | 25 | respect to the disposition of the rent itself because if |

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we're able to reach agreement, with respect to rental, we strongly believe that all of the rental monies have to go toward the maintenance and upkeep of the property and those were issues, Your Honor, we weren't able to get past. What I had -- what I would propose, Your Honor, is the order that we have uploaded, which I thought had satisfied the issues last week with respect to the rental issues, that they can be revisited in another filing. I believe it's been indicated on the record that currently there's over a million dollars of money on reserve with respect to the maintenance, so I think we're good for another 13 months there. If the trustee continues, or decides to continue to move forward with the rental issue, I would like the opportunity to have a conversation with both, the rental agent, as well as the sales officer, to make sure, first of all, so that I can inform my client what impact having a parallel rental program on top of a sale program might have in connection with a possible buyer. And, of course, Your Honor, we believe, although, I don't think it has to be an issue for today, rental really is outside the form of the settlement agreement. But I think from a notice standpoint, from a motion standpoint, the rental issue today is really not properly teed up. Bravo is not trying to stand in, in any way, with respect to progress,

1 2 3 4 but this is an important issue. It has been from the beginning. Rental is a new issue and we think it has to be a little bit more thoughtfully continued -- thought about and explored.

5 6 7 8 9 10 11 12 And then with respect to the disposition of the rental proceeds themselves, we think that's a critical issue. If you recall, Your Honor, there are three different adversaries against my client at the moment, all of them having to do with who really owns this property. And so, as you can imagine, the disposition of those rental proceeds, outside of the use of a property, would give us some heartburn.

13 14 15 16 17 18 19 20 So that's really the essence, Your Honor. We'd respectfully ask that the order that we have uploaded, which accepts all of the trustee's comments and all the trustee's language, but for the rental issue, that be approved today and that we will work with the trustee on the rental issue to explore if there's a pathway here, where we can reach agreement on it, but it's not necessarily a today issue, Your Honor.

21 22 23 24 25 THE COURT: Okay. I have a couple of questions, given what you've just stated. When the Holdings case was in New York, the -- my understanding, and I believe it's accurate, is that the debtor, Holdings, filed the motion and a plan to sell the property, to sell the apartment and there

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 was a sales agent hired and all that, and that's been going on for more than a year and a half. And from what I understand, but you obviously, The Sherry-Netherland's lawyer can correct me if I'm wrong, too -- anybody can -- I haven't seen any offers for the purchase of that apartment. Is that correct? MR. LAWALL: Your Honor, there's been activity. I don't think -- I'm not aware of a firm offer having been -- THE COURT: Right. MR. LAWALL: -- made on the property. I'm not sure that the sales process has been going on for a year and a half. It could have been, Your Honor. I don't have those dates in front of me. THE COURT: Well, I can tell you that the orders that I have reviewed of Judge Garrity approved a second restated settlement agreement and other things back in early September of 2021, so I do think it's been going on for just about a year and a half, if not longer, but at least that long, number one. Number two, the debtor, Holdings, sought the approval with regard to the disposition of this property under Section 363 of the Code, which you know, is "use, sale, or lease of property." So, I understand your point, and I'm not ruling on it at the moment, but I don't think -- I think if there is any issue with regard to the lease and teeing it up in a

1 2 different motion, we can do that in a week or two. I mean, it really doesn't take a lot of time.

| 3 | This is the only asset of the debtor. The debtor, | |----|---------------------------------------------------------------| | 4 | when represented by counsel in that New York case, confirmed | | 5 | that time and time again in all of the pleadings they filed | | 6 | in that case, they even commenced an action against your | | 7 | client saying that they were "directed," I believe the word | | 8 | is -- but I'm not sure that's accurate, so I shouldn't say | | 9 | that -- but they were told that they had to place the name -- | | 10 | title to the apartment under the name of "Bravo Luck" for the | | 11 | benefit of the debtor's son; that's what the allegation is. | | 12 | It's a declaratory judgment action, right, and that's what -- | | 13 | and they're saying that Bravo Luck doesn't own the -- that's | | 14 | what they want the declaration to be from this Court, or it | | 15 | was Judge Garrity before, but once it got transferred here, | | 16 | then this Court, that Bravo Luck doesn't own the apartment, | | 17 | right? | | 18 | MR. LAWALL: The -- Your Honor, I'm not sure I | | 19 | would characterize it exactly like that, but I think the | | 20 | essence is correct. The dispute here is who actually has | | 21 | ownership of the apartment -- | | 22 | THE COURT: Right. | | 23 | MR. LAWALL: -- and that's been central to the | | 24 | dispute -- | | 25 | THE COURT: Right. | | | |

Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 15 of 32

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LAWALL: -- and it will continue to be. The -- THE COURT: Well, I don't know how long it will continue to be, so just -- I just want you to understand that. I mean, this is -- this has been going on for a long time. The trustee has come in. We had the whole issue with Genever BVI and the fact that the BVI Court was not going to hear the continued challenges to the ownership of the -- of BVI and then, therefore, the apartment. I mean, I understand everything you're saying. All I'm saying to you is I don't know how much longer this is going to go on, okay. So, with regard to the rent issue, the issue that you raise about notice and it not being part of the original motion, I think is persuasive, but I think we can rectify that issue very quickly. The Code and the Rules say that the Court can shorten any time frame for notice of a motion brought under Section 363 for cause shown; I think it's Rule 2002(a), possibly. And the cause shown here is that this property has not sold for more than a year and a half, and not even has one offer been brought forward, okay, and - not that I'm aware of anyway. If anybody's -- if I'm wrong, correct me, okay, but I don't see anything in the record of these cases to establish that there's been a sale of this property, even contemplated, you know. Even if it was just an offer that was still subject to Court approval hasn't even

16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 been brought forward. Now -- MR. LAWALL: Understood, Your Honor. THE COURT: -- Gen -- the Holdings -- Holdings filed a plan in that Chapter 11 case more than a year and a half ago that said, We're liquidating this apartment -- MR. LAWALL: Right. THE COURT: -- all right. But it hasn't happened, okay. MR. LAWALL: Well, that, in part, you were, was because of the filing of the Kwok bankruptcy and that plan was -- THE COURT: It may or may not be, but it doesn't matter, because it still was that -- Gen -- Holdings' estate was comprised of the ownership interest in the apartment and everybody agreed that the property was going to be sold through the sales agent. And there was a whole, apparently, many, many hearings about what the sales agent could or could not do, which resulted in different agreements and then the agreements not necessarily being met. And the issues that were raised last week here, whether that settlement agreement has expired by its own terms, because it was expired in November of 2022, you've all come to an agreement on the consent, and I'm happy that that's the case. I -- as I said, I'm persuaded by your argument Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 16 of 32

| 1 | about the trustee now seeking to rent, not necessarily being | |----|--------------------------------------------------------------| | 2 | on notice to everybody, but I think that can be accomplished | | 3 | in a very short amount of time. And if that's what the | | 4 | trustee wants to do, then that can happen in this court, | | 5 | okay, because he came into this situation when there were | | 6 | facts that were already in existence for a long time in the | | 7 | New York case, and now he's trying to turn that asset into | | 8 | cash, which was what was always contemplated by the | | 9 | Chapter 11 case in New York. | | 10 | Now, you may say the rental income, you're going | | 11 | to fight, you know, about who -- not fight, but raise issues | | 12 | about who's entitled to be paid that. Well, as you just | | 13 | said, and counsel for The Sherry-Netherland said last week, | | 14 | if there's a million dollars in a security deposit and | | 15 | there's 13 months left, then I wouldn't know why the rental | | 16 | income wouldn't come into this estate. | | 17 | MR. LAWALL: Well -- | | 18 | THE COURT: I -- and we'll -- we can talk about | | 19 | that when we get there, but I'm just giving you a heads-up. | | 20 | I think that the rental income, why wouldn't it be property | | 21 | of this estate, of these jointly administered estates -- | | 22 | MR. LAWALL: Sure. Your Honor -- | | 23 | THE COURT: -- you know? So -- and you'll make | | 24 | your argument and you'll tell me why I'm wrong -- | | 25 | MR. LAWALL: Sure. |

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: -- and I'll listen to you, but the issue now is Mr. Despins was appointed to determine the assets of this -- these debtor's estates and turn them into cash to distribute them to creditors. That's what we're going to do, okay. So -- but as far as today is concerned, I saw your order and I appreciate it. I understand you took -- you deleted the paragraph about the rental, renting it, and I can -- I think that's fine. I actually think that's fine, but I also think that I can add to this order that the trustee is entitled to, and I'll give him a period of time, to bring a motion to -- with regard to renting the property. Mr. Despins, did you have an issue with what I just said? MR. DESPINS: Very slight, Your Honor. I wanted you to know that in our noticed proposed order we said that to the extent necessary, this shall be deemed an amended motion to seek this relief. That was filed on the 25th, so I would ask the Court to consider when you set new deadlines, the fact that there's already been notice given of this amended motion on January 25th and, therefore, I would want you to take that into account, Your Honor. That's -- THE COURT: Okay. I'll take that into account. MR. DESPINS: -- that's my point.

19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: So, I'm prepared to enter your order with some, most likely an addition that says that the trustee can do something in a period of time and you'll have a right to object to it, okay. MR. LAWALL: Yes, Your Honor. I think just to round out the discussion, if I may? THE COURT: Sure. MR. LAWALL: The -- one of the issues is really going to come and Your Honor had specifically identified the issue in terms of monetizing this asset for sale. What I understand to be is they're talking about a 12-month lease. So, if it gets leased for 12 months, it's not going to be sold for that period of time. So, my point has been this issue of leasing is a little more complicated than simply going out and finding a tenant for 30 days or 60 days, particularly given a property of this import. And given the market, Your Honor, at this point, with respect to those rental income, those monies, in terms of it being property of the estate, there is certainly an issue, Your Honor, given the disputed ownership, which the trustee has identified in three separate adversary proceedings against my client. There's a dispute there. THE COURT: Well, Holdings -- MR. LAWALL: I'm sorry, Your Honor? Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 19 of 32

20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Holdings identified it, as well. It signed the complaint in New York. MR. LAWALL: That was at the direct -- that was at the time, Your Honor, and I appreciate the separation, but that was at a time when Mr. Despins was already the trustee -- THE COURT: I understand. MR. LAWALL: -- in the Kwok bankruptcy. THE COURT: I understand. MR. LAWALL: Right. THE COURT: But a lawyer that wasn't Mr. Despins' lawyer signed that complaint. MR. LAWALL: Understood, Your Honor. And there's -- we have never shied away from the fact that there is a dispute with respect to the ownership and with respect to trying these issues. We are fully prepared to try them, Your Honor, and to set a schedule and all of that. We're not trying to hide from that. We know -- THE COURT: I didn't say -- I never suggested that you were. I'm not suggesting that at all. I'm suggesting we're going to move on with the property: it's either going to be sold, rented, or both -- MR. LAWALL: But the problem with renting -- THE COURT: -- then we'll see what happens. You know, maybe -- you'll be able to talk once the specifics are Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 20 of 32

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ironed out and, you know, who knows, you know, people could be renting with an option to purchase. I don't know, you know. I mean, we'll see. We'll see how the issue is raised. But I am going to give the trustee the opportunity to have an order authorizing him to rent the apartment and he's going to have to provide all the terms and conditions and you're going to have an opportunity to object to that, okay, and anybody else that wants to object to it. And so, with regard to the motion for the order further extending the sale process, what I'm going to do is I'm going to, you know, grant it in part with your proposed order, counsel, with changes -- with additions that I'm going to make that says what I've just stated, without specifically using all the language that will be in the order, and acknowledging -- Mr. Despins wants me to say that the motion filed on the 25th was, in fact, that. And I'll say that that's his assertion, but I'm going to give times for somebody to do whatever it is they're going to do, okay. That's how we're going to proceed. MR. LAWALL: Very good, thank you. Your Honor, we have the -- well, I'll leave to the 3 o'clock list for the adversary. Thank you. THE COURT: Yes, thank you. MR. DESPINS: Your Honor, to be candid with Your Honor, I did not review his form of order. I'm relying on

| Case 22-50073 | Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 22 of 32 | |---------------|--------------------------------------------------------------------------| | | 22 | | 1 | his representation that it's identical to ours -- | | 2 | THE COURT: I think it is. | | 3 | MR. DESPINS: -- except for the rental issue. If | | 4 | that's the case, then we have no issues with using his order. | | 5 | THE COURT: I can tell you that I believe it is. | | 6 | I -- but did I look at this somewhat quickly? Yes, but I | | 7 | believe it is exactly the same order with that one paragraph | | 8 | deleted. | | 9 | MR. LAWALL: Your Honor, if there were any | | 10 | changes, and I'm not aware of any, because I, myself, was the | | 11 | one who deleted the one paragraph, but if there are any | | 12 | changes, we will certainly conform it to his original. | | 13 | THE COURT: Okay. Thank you. | | 14 | All right. So with regard to that motion, then | | 15 | the motion for -- to extend the sale process, then that is | | 16 | granted, in part, for the reasons stated on the record. | | 17 | I will take Bravo Luck's counsel's marked-up | | 18 | order, which I do believe, but I will confirm is the | | 19 | trustee's proposed order, with the deletion of the paragraph | | 20 | about the rent, and then I will add provisions regarding the | | 21 | filing of a motion or seeking approval to rent the property | | 22 | and providing an opportunity to object and setting a hearing | | 23 | on that, as well, okay. | | 24 | MR. LAWALL: Thank you, Your Honor. | | 25 | MR. DESPINS: Thank you. |

| | 23 | |----|---------------------------------------------------------------| | 1 | THE COURT: Thank you. | | 2 | MR. PETROCELLI: Your Honor, if I could, just to | | 3 | clarify one point? I just want to make sure that I'm not | | 4 | misunderstanding what Your Honor is saying, is that the order | | 5 | will give the trustee the opportunity to do what he proposed | | 6 | to do in this current order, which is get authorization to | | 7 | try to rent the apartment? | | 8 | Certainly, there were -- | | 9 | THE COURT: That is correct. | | 10 | MR. PETROCELLI: -- representations in there about | | 11 | preserving the rights of The Sherry-Netherland, including | | 12 | approval rights, and we just want to make sure that it's | | 13 | clear that we're -- our understanding is that this is not | | 14 | actually to rent the apartment, but to attempt to rent the | | 15 | apartment? | | 16 | THE COURT: That is correct. And you will have | | 17 | notice and you will be able to file whatever response that | | 18 | you feel is necessary to protect your client's rights. | | 19 | MR. PETROCELLI: Thank you very much, Your Honor. | | 20 | THE COURT: Okay. Thank you. | | 21 | (Pause) | | 22 | THE COURT: Okay. With regarding -- with regard | | 23 | to the order establishing deadlines for the filing of proofs | | 24 | of claim and the retention order on, with regard to Epiq, I | | 25 | saw, Trustee Despins, a revised, proposed order on Epiq, but | | | |

| 1 | it still doesn't do what it needs to do as far as from the | |----|-----------------------------------------------------------------| | 2 | Clerk's Office perspective and the statutory cites. | | 3 | The -- there -- so, I am going to have to submit | | 4 | to you all, or we'll have to somehow -- I mean, I think | | 5 | there's a lot of findings in here that are unnecessary and | | 6 | not accurate. I mean, I don't think it is necessarily | | 7 | burdensome for the Clerk's Office to do this. You want | | 8 | the -- Epiq to do it because of the confidential nature of | | 9 | the claims and that's fine. I don't think the -- I think the | | 10 | Clerk's Office could do this, but I don't -- I have no | | 11 | problem with Epiq doing it, okay. So I'm going to make some | | 12 | of those changes. | | 13 | I'm going to add some language in the order that | | 14 | says, you know, "subject to the conditions of this order," | | 15 | because the services agreement doesn't include noticing and | | 16 | then it includes a bunch of other things like helping the | | 17 | debtor prepare schedules. Obviously, that's not going to | | 18 | happen in this case, so I'll take care of that. | | 19 | When it says Epiq shall service the custodian of | | 20 | the court of records -- of the court records, I think it | | 21 | needs to say, "Epiq shall serve to assist the Clerk of Court | | 22 | as the custodian of the court records." I understand Epiq is | | 23 | going to keep everything, okay -- I've got no problem with | | 24 | that -- but Epiq has to, then, be responsible for serving | | 25 | everything that needs to be served by, either this Court's | | | |

25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 direction, the Clerk of the Court's direction, or your direction, and it has to be clear who they're serving. I don't think that's going to be a problem. I just think the order has to be clear to say that. Also, I'm going to change the certificate of service that they're going to file to one business day after they serve, because they can do a certificate of service within one business day. They also have a paragraph that I don't think that they -- I think it just doesn't make sense. Because it says -- paragraph 4 that was added to the redlined version, they say: "Epiq shall eliminate all duplicate notices in its service list and for services upon those parties who have filed a notice of appearance, limit service to the persons identified in such notice."

17 18 19 20 21 22 23 24 They don't have to serve anybody that's filed a notice of appearance; that's the whole point. There's -- a notice of electronic filing is the certificate of service under our District Court Local Rules and our Bankruptcy Court Local Rules. So, what I'm saying is don't -- all you have to serve is the people who don't get it electronically, that's all you have to serve, and show that you did that. That's all they have to do, okay.

It's not -- none of this, in my opinion, is earth-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 shattering. What I'd like your office to do when you have the opportunity, is to get the version -- and maybe you already have -- to the clerk -- to the courtroom deputy in Word and then we can show you the changes we're going to make, and then if anybody has a problem with it, they can let the Court know, okay. MR. DESPINS: Will do, Your Honor. Thank you. THE COURT: Thank you. Now, with regard to the proof of claim deadline, as I stated last week during the hearing when we had evidence with regard to many exhibits introduced with regard to the claims process in this case and I issued orders overruling the debtor's objections to, I believe it was three proofs of claim, and stating that the debtor could not object to any further claims, any future -- any other claims, without obtaining Court approval, I said to everyone, and I asked everyone to be prepared to respond to it today, that I'm considering extending the proof of claim bar date because of what has gone on in this case. So, Trustee Despins, have you had an opportunity to think about that? MR. DESPINS: Yes, Your Honor. THE COURT: Okay. And what's your thoughts, please? MR. DESPINS: May I approach the --

| Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 27 of 32 | |-------------------------------------------------------------------------------------------| | 27 | | THE COURT: Yes, thank you. | | MR. DESPINS: First, I want to -- I know you were | | in court this morning so you may not have seen it, we filed a | | statement. | | THE COURT: I haven't seen it. | | MR. DESPINS: Okay. But, basically, showing to | | the Court that there's more of the same going on. This time, | | basically telling the supporters of Mr. Kwok, him telling | | them to file claims and basically -- it's a quote, "Let the | | attorney's fees of trustees accumulate to one trillion, if | | possible." Essentially, we can't control the case, but we'll | | make sure that it's a complete mess. | | So we filed this, and we're obviously very upset | | about this, but -- and it's going to surprise you -- at the | | end of the day, we believe the Court has, and you know that | | you do have under the excusable neglect standard, the | | ability, after the fact, to look at claimants who filed a | | late claim and say, You know what, I can find that these | | people were confused or felt threatened and I have the | | ability through that mechanism to remedy the potential harm | | here. | | And I know it's counterintuitive, because you | | might say, Well, the trustee is going to ask for more time. | | The problem with that, you know, there are a couple of | | points, Your Honor. One is, if it's, like, a few days, okay, | | | | |

| 1 | but if it's more than that, I need to give notice of that to | |----|----------------------------------------------------------------| | 2 | people. And, Your Honor, we are so tapped out from a funds | | 3 | point of view, we -- we're in the negative zone now where | | 4 | we're financing all of these expenditures. So, for example, | | 5 | publication notice: \$20,000. Things like that. So, | | 6 | therefore, we're asking the Court to maintain the bar date | | 7 | with the understanding that the Court would have the ability | | 8 | through the excusable neglect tool, to remedy the situation | | 9 | after the fact if there's a need for that. | | 10 | And so, we thought a lot about it, Your Honor, and | | 11 | that's where we came out. We believe that your decision to | | 12 | quash the claims objections and other things that have | | 13 | happened, are sending a signal through the internet, you | | 14 | know, communication that these people have, that have partly | | 15 | remedied what's going on in the case, but time will tell | | 16 | whether it's fully remedied or not. And I believe that | | 17 | through excusable neglect, you have the ability to deal with | | 18 | that and that would be, ultimately, our recommendation, to | | 19 | not change the bar date, Your Honor. | | 20 | THE COURT: Okay. Thank you. | | 21 | MR. DESPINS: Thank you. | | 22 | THE COURT: Does anyone else wish to be heard? | | 23 | MS. SMITH: May I? | | 24 | THE COURT: Yes, please. | | 25 | MS. SMITH: Thank you, Your Honor. Annecca Smith, |

1 on behalf of PAX.

(Pause)

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 It is also PAX's view that it would be appropriate to maintain February 17th as the bar date, in part, for the reasons that Trustee Despins stated, including the Pioneer factors and the excusable neglect standard, and the view of PAX that this Court's action last week to also cut off further objection rights, claim objection rights of Kwok, absent permission, are sufficient for these purposes. In addition, PAX wanted to emphasize the importance of the mediation to these cases. Mr. Friedman and Mr. Sarnoff asked me to pass along their regrets that they are unable to attend today; they are going to be meeting with the mediator on behalf of PAX as an initial jumping-off point for that process. The February 17th date is appropriate for use in the mediation because it will enable the parties to fully understand the universe of claims and maximize the chances of a successful settlement. To further delay that, given the bounds of the current mediation order, would jeopardize the success of the mediation. Excuse me, Your Honor.

23 24 25 MS. SMITH: In addition, this case has been pending for almost exactly one year as of the bar date, in particular, and it is the view of PAX that the interests of

| 1 | the creditors are also better served to reach a settlement | |----|-----------------------------------------------------------------| | 2 | and reach a resolution of these cases. Thank you. | | 3 | THE COURT: Thank you. | | 4 | Does anyone else wish to be heard? | | 5 | MS. MAYHEW: Your Honor, the Committee agrees with | | 6 | the approach proposed by Trustee Despins. I think it makes | | 7 | sense to keep the bar date as is, and to the extent that | | 8 | there are any late-filed claims, they can certainly be | | 9 | considered. But at this point, it doesn't seem to make sense | | 10 | to extend it, either a month or even a few weeks through the | | 11 | end of the month, given the costs that would be incurred. | | 12 | Thank you. | | 13 | THE COURT: Thank you. | | 14 | Mr. Kindseth? | | 15 | MR. KINDSETH: The debtor is not taking any | | 16 | position with respect to this issue, Your Honor. | | 17 | THE COURT: But you -- the debtor has taken a | | 18 | position, with respect to the issue before. | | 19 | MR. KINDSETH: The debtor's position is -- has not | | 20 | changed, so -- | | 21 | THE COURT: Then you are taking a position, | | 22 | because your position was made clear in previous hearings | | 23 | that you wanted the bar date to be as soon as possible, | | 24 | correct? | | 25 | MR. KINDSETH: Correct. | | | |

31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Okay. Any -- we -- anyone else have anything they want to add on the bar date issue? (No verbal response) THE COURT: Okay. Then we'll come back to that later. All right. Now, we have the motion to compel compliance with subpoenas for JPMorgan and UBS. Who will be handling that, Attorney -- Trustee Despins? MR. DESPINS: That will be Mr. Linsey, but he's busy doing God's work out there, so if we could skip that for now, that would be great, Your Honor. THE COURT: All right. Well, then we have left the adversary proceeding pretrial conference or the motion to seal. So the adversary proceeding pretrial conference, shall we address that now? MR. LAWALL: That would be fine, Your Honor. MR. DESPINS: Sure. THE COURT: All right. Just let -- if you would, let the courtroom deputy just call the adversary proceeding number so she can make sure that the record that we just discussed, we're going to discuss will be part of the adversary proceeding. So, go right ahead. THE COURTROOM DEPUTY: Okay. (Proceedings concluded at 3:13 p.m.) Case 22-50073 Doc 1434 Filed 02/02/23 Entered 02/02/23 13:08:14 Page 31 of 32

| Case 22-50073 | | Doc 1434 | Filed 02/02/23 | Entered 02/02/23 13:08:14 | Page 32 of 32 | |---------------|------------------------------------------------------------|------------------------|-----------------------------|---------------------------|------------------| | | | | | | 32 | | 1 | CERTIFICATION | | | | | | 2 | I certify that the foregoing is a correct | | | | | | 3 | transcript from the electronic sound recording of the | | | | | | 4 | proceedings in the above-entitled matter to the best of my | | | | | | 5 | knowledge and ability. | | | | | | 6 | | | | | | | 7 | | /s/ William J. Garling | | | February 2, 2023 | | 8 | | | William J. Garling, CET-543 | | | | 9 | Certified Court Transcriptionist | | | | | | 10 | | For Reliable | | | | | 11 | | | | | | | 12 | | | | | | | 13 | | | | | | | 14 | | | | | | | 15 | | | | | | | 16 | | | | | | | 17 | | | | | | | 18 | | | | | | | 19 | | | | | | | 20 | | | | | | | 21 | | | | | | | 22 | | | | | | | 23 24 | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | |