Guo Wengui / Miles Guo — bankruptcy case · ORDER · ECF #411

METADATA

Defendant: Guo Wengui / Miles Guo / Ho Wan Kwok
Court: CTB
Case No.: 22-50073
ECF #: 411
Type: ORDER
Filed: 2022-05-20

FULL TEXT

Case 22-50073 Doc 411 Filed 05/20/22 Entered 05/20/22 15:03:33 Page 1 of 30

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \* Case No. 22-50073(JAM) \* HO WAN KWOK, \* Bridgeport, Connecticut \* May 17, 2022 Debtor. \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* TRANSCRIPT OF MOTION FOR STATUS CONFERENCE AND PROTECTIVE ORDER BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Debtor: BENNETT S. SILVERBERG, ESQ. JEFFREY L. JONAS, ESQ. Brown Rudnick, LLP Seven Times Square New York, NY 10036 For the Creditor, Pacific PETER FRIEDMAN, ESQ. Alliance Asia Opportunity STUART SARNOFF, ESQ. Fund L.P.: LAURA ARRONSON, ESQ. O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, NY 10036 PATRICK M. BIRNEY, ESQ. Robinson & Cole LLP 280 Trumbull Street Hartford, CT 06103 Proceedings recorded by electronic sound recording, transcript produced by transcription service. **Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992**

APPEARANCES Cont'd: For the U.S. Trustee: HOLLEY L. CLAIBORN, ESQ. Office of the United States Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT 06510 For the Official Committee IRVE GOLDMAN, ESQ. of Unsecured Creditors: JOHN KAPLAN, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For Rui Ma, Zheng Wu and KRISTEN MAYHEW, ESQ. Weican Meng, Creditors: McElroy, Deutsch, Mulvaney & Carpenter 30 Jeliff Lane Southport, CT 06890 CAROLLLYNN CALLARI, ESQ. Law firm of Callari Partners One Rockefeller Plaza New York, NY 10020 For HK International Funds STEPHEN M. KINDSETH, ESQ. Investments (USA) Limited, AARON ROMNEY, ESQ. LLC, Interested Party: Zeisler & Zeisler 10 Middle Street Bridgeport, CT 06604

| | 3 | |----|--------------------------------------------------------------| | 1 | (Proceedings commenced at 12:05 p.m.) | | 2 | THE CLERK: Case no. 22-50073, Ho Wan Kwok. | | 3 | THE COURT: Good afternoon. If we could have | | 4 | appearances for the record, starting with the debtor's | | 5 | counsel, please. | | 6 | MR. JONAS: Good afternoon, Your Honor. Jeff | | 7 | Jonas, Brown Rudnick. With me is Ben Silverberg on behalf | | 8 | of the debtor. | | 9 | THE COURT: Good afternoon. | | 10 | MR. SILVERBERG: Good afternoon, Your Honor. | | 11 | MR. ROMNEY: Good afternoon, Your Honor. Aaron | | 12 | Romney, Zeisler and Zeisler. With me is Stephen Kindseth, | | 13 | my partner, for HK International Investments USA, LLC, and | | 14 | Mei Guo. | | 15 | THE COURT: Good afternoon. Attorney Friedman. | | 16 | MR. FRIEDMAN: Good afternoon, Your Honor. | | 17 | It's Peter Friedman, from O'Melveny and Myers, on | | 18 | behalf of Pacific Alliance Group. I'm joined by my | | 19 | colleague Mr. Sarnoff -- Stuart Sarnoff and Patrick Birney | | 20 | of the Robinson Cole firm. | | 21 | THE COURT: Good afternoon. Attorney Goldman. | | 22 | MR. GOLDMAN: Good afternoon, Your Honor. Irve | | 23 | Goldman, Pullman and Comley. With me Jonathan Kaplan. | | 24 | We're representing the Committee of Unsecured Creditors. | | 25 | THE COURT: Good afternoon. | | | |

MS. CLAIBORN: Good afternoon, Your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon. MS. MAYHEW: Good afternoon, Your Honor. Kristen Mayhew, McElroy, Deutsch, Mulvaney and Carpenter on behalf of creditors Rui Ma and Weican Meng, and my co-counsel, Carollynn Callari is appearing remotely today. THE COURT: Yes. Good afternoon. Good afternoon, Attorney Callari. MS. CALLARI: Good afternoon, Your Honor. Thank you. THE COURT: Okay. So today's status conference -- we're going to start with the status conference first and then we'll move to the motion for a protective order that was filed by the debtor. But with regard to the status conference -- and we continued this from last week regarding the protective order for Mei Guo and as a designated representative of HKI Delaware. When we last spoke it seemed that the issue was whether or not the deposition would need to be recorded, and it was the position of -- video recorded. And it was the position of PAX that it should and the position of the deponent that it should not. I asked you to file statements, which you did, and

I appreciate that. But I was just a little confused and, again, because we had hearings today and I probably haven't looked at these -- I know I haven't looked at these to the extent that I would have otherwise had we not had hearings. The committee's response says that PAX intends to withdraw its subpoena and notice of deposition -- will not be proceeding with the deposition. Is that correct, Attorney Friedman? MR. FRIEDMAN: So, Your Honor. It's sort of a packaged deal and it relates to the status conference. THE COURT: Okay. Then go ahead, please. MR. FRIEDMAN: So we have had discussions with committee counsel and with Ms. Callari. And the agreement -- and I just wanted everybody to -- sort of suggest that it is on the record today is that there were be no contest with respect to whether there is cause for dismissal, conversion or appointment of a trustee. No one's going to dispute that. And now there's also just a few other things to mention. One is we still file a reply brief tomorrow. We will also be filing exhibits on Friday, which are based on, you know, a variety of things, filings made in this case, et cetera, from which we believe the court can also actually make a factual determination that cause exists. In return for that, as well as one other issue, we

would not take any more discovery. So discovery from our perceptive -- we wouldn't need anymore discovery. The other issue is that counsel for the committee has requested or proposed that each party be able to file simultaneously on Friday something no more than seven pages as to what is the right path forward. Is it dismissal? Is it appointment of a trustee? Is it conversion? So we certainly don't have an objection to that if it's acceptable to the court. We would also file something along those lines stating our position as to what we think the right answer is and that's the way we believe in light of all the things that have occurred over the last week, frankly, the last several months, since February, is the best way to proceed on our motion to dismiss the case, or in the alternative join in the appointment of a trustee. THE COURT: So I understand that and I appreciate that. So that means that we don't have to address the protective order or -- because you're not going to conduct the deposition? MR. FRIEDMAN: So, Your Honor, we would not need to address the protective order, the conditions for a deposition of Mei Guo. None of that would be relevant. We've been having discussions with counsel. To me the important thing is that the idea that on one is challenging whether cause exists be agreed to on the

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| 1 | record by the parties today, so that nobody needs to expend | |----|--------------------------------------------------------------| | 2 | more time, resources, energy with a particular court. | | 3 | THE COURT: Okay. So that's helpful, but I want | | 4 | to be clear. So the court -- you don't need the court to | | 5 | make any findings of fact with regard to cause. All you | | 6 | need the court to do is to determine whether the case should | | 7 | be dismissed, converted or a Chapter 11 trustee appointed. | | 8 | MR. FRIEDMAN: Your Honor, we will submit a record | | 9 | -- we will submit documentary evidence from which we believe | | 10 | the court can draw inference as to the existence of cause. | | 11 | We do think that is important but we don't think - | | 12 | - | | 13 | THE COURT: I think it's important too but -- | | 14 | MR. FRIEDMAN: We -- | | 15 | THE COURT: I thought I just heard you say that no | | 16 | one's going to contest that cause exists. | | 17 | MR. FRIEDMAN: No one is contesting it. I do | | 18 | think we still belt and suspenders ought to be able to make | | 19 | our arguments. We think some of the reasons for cause | | 20 | warrant dismissal. But -- | | 21 | THE COURT: Understood. | | 22 | MR. FRIEDMAN: And people can draw inferences, | | 23 | right? | | 24 | I mean, as an example, our argument based on the | | 25 | documentary evidence is that this case was filed for one | | | |

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purpose. Mr. -- you know, the committee may dispute that from the face of the evidence, right, and how that deals with conversion, or dismissal, or appointment of a trustee. I don't think anybody needs it. THE COURT: Right. MR. FRIEDMAN: We don't need to take anybody's deposition to do that at this point, even where people stand. And so have I accurately -- I just want to be fair to counsel -- MR. GOLDMAN: Yes. Irve Goldman for the committee, Your Honor. That was nicely and accurately presented. We would -- I would just put a little bit of a finer point on it. We're not only not opposing cause, we would stipulate that cause exists. Now if Mr. Friedman feels like he -- THE COURT: Well, is the debtor stipulating that cause exists? MR. JONAS: Your Honor, I've not been -- we've not been -- other than a call -- a courtesy call from Mr. Friedman probably an hour or two ago advising me of the arrangements that had been met or agreed to we haven't been privy to all these conversations. So honestly, I didn't know that I was being asked

on behalf of the debtor to -- THE COURT: Okay. That's fair. That's fair. MR. JONAS: Our view, as you know, Your Honor, we consented to dismissal. We support dismissal. We don't think the case should be converted. We don't think a Chapter 11 or other trustee -- THE COURT: Okay. That's my question. All right. MR. JONAS: Thank you, Your Honor. THE COURT: So if you consent to dismissal, then you consent that cause exists at least for dismissal under 1112 of the bankruptcy code. MR. JONAS: That is correct, Your Honor. THE COURT: Okay. Okay. All right. Thank you, Attorney Jonas. MR. FRIEDMAN: Your Honor, I'd just ask Ms. Callari to confirm that as well so we don't have -- there's no open -- nothing open, because her client filed a motion - - a position statement, or an objection to our motion. THE COURT: Attorney Callari, could you hear Attorney Friedman? MS. CALLARI: I did, Your Honor. Thank you. And I'm happy to confirm. Again, we are not going to dispute that there is cause but our position is going to be that cause exists for conversion. But we're not going to dispute that cause exists for one of those.

The question's going to be for Your Honor which one of those are in the best interests of the estate, Your Honor. THE COURT: All right. So that's helpful. Then all I'll have to find is what factors I think are appropriate cause for one of the three avenues, whether it's dismissal, conversion of an appointment of a Chapter 11 trustee. MR. GOLDMAN: That's why we thought that the supplemental briefing might be helpful. THE COURT: Okay. And we'll get there in a second. So I just want to be very clear then. I want to make sure I understand where you all are and that I'm on the same place you are, which is -- so next week we're going to have a hearing on the -- starting on the 25th, where you're going to, Attorney Friedman, present evidence that you think supports whatever path it is you think this case should take. But I'm not going to have to make findings that cause exists. I'm just going to have to make findings that whatever these facts are that I find based upon whatever you submit or any other party submits, by the way. I'm not saying it's just you. That those factors that I will find, those facts will establish why the court determines it's in

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the best interest of the creditors in the estate, or whatever 1112(b) says, to do A, B or C. So you're not -- are you anticipating calling witnesses or is this all documents? MR. FRIEDMAN: It should be -- we may have one attorney declaration, Your Honor. I don't think I would put my colleague on the stand, but we would otherwise be using documents that we believe are self authenticating. MR. GOLDMAN: That would be the same for us, Your Honor, although I may have one or two witnesses. I haven't really focused enough on that aspect of the evidentiary hearing. THE COURT: Didn't I set a date -- MR. GOLDMAN: Yes, you did. You did. THE COURT: -- for a list of witnesses and exhibits. MR. GOLDMAN: It's Friday. THE COURT: Correct? MR. FRIEDMAN: It's Friday. And I would ask the court if witnesses are identified by Friday that they be available to be deposed Monday or Tuesday. THE COURT: Yes, they'd have to be. I mean, if that's the situation, right? MR. GOLDMAN: Yes, I can tell you in advance -- I'm not going to wait until --

THE COURT: Okay. So all I'm going to be doing -- and that's not all. I'm not trying to -- I appreciate the efforts of the parties in narrowing the issue, but I don't have to make findings about -- that cause exists. I just have to make findings of what cause is -- what is cause and that in order for me to determine what's in the best interests of creditors in the estate with regard to dismissal, conversion or the appointment of a Chapter 11 trustee. Now does the Office of the U.S. Trustee still want an examiner? MS. CLAIBORN: Your Honor, as of the moment the U.S. Trustee is in support of dismissal. THE COURT: Okay. Thank you. I'm just looking at the statute, 1112(b) where there is a reference to an examiner being appointed. And obviously, I know you filed a motion for the appointment of an examiner -- your office, some time ago. MS. CLAIBORN: Your Honor, we would reserve all the opportunities that 1112 presents and all the relief that could be provided pursuant to that statute. THE COURT: Okay. All right. Thank you. So then as far as this afternoon is concerned we don't have to address the protective order for Ms. Guo.

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That's one. It's moot essentially because of the agreement of the parties with regard to how we're proceeding with the evidentiary hearing next week. Is that correct? MR. ROMNEY: That's correct, Your Honor. To keep the record clean we would like to withdraw our motion, docket no. 343, without prejudice to renewing it if anyone else seeks to depose Ms. Guo or HKI's corporate representative. THE COURT: Understood. Thank you. So then Attorney Jonas, is the only thing left your protective order for this afternoon? MR. JONAS: It is, Your Honor. And honestly, if -- as long as we're all clear, I don't want to make a misstep but I think I've heard that discovery pointed at the debtor is not going forward and if that's the case, effectively withdrawn, I'm happy to withdraw the -- we don't need a protective order. If anyone has a different view, by all means I'd ask them to speak now but I'm happy to do it that way, Your Honor. THE COURT: Attorney Friedman. MR. FRIEDMAN: I guess I should confirm one thing if you can ask me -- if it's okay for me to address counsel. THE COURT: Certainly. Go right ahead. MR. FRIEDMAN: Mr. Kwok isn't coming to the

| | 14 | |----|----------------------------------------------------------------| | 1 | hearing next week to testify, correct? | | 2 | MR. JONAS: Your Honor, I guess what I'd say is my | | 3 | present intention is I don't think it's necessary. If in | | 4 | any way that changes, I'll follow the same rule and we'll | | 5 | even do it before Friday, but we'll make sure, obviously, | | 6 | that if we're going to present, then we'll make him | | 7 | available, et cetera, consistent with the other practice. | | 8 | THE COURT: Okay. Is that satisfactory to you, | | 9 | Attorney Friedman? | | 10 | MR. FRIEDMAN: That is satisfactory, Your Honor. | | 11 | THE COURT: Okay. Attorney Callari, is that | | 12 | satisfactory what Attorney Jonas just said about Mr. Kwok's | | 13 | presence at the hearing on the 25th? | | 14 | MS. CALLARI: Yes, Your Honor. Thank you. | | 15 | THE COURT: Okay. Thank you. | | 16 | Okay. So what else do we need to do this | | 17 | afternoon then? I thought we might be here for a while, but | | 18 | maybe we're not and you all had to come here for nothing, | | 19 | unfortunately. Not nothing -- | | 20 | MR. JONAS: It's always a pleasure, Your Honor. | | 21 | Honestly, Your Honor -- Jeff Jonas, from Brown | | 22 | Rudnick. | | 23 | I don't think there's anything else to accomplish. | | 24 | MR. GOLDMAN: There's one other item. | | 25 | THE COURT: Oh, there is. I'm sorry. You did, | | | |

| 15 | |----------------------------------------------------------------| | Attorney Goldman, ask for something and I was -- we were in | | here at 2 o'clock when it was filed, so I didn't look at it | | except for 14 seconds I would say. But it's an extension of | | time to file dischargeability complaints. Is that correct? | | MR. GOLDMAN: Yes. Yes. | | I believe that since I filed that we worked out I | | believe a stipulation between the debtor and the committee | | which is acceptable to PAX, I believe. I don't know if | | they've had an opportunity to review it but -- | | MS. CALLARI: I have not. | | MR. GOLDMAN: Okay. I understand -- now I'm being | | informed it was just circulated maybe right before the | | hearing. So -- | | THE COURT: I have no idea. | | MS. CALLARI: Mr. Goldman -- | | THE COURT: Go right ahead, Attorney Callari. | | MS. CALLARI: My understanding, Your Honor, is | | right before the hearing debtor's counsel sent a revised | | stipulation, but my understanding is that that revised | | stipulation and the last I saw was limiting who that | | extension for the complaint was covering. | | And maybe that's changed inside the courtroom with | | people and I'm not there, but the last thing I happened to | | see was limiting the extension for certain parties and that | | was not my understanding prior to an hour ago. | | |

MR. JONAS: If I may, Your Honor. THE COURT: Certainly. MR. JONAS: Jeff Jonas, Brown Rudnick. That has been changed, corrected, however you want to refer to it and the extension is available to all creditors. THE COURT: Okay. Attorney Callari. Did you hear that? The extension is available to all creditors. MS. CALLARI: With that, Your Honor, a 30-day extension with all creditors (indiscernible) the details I'm sure can be worked out if they're not (indiscernible). I will defer to Attorney Goldman on that and my co-counsel in the courtroom. Thank you, Your Honor. THE COURT: Okay. Everyone is in agreement then? There'll be some form of an order, a stipulated order extending the deadline to file dischargeability or objection to discharge. MR. GOLDMAN: Well, the objection to discharge under 272 I don't think would apply at this point because obviously we're not in a Chapter 7. So it could potentially apply under Section -- THE COURT: It could potentially apply -- MR. GOLDMAN: -- 1141(d)(3). THE COURT: Yes. MR. GOLDMAN: But we're not going to know if

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there's ever going to be a plan, let alone a liquidating plan where the debtor doesn't engage in business thereafter, which would be the only circumstances under which a 272 action would be relevant. So there's no sense in forcing -- THE COURT: Okay. Whatever you all decide is fine with me. MR. GOLDMAN: Actually, the stipulation actually says that to the avoidance of doubt the 1141(d)(3) deadline remains the date of confirmation. The date of the confirmation hearing on any plan. That's how the 341 notice sets it up. THE COURT: Well, that is what it's supposed to be. You're right. MR. GOLDMAN: Yes. THE COURT: You're right, but the practice has been in many jurisdictions that it's the same date even though it shouldn't be in an 11, or a 12, or a 13. MR. GOLDMAN: Yeah, I agree. It should not be. You shouldn't force creditors to -- THE COURT: You don't get a -- you are not entitled to a discharge until some point in the future. And only after certain events occurred. MR. GOLDMAN: Correct. MR. JONAS: It would arguably not -- right. I'm

| | 18 | |----|--------------------------------------------------------------| | 1 | not even sure there would be constitutional jurisdiction. | | 2 | It would be purely an advisory opinion, because nobody | | 3 | knows. | | 4 | THE COURT: I couldn't hear what you said. I'm | | 5 | sorry. | | 6 | MR. JONAS: Arguably it wouldn't even be ripe. It | | 7 | wouldn't even be constitutionally right. | | 8 | THE COURT: Will, I think it's not -- I think | | 9 | that's what Attorney Goldman and I are saying. This is -- | | 10 | the practice has been throughout the country that the dates | | 11 | are the same, but they're not the same if it's not a Chapter | | 12 | 7 case. | | 13 | MR. JONAS: Correct. | | 14 | THE COURT: You have to have a plan. You have to | | 15 | have substantial consummation of a plan. You can't get a | | 16 | discharge arguably until you have completed the plan. | | 17 | Now you can argue that the effective confirmation | | 18 | discharges but it discharges if the plan is substantially | | 19 | consummated, or in a Chapter 13 all payments under the plan. | | 20 | So I know -- I think that's confusing myself. I've | | 21 | always wondered why there isn't a more -- one of the things | | 22 | that the Bankruptcy Rules Committee nationally could do is | | 23 | address that issue, but it's never been addressed -- | | 24 | Congress, but whatever. | | 25 | In any event, I agree. If your stipulation is with |

regard to 523 causes of action, that's fine. MR. JONAS: Yes. MR. SILVERBERG: Yes, Your Honor. It's Bennett Silverberg, from Brown Rudnick, on behalf of the debtor. What the stipulation proposes to do is simply extend the period under Rule 4007(c), the 60 days by 30 days. And the stipulation, which perhaps Mr. Goldman hasn't had an opportunity to review, simply says that all of the other deadlines prescribed by the bankruptcy rules are unaffected by the stipulation. THE COURT: Okay. Thank you. So how much time do you need to submit -- you want that done before Friday though because the extension -- the deadline is Friday, correct? MR. GOLDMAN: Correct. May 20th. THE COURT: So you need to get that order in tomorrow or Thursday to be on the safe side, right? MR. GOLDMAN: Yes, Your Honor. THE COURT: All right. That's fine. As I said, I looked at it very quickly, but let's go back to just make sure we're clear on the record. Mr. Jonas, so the debtor's motion for a protective order, are you also withdrawing that on the record at this time? MR. JONAS: Yes, Your Honor.

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THE COURT: Okay. Thank you. And you'd have the same rights to, you know, renew it if someone for some reason sought that same discovery. MR. JONAS: Thank you. THE COURT: Okay. Then with regard to the position papers that parties would like the opportunity to file by Friday, May 20, concerning which path you all believe the court should take under 1112(b), dismissal, conversion or appointment of a Chapter 11 trustee. I'd like those papers filed by 5:00 p.m. on Friday, please. And then I'm not sure there's anything else we need to -- and Attorney Goldman, are you going to be responsible for getting the orders submitted on the extension of time? MR. GOLDMAN: Yes, Your Honor. THE COURT: Attorney Claiborn? MS. CLAIBORN: Your Honor, I just wanted to put a finer point on that briefing schedule. Is it a required briefing or is it an optional? THE COURT: It's optional. MS. CLAIBORN: Thank you. THE COURT: If anybody wants to -- I'm not requiring anybody to submit their positions but if they would like to, you're more than welcome to, okay? MR. ROMNEY: Your Honor, if I may add one more

statement to the record. Ms. Guo and HKI are a third party to this proceeding. We have no position on PAX's motion to dismiss. We would like to put on the record that we do not intend to be here, either our client or counsel, as long as we may be excused by the court. THE COURT: As long as no one else expects your client to be here and question your client, I have no problem with that. So does anyone expect Ms. Guo to be here and be available to testify in connection with the motion to dismiss? MR. FRIEDMAN: Not PAX, Your Honor. THE COURT: Okay. MR. GOLDMAN: Not from the committee, Your Honor. THE COURT: The committee. MS. CLAIBORN: Not from the U.S. Trustee, Your Honor. MR. JONAS: Not the debtor, Your Honor. THE COURT: Okay. Then yes, you can be dismissed. MR. ROMNEY: Thank you. THE COURT: And you don't -- there's no need for you to attend the hearing. I should have asked Attorney Callari and Attorney Mayhew that though. I think that I didn't ask that question. Do you have any interest -- intention, I should say, of

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questioning Ms. Guo at the dismissal hearing? MS. CALLARI: Not at this time, Your Honor. Thank you. THE COURT: Well, if it's not a -- it's kind of now or never as they say. MS. CALLARI: No, Your Honor. THE COURT: Okay. All right. Thank you. MR. ROMNEY: Thank you, Your Honor. THE COURT: All right. So then you'll be dismissed from the hearing. So I'm just looking. Again, I don't think there's anything else we need to accomplish this afternoon, is there? MR. JONAS: Your Honor, the only -- we've been discussing it and I just want to put it out there for the court. I think it's presently scheduled for two days, the 25th and the 26th. You know, I guess we should -- if the court desires to leave both days open, obviously, the facts on the ground have changed and I doubt we'll need two days. So one of the things we had discussed moments before the hearing began, we didn't resolve it in any way, was whether or not the second day could be taken off the court's calendar. I know it's a long weekend, et cetera, but I don't

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know -- we don't have an agreement on that. It's just something I -- THE COURT: You know, what? I think we'll just keep them on and -- MR. JONAS: Very good. THE COURT: And just so nobody -- because what could happen, and it's not likely to happen, but somebody could schedule something else on that day and -- MR. JONAS: Very good. THE COURT: I think just keep it there and we'll see how it goes. MR. JONAS: Very good. Thank you, Your Honor. THE COURT: Okay. But I appreciate you mentioning that you think it may not take both days. And I think your -- given the facts that I've seen, and I don't pretend to have looked at all the facts in the same way you all have, but I would be surprised if we needed two days as well. MR. JONAS: Thank you, Your Honor. THE COURT: Attorney Friedman? MR. FRIEDMAN: Your Honor, I just want to make one statement. I don't know that it would change anybody's position or strengthen or weaken the case for dismissal, which we think is clearly the right option. And I don't want to get into an argument about the merits, which is not for today, other than to say, you know,

one of our arguments is going to be that nobody should be worse off for this case having been filed and it shouldn't be a condition. But I would encourage the debtor to see if there's a mechanism for making sure that committee counsel and other individuals -- PAX would waive any right to do it. But that other people who have been put in this position of having to spend the last three months showing up and litigating, the debtor, which at one point as willing to make a DIP proposal, make an arrangement so that those people aren't burdened in the event the court chooses to dismiss the case. I can't make anybody do anything. I understand that. Mr. -- you know, the committee counsel has its fiduciary obligation to everybody -- it's constituents. I understand that, too. But I do think as a matter of equity if something can be worked out, that would be great. THE COURT: Okay. Thank you. I actually do have a question that we can talk about on Thursday -- I mean, Wednesday, excuse me. And we should talk about before we go much further is what about the order that you all agreed to with regard to the boat and the funds. What happens upon dismissal? MR. JONAS: Your Honor, the order --

THE COURT: If there is dismissal, or conversion, or the appointment of a Chapter 11 Trustee. Obviously, if there's conversion or appointment of a Chapter 11 trustee, the order still has effect in the case. What about dismissal? MR. JONAS: Yes, Your Honor. Jeff Jonas, Brown Rudnick for the debtor. First of all, Your Honor -- and it's not my client but I did see there was a filing made by the boat owner with respect to the boat, and a status report as required, which indicates that -- and, again, I'm just -- I don't want to -- I'm not being too specific but there was a declaration attached and I believe it -- THE COURT: I'm not sure it was a declaration, by the way. MR. JONAS: Okay. THE COURT: Because it doesn't say that it was signed under the United States statute -- MR. JONAS: Understood. THE COURT: Or it was sworn and subscribed to. MR. JONAS: Whatever it is, Your Honor. THE COURT: I did see that. I have to say I did see that. MR. JONAS: In any event, I think it said the boat would be back certainly by the end of June, which would be

early, and the order, you may recall, actually contemplates what would happen upon dismissal.

And I believe, and I don't want to misspeak and obviously it says what is says, but I believe that it effectively provided for everything to happen that should happen, which is the court would maintain jurisdiction, the boat would come back. The money would be returned.

If there's dismissal, the boat then would be brought to New York under the jurisdiction of the court in New York so that nothing will -- I should say this. I don't think anything will be lost, if you will, with respect to the boat upon a dismissal, since it was contemplated.

THE COURT: I think that's correct. I haven't looked back at it, but that was my recollection, that the court would retain jurisdiction, so that even if the case was dismissed, the case would not be closed, because there'd be a retention of jurisdiction with regard to that order.

MR. JONAS: Yes, the point being that nobody wants to lose the -- all parties, nobody wants to lose the benefits of that order based on a dismissal, which obviously we were aware was coming in light of the motion had been filed.

MR. FRIEDMAN: That's something that Mr. Kindseth and I spent a considerable amount of time, and his colleague, discussing and there would have to be further

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order of the court to reach a -- how do we transfer either the boat or the money and escrow to the supervision of the New York court. That's also specifically contemplated. Mr. Jonas' explanation of what happens to the boat is consistent with what I believe we negotiated for and what was agreed to by counsel for the debtor and counsel for HKI International. MR. KINDSETH: That's correct, Your Honor. Stephen Kindseth for HKI International. That's my understanding as well and it was the intention of the parties. And with respect to the declaration, I apologize if there's some technical defect in that. That was obviously an oversight. But we'll get that remedied promptly and a correct form of declaration will be filed within the next day or two, if not today. THE COURT: Well, I'm not saying I'm right. I'm saying my review -- I didn't see a reference to the statute under which 28 USC -- whatever. And I don't have it in front of me. I don't remember. But -- or that the declaration was subscribed and sworn to. So if it's not one or the other, then it's not a declaration that has any evidentiary effect is my -- I believe I'm correct on that part of it. But could I have reviewed the declaration and

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missed something? Sure. So I don't -- MR. KINDSETH: And I could have inadvertently omitted that -- I mean, it is an absolute oversight. Our intention was to submit an appropriate declaration attesting to those facts and we provided documentary support or one component of it. And we will remedy whatever issue there is if there is -- THE COURT: If there is one. MR. KINDSETH: Absolutely. THE COURT: As I said I could be wrong. I mean, everything -- wasn't that just filed last night or something, so -- MR. KINDSETH: Yesterday. THE COURT: And we had hearings all day today. So I could -- my review could have been -- I may be wrong in my review. I might have missed it. MR. KINDSETH: Yes, and my client -- THE COURT: But I did look at it. I have to say I did look to see if I thought it was appropriate -- an appropriate declaration but my initial response is that I don't think it is, but I could be wrong. So if there's an issue, you can correct it, okay? You will correct it. And if there is no issue, then there's nothing to correct. MR. KINDSETH: And to answer your question just

clearly, the parties expressly contemplated what would happen with the Lady Mae. In the event of dismissal, the intent was to provide my client with one opportunity to bring the boat back by July 15th. And if dismissal occurred before July 15th, my client would still have that opportunity. THE COURT: Okay. Thank you. All right. Well, that's what my recollection of the order was, but again, you all know it better than I in that I have to look at other matters and I could be wrong in my recollection. So I wanted to make sure that that was not an issue before going into Wednesday's hearing. All right. Is there anything further we need to discuss this afternoon? Okay. Well, thank you all very much and I'll look for the order, Mr. Goldman, on the extension. We'll look for the position papers of the parties, whoever decides to submit one and then we'll see you next Wednesday. ALL: Thank you, Your Honor. THE COURT: Court is adjourned. (Proceedings concluded at 3:33 p.m.)

I, CHRISTINE FIORE, court-approved transcriber and certified electronic reporter and transcriber, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above-entitled matter. 9 May 20, 2022 10 Christine Fiore, CERT