Guo Wengui / Miles Guo — bankruptcy case · ECF #3446

METADATA

Defendant: Guo Wengui / Miles Guo / Ho Wan Kwok
Court: CTB
Case No.: 22-50073
ECF #: 3446
Type: UNKNOWN
Filed: 2024-08-21

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, et al., . . (Jointly Administered) Debtors. . . . . . . . . . . . . . . . . . . GENEVER HOLDINGS LLC and . Adversary Proceeding LUC A. DESPINS, CHAPTER 11 . No. 23-05002 (JAM) TRUSTEE, . . Plaintiff, . . v. . . HO WAN KWOK, HING CHI NGOK, . QIANG GUO, AND MEI GUO, . . Defendants. . . . . . . . . . . . . . . . . . LUC A. DESPINS, et al., . Adversary Proceeding . No. 23-05017 (JAM) Plaintiffs, . . v. . Courtroom 123 . Brien McMahon Federal Building TAURUS FUND, LLC, et al., . 915 Lafayette Boulevard . Bridgeport, Connecticut 06604 Defendants. . . Tuesday, August 13, 2024 . . . . . . . . . . . . . . . 1:12 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE (Continued) Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 1 of 96

| | Case 22-50073 | Doc 3446 |----|---------------| | | | | | | | 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 08/21/24 | | | | | Entered 08/21/24 10:22:10 | Page 2 of 96 | | -----------------------------------------------------------|------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|----------------------------------------------------|--|---------------------------------------------|------------------------------|--------------|---| | | | | | | | | 2 | | | | | | | | | | | APPEARANCES: | | | | | | | | | | For the Chapter 11 Trustee: Patrick Linsey, Esquire | | | | | | | | | | | | NEUBERT PEPE & MONTEITH, P.C. 195 Church Street | | | | | | | | | 13th Floor | | | New Haven, Connecticut 06510 | | | | | -and- | | | | | | | | | | | | | Luc A. Despins, Esquire | | | | | | Shlomo Maza, Esquire PAUL HASTINGS, LLP | | | | | | | | | | | 200 Park Avenue New York, New York 10166 | | | | | | | | | | Nicholas A. Bassett, Esquire | | | | | | 2050 M Street, NW Washington, DC 20036 | | | | | | | | | | | | | | | | For the U.S. Trustee: | | | | | | Holley L. Claiborn, Esquire | | | | | OFFICE OF THE UNITED STATES TRUSTEE The Giaimo Federal Building 150 Court Street, Room 302 | | | | | | | | | | New Haven, Connecticut 06510 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 3 of 96

3 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 APPEARANCES (CONTINUED): For Pacific Alliance Asia Opportunity Fund: Annecca H. Smith, Esquire ROBINSON & COLE, LLP 280 Trumbull Street Hartford, Connecticut 06103 -and- Stuart M. Sarnoff, Esquire O'MELVENY & MYERS, LLP Times Square Tower 7 Times Square New York, New York 10036 For the Official Committee of Unsecured Creditors: Kristin B. Mayhew, Esquire PULLMAN & COMLEY, LLC 850 Main Street 8th Floor Bridgeport, Connecticut 06601 For G Club Operations, Weddle Law PLLC, FFP BVI Limited, Ogier, and Pillsbury Winthrop Shaw Pittman, LLP: Jeffrey M. Sklarz, Esquire GREEN & SKLARZ, LLC One Audubon Street 3rd Floor New Haven, Connecticut 06511 For Yankwitt, LLP; Ganfer Shore Leeds & Zauderer, LLP; Brune Law, P.C.; and Petrillo Klein + Boxer, LLP: Anthony J. Proscia, Esquire KAUFMAN DOLOWICH, LLP 40 Exchange Place 20th Floor New York, New York 10005

Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 4 of 96

| | | | 4 | |----|----------------------------------------------|--------------------------------------------------------|---| | 1 | APPEARANCES (CONTINUED): | | | | 2 | For Meta | | | | 3 | Platforms, Inc., and Apple, Inc.: | Jin Yan, Esquire | | | 4 | | ARENTFOX SCHIFF, LLP 1717 K Street NW | | | 5 | | Washington DC 20006 | | | 6 | For Hing Chi Ngok and Greenwich Land, LLC | Austin D. Kim, Esquire | | | 7 | | MEISTER SEELIG & FEIN, LLP 125 Park Avenue | | | 8 | | 7th Floor New York, New York 10017 | | | 9 | For Morvillo | | | | 10 | Abramowitz Grand Iason & Anello, P.C: | Rowena A. Moffett, Esquire | | | 11 | | BRENNER, SALTZMAN & WALLMAN, LLP 271 Whitney Avenue | | | 12 | | New Haven, Connecticut 06511 | | | 13 | | | | | 14 | | | | | 15 | | | | | 16 | | | | | 17 | | | | | 18 | | | | | 19 | | | | | 20 | | | | | 21 | | | | | 22 | | | | | 23 | | | | | 24 | | | | | 25 | | | | | | | | | | | | | |

5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 INDEX MOTIONS: PAGE In re: Ho Wan Kwok, et al. Main Case no. 22-050073 (JAM) Matter No. 1: Motion to Extend Time to Extend Deadline to File Avoidance Actions (First Supplemental Motion) to 02/15/2025 (RE: 3329) 14 Court's Ruling: 80 Matter No. 2: Amended Emergency Motion of Chapter 11 Trustee, Pursuant to Bankruptcy Code Section 363(b), for Entry of Order Authorizing Trustee to Fund Maintenance of Mahwah Mansion and for Related Relief (RE: 3381) 81 Court's Ruling: 86 Genever Holdings LLC and Luc A. Despins, Chapter 11 Trustee v Ho Wan Kwok, Hing Chi Ngok, Qiang Guo, and Mei Guo Adversary Case No. 23-05002 (JAM) Matter No. 3: Pretrial Conference Hearing 89 Court's Ruling: 90 Luc A. Despins, et al. v Taurus Fund, LLC, et al. Adversary Case No. 23-05017 (JAM) Matter No. 4: Status Conference 90 Court's Ruling: 94 Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 5 of 96

| | Case 22-50073 | Doc 3446 | Filed 08/21/24 | Entered 08/21/24 10:22:10 | Page 6 of 96 | |----|---------------|-------------------------------------|---------------------------------|-----------------------------------|--------------| | | | | | | 6 | | 1 | | | | INDEX | | | 2 | | | | | | | 3 | | WITNESSES CALLED BY THE TRUSTEE: | | | PAGE | | 4 | | LUC A. DESPINS | | | | | 5 | | | | Direct examination by Mr. Bassett | 18 | | 6 | | | Cross-examination by Mr. Yan | | 30 | | 7 | | | Cross-examination by Mr. Sklarz | | 34 | | 8 | | | | | | | 9 | | | Transcriptionist's Certificate | | 96 | | 10 | | | | | | | 11 | | | | | | | 12 | | | | | | | 13 | | | | | | | 14 | | | | | | | 15 | | | | | | | 16 | | | | | | | 17 | | | | | | | 18 | | | | | | | 19 | | | | | | | 20 | | | | | | | 21 | | | | | | | 22 | | | | | | | 23 | | | | | | | 24 | | | | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | |

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 (Proceedings commenced at 1:12 p.m.) THE CLERK: Case Number 22-50073, Ho Wan Kwok; Adversary 23-50002, Genever Holdings, LLC, et al. v Kwok, et al., and Adversary 23-05017 Despins, et al., v Taurus Fund LLC, et al. THE COURT: Okay. Good afternoon. If we could have appearances for the record, please, starting with the Chapter 11 Trustee. Trustee Despins? (No verbal response) THE COURT: Is he frozen? Maybe. THE CLERK: No. THE COURT: Okay. They can't hear me? Apparently, they can't hear me. THE CLERK: Trustee Despins? (No verbal response) THE CLERK: Oh, you know what? I'm sorry, I'll call him. I'm sorry, Judge. THE COURT: So I think we have to start all over again, because I don't think that was recording or anyone could hear us. THE CLERK: Yes. Case Number -- the United States Bankruptcy Court for the District of Connecticut is now in session after recess. Judge -- the Honorable Julie Manning is presiding. Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 7 of 96

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, everyone. There are matters on the calendar beginning at 1:00 p.m., so I ask the courtroom deputy to please call the calendar. THE CLERK: Case Number 22-50073, Ho Wan Kwok; Adversary 23-05002, Genever Holdings, LLC, et al. v Kwok, et al.; and Adversary 23-05017, Despins, et al. v Taurus Fund, LLC, et al. THE COURT: Good afternoon. I'm going to take appearances to the record. We are on remote. This was supposed to be a remote hearing, which was not evidentiary. Whether it will be or not, we will see, because I don't conduct evidentiary hearings remotely. But when everyone notes their appearance, I'd like to make sure that whoever is noting their appearance, notes whether they have actually filed a notice of appearance in the case or in the adversary proceeding, because if you have not done so, you will need to do so. So, in any event, we will start with the Chapter 11 Trustee. MR. DESPINS: Good afternoon, Your Honor. Luc Despins, Chapter 11 Trustee. MR. BASSETT: Good afternoon, Your Honor. Nick Bassett from Paul Hastings, on behalf of the Chapter 11 Trustee. MR. MAZA: Good afternoon, Shlomo Maza of Paul Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 8 of 96

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 Hastings, as well. MR. LINSEY: Good afternoon, Your Honor -- THE COURT: I'm sorry, sir. I couldn't hear what you said. Let's go back to the gentleman who just spoke, please. MR. MAZA: Shlomo Maza with Paul Hastings for the trustee, as well. THE COURT: Good afternoon. MR. MAZA: Sorry, Your Honor. THE COURT: Sorry, I could not hear you. I apologize. MR. LINSEY: Good afternoon, Your Honor. Patrick Linsey of Neubert Pepe & Monteith for the trustee, and trustee's counsel do have appearances entered. THE COURT: Thank you. MS. CLAIBORN: Good afternoon. Holley Claiborn for the U.S. Trustee. MR. SARNOFF: Good afternoon, Your Honor. Stuart Sarnoff, O'Melveny & Myers, on behalf of creditor PAX in the main case. I'm not sure if I filed a notice of appearance in the adversary proceeding that's under discussion today, but I don't expect to be participating. THE COURT: Thank you. I don't think you need a file a notice in the adversary proceeding unless you choose to, but you do need to Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 9 of 96

10 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 have an appearance in the main case, which you already do and have for some time, so thank you. MR. SARNOFF: Thank you. MS. SMITH: Good afternoon, Your Honor. Annecca Smith of Robinson & Cole, Connecticut counsel to creditor PAX. MS. MAYHEW: Good afternoon, Your Honor. Kristin Mayhew, Pullman & Comley, on behalf of the Creditors Committee. I have an appearance in the main case, but I do not believe we have an appearance in the adversary proceeding. MR. SKLARZ: Good afternoon, Your Honor. Jeffrey Sklarz of Green & Sklarz, for certain objecting parties. I have an appearance in the main case, as well as the applicable adversaries where some of the objections were filed. Also online is my associate Michelle Antao. I don't recall if she has an appearance, and she won't be arguing. But if she doesn't, we'll get an appearance for her in the main case. I'll also note that my client, one of my clients, Justin Weddle of Weddle Law is also viewing proceedings; he is a party to one of the adversaries, or his law firm is a party to one of the adversaries. THE COURT: Okay. Thank you. There is no hearing in the adversary proceedings Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 10 of 96

11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 today, though, just so the record is clear. MR. SKLARZ: Understood, Your Honor. MR. YAN: Good afternoon, Your Honor. Jin Yan on behalf of Meta Platforms, Inc. and Apple, Inc. We do have appearances on in the adversary cases. I don't recall if we have appearances in the main bankruptcy case. THE COURT: Okay. Thank you. MR. PROSCIA: Good afternoon, Your Honor. Anthony Proscia from Kaufman Dolowich. We represent four law firms in the related adversary proceedings. We will not be speaking; we're just monitoring for the today. THE COURT: What related adversary proceeding are you speaking of, Counsel? MR. PROSCIA: Sure. It's the adversary proceedings against Yankwitt, against Ganfer Shore, against Brune Law, and against Petrillo Klein. THE COURT: You're going to have to spell every one of those, Counsel. Our record is only kept by audio and if the person who, then, creates the transcript can't understand -- and that's not your fault. It's not your fault; it's just the way it is -- you know, then there's a lot of blanks in the transcript. So I'm going to ask you, if you would, please, spell all the names of the Defendants you just named in adversary proceedings. MR. PROSCIA: Sure, Your Honor. Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 11 of 96

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 first law firm is Yankwitt, which Y-a-n-k-w-it-t. The second law firm is Ganfer Shore, G-a-n-f-e-r S-h-or-e. The third law firm is Brune Law, B-r-u-n-e. The fourth one is Petrillo Klein, P-e-t-r-i-l-l-o K-l-e-i-n. THE COURT: Thank you. MR. KIM: Good afternoon, Your Honor. Austin Kim from Meister Seelig & Fein, and we have an appearance in both, the main proceeding and adversary proceeding on behalf of the Greenwich Land Defendants, that's Hing Chi Ngok and Greenwich Land, LLC. THE COURT: Thank you. MS. MOFFETT: Your Honor, Rowena Moffett from Brenner Saltzman & Wallman. I represent another of the adversary Defendants, a law firm called Morvillo Abramowitz Grand Iason & Anello, spelled M-o-r-v-i-l-l-o A-b-r-a-m-o-wi-t-z G-r-a-n-d I-a-s-o-n & A-n-e-l-l-o, P.C. THE COURT: Thank you. Have I taken everyone's appearance for the record, then? (No verbal response) THE COURT: Okay. The first -- I'm not sure, Trustee Despins, how you want to proceed, but I would just note that the matters on the calendar today, the first two matters, the first motion -- first supplemental motion to extend deadline and the amended emergency motion authorizing

| 1 | funding, were filed in the main case, as they should be, | |----|-----------------------------------------------------------------| | 2 | because that's relief that's related to the estate as a | | 3 | whole. The two final matters on the calendar are really with | | 4 | regard to a pretrial conference in a specific adversary | | 5 | proceeding, 23-05002, and then a request for a status | | 6 | conference in another adversary proceeding, 23-05017. | | 7 | Trustee Despins, I do not know how you intend to proceeding, | | 8 | but I will hear from you with regard to your intentions. | | 9 | MR. DESPINS: Yes, and first, a clarification. I | | 10 | thought we also had a motion in with Mahwah adversary | | 11 | proceeding to authorize us to spend money to maintain, maybe | | 12 | even you covered that, but there's a hearing on that today, I | | 13 | believe to authorize us to spend money to pay taxes and | | 14 | security services and all of that, I believe. That should be | | 15 | on the agenda for today. | | 16 | THE COURT: You may be correct about that. I'll | | 17 | take a look at that. | | 18 | MR. DESPINS: Okay. | | 19 | THE COURT: I see what you're saying. You filed | | 20 | an emergency motion that we -- yes, I understand what you're | | 21 | saying. Okay. I'll take a look while you're speaking. | | 22 | MR. DESPINS: But, in any event, Your Honor, I | | 23 | think that given the number of people on the phone that are | | 24 | here for the, what I refer to as the August 15th extension | | 25 | motion, it probably makes sense to cover that first so that |

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 the people are free to stay on for the rest, but at least they don't have to; otherwise, they'll have to stay on for everything and there'll be nothing productive and (indiscernible). So, I would recommend starting with the August 15th extension motion. THE COURT: Go right ahead, which is just for the record, ECF 3329. MR. DESPINS: Mr. Bassett is handling that motion, Your Honor. THE COURT: Mr. Bassett, you're on -- there you go -- you were on mute, but please proceed. MR. BASSETT: My apologies. Good afternoon, Your Honor. Again, for the record, it's Nick Bassett from Paul Hastings on behalf of the Chapter 11 Trustee. To address Your Honor's question at the outset, we did intend, obviously, with the Court's permission, to have a very limited evidentiary presentation today and it is certainly our apologies for assuming we would be able to do that via Zoom. I think the reason we had proceeded in that manner is because at the hearing on this motion that occurred in February, it was done remotely and we did have the trustee provide some testimony. I realize now in thinking back on that particular

hearing, that I think we did that one remotely due to

1 2 3 unanticipated weather issues. So maybe there was an exception made to the Court's general policy in that instance.

4 5 6 7 8 9 10 11 Be that as it may, Your Honor, again, obviously, we're at the Court's mercy, but subject to your permission, we did intend to have the trustee present limited testimony. I think most of the record that we would rely on in support of the motion is the record indicates, which we would ask the Court to take judicial notice, so I don't think the evidentiary presentation would be long, but that was our intention, Your Honor.

12 13 14 15 16 17 18 THE COURT: Well, the only reason I raise the issue is because there's going -- if Trustee Despins testifies, then there's going to be five different lawyers that are going to cross-examine him, is that what we're going to do, because there's a number of objections filed to this motion, so I would assume all those lawyers are going to want to cross-examine him.

19 20 21 22 23 24 25 MR. BASSETT: I can't speak for him, Your Honor. I would note that I think each of those parties, or at least some of those parties, reserved the right expressly in their objections to cross-examine the trustee to the extent he testified. I don't know if they intend to or not. As I said, the testimony will be limited. I would expect 10 or so minutes, which I would hope you would cabin

1 2 and eliminate the scope of their cross, but, again, I can't speak for the opposing parties' counsel.

3 4 THE COURT: I understand you can't speak for them; I'm not suggesting you should.

5 6 7 8 9 10 11 12 13 But I'm saying I am virtually certain that they're going to want to cross-examine him, so then we're going to have direct examination and cross-examination remotely and the courtroom deputy has to then swear the parties in remotely. The courtroom deputy is not on a camera. You know, there are issues with that; that's why I don't do that unless it's determined in advance and there's a reason for it. Because, as you know, the Federal Rules of Evidence still require in-court hearings for testimony.

14 15 16 17 18 19 20 21 22 23 24 25 In any event, if that's how we're going to proceed, we'll see how we do, but I do think that, you know, it is necessary to understand that there's no reason why if testimony and exhibits are going to be introduced, why parties can't be here in the courtroom or work out an arrangement in advance so the Court is aware of what's happening. And that's what I would say with regard to that. MR. BASSETT: Understood, Your Honor. I will take the blame for not having dealt with this appropriately in advance. THE COURT: All right. Well, let's see how things proceed, so go right ahead.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Are you calling Trustee Despins as a witness right now? MR. BASSETT: So, Your Honor, we would. I think the ladies of the jury Calloway to proceed would be for us to complete our limited evidentiary presentation, which really will only consist of the trustee testifying and the Court can, obviously, take notice of other filings in the record, which we refer to in our papers and they refer to, again, in argument, but it's really just the trustee taking the stand, which I think would be the appropriate way to proceed right now. THE COURT: Okay. Given what I've stated for the record, the courtroom deputy does not have a camera, so I am going to have to say for the record that I am sitting next to the courtroom deputy. I can see her. She is going to swear in the witness, Trustee Despins, and then we will have to go from there, okay. So I'm going to ask -- Trustee Despins, are ready to be sworn in? MR. DESPINS: Yes, Your Honor. THE COURT: Okay. So as if we can pretend we're in the courtroom and, Attorney Bassett just called you to the witness stand. So, now, we need to turn this over to the courtroom deputy, whose duty it is to swear in the witness. THE CLERK: Thank you.

18 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 Attorney Despins, please raise your right hand. THE COURT: We can't see your right hand, Trustee Despins. We need to see it. MR. DESPINS: Sorry, Your Honor. THE COURT: The other way. MR. DESPINS: Yes. THE CLERK: Okay. MR. DESPINS: Hold on a second. I don't know why that's not -- okay. That's my right hand. THE COURT: Okay. MR. DESPINS: Yes. THE CLERK: Okay. LUC A. DESPINS, TRUSTEE'S WITNESS, SWORN THE WITNESS: I do. THE CLERK: State your name and address for the record, your business address, of course. THE WITNESS: Luc Despins, 200 Park Avenue, New York, New York 10166. THE COURT: Okay. Mr. Bassett, you may proceed. MR. BASSETT: Thank you, Your Honor. DIRECT EXAMINATION BY MR. BASSETT: Q Trustee Despins, you understand we are here today on the trustee's motion to extend avoidance action deadlines; is that right? Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 18 of 96

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 19 of 96 | |---------------|--------------------------------------------------------------------------| | | 19 | | 1 | A I do. | | 2 | Q Now, this is the second motion, such motion you have | | 3 | filed in this case; is that right? | | 4 | A That's correct. | | 5 | Q Now, do you recall, Trustee Despins, testifying at the | | 6 | hearing on the first motion, which I believe was on | | 7 | February 13th of this year? | | 8 | A Yes, I do. | | 9 | Q And have you reviewed that testimony, again, in | | 10 | anticipation of your testimony today? | | 11 | A Yes, I have. | | 12 | Q Was that testimony that you gave them, Trustee Despins, | | 13 | true and accurate to the best of your recollection? | | 14 | A It was. | | 15 | Q Okay. So what I'd like to do today is just briefly ask | | 16 | some questions about events that have happened and transpired | | 17 | since you last testified in February of 2024. | | 18 | Now, Trustee Despins, can you just generally describe | | 19 | what you have been doing in your investigation in this | | 20 | Chapter 11 case since we've last had that hearing in February | | 21 | of this year? | | 22 | A A number of things. First, continuing to review | | 23 | documents we have received, analyzing them, bank account | | 24 | statements, et cetera, with the help of Kroll. Then, we also | | 25 | sought what we call "follow-up 2004 discovery" for a limited | | | |

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 20 of 96 | |---------------|--------------------------------------------------------------------------| | | 20 | | | | | 1 | number of parties to advance our investigation. | | 2 | Q Okay. When you say Rule 2004 discovery, how many | | 3 | additional Rule 2004 motions that you recall, have you filed | | 4 | since the hearing in February? | | 5 | A Four. | | 6 | Q And do you know how many additional parties, or | | 7 | discovery targets, if you will, that those motions covered? | | 8 | A 47. | | 9 | Q And do you have a general sense of approximately how | | 10 | many documents were obtained through those Rule 2004 motions | | 11 | from those parties? | | 12 | A Just from those parties with the new 2004, around 700 | | 13 | documents. | | 14 | Q Okay. Now, in addition to the 2004 discovery that you | | 15 | just described, have you and your team obtained additional | | 16 | documents by other means or from other sources? | | 17 | A Yes. The first source is pursuing the existing 2004, | | 18 | the ones that were existing before (indiscernible) to obtain | | 19 | more information from the targets of that investigation. | | 20 | Nobody ever produces all of their documents on the | | 21 | first go-around, so we have to pursue this case. It was | | 22 | mostly Mr. Linsey's firm that did this. So that was one | | 23 | source of a very voluminous source of documents that we | | 24 | received. | | 25 | In addition to that, we obtained access to documents | | | |

| 1 | that were in a warehouse in Jersey and, also, they were | |----|---------------------------------------------------------------| | 2 | iPhones and the like, computers, in that facility that we | | 3 | obtained and we analyzed. So that's, generally, the | | 4 | additional work that was done in terms of obtaining | | 5 | documents. | | 6 | Q And do you have a ballpark sense of the volume of | | 7 | documents that we're talking about when you pull together | | 8 | these additional sources with the 2004 discovery that you | | 9 | described? | | 10 | A Well, putting aside the 700 documents that exist for | | 11 | the new -- for 2004, there would be in excess of 20,000 | | 12 | documents from the sources I've described, which is the | | 13 | previous, the initially previously granted 2004, the New | | 14 | Jersey warehouse, and the computers, and the iPhones that we | | 15 | found in that facility. | | 16 | Q Now, what is your team, if anything, doing with this | | 17 | documents as you receive them? | | 18 | A Well, not to go into a lot of details, but, basically, | | 19 | we have a software program that allows us to search by name, | | 20 | so they're downloaded to that so everyone can actually search | | 21 | a specific term. Then, they're also given, that access is | | 22 | given to the Kroll team so they can also look at that, and | | 23 | that gives them a lead as to new bank accounts and the like. | | 24 | So there's a whole process that goes on, that's still | | 25 | ongoing, as to those documents. | | | |

| 1 | Q So you mentioned Kroll and their bank account analysis, | |----|---------------------------------------------------------------| | 2 | which was a topic that came up at the hearing in February. | | 3 | Can you talk more about the additional work, any | | 4 | additional discoveries that the Kroll team has made, with | | 5 | respect to bank accounts since February? | | 6 | A Yeah, as I described when I testified, you know, these | | 7 | bank accounts, they're really almost the only key documents | | 8 | we have, or at least documents that we're sure of their | | 9 | authenticity because they come from banks. And every time | | 10 | you look at a bank account, there's dozens, if not hundreds | | 11 | of transfers that lead you to other bank accounts, and that's | | 12 | what Kroll does. | | 13 | So what they did is that through this additional | | 14 | discovery that Mr. Linsey's firm produced, we're able to -- | | 15 | they were able to identify 200 additional bank accounts that | | 16 | they started analyzing and are still analyzing at this stage. | | 17 | Q And do you have a ballpark sense at all as to how many | | 18 | transfers within those accounts have been analyzed? | | 19 | A Not precisely. It's thousands and thousands, but I | | 20 | would hesitate to give a precise number. | | 21 | Q And how long does it take Kroll to go through this sort | | 22 | of exercise? | | 23 | MR. SKLARZ: Objection; hearsay. | | 24 | He's asking what somebody else is not in court is | | 25 | doing. | | | |

23 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. BASSETT: Your Honor, the trustee -- THE COURT: So, hold on a second. Attorney Sklarz, I didn't hear you, so you're going to have to do that again. MR. SKLARZ: I'm sorry. THE COURT: That's not your fault. MR. SKLARZ: Objection. THE COURT: That's not your fault. I'm just saying that's one of the downsides to remote, right. I can't hear you when you start to talk, so I'm going to ask you to do that again, please. MR. SKLARZ: Fair enough, Your Honor. My objection is on account of hearsay. The trustee is testifying about what Kroll, who is a party not in court today, is doing, so it's hearsay. THE COURT: Do you have a responses, Attorney Bassett? MR. BASSETT: Your Honor -- yes, Your Honor. I don't understand how the question calls for hearsay. The trustee has retained Kroll as his advisor in this case; he's testified about that at length, including at the last hearing. The trustee, obviously, has firsthand knowledge of how long it has taken Kroll, at his direction, to perform certain tasks. MR. SKLARZ: That is classic hearsay. Kroll isn't Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 23 of 96

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 24 of 96 | |---------------|--------------------------------------------------------------------------| | | 24 | | 1 | here. | | 2 | THE COURT: I'm going to overrule the objection, | | 3 | but give the testimony whatever weight I think is | | 4 | appropriate. | | 5 | So please continue. | | 6 | BY MR. BASSETT: | | 7 | Q So approximately how long, Trustee Despins, does it | | 8 | take Kroll to perform the type of bank account analysis that | | 9 | you just described? | | 10 | A It's impossible to give a precise, you know, number of | | 11 | days answer to that because it depends on how many transfers | | 12 | are in the accounts. But as to those 200, there are still -- | | 13 | that analysis is still ongoing, because as I said, every | | 14 | account opens the door to another account and that analysis | | 15 | is still ongoing. It's not the same degree that it was going | | 16 | on, let's say, in January or February, but it's still | | 17 | ongoing, as we speak. | | 18 | Q Now, Trustee Despins, you're aware that the debtors' | | 19 | criminal trial has taken place in the United States District | | 20 | Court for the Southern District of New York, correct? | | 21 | A Correct, yes. | | 22 | Q And do you recall, approximately, when that trial | | 23 | started? | | 24 | A In late May; May 22nd, something along those lines. | | 25 | Q And, approximately, when it concluded? | | | |

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 25 of 96 | |---------------|--------------------------------------------------------------------------| | | 25 | | 1 | A In mid-July; July 16th or 17th. | | 2 | Q And did your team monitor that trial as it was | | 3 | transpiring? | | 4 | A Yes, we did, either through attendance when there were | | 5 | key witnesses that could be key to our case and we wanted to | | 6 | gauge their credibility as a witness or by reading | | 7 | transcripts when they were routine witnesses like FBI | | 8 | testimony where, like, we didn't need to be there for that. | | 9 | Q And so how, if at all, was the criminal trial relevant | | 10 | to your investigation in this case? | | 11 | A Incredibly relevant. As I said, testified before, the | | 12 | government has better tools than we do. They have all sorts | | 13 | of ways of getting information. | | 14 | And what could be learned through that trial, | | 15 | basically, is it just opened up a whole new dimension as to a | | 16 | number of the things that we've been analyzing. | | 17 | Q And do you know, Trustee Despins, approximately how | | 18 | many witnesses there were in the criminal trial altogether? | | 19 | A The government had over 30 and the Defendant has | | 20 | something like 8 or 10. Not more than 10. | | 21 | Q And do you have a ballpark sense for how many exhibits | | 22 | were introduced into evidence during the criminal trial? | | 23 | A There's thousands. My memory was 2900 and something, | | 24 | so thousands of exhibits. | | 25 | Q And do you have access to those exhibits? |

| 1 | A No. | |----|-----------------------------------------------------------------| | 2 | Before trial begins, in theory, when the government | | 3 | uses an exhibit, it's supposed to post them promptly, but as | | 4 | of today, there's still hundreds of exhibits that have not | | 5 | been downloaded so that we can have access to them. So we | | 6 | did not have access to them before -- most of them. Some of | | 7 | them we did, but most of them, we did not have access. Since | | 8 | they were posted, we've had access, but that's not the | | 9 | complete list. There's hundreds of exhibits that, for some | | 10 | reason, have not been posted yet. Of course, we've been | | 11 | following up with the government to make sure they do post | | 12 | them promptly. | | 13 | Q And what is your team doing with the exhibits from the | | 14 | criminal trial, if they are able to access them? | | 15 | A Same routine as putting this on our software database, | | 16 | giving it to Kroll, because there are references to bank | | 17 | accounts. There's actually analysis of bank transfers in | | 18 | government exhibits. So we're feeding all of that to them so | | 19 | they can update their analysis. | | 20 | Q Now, Trustee Despins, are you aware that this Court | | 21 | entered an order staying certain litigation and certain | | 22 | litigation activities, including depositions, during the | | 23 | pendency of the criminal trial? | | 24 | A Yes, I am. | | 25 | Q How, if at all, did that stay impact your investigation |

| | 27 | |----|----------------------------------------------------------------| | 1 | progress over the last few months? | | 2 | A Well, there was an absolute prohibition on depositions | | 3 | during that time period, so -- obviously, there are a number | | 4 | of witnesses that we were about to depose that, in fact, were | | 5 | potentially going to be testifying at the criminal trial and, | | 6 | therefore, we could not depose until, you know, last week or | | 7 | something like that. So, clearly, it had a major impact on | | 8 | our ability to depose the key witnesses. | | 9 | Q Now, that stay was granted, pursuant to a motion that | | 10 | you filed; is that right? | | 11 | A That's correct. | | 12 | Q Why did you file that motion? | | 13 | A Two reasons. The first one is that the debtor was | | 14 | filing a renewed motion before the criminal court to stay the | | 15 | entire bankruptcy case, so, obviously, we did not want that | | 16 | to happen; that would have been a disaster and, therefore, | | 17 | that was part of the reason. But the other part of the | | 18 | reason is that the witnesses that we were scheduling for | | 19 | depositions were saying, Hey, I'm going to be a witness or, | | 20 | I'm talking with the Government, and I will complain to them | | 21 | that you're trying to depose us. And, of course, the impact | | 22 | of that would have -- could have been that the government | | 23 | would have said, Well, actually, we think the bankruptcy case | | 24 | should be stayed completely. | | 25 | And that's why we filed this motion, which was kind of |

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 (indiscernible), in attempt that we were still able to get documents, but no depositions, so that we would not interfere with the criminal trial or the witnesses that could or have appeared at the criminal trial. Q Now, since February 15th of 2024, have you filed any additional avoidance actions? A Yes. Q Approximately how many? A We filed four, but we're about to file, or we're in the process -- they're just appearing on the docket today -- of filing an additional 30 or so. Q And how are you deciding when to file these complaints? A As soon as we're ready to file them, in the sense that we have enough information to file them and we've verified all the information to the best of our ability. We're not holding anything back. We're filing all the ones that we can right now and that's how we have decided, if we have enough information. That process is led mostly by Mr. Linsey's firm, but, you know, I'm involved with reviewing the complaints. But, basically, we file them when we have enough information to go ahead. Q Trustee Despins, you testified in February about some of the obstruction that had occurred at the hands of the debtor and others in this case, do you recall that testimony? A Yes.

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 Q Now, that obstruction that you talked about then, has that continued to affect your investigation in your view? A Sure, because as I said, the only reliable source we have are bank accounts, but that doesn't show you the full picture; it just shows you transfers. We have no books and records. You know, the debtor testified many times he didn't have an iPhone. And now, of course, we know he had an iPhone, because that came out in the criminal trial; he had many iPhones, but with data. And, obviously, the inability to have books and records to tie all of this makes this case, I would say, unprecedented in terms of the amount of work that needs to be done to tie everything together. MR. BASSETT: No further questions, Your Honor. THE COURT: Okay. Thank you. Does anyone wish to cross-examine Trustee Despins? MR. YAN: Your Honor, I have just a few questions for Trustee Despins. THE COURT: Okay. Would you just -- I can see you, but would you please state your name for the record, again, and who you represent, because, again, as I said at the beginning of the hearing, we only have audio for our transcripts, so it would be helpful to make the record as clear as possible. Thank you. MR. YAN: Sure. My name is Jin Yan, J-i-n, last

30 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 name, Y-a-n. I represent Apple, Inc. and Meta Platforms, Inc. CROSS-EXAMINATION BY MR. YAN: Q Trustee Despins -- THE COURT: Go right ahead. I'm sorry, I didn't mean -- MR. YAN: Thank you, Your Honor. THE COURT: -- to speak over you. I apologize. But you may proceed. MR. YAN: Thank you, Your Honor. BY MR. YAN: Q Trustee Despins, you testified earlier that you issued four new 2004 (indiscernible) targeting 47 parties. Did I state that correctly? A That's correct. Q Was Apple one of those targets? A I don't recall. Q Do you recall if Meta was one of those targets? A I don't recall. Q What actions have you taken, specifically, to investigate additional avoidance claims against Apple or Meta? A There's -- they're part of, meaning that we searched, generally, for all transfers through these bank accounts that Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 30 of 96

| 31 | |----| |----|

| 1 | we keep getting these 200 additional bank accounts, so if | | |----|---------------------------------------------------------------|--| | 2 | Meta or Apple appears in there, we're going to pursue that. | | | 3 | So that's part of the analysis. | | | 4 | But we don't go -- our analysis is not Defendants | | | 5 | targeted, in the sense that we are looking for transfers, | | | 6 | because we have this running clock that we're trying to | | | 7 | comply with and, therefore, we're looking at all transfers. | | | 8 | And if it happens that Meta or Apple is on that list, | | | 9 | then we will chase that. | | | 10 | Q Trustee Despins, you're aware that you've already sued | | | 11 | Apple, correct? | | | 12 | A Correct. | | | 13 | Q And you're also aware that you've already sued Meta, | | | 14 | right? | | | 15 | A Correct. | | | 16 | Q Have you identified any additional claims, other than | | | 17 | the ones in your current lawsuit against Meta? | | | 18 | A There are some smaller claims that we found, but not -- | | | 19 | nothing material, you know, in the thousands of dollars, not | | | 20 | in the hundreds of thousands of dollars. So, at this time, | | | 21 | the answer would be, no, nothing material. | | | 22 | Q What about against Apple? | | | 23 | A Same answer. | | | 24 | Q And you said the additional claims that you found that | | | 25 | are not material, are those already asserted in the claims in | | | | | |

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 32 of 96 | |---------------|--------------------------------------------------------------------------| | | 32 | | | | | 1 | the lawsuit that's been brought? | | 2 | A I don't think so. I think these would be added to | | 3 | that, but, again, not in -- it wouldn't move the dial in a | | 4 | material way. | | 5 | Q Do you intend to serve those claims against Apple or | | 6 | Meta? | | 7 | A I need to talk to counsel about that. You know, | | 8 | (indiscernible) litigation, so I need to confer with them to | | 9 | decide whether it's worth doing that. | | 10 | Q Okay. And when did you identify those additional | | 11 | claims that are not part of the existing lawsuits? | | 12 | A I don't know when. Obviously after February 15th, but | | 13 | when between February 15th and now, I couldn't say. | | 14 | Q Can you explain why you haven't sought to amend your | | 15 | existing lawsuit to add those claims? | | 16 | A Because Apple and Meta is not the only thing we're | | 17 | focusing on. We're focusing on, you know, more than 300 | | 18 | Defendants and now we're adding another 50 or so and 30, plus | | 19 | another potential 20, so that's 50. So, we -- I understand | | 20 | from your perspective, you're concerned about those two only, | | 21 | but there are a lot of balls in the air and we go to the most | | 22 | material and the most critical aspects first. | | 23 | And that's why I said I'm aware of additional | | 24 | transfers, but I don't think they move the dial and certainly | | 25 | not in the way that we would put everything to the side and | | | |

Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 33 of 96

33 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 amend to add the, at this time, to amend to add these amounts that are not material. If we find something that's really material, then we would, obviously, amend it as quickly as we can. So there's no strategy vis-a-vis, Apple or Meta; it's a global strategy of dealing with hundreds of Defendants and we go to the most pressing, you know, because there's a limited number of hours in the day. MR. YAN: I have no further questions. Thank you, Trustee Despins. THE COURT: Thank you. Does anyone else wish to cross-examine Trustee Despins? MR. SKLARZ: Yes, Your Honor. THE COURT: Attorney Sklarz, will you just, again, state your name for the record and who you represent, because we need that for the record, please. Thank you. MR. SKLARZ: Yes, Jeffrey Sklarz and for purposes of this hearing, my clients are G Club; FFP (BVI) Limited, which is sued in Adversary Proceeding 24-506 -- 5056; Ogier, 24 -- sued in Adversary 24-05012; Pillsbury Winthrop Shaw Pittman, sued in Adversary 24-05014; and Weddle Law, sued in Adversary 24-05188. // //

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 34 of 96 | |---------------|--------------------------------------------------------------------------| | | 34 | | 1 | CROSS-EXAMINATION | | 2 | BY MR. SKLARZ: | | 3 | Q Trustee Despins, you indicated that you received | | 4 | additional information, which, much like the proverbial | | 5 | Russian nesting doll, every time you open one layer, you get | | 6 | more and more. | | 7 | Is that fair to say? | | 8 | A As a general characterization, yes. | | 9 | Q Okay. So to the extent you continue to get more and | | 10 | more information, are you indicating there's a possibility | | 11 | that your investigation could go on, effectively, in | | 12 | perpetuity for years and years and years? | | 13 | A No, at one point, we need to, you know, wrap up this | | 14 | case and move on to other things in our lives and that's the | | 15 | intent here. From our point of view, we're not at that stage | | 16 | yet, but, clearly, the goal is to get to that stage so that | | 17 | we can move on. We have to balance that desire of leaving | | 18 | potential targets, you know, without a claim, so, that's, | | 19 | really, the balancing act there. | | 20 | Q And you also indicated earlier, I believe, that you had | | 21 | moved to stay your own pursuit of cases based on the criminal | | 22 | proceeding. | | 23 | Did I understand that correctly? | | 24 | A No, we did that in the past. | | 25 | Q You did that in the past? | | | |

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 35 of 96 | |---------------|--------------------------------------------------------------------------| | | 35 | | | | | 1 | A Yes. | | 2 | Q And there were pending discovery examinations, I | | 3 | believe you said, that were stayed as a result of your | | 4 | motion, correct? | | 5 | A Correct. | | 6 | Q And some of those folks you were going to take exams of | | 7 | were witnesses in the criminal proceeding, correct? | | 8 | A I said witnesses or could have been witnesses so, the | | 9 | government had to decide to use them. Now, they would be in | | 10 | one of those two categories. | | 11 | Q Okay. So, you -- and no one opposed your motion to | | 12 | stay; is that the testimony? | | 13 | A I don't think anybody did; that's right. | | 14 | Q So you self-stayed cases for your own reasons; that's | | 15 | fair to say? | | 16 | A No. | | 17 | Q You self-stayed the case for other people's reasons? | | 18 | A No, we filed a motion, but it was not in a vacuum; it's | | 19 | not just for our own reasons. | | 20 | It's that because we were attempting to depose people | | 21 | who said, Wait a minute, I'm a witness or I've been asked to | | 22 | be a witness in a criminal trial and they were going to | | 23 | complain about it, what we were trying to do, to the DOJ, | | 24 | that's when we decided we needed to halt this during the | | 25 | duration of the trial. So, we did that on our own, but it | | | |

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 36 of 96 | |---------------|--------------------------------------------------------------------------| | | 36 | | | | | 1 | was taking into account a number of factors, including not | | 2 | interfering with a criminal proceeding. | | 3 | Q Have you coordinated witness testimony with the | | 4 | government? | | 5 | A Never. | | 6 | MR. BASSETT: Objection; irrelevant. | | 7 | THE COURT: Sustained. So we'll strike that from | | 8 | the record, that answer. | | 9 | BY MR. SKLARZ: | | 10 | Q In terms of my clients who've objected today, G Club, | | 11 | FFP, Ogier, Pillsbury Winthrop, and Weddle Law, they were all | | 12 | sued prior to the February extension order; is that correct? | | 13 | A Well, I know about G Club for sure, on both, on alter | | 14 | ego and what we would call a precautionary transfer | | 15 | complaint. Ogier, I know, as well. Pillsbury, yes. | | 16 | The other entity you mentioned, I'm sorry, I don't recall | | 17 | them. | | 18 | Q Okay. With respect to all of those entities, are there | | 19 | any other claims you discovered between February and today | | 20 | that you're intending to bring? | | 21 | A I want to be careful, because, remember, as to G Club, | | 22 | our first cause of action is to seek alter-ego or alter | | 23 | (indiscernible) ruling. The fraudulent transfer would only | | 24 | be if we don't succeed in that and, therefore, there has been | | 25 | no focus on the fraudulent transfer claims against G Club, | | | |

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 because we first want to try to obtain a ruling of alter-ego. So, you know, I cannot say that there's not more in terms of fraudulent transfer, because that's not our focus against G Club. As to the other entities, I really hesitate in giving you a definite answer, because there's 280 Defendants, so I don't know each one of them. But nothing comes to mind in terms of, oh, there's another (indiscernible) against (indiscernible) or something like that. Nothing comes to mind along those lines. Q So as you sit here today, you're not aware of any additional claims that could be brought -- let's put G Club aside and we'll go through it one by one -- as you sit here today, you're not aware of any additional claims that could be brought against FFP? A Against, there's 280 Defendants, so I can't -- I don't know, so I hesitate to give you an answer that there's definitely not. I (indiscernible). Q So, the question, again, as to Ogier, as you sit here today, are you aware of any additional claims against Ogier? A None that are material or that have been brought to my attention. I want to be clear, there's -- you know, Mr. Linsey's firm is running that process, generally, and so they may be reviewing and finding additional transfers and they don't

38 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 bring every dollar to my attention until it's time to file an amended complaint. So I have not been approached by them to file an amended complaint at this time against (indiscernible). THE COURT: Attorney Sklarz, before you continue, I just want to make sure that the record is clear. The two parties you just asked about, the first was FFP; is that correct? MR. SKLARZ: Correct, Your Honor. Yes. THE COURT: And the second was Ogier; is that correct? MR. SKLARZ: Ogier is O-g-i-e-r. THE COURT: Okay. That's -- we do need to do that, unfortunately, for the record, so I may have to ask you to -- I mean, now that you've said those two, that's very helpful. MR. SKLARZ: Sure. THE COURT: If you talk about other Defendants that you represent, I would ask you to please spell their names for the record. MR. SKLARZ: No problem, Your Honor. THE COURT: Thank you. BY MR. SKLARZ: Q So the next Defendant would be Pillsbury Winthrop, P-il-l-s-b-u-r-y W-i-n-t-h-r-o-p. It's a New York law firm. Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 38 of 96

| | | 39 | |----|---|---------------------------------------------------------------| | 1 | | Are you aware of any additional claims against | | 2 | | Pillsbury? | | 3 | A | Again, I -- what I'm aware of is nobody has asked me to | | 4 | | sign off on an amended complaint being filed. That's the | | 5 | | best information I can give you at this stage. | | 6 | Q | With respect to Weddle Law, W-e-d-d-l-e, are you aware | | 7 | | of any additional claims against Weddle Law? | | 8 | A | I would give you the same answer; there's no current | | 9 | | plan, to my knowledge, to file an amended complaint asserting | | 10 | | additional claims. | | 11 | Q | Thank you. | | 12 | | Now, you mentioned the debtor, post-February has | | 13 | | continued to obstruct your getting books and records. | | 14 | | Is that -- did I understand your testimony correctly? | | 15 | A | I think the question that was asked was whether the | | 16 | | obstruction by the debtor affected us, continued to affect us | | 17 | | post-February and the answer was yes. | | 18 | Q | Okay. So let's break it down a little bit. | | 19 | | Has the debtor obstructed you in your investigation | | 20 | | since the February extension order came out? | | 21 | A | Well, every day that they're not producing their books | | 22 | | and records, they're obstructing us; that's one way of | | 23 | | looking at it. | | 24 | Q | What -- | | 25 | A | Not when -- sorry. | | | | |

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 40 of 96 | |---------------|--------------------------------------------------------------------------| | | 40 | | 1 | Q What precisely has the debtor himself done? He's been | | 2 | sitting in jail, correct? | | 3 | A Correct. | | | | | 4 | Q What has he done since the February extension order, | | 5 | which, just for reference, is dated -- it's ECF 2921 -- | | 6 | dated, February 15, 2024. What, since February 15th, 2024, | | 7 | has the debtor done to obstruct your investigation, other | | 8 | than not cooperating when you asked him to? | | 9 | A He's continued to fail to produce his books and | | 10 | records. | | 11 | Q Okay. Now, you have obtained various books and | | 12 | records, correct, related to debtor entities? | | 13 | Strike that question. Let me ask again. | | 14 | You have obtained various books and records from both, | | 15 | the debtor and entities that you claim are controlled by the | | 16 | debtor; is that fair to say? | | 17 | A No, I wouldn't say that there's any books and records | | 18 | from the debtor and as to other entities, what qualifies as | | 19 | books and records is unclear. We did obtain business | | 20 | documents from other entities, yes. | | 21 | Q So, for example, with respect to -- there were a number | | 22 | of entities that have the letters HGHK preceding them, you | | 23 | obtained books and records from certain HK -- HGHK entities, | | 24 | like HGHK Technologies; is that correct? | | 25 | A I hesitate to say books and records. We obtained | | | |

| | 41 | |----|----------------------------------------------------------------| | 1 | documentation from them showing transactions. Whether these | | 2 | were really accurate, complete books and records, I could not | | 3 | say. I actually would not say that. | | 4 | Q Okay. There was a gentleman, a receiver appointed in | | 5 | an action by the name of Hofmeister, H-o-f-m-e-i-s-t-e-r, do | | 6 | you remember him? | | 7 | A Yes, I do. | | 8 | Q And there was a settlement entered into, whereby he | | 9 | turned over or gave access to you, with respect to the | | 10 | entities that he was appointed receiver over, do you recall | | 11 | that? | | 12 | A He gave me access to what? | | 13 | Q I'm asking, did he give you access to information? | | 14 | A He gave us access to information that he had received, | | 15 | yes. | | 16 | Q Okay. And you entered into a settlement that was | | 17 | approved by this Court with Mr. Hofmeister; is that right? | | 18 | A That's correct. | | 19 | Q What did you get from Mr. Hofmeister? | | 20 | A A series of documents purporting to show some | | 21 | transfers, some payments, but I don't think there were | | 22 | balance sheets. Nothing that was pass muster, in terms of a | | 23 | true accounting. | | 24 | Q And -- | | 25 | A We got what he got from Mr. Kwok's associates. He | | | |

42 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 didn't prepare any books and records. He just gave us what they gave him. Q So Mr. Kwok's associates turned over information to Mr. Hofmeister, who then turned it over to you? A They gave some information, yes, that's correct. Yes. Q And did Mr. Hofmeister obstruct your investigation? A Sorry, did he obstruct our investigation? No. Q Let me just have a moment. (Pause) MR. SKLARZ: Thank you, Trustee. I don't have further questions at this time. THE WITNESS: Thank you. THE COURT: Thank you. Does anyone else wish to cross-examine Trustee Despins? (No verbal response) THE COURT: All right. Hearing nothing, Attorney Bassett, do you have any redirect? MR. BASSETT: No redirect, Your Honor. THE COURT: Okay. Thank you, Trustee Despins. Your testimony is concluded. You're excused as a witness. (Witness excused) THE COURT: I know you're going to continue to be at the hearing, but you're excused as a witness. Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 42 of 96

43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. DESPINS: Thank you, Your Honor. THE COURT: Thank you. Attorney Bassett, did you wish to proceed, continue? MR. BASSETT: Yes, Your Honor, thank you. THE COURT: You're welcome. MR. BASSETT: Again, for the record, Nick Bassett from Paul Hastings on behalf of the Chapter 11 Trustee. Your Honor, that -- in addition, as I said before, in addition to Trustee Despins' testimony, we believe that the record generally in this Chapter 11 case and the related adversary proceedings is highly relevant to the motion before the Court today, as it was to the motion before the Court back in February and the Court can, then, you know, take judicial notice of that docket and of that record. So, you know, coupling the record before - coupling the record in this case with Trustee Despins' testimony, that concludes our evidence in support of the motion. And with that, I would propose proceeding to argument. I'm happy to do that, Your Honor. THE COURT: Go right ahead. MR. BASSETT: Thank you very much. So, Your Honor, I'll try to be brief in my remarks, because I don't think there is really any new ground to cover that we did not already cover when we had the Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 43 of 96

1 2 3 4 5 6 7 8 9 10 11 12 13 14 hearing back in February on the first motion to extend the trustee's time to file avoidance actions. The Court, in that order, which was issued on February 15th, 2024, and is at ECF 2921, the Court reached two main conclusions. First, it granted the trustee's request for an extension of his deadline to file avoidance actions from February 15th, 2024, through August 15th, 2024, under Federal Rule of Bankruptcy Procedure 9006(b). Second, the Court determined in that order that it disagreed and denied the trustee's requests for equitable tolling on the statute of limitations deadline; however, it expressly did so without prejudice to the trustee's ability to raise equitable tolling in response to any argument that a particular adversary Defendant may raise as to the statute of limitations in the future.

15 16 17 18 19 20 21 22 23 24 25 Your Honor, there is no reason, based on either the passage of time, the intervening facts and circumstances that have occurred since February, or anything in the objections that the Court has received, that would militate in favor of any other outcome that's different from what the Court already concluded back in February. I do want to emphasize that the trustee absolutely intends to argue equitable tolling at the appropriate time if a Defendant raises a statute of limitations issue in an adversary proceeding, but we respect the Court's ruling as to that and will reserve all rights accordingly.

1 2 3 4 5 6 7 8 9 10 11 12 13 Your Honor, I'll spend the balance of my time just responding to the particular arguments that certain of the objecting parties have raised. Again, in my view, there is nothing new. I think the arguments generally fall into two buckets. The first is the objecting parties reiterate arguments they made previously that the Court should not be able to use Federal Rule of Bankruptcy Procedure 9006(b) to extend the deadline for filing avoidance actions. And then the second argument is one that's really based on the factual record, with parties taxes the position that nothing has occurred or that there were no facts in the record that would justify extending the deadline to file avoidance actions further.

14 15 16 17 18 19 20 21 22 On the first of those arguments, on 9006(b), Your Honor, again, I think it's already been decided. The Court carefully analyzed this issue and the relevant case law in its first extension order. The Court, after conducting that analysis, ultimately concluded correctly that limitations periods are generally not substantive and, therefore, the Court has the power to use Rule 9006(b) to extend the limitations period set forth in 546(a), based on principles of equity.

23 24 25 In reaching that decision, the Court expressly considered and declined to follow contrary case law, including, specifically, Judge Tancredi's decision in the In

1 2 3 4 5 6 7 8 re Walnut Hill case, which the objecting parties continue to rely upon. The Court also specifically noted in his decision, which granted the trustee's request to extend the deadline for filing avoidance actions to August 15th, 2024, that, (indiscernible) for the order, but which date may be further extended upon notice and a hearing, and that's why we're here today, Your Honor, to have a further hearing on extending that deadline through February of 2015 [sic].

9 10 11 12 13 14 15 Everything the Court decided in its prior order on this issue, Your Honor, remains correct today and it should not be disturbed. The only argument that certain of the objecting parties attempt to characterize as a new argument is an argument based on the Supreme Court's recent decision in the Purdue Pharma case, but nothing about that decision, Your Honor, impacts the Court's analysis.

16 17 18 19 20 21 22 23 24 In Purdue, the Supreme Court concluded that bankruptcy courts -- the Bankruptcy Court in that case could not prove the nonconsensual, third-party release because Congress had not authorized such releases under the Bankruptcy Code and it undeniably would have affected the substantive rights of parties who held claims against other parties. It's important to note, and there's an entire section of the Court's opinion at the end where the Court is very clear to caution the narrowness of its holding.

And the Court said, quote, "As important as the

1 2 3 4 5 6 7 question we decide today are the ones we do not decide." The Court then concluded, quote, "Consigning ourselves to the question presented, we hold only that the Bankruptcy Code does not authorize the release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seeks to discharge claims against a nondebtor without the consent of the affected claimants."

8 9 10 11 So, Your Honor, the decision to the issue before the Court today obviously does not involve nonconsensual third-party releases and, therefore, in our view, Purdue has no bearing on the Court's decision.

12 13 14 15 16 17 18 Now, to the extent and notwithstanding the Court's very careful attempt to clarify the narrowness of its holding, Purdue can be said to stand for broader principles. At most, I would submit it could stand for the proposition that bankruptcy courts are not allowed to use their equitable powers in a way that affects substantive rights in a manner that is inconsistent with the Bankruptcy Code.

19 20 21 22 23 And, again, the Court addressed this issue and already decided it, and we make this point in our reply brief, the point being that the statute of limitations here are not substantive, therefore, the Court is not modifying substantive rights.

24 25 Now, if the Defendants' broad ruling of Purdue are correct, the implications of that would be far broader than

1 2 3 4 5 they suggest, because as I read their objection, they're effectively saying that a Court could never use equitable powers to effect statutes of limitation, would that would apply to equitable tolling, as well. That also applies outside of the bankruptcy context.

6 7 8 9 10 11 12 I don't think there's any possible reasonable reading of the Purdue case, which could be said that -- where the Supreme Court could have been said to have intended to do away with equitable tolling of statutes of limitations, like, that's a far too broad reading of that decision and I think that it certainly was not intended to be -- that it was not intended to have that effect.

13 14 15 16 17 18 19 20 21 Your Honor, aside from the 9006(b) arguments and the Purdue overlay, as I'll call it, the only other argument that the objectors really make is that, in their view, the circumstances don't justify an extension of time. Your Honor, I would submit based on the testimony that the trustee gave today, based on the record in this case, and based on the testimony that he gave back in February, the record amply supports the limited, further extension that the trustee is seeking.

22 23 24 25 And you can tell from the cross-examination today one of the points that the objectors are making is that, Well, this obstruction, this all occurred at the beginning of the case and the debtor has been in prison. He hasn't been

1 2 3 4 5 6 7 8 9 10 11 actively obstructing the trustee's investigation since, but that's just not true, because the obstruction that occurred and the unique and extraordinary cases of this case are that we have a debtor and we have an individual associated with the debtor who has never cooperated with the trustee's investigation. They've never provided the books and records that ordinarily should be provided in any case. That continues to impede the trustee's investigation. All the issues arising out of that lack of cooperation does not magically disappear after February 15th of this year, Your Honor.

12 13 14 15 16 17 18 19 And the trustee testified about the diligent efforts that he is continuing to undertake. He testified about thousands of documents that his team has received from 2004 investigations, from a warehouse belonging to Golden Spring that his team obtained access to, to the thousands of exhibits in a criminal trial, all of which he does not even have access to yet. He talked about his team's process for going through those documents as diligently as they can.

20 21 22 23 24 The trustee also talked about his monitoring of the criminal trial more generally and the relevance that has to his investigation. He talked about the bank account analysis being undertaken by Kroll, which was the subject of extensive testimony back in February.

Your Honor, all of that is ongoing. All of it

1 2 takes time. All of it continues to be affected by the unique and extraordinary circumstances of this case.

3 4 5 6 7 8 9 10 11 12 The last point I will address, Your Honor, as to the trustee's diligence with his investigation is the argument that (indiscernible) surrounding the motion to stay the bankruptcy case. Your Honor, that was a motion that the trustee presented. You heard from him today the reasons why it was filed. The Court granted that motion. In doing so, I'd submit that the Court found that that motion was in the best interests of the estate. Other parties, including the objectors who are here today, had the opportunity to object to that if they thought it was not appropriate.

13 14 15 16 17 18 19 20 21 And, again, Your Honor, the trustee had very good reasons for doing that. The potential consequences of not proceeding in that manner would have been to fight with the debtor about a global stay of the bankruptcy case, which would have been a disaster if the trustee had been unable to continue to do any of his work during the pendency of the criminal trial, that would have been a disaster and, therefore, he made the recent decision to file that motion and it was granted by the Court.

22 23 24 25 The last argument I'll briefly address, Your Honor, is the argument by Meta and Apple, where they say that, again, there's no evidence that they, themselves, are done anything to obstruct the trustee's investigation. And

1 2 3 4 5 6 7 8 on that, Your Honor, I would just simply point the Court to the decision already issued in the first extension order at paragraph 14, where the Court said, quote, "The bankruptcy case presents a rather different (indiscernible) on equitable tolling and the typical situation, it would have been debtors' conduct, rather than the Defendants' conduct, which invokes equitable tolling. In some senses, this is unfair to the Defendant."

9 10 11 And the Court cited cases in support of that, including the Fundamental Long Term Care case from the Middle District of Florida Bankruptcy Court, cited in this opinion.

12 13 14 15 16 17 So, Your Honor, the point is not whether a particular individual, avoidance action Defendant obstructed the trustee's investigation; it is whether or not there has been an obstruction, generally, that has prevented the trustee from being able to complete his investigation within the time that ordinarily exists under the Bankruptcy Code.

18 19 20 21 22 So, Your Honor, for all those reasons, we would respectfully request that the Court grant an extension of the deadline to file avoidance actions by another six months through February 15th, 2025. Thank you, Your Honor. THE COURT: Thank you.

23 24 25 And who wishes to go, to proceed first with their objection? We have counsel for -- we have Attorney Yan, Attorney Sklarz. Is anyone else going to be making an

52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 argument, in objection to the motion? MR. KIM: Your Honor, there's also an objection filed by the Greenwich Land Defendants, so I'll reserve until the end and if the -- THE COURT: Oh, yes. MR. KIM: -- and if Mr. Yan and Mr. Sklarz cover all the ground, then I have no need to retread. THE COURT: Thank you, Attorney Kim. I just missed -- I misplaced your objection for a second, there. I apologize. All right. So, Attorney Sklarz, Attorney Yan, who would like to proceed first? MR. SKLARZ: By all means, go ahead, Attorney Yan. MR. YAN: Thank you. Thank you, Your Honor. As Your Honor noted in her prior order granting the trustee's requested extension, an (indiscernible) concern under Rule 9006(b) is prejudice to the Defendant. Now, I'll say that we disagree with the Court's analysis, but I don't think we need to retread on 9006(b) arguments. Here, we have a case where we're differently situated from some of the other Defendants that are going to be Defendants and potential Defendants that might be affected by the order that the trustee's asking the Court to enter. And we're differently situated because Meta and Apple have Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 52 of 96

| Case 22-50073 | Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 53 of 96 | |---------------|--------------------------------------------------------------------------| | | 53 | | | | | 1 | already been sued; they were sued before the prior extension | | 2 | that was granted. And in those cases, we have spent the | | 3 | money and expense to move to dismiss and filed a number of | | 4 | other things. | | 5 | And so, we're differently situated than those | | 6 | people who don't even though that they're targets and haven't | | 7 | had to do anything yet. | | 8 | UNIDENTIFIED SPEAKER: (Indiscernible.) | | 9 | MR. YAN: I'm sorry, go ahead. | | 10 | The other thing is kind of related to that is, | | 11 | here, we've come before the Court and we've objected to it | | 12 | and I don't see how we're differently situated from some of | | 13 | the other Defendants or parties that have been carved out of | | 14 | the last order, such as UBS and Sotheby's, who also filed | | 15 | objections and were carved out. | | 16 | Here, as you've heard the trustee say, he has | | 17 | identified potential, additional claims against Meta and | | 18 | Apple that he says are non-material, but it's been six | | 19 | months. He filed it before the last extension and he hasn't | | 20 | done anything with those claims. We don't know. He hasn't | | 21 | said whether he needs additional time beyond the six-month | | 22 | extension already, another six months to file anything | | 23 | additional against Apple. | | 24 | And there's a fundamental fairness point where the | | 25 | trustee gets to reserve all of his arguments, with respect to | | | |

| 1 | equitable tolling and all of the (indiscernible) arguments | |----|---------------------------------------------------------------| | 2 | and on top of that, he gets this order saying, Yeah, he can | | 3 | timely file in another six months; whereas, we are prejudiced | | 4 | because we can't make that argument anymore after this order. | | 5 | And so why does he get belts-and-suspenders and we, who have | | 6 | done nothing wrong, we get cut off at the knees, with respect | | 7 | to our arguments relating to why the trustee's claims are | | 8 | time-barred. | | 9 | And so for those reasons we would just ask that -- | | 10 | THE COURT: Wait. May I stop you just right there | | 11 | for one second so I make sure I understand your argument? | | 12 | MR. YAN: Sure. | | 13 | THE COURT: When you say you get cut off at the | | 14 | knees on his equitable tolling argument, is that the point | | 15 | that you're making, Counsel? I just want to make sure I | | 16 | understand. | | 17 | MR. YAN: Not the equitable tolling argument. | | 18 | I'm just saying he gets to make his equitable -- | | 19 | if we -- if he makes an equitable tolling argument -- we'll | | 20 | get to that -- I don't think the order affects that, but he | | 21 | will already have an advantage in that he can wave the order | | 22 | around and say, If we make an argument that his claims are | | 23 | time-barred, he can say, Well, look, I have an order from the | | 24 | judge saying that that argument no longer flies, with respect | | 25 | to you. |

THE COURT: Well, I don't think it's true. MR. YAN: So, I'm just --

3 4 5 6 7 8 9 10 THE COURT: I don't think that's what the order says. So maybe I need you to point me in that direction, because I believe what the order says is that there's an extension of time granted under these very specific and unusual circumstances of these complex, consolidated, administratively consolidated Chapter 11 cases and adversary proceedings and that I was not going to prospectively order that the trustee can assert equitable tolling.

11 12 13 14 15 I believe the order says that the trustee can assert equitable tolling when someone raises it in a motion to dismiss or another pleading. And so I don't see how that cuts you off at the knees at all, so I would like to make sure I'm not missing your point.

16 17 18 MR. YAN: Sure. I guess my point, Your Honor, is why does he need that? He can always make an equitable tolling argument because his rights are preserved.

19 20 21 22 23 24 THE COURT: What does he need what, though; I didn't give him what he wanted, so I don't know what you're -- I guess that's what I'm struggling with. I didn't give him what he wanted in the original order. I didn't say that he prospectively has the right to assert equitable tolling; I didn't say that.

I said that under the cases that all the parties

| 1 | cited, the application of equitable tolling does not come | |----|-----------------------------------------------------------------| | 2 | into play or does not become an issue unless and until it's | | 3 | raised in connection with a motion to dismiss the case | | 4 | because the statute of limitations has passed. That's what | | 5 | the order says. | | 6 | MR. YAN: Understood. Understood, Your Honor. | | 7 | And my point is, why does he need more than that? | | 8 | He can -- that argument is preserved. If he can make that -- | | 9 | THE COURT: I don't know that he does need more | | 10 | than that. | | 11 | MR. YAN: That's my point, Your Honor, why does he | | 12 | need this additional order? | | 13 | THE COURT: Well, that's time. Time is different | | 14 | from equitable tolling, Counsel. He's asking for additional | | 15 | time. | | 16 | I didn't -- he's asking for an additional time to | | 17 | commence causes of action, okay. I didn't hear Attorney | | 18 | Bassett -- but maybe I missed it and that's why I'm stopping | | 19 | to ask these questions -- I didn't hear Attorney Bassett, and | | 20 | I don't think I read in the papers, but maybe I'm -- you | | 21 | know, I could have missed it, because as you can, I'm sure, | | 22 | appreciate, there are a lot of papers filed in this case and | | 23 | in the adversary proceedings, but I didn't hear Attorney | | 24 | Bassett ask me to prospectively order from this point forward | | 25 | that equitable tolling, the trustee is entitled to assert |

57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that. I didn't hear him. Attorney Bassett, did you ask me to do that, because if you did, I missed it. MR. BASSETT: I did not, Your Honor; in fact, the Court has already ruled on that issue. THE COURT: Okay. Thank you. So, that's my question to you, Attorney Yan. The only issue that I see and is right now in the papers is, the trustee is asking for an extension of time to commence causes of action. I've ruled on the issue of equitable tolling. So I'm a little confused as to your statement that somehow you've been -- and I apologize -- I think the words were that you're cut off at the knees. I don't see how you are. So, please explain to me. I don't want you to not tell me. I'm just not sure that I understand your argument. MR. YAN: Sure, Your Honor. And I think this -- let me go back to the argument. I think the point I was really trying to make is we're differently situated because he doesn't need more time; he's already asserted claims against us, so I don't think it's equitable for him to get additional time to add on to claims that he's already asserted against us. THE COURT: Well, don't you think the Federal Rules of Civil Procedure will address that? If he tries to Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 57 of 96

| 1 | add on claims or bring a new cause of action, you can do | |----|---------------------------------------------------------------| | 2 | whatever you need to do, if he even does that. | | 3 | And I think you asked him -- and I understand why | | 4 | you did -- were there any additional claims against Apple and | | 5 | metal -- Meta, excuse me -- and his answer was "not material | | 6 | claims that he could think of" and that was the answer I | | 7 | heard. | | 8 | But the Federal Rules of Civil Procedure will deal | | 9 | with it one way or another; either he'll move to amend the | | 10 | complaint that was, as you already admitted, was filed before | | 11 | the expiration of the statute under the applicable statutes | | 12 | or he'll file a new cause of action. And in either case, | | 13 | you're going to either oppose the motion to amend or you're | | 14 | going to move to dismiss. And that's how the Federal Rules | | 15 | of Civil Procedure work, right? | | 16 | I mean, I guess I'm a little confused by your | | 17 | argument, because you -- I agree with you, though, that you | | 18 | are differently situated insofar as your clients were sued | | 19 | before any applicable statute ran. So, from that | | 20 | perspective, I think whatever happens, happens and the | | 21 | Federal Rules of Civil Procedure will -- do apply and you and | | 22 | the trustee will assert whatever arguments you have under the | | 23 | applicable Federal Rules of Civil Procedure and then the | | 24 | Court will address those accordingly. | | 25 | MR. YAN: I think that makes sense if he's going | | | |

1 2 3 4 5 6 to assert them in the same case. What we're concerned about, and what we didn't see in the papers or hear from the trustee is that they intend to assert civil litigation. So, eight months down the line, does he intend to file a new claim against us? We don't know, and so we want to preserve our right to object to that.

7 8 9 10 11 12 13 THE COURT: Well, I think you vaccinate right. I don't see how you would -- my prior order does preserve that right for you, in my opinion. Maybe I'm wrong, but it says that the trustee is not entitled to prospective, equitable tolling and that issue will come up, if at all, when a party raises and files a motion to dismiss, asserting that a statute of limitations has passed.

MR. YAN: Understood, Your Honor.

15 16 17 18 THE COURT: So, I don't see how your right isn't preserved. But that doesn't mean I'm right, Counsel; I'm just telling you, that's the Court's perspective. You can do with that what you feel is appropriate.

19 20 21 22 23 24 25 But the prior order was very -- I tried to be very clear in a very short amount of time to say that the trustee's right to bring causes of action was extended because I felt and I found and held that Rule 9006 did not bar that extension because those statutes were statutes of repose, which did not affect substantive rights of parties. And I found that, based upon many things, including the

``` 60 ``` 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 Supreme Court case of Young, in which Justice Scalia, writing for the majority, said that those statutes are not substantive statutes; they don't affect substantive rights. So, in any event, what I'm saying to you is, I understand what you're saying, but I believe you are protected. You may think otherwise, and I completely respect that, but that is the reason why I proceed -- the decision says what it says. MR. YAN: Understood, Your Honor. THE COURT: I didn't foreclose on any Defendant from asserting that there was some kind of statute of limitations issue. MR. YAN: Understood, Your Honor. And then that, perhaps, is the issue where we didn't see that level of protection that you just articulated, which is why we asked to just be carved out from the ambit of the order. THE COURT: So, what you're saying is you would like me to rule -- and I just want to make sure -- with regard to Apple and Meta that if there's an extension granted, it doesn't apply to them? MR. YAN: That's correct, Your Honor. THE COURT: Well, if I agreed with you, which I don't know that I will, but I would not agree with you with regard to the existing causes of action being amended. Now,

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61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that doesn't mean you couldn't oppose amendment, but, obviously, the Federal Rules of Civil Procedure allow for amendments to an existing cause of action. They allow to it up until after trial. So, with regard to that issue, the only issue that I think, then, I would decide with regard to Meta and Apple are whether Meta and Apple are carved out from any new causes of action. That's what I would decide. MR. YAN: I think your articulation is exactly right, Your Honor. I agree with that. THE COURT: Okay. Great. I appreciate that. I didn't mean to cut you off, so if there's more that you want to argue, please do. I just wanted to be -- I wanted to make sure I understood what you were arguing. MR. YAN: No, we appreciate that, Your Honor, and that's all that I have. THE COURT: Okay. Thank you. Attorney Sklarz, did you wish to proceed next? MR. SKLARZ: Yes, please, Your Honor. Your Honor, in nearly 40 years of an unbroken line of cases, running from Northern Pipeline to Granfinanciera to Stern to Purdue, cited just a few months ago, our Supreme Court has held that unless the Bankruptcy Code clearly permits relief, Bankruptcy Courts cannot fashion substantive relief based on either gap-fillers or a lack of Congress

1 saying that they can't be done.

2 3 4 5 6 7 So in Purdue, there's nothing in 1123 that says Bankruptcy Courts can't authorize nonconsensual third-party releases. But the Supreme Court was still clear that they're not allowed because of the Code silence and allowing such relief would countermand specific provisions of the Code, namely, Section 1141 and the discharge provisions.

8 9 10 11 12 13 14 Here, and, certainly in light of Your Honor's ruling, Purdue came out afterward, but in light of Purdue, and analyzed against that backdrop, the applicable section that provides the statute of limitations, Section 546, says it's two years. It is silent on whether you can or cannot extend it. There's nothing in the Bankruptcy Code that says you can extend it or you can't extend it.

15 16 17 18 19 So the trustee looks to Rule 9006 and refers to what they're requesting under 9006, listed on page 5 of their reply brief -- I'm sorry, paragraph 5 of their reply brief as a "equitable extension." This is definitely not an equitable extension.

20 21 22 23 24 25 As Your Honor just discussed with Attorney Yan, equity, as to statutes of limitation, we know of three main extending doctrines of statutes of limitations: equitable tolling, fraudulent concealment, and the discovery rule. What this is, very specifically, is the use of a rule, not a statute, but we'll just say a provision, not a

1 2 3 4 5 common law provision, not something that exists in the equitable ether, but a written rule that has general application to extend a statute of limitations, 546, that have a specific statement. So this is precisely what Purdue warns against.

6 7 8 9 10 11 12 Again, the dissent in Purdue makes exactly the same observations as the trustee. Over 40 times, the dissent refers to equitable relief or some variance of the word "equity" and their argument is the releases and the settlement payments solve those problems and ensure fair and equitable recovery for the opioid victims. It's certainly a good argument, but it wasn't the majority.

13 14 15 The majority says otherwise. It says, faced with so many marks against its interpretation of the law, plan proponents in the dissent resort to a policy argument.

16 17 18 19 20 21 22 That is exactly what occurs here. It's a policy argument saying that because of all these other things, other than what is written down, that the statute can be extended. The trustee's request for an equitable extension has to fail for exactly the reasons stated in Purdue. The Code provides absolutely no mechanism for a prospective extension of a written-down statutes of limitations.

23 24 25 And I think in light of Purdue and now specific it was, it's important that I briefly just turn to three of the Court's main holdings in the February ruling. I don't want

| 1 | to -- Your Honor ruled and I just -- I think in the context | |----|-------------------------------------------------------------------| | 2 | of Purdue, it's a little bit different. So the three main | | 3 | rulings as to why, as I understand it, Your Honor ruled | | 4 | that 9006 applies is the Rules Enabling Act doesn't apply to | | 5 | stop 9006 from applying because of traditional principles of | | 6 | equity. In light of Purdue, it is unclear. So that's number | | 7 | one. Number two, statutes of limitations are procedural, and | | 8 | that's subject to the Bankruptcy Rules. And third, the | | 9 | statutes of limitations provisions of the Code come into | | 10 | existence, only once a Title 11 case is filed. | | 11 | Turning back -- let me expand on that a little | | 12 | bit. So, turning back to the Rules Enabling Act question. | | 13 | Essentially, the Rules Enabling Act and the jurisprudence | | 14 | thereunder says, as long as there isn't something specific | | 15 | that says you can't -- you can't do it, you can apply this -- | | 16 | you can apply traditional tolling doctrines. Traditional | | 17 | tolling doctrines, as we discussed, are equitable tolling, | | 18 | discovery rule, and fraudulent concealment. | | 19 | Using Rule 9006 to prospectively extend the | | 20 | statute, in other words, as Your Honor explained, an | | 21 | extension of time to commence causes of action are different | | 22 | than equitable tolling. I agree 100 percent. This has | | 23 | nothing to do with equity. | | 24 | This has to do with, can you graft on an extension | | 25 | provision that is written nowhere in the Code by gap-filling |

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 with the Rules? In light of Purdue, is it unclear how an arguably equitable approach can be applied to pull gap-filler from the Rules and apply here. There's no argument that there's a right to equitable tolling at this time; that argument has been reserved, as we just discussed. There's no argument that there's been a prospective, fraudulent concealment, or discovery rule violations, or some other traditional, common law tolling doctrine. The trustee cites 9006. He doesn't cite equity to support his 9006 argument. Turning to the question of whether statutes of limitations are procedural or substantive. I apologize, I don't -- so, first, we cite -- and I'll just refer to the G Club brief, because that's in the main case. The arguments that we submitted in our briefing in the four adversaries are essentially the same, just the structure is a little bit different. On page 6 of G Club, we cite to the Second Circuit's ruling in Enterprise Mortgage, which explains that substantive and procedural for how the rights affect somebody in the case is a different analysis than whether something is substantive or procedural for choice of law purposes, which is where that substantive, procedural analysis comes from. We briefed this in our case.

And then Enterprise Mortgage, the Second Circuit

1 2 3 4 5 6 7 8 explains that procedural versus substantive, you have to look at it through the eyes of the Defendant. So, here, the Defendant, my clients, or anybody else who hasn't been sued or who doesn't even know they're going to be sued -- perhaps anybody else in the room, we don't know -- the -- from their eyes, the two years has passed. So they -- to them, to that unsued party as of today, they're -- that is a substantive, not a procedural right under Enterprise Mortgage.

9 10 11 12 13 14 15 16 17 18 And then we also cite the case of Aetna Life - and the citation there is 391 F.3d 401, and that's on page, mainly on page 6 of our brief in G Club -- that case applied the Sarbanes-Oxley (indiscernible) was -- looking at the Sarbanes-Oxley Act, but it also references a Supreme Court case of Landgraf and it explains that the resurrection of previously time-barred claims has an impermissible, retroactive effect extending the statute of limitations retroactively, increasing the Defendant's liability for past conduct.

19 20 21 22 23 24 Now, there, there was a law -- the question was whether the law was retroactively applied. Here, the law can't be retroactively applied. There's been no change in the law. What there is, is a gap-filler provision, 9006, to extend the statute of limitations prospectively. If Congress can't do it with an act and not make

it specific, we can't do it otherwise. That is exactly what

| 1 | Purdue says. | |----|------------------------------------------------------------------| | 2 | Finally, whether 546 is subject to tolling because | | 3 | it doesn't come into existence until it's a Title 11 case is | | 4 | filed; again, under that the Court has ruled. Your Honor | | 5 | applied IDB (phonetic) over Butcher, but again, I think we | | 6 | need to view those cases now in light of Purdue. And it | | 7 | appears in my view that the Purdue case says that is not the | | 8 | analysis, that the Butcher analysis should be applied. | | 9 | And we cited -- | | 10 | THE COURT: But the Purdue case doesn't say | | 11 | anywhere in it that the Butcher analysis should be applied -- | | 12 | MR. SKLARZ: Oh, no, no, no, no. | | 13 | THE COURT: -- and, in fact, in Butcher, all the | | 14 | courts in Butcher in the circuit in Butcher don't follow | | 15 | Butcher. If Purdue says that, please tell me, because I | | 16 | don't believe that it says anything at all about Butcher. It | | 17 | never mentions it. | | 18 | MR. SKLARZ: Oh, I agree, Purdue doesn't cite | | 19 | Butcher. | | 20 | THE COURT: Okay. | | 21 | MR. SKLARZ: What it does is apply a similar | | 22 | analysis, which is textual. You read the text. The text is | | 23 | clear. The text applies. | | 24 | And then we cited additional cases in our brief in | | 25 | that regard, more than we cited in the previous brief, using | | | |

68 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 other provisions of the Code. I'm sorry, Your Honor? THE COURT: No, I don't have anything. Go ahead. MR. SKLARZ: Okay. So -- if I may just have one moment, Your Honor? THE COURT: Certainly. MR. SKLARZ: I just need to check if I have anything else. (Pause) MR. SKLARZ: Just turning briefly to the factual argument justification. Regardless of whether Your Honor agrees with me or agrees with the trustee, I think we can all agree prospectively extending statutes of limitations is very unusual. It's already been done once in this case. Your Honor found, as Your Honor noted, on very specific facts that that extraordinary relief was probative. If Your Honor disagrees with me on the Purdue argument and the arguments we've set forth, I still believe that they cannot meet the burden Your Honor imposed upon them under Your Honor's February ruling. There's no longer extraordinary that Mr. Kwok did or did not do anything; in fact, on examination, we know a lot of information has been turned over. It may not have been turned over as quickly as the trustee had hoped, but that is not some kind of obstruction. Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 68 of 96

1 2 3 4 For example, the trustee said the government hasn't turned over the information. Is that obstruction by the government, of not turning over information? Of course not.

5 6 7 On cross-examination, the trustee indicated that more information occurs daily. That is true in almost every financial fraud investigation.

8 9 10 11 12 13 14 There were -- Your Honor found extraordinary facts the first time. We have to look at what's occurred since then. And we have not heard anything today that is of the nature of extraordinary. There was no further protesting or other actions that Mr. Kwok's retainers took. There was no lack of funds, which was the major reason the last time around, to toll the statute.

15 16 17 18 19 20 21 THE COURT: Well, I just want to stop you there. I don't even think there was any mention of protesting in the prior ruling and I'm not sure that there was any mention of a lack of funds, other than that was an argument made by the objecting parties that somehow that should persuade the Court that the trustee didn't act diligently because he didn't have funds to retain a forensic accountant.

22 23 24 25 So, just to be clear, when you say the factual basis and that the trustee can't meet its burden, the argument about the protesting, I don't even think that was mentioned. I could be wrong, though; it could have been

70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 mentioned in the order. MR. SKLARZ: I -- THE COURT: But with regard to the funding, the lack of funding, that was a claim that was raised by the objecting parties to try to establish for the Court or persuade the Court that the trustee did not act diligently and I found just the opposite, in fact. I found that it was clear to the Court that the trustee has been more than reasonably diligent. So I don't think the argument about funds and/or protesting is persuasive. MR. SKLARZ: And that's my -- I'm not saying it is; what I'm saying is those facts do not exist today. And I recall Kwok's examining the trustee on the lack of funds. What he indicated, as I recall, and we could do back to the record, is that he did not hire a forensic accountant because his firm didn't want to share payments pari passu with the forensic accountant, so he deferred hiring. But we make -- THE COURT: No, that wasn't the testimony at all; in fact, the testimony was that he didn't hire the accountant because the forensic accountant wanted to be paid -- MR. SKLARZ: Right. THE COURT: -- and there weren't funds in the estate to pay the forensic accountant and the forensic Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 70 of 96

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 accountant didn't want to take the risk that the forensic accountant would have to share with all the other administrative claimants in an insolvent estate. That was - that's my recollection of the testimony. MR. SKLARZ: I suppose I have a different recollection, but -- THE COURT: Oh, you could be right, but I'm just saying that's my recollection. MR. SKLARZ: -- it probably doesn't matter. It's written down for a reason -- THE COURT: Right. MR. SKLARZ: -- and my point is it's not terribly relevant right now. What the trustee presented today was, I have a lot of work to do and it's hard and there's lots of it. And I have great sympathy that there is a lot of work to do, but what we're talking about is meeting the standards Your Honor set in the ruling, which is extraordinary circumstances. I guess the first time is if it happened. The second time is a coincidence. If we get to a third time, perhaps that's a mode of operation. I don't know when extraordinary stops becoming extraordinary. But, certainly, we're -- I'm not sure why we're now adding a full year under the trustee's motion to what Congress said should be the statute of limitations of two years.

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 So I don't think that even if Your Honor reaches the factual issue, it rises to the level of extraordinary as Your Honor ruled in your prior (indiscernible). But, Your Honor, I'm happy to answer any questions; otherwise, that concludes my presentation. THE COURT: Thank you. I do not have any questions at the moment, Attorney Sklarz, thank you. Attorney Kim, did you wish to be heard? MR. KIM: Thank you, Your Honor. Austin Kim for the Greenwich Land Defendants. Just a few finer points to pick up on what Attorney Yan had mentioned. You know, what's -- from our position, what's going on here is the trustee is seeking to obtain the relief of equitable tolling without having to seek it, one, and then, two, with equitable tolling is done on a case-by-case basis, because it is factually dependent, what the trustee is seeking is an omnibus order that sort of avoids the trustee having to establish on a case-by-case basis, why they should effectively obtain the relief of equitable tolling. So, with equitable tolling, you know, it's a caseby-case, fact-specific analysis. What the trustee is seeking is essentially a six-month equitable toll the first time around and now they're seeking a second, six-month equitable toll the second time around, based, essentially, on the same facts.

1 2 3 4 5 6 7 8 9 10 11 12 13 And so, you know, the constitute did provide some testimony as to what, you know, additional efforts have been made since February, but the bulk of what the trustee has put forth as to why an additional six months is necessary are facts that existed a year ago, or facts that already existed six months ago. So, I'm not here to doubt the diligence of the trustee in, you know, the efforts made to do the investigation, but it's not just confined to the trustee's diligence; it's the, so what? What has come out since February that is so extraordinary that the Court should exercise its discretion to grant to extend the statute of limitations by another 25 percent on an omnibus basis without the trustee demonstrating what's new.

14 15 16 17 18 19 20 21 22 Vague statements of, Well, we have received 400 documents or 700 documents or 20,000 documents, that's great, but so what, right? We don't know when these documents were received, you know, where the progress is, and I just think it's inequitable to allow the trustee to continue to, on a piecemeal basis, obtain equitable tolling relief across the board and as to, you know, frankly, parties that are not here or who haven't been named yet or based on some speculation that there could be something there.

23 24 25 So, on that basis, we do stand by our initial objection that, you know, we do disagree with the Court's prior ruling that, you know, the statute of limitations, 546,

1 2 can be extended for the same reasons that my prior colleagues have mentioned, and we rest there.

THE COURT: Okay. Thank you. Attorney Bassett, do you have any reply? MR. BASSETT: Yes, Your Honor, briefly.

6 7 8 9 10 11 12 So, I'll start by responding to some of Attorney Sklarz's arguments, which I think almost exclusively for the first half of his presentation focused on the Purdue case. And, look, I understand, Your Honor, the inclination to cease upon a high-profile ruling of the Supreme Court and sort of turn that into something significant to this motion, but I really just do not think it is.

13 14 15 16 17 18 Purdue could not be a more different case than this case, as much as Attorney Sklarz tries to characterize it otherwise. Purdue dealt with giving a discharge to a nondebtor; an issue that's fundamental to the Bankruptcy Code and I would submit (indiscernible) whether one talks about these issues.

19 20 21 22 23 24 25 In this case, the Court has been asked to extend the statute of limitations, which it has found is procedural, non-substantive. There should not be a wider gulf between those scenarios, Purdue on the one hand and what the Court is confronted with in the context of this motion. That also needs to be considered in the context of what the Supreme Court specifically said about the narrowness of its decision.

1 2 3 It was very careful to say that it was talking about thirdparty releases and their permissibility on a nonconsensual scenario in that case.

4 5 6 7 8 9 10 11 12 13 14 15 16 17 And what I think Attorney Sklarz did not say, because he could not say, or maybe he will come back and argue this down the line if we do have a dispute about equitable tolling, but if you take his argument to its logical extension, he's basically saying the Supreme Court, in a Purdue decision about nonconsensual third-party releases intended to say that equitable tolling of a statute of limitation as set forth in a statute of Congress is never permissible. That's the logical extension of what he's saying. He talks about the dissent and the equitable arguments that the Supreme Court's majority did not consider. That's essentially where he is taking that argument. And I submit there is no logical reading of the Purdue decision that could be read that broadly, Your Honor.

18 19 20 21 22 23 24 25 Now, as to the facts -- and just to round out, Your Honor, the 9006(b) and all the legal arguments surrounding whether or not the Court has the authority to extend the deadline, nothing else is new. The Court's analysis, its decision was correct. No intervening cases have been issued. There's no other reason as to why that analysis should be revisited and, therefore, we would ask that the same order, again, be entered.

1 2 3 4 5 As to the factual arguments that the parties have raised, Attorney Sklarz, as to the (indiscernible) Attorney Kim, I believe, as well, had -- I think the way Attorney Sklarz characterized it is the circumstances of this case are, quote, no longer extraordinary.

6 7 8 9 10 11 12 13 14 15 16 17 18 19 Your Honor, I'm not sure what that means. The circumstances of this case are either extraordinary or they are not and I don't think anyone could, with a straight face, take the position that this case is anything but incredibly extraordinary based on the level of obstruction the trustee has faced from the beginning of the case, based on the fact that this is a debtor who purported to file bankruptcy in this case with, I think, 3,000 or some odd dollars in cash to his name, despite having lived the life of a billionaire. He's had to peel back every layer of the onion to try to figure out where the shell companies, where these assets were really held and whose names are they nominally held. Where are the bank accounts and other transactions located that explain the true nature of the debtors' financial affairs?

20 21 22 23 24 25 The debtor has never cooperated. He never provided books and records and that continues to affect the trustee's investigation today. This case is, and always has been extraordinary. That did not stop on February 15th. The fallacy in the objectors' arguments is that all the obstruction, all the unique circumstances of this case

1 2 3 necessarily could have been overcome in the six months that have occurred since February 15th until now, but as the trustee has testified, that just hasn't been the case.

4 5 6 7 8 9 10 11 12 13 14 15 16 17 And the inquiry, Your Honor, for extending the statute of limitations in the context of the order that the Court issued is whether the trustee has been diligent. And Your Honor found that he has been. I think the testimony today only demonstrates that that diligence has continued. The trustee has said that he's filing complaints as soon as he possibly can. He and his team are diligently working to pursue additional 2004 targets. They are viewing documents from the criminal case: twenty-plus-thousand documents that the trustee and his team are going through. The Kroll team is continuing to analyze bank accounts, all of which should have been provided if they were -- if this were a normal case where the debtor is cooperating, he'd provide access to his books and records.

18 19 20 21 22 23 But the trustee is continuing to do all of those things. He's testified clearly that he's been diligent in his efforts and, Your Honor, I think that factual record, again, together with the context of this case from the beginning, amply supports the further extension that the trustee is seeking.

24 25 Subject to any questions the Court may have, I don't have any further remarks at this time. Thank you, Your 2 3 THE COURT: Thank you. I do not have any questions.

4 5 6 7 Anything further, Attorney Yan? Attorney Sklarz? Or -- did I lose everybody? Oh, no, Attorney Sklarz is still there. Or Attorney Kim, that you'd like to state for the record?

8 9 10 11 12 13 MR. SKLARZ: Only, Your Honor, I don't know if you want me to submit -- I don't know that it's necessary, but I certainly will -- of any of the prior transcripts references that we discussed during my argument related to what the trustee was doing back at the inception of the case. THE COURT: That is not necessary, from my

14 perspective, thank you.

15 16 17 18 19 20 21 22 MR. SKLARZ: And just very briefly, I never made the argument that Purdue removes equitable tolling; to the contrary, I said that the trustee's argument is not equitable in nature. It's made on the basis of a rule and doesn't invoke the Court's equitable, true equitable jurisdiction, which would be invoked through common law doctrines, such as equitable tolling. So, I just want to make sure that that is clear.

23 Thank you, Your Honor.

24 THE COURT: Thank you.

25 Anyone else wish to be heard any further?

79 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. KIM: Your Honor, I would just be remiss (indiscernible) to mention one point -- THE COURT: Attorney Kim, I'm just going to stop you for a second, just so it's clear that it's you that's speaking. So, Attorney Kim, you go right ahead. MR. KIM: Yes, Austin Kim for the Greenwich Land Defendants. I apologize, Your Honor. THE COURT: No, that's okay. MR. KIM: Austin Kim for the Greenwich Land Defendants. The one last point that I wanted to raise is that the bulk of what the trustee has presented are vague claims of obstruction or of concealment, but those are precisely why the equitable doctrines of equitable tolling or fraudulent concealment, those doctrines already exist. So the trustee is totally protected if, for example, some of the 700 documents or whatever documents do uncover some basis for an additional adversary proceeding after the 15th of August. So the trustee does not need the Court's additional order, basically granting him a six-month reprieve from having to justify an equitable toll for any particular case because they have it for every case, brought or not brought. So, we would just say that as a matter of equity to the objectors and for individuals who are not yet here, Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 79 of 96

1 2 3 4 5 6 that there's no need for the trustee to get the additional sort of protection of not having to establish their burden based on some claim of obstruction, because that same argument that was raised in February is the same argument being raised today. I mean, it'll probably be raised against next February.

7 8 9 10 11 12 13 14 15 16 17 18 19 At a certain point -- I'm not saying this case is going to last forever -- but at a certain point, I think the two-year statute of limitations was made for a particular reason. They've already received a 25 percent extension. Now, they're seeking a 50 percent extension. At a certain point, you know, I think that the Court should hold the trustee to its tasks and let him know, Hey, you already have these rights if you can show that that was, in fact, observe instruction that caused a delay and having the information to bring the adversary proceeding, instead of prospectively saying, Well, you know, we think there's obstruction and we're looking at information and Kroll is spending some time digging around.

20 21 22 I think it's insufficient to justify a cause basis for essentially granting them equitable tolling on an omnibus basis, and that's all I have, Your Honor.

23 24 25 THE COURT: Okay. Thank you. All right. With regard to the motion for extension of time, the first supplemental motion to extend

81 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 deadline to file avoidance actions, ECF 3329, I will take the matter under advisement and rule accordingly. Thank you all very much. Now, we'll move to the mentioned emergency motion for order authorizing funding to maintain the Mahwah Mansion. And parties who were here on the first matter, if you do not want to stay, you are absolutely excused, but you're also welcome to stay throughout the entire hearing. Thank you. UNIDENTIFIED SPEAKER: Thank you, Your Honor. MR. LINSEY: Thank you, Your Honor. I'll be addressing the amended emergency motion. This is Patrick Linsey for the Chapter 11 Trustee. THE COURT: Yes. MR. LINSEY: The amended emergency motion was filed in the main case, but addresses facts that are at issue in the Taurus Fund LLC adversary proceeding 23-5017. That adversary proceeding was filed against Taurus Fund and its co-defendants involving a \$26-and-a-half-million mansion in Mahwah New Jersey, which the debtor purchased in December of 2021. Since the Court entered a preliminary injunction in that adversary proceeding and until the debtors' criminal trial, the Defendants have been funding security and other expenses for the Mahwah Mansion. These expenses are

1 2 3 4 5 6 7 substantial. The Mahwah Mansion is approximately 50,000 square feet in interior size and has approximately 12 and a half acres of grounds. The cost of the security services for the Mahwah Mansion is approximately \$14,200 a week. The cost of the real estate taxes for the property, which the Defendants have also been funding, is approximately \$70,000 per quarter.

8 9 10 11 12 The trustee expects there will be other expenses, as well (indiscernible) and the like. It's important for the value of the Mahwah Mansion to be preserved for the benefit of the estate, hence the trustee's motion requesting authority under the Bankruptcy Code to fund these expenses.

13 14 15 16 17 18 19 20 21 22 The Court has already found in its ruling on the preliminary injunction that it is administer likely than not that the debtor is the beneficial owner of and controls the Mahwah Mansion. The Court also noted in the preliminary injunction that for a period of time, the debtor had made the Mahwah Mansion available to other individuals and entities, such that it was frequented by third parties. This highlights the importance that security be maintained in light of the threat of damage by people who had previously frequented the property.

23 24 25 The preliminary injunction, as the Court is aware, requires that the Defendants employ the security services. Following the debtors' criminal trial, Taurus Fund informed

1 2 3 4 5 6 7 8 9 10 the manager of the security services that Taurus Fund would no longer be providing funding. While the trustee believes that Taurus Fund is violating a preliminary injunction, it is important that the value of this property is preserved in light of the trustee's expectation that through the adversary proceeding, the mansion will be confirmed by judgment of the Court to be property of the estate. In fact, from the evidence from the debtors' criminal trial, the trustee's case that this is property of the estate is even stronger now than it was when the Court

11 12 entered the preliminary injunction order and made those findings there.

13 14 15 16 17 One additional thing I neglected to mention, what we know from proceedings in the Mahwah adversary proceeding is that the Mahwah Mansion is presently not insured, which, again, is further reason that measures need to be taken to ensure that the property is secured.

18 19 20 21 22 23 The trustee's motion requests authority under Section 363(b) of the Bankruptcy Code to use property of the estate to pay expenses of the Mahwah Mansion up to a cap of \$300,000. We're seeking this relief because we don't yet have that judgment saying this is property of the estate. The trustee is hopeful that the \$300,000 cap will

24 25 provide adequate funding for any expenses over the period of time necessary to obtain judgment as to ownership of the

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 property. To the extent the cap requires adjustment, there's a mechanism built into the proposed order to do that. To be clear and for the purpose of the record, we're filing a 363(b) motion because the property is not, by the Court's ruling yet, property of the estate; however, once that ruling enters, the trustee understands that we would no longer need to be under the relief sought in this order under 363(b), because at that point, the payments to maintain the property would be ordinary course. The motion also provides that the trustee does not obtain judgment in the adversary proceeding to the extent that, or to the effect, rather, that the Mahwah Mansion is property of the estate, that the estate will then have a claim against Taurus Fund in the amount of the expenses advanced to be secured by the value of the Mahwah Mansion. This is because right now, Taurus Fund is obligated under the preliminary injunction to be funding expenses. It's not doing so. And under a hypothetical scenario, just to be clear, we don't think it's going to come to pass, but under a hypothetical scenario where the estate's claims do not prevail, Taurus Fund would have been unjustly enriched by the estate's funding of these expenses.

23 24 25 The trustee would also note that the relief he is seeking does not reveal the Defendants of their obligations under the preliminary injunction; again, this motion is one

1 2 3 4 5 of practicality. Your Honor can enter further orders and we may proceed with further orders in regards to those matters, but from a practical perspective, the trustee has an obligation to preserve the value for the estate and that's what we're doing by this motion.

6 7 8 9 10 11 12 13 Yesterday, Taurus Fund filed a response to the motion consenting to the relief requested by the trustee, as provided in the proposed order that's at ECF 3392. Since filing the motion, the trustee has consulted with counsel for the United States Trustee, who suggested that terms in the proposed order that rely on incorporated definition be expressly defined in the proposed order and the trustee agrees that makes sense.

14 15 16 17 18 19 20 21 22 So what the trustee would propose to do, to the extent the Court is inclined to grant the motion, is that we submit a revised proposed order that expressly defines the capitalized terms for which definitions are incorporated. That we note that the Taurus Fund filed a response saying that it does not object to the relief sought in the order. And that we say, explicitly, that there was a hearing today. We can submit that order -- the trustee can submit that order, certainly, by tomorrow, if not by later today,

23 24 25 and can send it to the courtroom deputy with the Mahwah Defendants and the U.S. Trustee CCed, in the Court would prefer we submit it otherwise.

86 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 With that, I'm happy to answer any questions that the Court may have. THE COURT: I do not have any questions at this time, thank you. MR. LINSEY: Thank you, Your Honor. THE COURT: Does anyone else wish to be heard on this motion? (No verbal response) THE COURT: Attorney Claiborn, do you agree with what Attorney Linsey said, with regard to the proposed order? MS. CLAIBORN: Yes, Your Honor. And the U.S. Trustee has no objection to the motion. THE COURT: Okay. I have looked at the proposed order -- does anybody else wish to be heard? I'm sorry, I don't want to cut anyone off? (No verbal response) THE COURT: Okay. I had looked at the proposed order and I understand that you're going to be making some changes, Attorney Linsey, assuming I'm going to grant the motion. I think the changes that you've just stated are fine. I find that no one has filed any written objection to your motion. The Taurus Fund did file something yesterday, I belief it was yesterday, that says they do not object to the motion, but they object to certain language in what it Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 86 of 96

1 2 believes is a mischaracterization of the Taurus Fund's behavior set forth in the motion.

| 3 | I think under the very specific circumstances of | |----|---------------------------------------------------------------| | 4 | this case and the issues related to the Mahwah Mansion that | | 5 | have been brought to the Court's attention, both in the main | | 6 | case and in the adversary proceeding that the trustee has | | 7 | commenced against the Taurus Fund and related Defendants, | | 8 | that the relief sought is reasonable and necessary under the | | 9 | circumstances. We've gone through the issues in the | | 10 | adversary proceeding, including the fact that there is no | | 11 | insurance at the property and that the security firm was | | 12 | retained as part of a preliminary injunction order. I know | | 13 | that the trustee is not pressing any issues with the | | 14 | preliminary injunction at this time. | | | |

15 16 17 18 19 For all those reasons, the amended motion for order is granted and, Attorney Linsey, you'll have the order in by tomorrow or the next day? I just need to give a date to the Clerk's Office so that they will be on the lookout for it.

20 21 MR. LINSEY: We'll have it in by tomorrow, Your Honor.

THE COURT: Thank you.

23 24 25 And you can just submit it to the courtroom deputy email box for Bridgeport. You do not need to docket it on the case docket.

| 1 | So the motion is granted and the revised proposed | |----|---------------------------------------------------------------| | 2 | order will be submitted on or before August 14th. | | 3 | MR. LINSEY: Thank you, Your Honor. | | 4 | THE COURT: Thank you. | | 5 | Now, with regard to the two -- now, Trustee | | 6 | Despins, I forget now, and I apologize. I think I've been | | 7 | sitting here for a few hours, but you had said something at | | 8 | the beginning that you thought there was something that | | 9 | needed to be on the calendar and now I can't recall what that | | 10 | was, because this was the Mahwah Mansion issue. | | 11 | Was there something else? | | 12 | MR. DESPINS: Well, no. There's the status | | 13 | conference on -- | | 14 | THE COURT: Right, the status conference. Yeah, | | 15 | that's fair. | | 16 | MR. DESPINS: -- the scheduling. | | 17 | THE COURT: That's the fourth matter on the | | 18 | calendar. | | 19 | There are two other -- the status conference was | | 20 | granted; it is on the calendar. | | 21 | But let's just take a moment with regard to the | | 22 | Genever adversary proceeding versus Kwok; that's been | | 23 | continued a few times before, but it was not continued today. | | 24 | MR. DESPINS: Yeah. | | 25 | THE COURT: Did you anticipate oh did you plan to | | | |

89 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 go forward with this matter? MR. DESPINS: No, we dropped the ball, Your Honor, on that. We should have extended that, as well. So we'll make sure that that happens. So, that should not go forward. We apologize for that. THE COURT: That's fine. So you're going to be filing a motion to set a new -- to adjourn the pretrial conference to a new date in the future? MR. DESPINS: Correct, Your Honor. THE COURT: All right. So we're just going to note that the conference was held, but that the Plaintiff will be submitting, I suppose, a motion or something -- will be submitting -- what did you file last time, was it an actual motion? I think it might have been, yeah, a motion to -- MR. DESPINS: A consent, yeah. THE COURT: -- adjourn hearing upon consent. MR. DESPINS: Yeah. THE COURT: So I think you'll be submitting another motion and suggest an adjourned pretrial conference date, okay? MR. DESPINS: Yes, Your Honor. (Pause) THE COURT: All right. So the pretrial conference Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 89 of 96

90 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 held, but it will be adjourned, again, to a date to be determined, okay? MR. DESPINS: Thank you, Your Honor. THE COURT: All right. So the last matter on the calendar is the status conference, so go right -- in the - with regard to the Taurus Fund adversary proceeding. So go right ahead, Trustee Despins. MR. DESPINS: Mr. Bassett will handle that, Your Honor. Thank you. THE COURT: Okay. MR. BASSETT: Your Honor, yes, again, Nick Bassett from Paul Hastings, on behalf of the Chapter 11 Trustee. Your Honor, it's a bit of an odd situation to be in for a status conference. We, as the Court will recall, we outlined this in our request for the status conference, the order saying various litigation, including the Mahwah adversary proceeding provided that upon the conclusion of the criminal trial, the debtor could file a notice indicating his intent to resume the adversary proceeding, following which the parties had seven days to confer about a proposed schedule. We sent our proposed schedule to Attorney Conway, counsel for the Defendants. He confirmed receipt, but did not give us his position on the schedule. We followed up with him prior to the seven-day deadline to request a status Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 90 of 96

1 2 3 conference and still did not hear anything, so we then requested the status conference. We've still not heard from him.

4 5 6 7 8 All we have heard is that he sent a response to the other motion that we just finished discussing, stating that he was occupied today and, therefore, would not be attending the hearing. So we are having a status conference with only one of the parties present.

9 10 11 12 13 14 15 16 17 18 19 From the trustee's perspective, Your Honor, our intent, which we have expressed to the Defendants' counsel is to move forward with summary judgment in the adversary proceeding as expeditiously as possible. We have undertaken some discovery. We have also very intently followed the criminal trial and gathered additional information from that trial that we would intend to use in support of summary judgment. We see no delay in moving ahead in that -- we see no reason to delay moving ahead in that direction and we've received no opposition, no response at all, from counsel to the Defendants.

20 21 22 23 24 25 So, that's what we intend to do. I think what we had said in the, in what we filed that requested the status conference, Your Honor, that we had anticipated filing our motion by the 19th and then giving the Defendants two weeks to respond and then we'd reply in a week. I think what we may do, and we can submit a proposed scheduling order, but

| 1 | out of respect for colleagues on me team that are working on | |----|---------------------------------------------------------------| | 2 | that motion, we may need a couple of extra days, so I think | | 3 | we would just propose a schedule that says we will file the | | 4 | motion and there'll be a 14-day response deadline and then | | 5 | a 7-day reply deadline. | | 6 | That's how we intend to proceed -- | | 7 | THE COURT: No, I think were usually give a 21-day | | 8 | response deadline, though, on motions; that's the District | | 9 | Court's Local Rule. | | 10 | MR. BASSETT: That's fine, Your Honor. | | 11 | THE COURT: Okay. | | 12 | MR. BASSETT: We had proposed to Defense counsel | | 13 | moving quickly under the circumstances, given the funding and | | 14 | other issues, but we're happy to do 21 days. | | 15 | The only other point I wanted to make, just so the | | 16 | Court is aware, although we did not hear back from counsel | | 17 | regarding our request for, regarding our proposed schedule, | | 18 | we did get notice that they filed a motion to withdraw the | | 19 | reference -- | | 20 | THE COURT: Yeah, I saw that. | | 21 | MR. BASSETT: -- Friday night. | | 22 | THE COURT: And it's been transmitted to the | | 23 | District Court. I think it might have been transmitted | | 24 | today. | | 25 | MR. BASSETT: Correct, Your Honor. | | | |

| 1 | Okay. I just wanted to make sure the Court was | | | | | | |----|---------------------------------------------------------------|--|--|--|--|--| | 2 | aware of that. And, obviously, in our view, if there's | | | | | | | 3 | summary judgment briefing before Your Honor and that leads to | | | | | | | 4 | the decision that would be reviewed by the Appellate Court, | | | | | | | 5 | in any event, so we'll deal with the motion to withdraw the | | | | | | | 6 | reference as we need to, but we don't see that as, you know, | | | | | | | 7 | creating any issue with respect to how we proceed before Your | | | | | | | 8 | Honor. | | | | | | | 9 | THE COURT: I understand. Mr. Conway may | | | | | | | 10 | disagree, but I'm sure we'll do that in his papers or not. | | | | | | | 11 | So we'll see how things proceed. | | | | | | | 12 | MR. DESPINS: Your Honor, if I may? Luc Despins, | | | | | | | 13 | Chapter 11 Trustee. | | | | | | | 14 | On the 21 days, can we -- because I have the | | | | | | | 15 | feeling that we're not going to hear from Mr. Conway again. | | | | | | | 16 | I could be wrong, but -- | | | | | | | 17 | THE COURT: You can ask for the time to be | | | | | | | 18 | shortened; yes, in your scheduling, you can ask for that. | | | | | | | 19 | MR. DESPINS: Or that if he intends to file | | | | | | | 20 | something, then he should have his 21 days, but if he's not | | | | | | | 21 | going to do it, I don't want to wait 21 days for nothing. | | | | | | | 22 | THE COURT: Well, I -- | | | | | | | 23 | MR. DESPINS: So I can't promise -- | | | | | | | 24 | THE COURT: Under the District Court Local Rules | | | | | | | 25 | it's 21 days so, if you want a shorter time, you'll have to | | | | | |

94 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 ask for it. MR. DESPINS: Thank you, Your Honor. THE COURT: Thank you. Attorney Bassett, is there anything else, then, we can do this afternoon with regard to this status conference? MR. BASSETT: No, Your Honor. Thank you very much. THE COURT: Okay. I'm not going to schedule another status conference at this point. You will just take whatever action you think is appropriate, including, as you mentioned, the likelihood of proceeding forward with summary judgment, okay? MR. BASSETT: Thank you, Your Honor. THE COURT: All right. Then, with regard to -- we have now addressed everything that is on today's calendar, but as we often do at the end of hearings when there are several matters, I ask the trustee or any parties, are there any other issues that the parties wish to discuss with the Court? MR. DESPINS: The only point, Your Honor -- thank you, Luc Despins, Chapter 11 Trustee -- is that we may need, and I don't know that yet, assistance in terms of getting title to Greenwich Land transferred in my name as trustee; to put insurance on, I need to have an insurable interest. We're working on that, the technical aspects of that, but we Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 94 of 96

Case 22-50073 Doc 3446 Filed 08/21/24 Entered 08/21/24 10:22:10 Page 95 of 96

95 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 may need, like, a court order that directs, you know, like, the Town (indiscernible) or something like that, but we hope to avoid all of that. And we are working on a stipulation with the Greenwich Land Defendants where, I think everything has been agreed to, where there'll be a transfer of possession on August 20th. So, if anything happens, it will need to be between now and August 20th, but hopefully, we won't. We'll just be submitting to Your Honor a stipulated or a consent order. THE COURT: Okay. Thank you. Anyone else -- MR. DESPINS: Thank you. THE COURT: -- wish to be heard on any matters this afternoon? (No verbal response) THE COURT: All right. Well, thank you, all. That concludes today's hearings and those were the last matters on today's calendar, so Court is adjourned. COUNSEL: Thank you, Your Honor. THE CLERK: Court is adjourned. Excuse me. (Proceedings concluded at 3:24 p.m.)

| Case 22-50073 | | Doc 3446 | Filed 08/21/24 | Entered 08/21/24 10:22:10 | Page 96 of 96 | | |---------------|------------------------------------------------------------|------------------------|----------------------------------|---------------------------|-----------------|--| | | | | | | 96 | | | 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 | | | August 19, 2024 | | | 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 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |