Guo Wengui / Miles Guo — bankruptcy case · EXHIBIT · ECF #4338-12

METADATA

Defendant: Guo Wengui / Miles Guo / Ho Wan Kwok
Court: CTB
Case No.: 22-50073
ECF #: 4338
Type: EXHIBIT
Filed: 2025-04-22

FULL TEXT

### **Exhibit 12**

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. . Courtroom 123 . Brien McMahon Federal Building . 915 Lafayette Boulevard . Bridgeport, Connecticut 06604 . . Thursday, February 27, 2025 . . . . . . . . . . . . . . 1:06 p.m. TRANSCRIPT OF HEARING BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Chapter 11 Trustee: Luc A. Despins, Esquire PAUL HASTINGS, LLP 200 Park Avenue New York, New York 10166 (APPEARANCES CONTINUED) Audio Operator: Electronically recorded Transcription Company: Reliable The Nemours Building 1007 N. Orange Street, Suite 110 Wilmington, Delaware 19801 Telephone: (302)654-8080 Email: gmatthews@reliable-co.com Proceedings recorded by electronic sound recording, transcript produced by transcription service. Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 2 of 31

2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 APPEARANCES (CONTINUED): For the Chapter 11 Trustee: Douglas S. Skalka, Esquire NEUBERT PEPE & MONTEITH, P.C. 195 Church Street 13th Floor New Haven, Connecticut 06510 For the Official Committee of Unsecured Creditors: Kristin B. Mayhew, Esquire PULLMAN & COMLEY, LLC 850 Main Street 8th Floor Bridgeport, Connecticut 06601 For the U.S. Trustee: Holley L. Claiborn, Esquire UNITED STAES OFFICE OF THE TRUSTEE The Giaimo Federal Building 150 Court Street Room 302 New Haven, Connecticut 06510 For Pacific Alliance Asia Opportunity Fund, L.P.: Annecca H. Smith, Esquire ROBINSON & COLE, LLP One State Street Hartford, Connecticut 06103 Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 3 of 31

INDEX MOTIONS: PAGE Matter No. 4018 Third Interim Fee Application of Prager Dreifuss AG, as Swiss Law Counsel, for Compensation and Reimbursement of Expenses Court's Ruling: 12 Matter No. 4021 Application to Employ The Hamilton Group, LLC as Auctioneer Court's Ruling: 24 \* \* \* Transcriptionist's Certificate 30 Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 4 of

| | Case 22-50073 Doc 4338-12 Filed |----|------------------------------------------ | | 31 4 | 1 | (Proceedings commenced at 1:06 p.m.) | 2 | THE COURT: Okay. Good afternoon. | 3 | We are a matter on the calendar at 1:00 p.m., so I | 4 | ask the courtroom deputy to please call the calendar. | 5 | THE DEPUTY: 22-50073, Ho Wan Kwok. | 6 | THE COURT: Good afternoon. | 7 | If we could have appearances for the record, | 8 | please, starting with the Chapter 11 Trustee. | 9 | MR. DESPINS: Good afternoon, Your Honor. | 10 | Luc Despins, Chapter 11 Trustee. | 11 | THE COURT: Good afternoon. | 12 | MR. SKALKA: Good afternoon, Your Honor. | 13 | Douglas Skalka, counsel for Mr. Despins. | 14 | THE COURT: Good afternoon. | 15 | MS. MAYHEW: Good afternoon, Your Honor. | 16 | Kristin Mayhew on behalf of the Creditors | 17 | Committee. | 18 | THE COURT: Good afternoon. | 19 | MS. CLAIBORN: Good afternoon, Your Honor. | 20 | Holley Claiborn for the U.S. Trustee. | 21 | THE COURT: Good afternoon. | 22 | MS. SMITH: Good afternoon, Your Honor. | 23 | Annecca Smith for creditor PAX. | 24 | THE COURT: Good afternoon. | 25 | All right. Thank you all for making yourself 04/22/25 Entered 04/22/25 10:31:17 Page 5 of | ------------------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | |

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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 available today. I did need to change the date of the hearing from Tuesday to today because of an unanticipated scheduling conflict, but obviously you were available today, so I appreciate that. On the calendar today are two matters. Trustee Despins, I'm not sure how you'd like to proceed, but please let me know and we can proceed accordingly. MR. DESPINS: Thank you, Your Honor. I would ask Mr. Skalka to take the lead on the auctioneer retention -- THE COURT: Okay. Go right ahead -- MR. DESPINS: -- first. THE COURT: -- Attorney Skalka. MR. SKALKA: Thank you, Your Honor. On the calendar today is an application by the trustee and Genever Holdings to retain Hamilton Group, LLC as an auctioneer. The application refers to two types of auction sales, Your Honor: an auction of what is referred to as the estate vehicles, these are motor vehicles that have been recovered by the trustee. Like, right now, the trustee is holding five motorcycles and a car. That would be part of what's referred to as the first vehicle group, first sale of motor vehicles. The motion does indicate that there might be additional sales of estate vehicles, but right now, the trustee will be looking to retain The Hamilton Group to

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1 2 3 4 5 6 7 auction these first vehicle -- the first vehicle group. The application also refers to the retention of The Hamilton Group to conduct an auction of what's referred to as estate furniture, other personal property, furniture that the trustee has recovered, also, and it's also in the name of Genever Holdings, LLC, from various properties in Connecticut and New York and New Jersey.

8 9 10 11 12 13 14 15 After the trustee -- we filed the application, Your Honor, we had some conversations with Ms. Claiborn at the U.S. Trustee's Office. She raised a concern about the fact that there was not an inventory about all of the estate furniture yet prepared in connection with the retention of The Hamilton Group. And so the trustee had decided not to go forward with the retention application with regard to the estate furniture sale process.

16 17 18 19 20 21 22 23 24 25 We are working on an inventory and we will file an inventory in connection with a sale motion. And so we submitted last week, a revised order as part of the notice that was filed last Friday; it's ECF 4145. And that proposed order only deals with the estate vehicle sale and retention of Hamilton Group in connection with that sale. It also refers to the fact that the sale regarding or the retention regarding the estate furniture will be adjourned until a future date once a motion to sell the estate furniture gets filed.

1 2 3 4 5 6 7 8 9 This is only an application to retain The Hamilton Group. We will file a separate motion in connection with the sale of the first vehicle group. The retention terms are fairly straightforward with regard to the vehicles. This will be an auction conducted by The Hamilton Group and they would be entitled to a buyer's premium and reimbursement of expenses upon application to the Court. But in the notice I filed last week, I also

10 11 12 13 14 indicated that The Hamilton Group had established or provided an estimated value of \$90,000 for the vehicles in the first sale and I also attached copies of the surety bonds that The Hamilton Group has obtained in connection with all the vehicles for this first sale.

15 16 17 18 19 I submitted the proposed -- as I said, I filed the proposed order. I do not believe any objections have been filed. I don't believe the U.S. Trustee's Office has any objections, so I would ask that the application be granted and the revised order I submitted last week.

20 21 22 I'm happy to answer any questions you may have. THE COURT: Thank you. I do not have any questions at this time.

23 24 25 Does anyone else wish to be heard in connection with the application to employ the accountant? MS. CLAIBORN: Your Honor, Holley Claiborn for the

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| 1 | U.S. Trustee. If I could make a few comments? | |----|-----------------------------------------------------------------| | 2 | THE COURT: Certainly. | | 3 | MS. CLAIBORN: Consistent with the comments that | | 4 | Attorney Skalka just prepared for the Court for bifurcating | | 5 | this employment into two phases: one has to do with vehicles | | 6 | and one has to do with the furniture. So all the estate is | | 7 | proceeding with today is the application to employ, with | | 8 | respect to selling the vehicles. | | 9 | And I want to put a finer point on what was said, | | 10 | which is that we're selling, as I understand it, the vehicles | | 11 | that the estate currently has possession of; those are the | | 12 | five motorcycles and the car. But we are also approving a | | 13 | process by which future vehicles, should they be acquired by | | 14 | the estate, will be sold through this auction process. | | 15 | And the application that was filed to employ | | 16 | Hamilton outlined that the process envisioned for the future | | 17 | acquired vehicles or furniture, also, will consist of a | | 18 | motion to sell and some notices about what's being sold, and | | 19 | what the bonds are, the value, et cetera, and those will be | | 20 | filed in connection with future activities and also in | | 21 | connection with future motions to sell whatever it is that | | 22 | they're trying to auction. | | 23 | So, I wanted to make it clear to the Court we're | | 24 | employing Hamilton right now to do two things: one, sell | | 25 | currently existing and the controlled property, with respect |

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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 to actually vehicles right now, and then future-acquired vehicles. And then when we come back and have another hearing, hopefully on the furniture, we'll be doing the same thing, with respect to the furniture. THE COURT: Understood. So -- MS. CLAIBORN: I don't know if there will be any future furniture, but just to the extent that there is, that's, I think, the plan. THE COURT: So my question, then, Attorney Claiborn -- and I thank you, I understand what you're saying -- is, have you reviewed the revised proposed order that Attorney Skalka mentioned, 4145, with regard to this application granting, in part -- or the order granting, in part, the application to employ? MS. CLAIBORN: Yes. THE COURT: Okay. And do you have any changes or concerns about what I'm looking at is a redlined version of that order that was filed on Friday? MS. CLAIBORN: I do not have any changes or concerns, Your Honor. THE COURT: Okay. MS. CLAIBORN: I would point the Court to the section, which I don't have in front of me, but itemizes what the expenses will be. There's been an increase, with respect to one of the expenses, and that has to do with the fact that

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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 there are some key fob issues and some extra expense will be associated with getting key fobs that work and control these vehicles. MR. SKALKA: That is correct, Your Honor. Unfortunately, when the trustee recovered these vehicles, literally, none of them had keys and some of them are electronic keys and they are, unfortunately, costly to replace. THE COURT: Okay. I don't remember seeing anything in the revised order about a key fob, but I could be wrong. Is it in -- MS. CLAIBORN: You wouldn't have noticed it, but the amount went up. I don't (indiscernible) Attorney Skalka can point you to which paragraph in the order. MR. SKALKA: Your Honor, in the second page of the order there's a listing of expenses, including key replacements, and that is now over \$8500. THE COURT: Oh, I see it now. Okay. Okay. Thank you, I see it. All right. Does anyone else wish to be heard in connection with the application to employ the auctioneer? (No verbal response) THE COURT: Okay. Hearing nothing, then I understand why the trustee is seeking to employ the

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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 auctioneer. The only thing I ask, Attorney Skalka, is it says 327 and 328; so, is the auctioneer's -- and it's possible that it is being set, right now, the compensation. I mean, they're not coming to the Court for - whenever 328 -- MS. CLAIBORN: They will be coming -- THE COURT: -- appears in an order, even if the entity has to file a fee application, the Court can't really do anything about it unless there's -- I mean, I forget the words, but I can pull out the Code -- you know, unless there's something extraordinary or some reason why the Court believes that. You're essentially pre-approving the compensation. So, does everybody -- has everybody thought about that or -- I mean, again -- MS. CLAIBORN: Your Honor, Holley Claiborn for the U.S. Trustee. I want to say that we are okay with that. And the reason is because this is a compensation structure for an auction process. So the structure is being pre-approved under 328. Certainly, we don't have the results of the auction, but it will be a mathematical calculation. And there is, with respect to the vehicles, there's not an auction fee that's being paid by the estate; it's being paid by the purchasers of the vehicles. So what

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we're approving is, that's the concept of the compensation for the auction process. There will be a fee application that gets filed that will seek reimbursement of the expenses and we'll seek a final approval of the amount of the compensation. THE COURT: Yeah, I mean, I would have to find that the terms and conditions proved to have been improvident, in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions; that's what the Code says. So, as long as everyone is fine with that, I'm fine with that. But I want everyone to make sure that we're all on the same page. MS. CLAIBORN: We are. THE COURT: Okay. All right. Then, I'm looking at the revised proposed order granting, in part, the application to employ an appoint The Hamilton Group as auctioneer. The only change that would need to be made to the revised proposed order is change the date from February 25th to February 27th, and that was because of the Court's scheduling issue. I don't see any other changes that need to be made to the order. I understand, as I said, the reason that the trustee is seeking to employ the auctioneer, and it does make sense under the circumstances of this case, so for all those

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| 1 | reasons, the application of the Chapter 11 Trustee to employ | |----|----------------------------------------------------------------| | 2 | and appoint The Hamilton Group as auctioneer is granted, in | | 3 | part, and the revised proposed order that's been submitted as | | 4 | ECF 4145, with the minor change of the date of the hearing | | 5 | noted on the record, will enter. | | 6 | MR. DESPINS: Thank you, Your Honor. | | 7 | THE COURT: Thank you. | | 8 | MR. DESPINS: So, Your Honor, with the Court's | | 9 | permission, I would move on to the Prager application at this | | 10 | time. | | 11 | THE COURT: Yes, please. Go right ahead. | | 12 | MR. DESPINS: So, I'll start by asking the | | 13 | courtroom deputy if it's possible to find, but not post | | 14 | immediately, but to find Docket 3034, because Your Honor will | | 15 | have to go to paragraph 6 of that order. | | 16 | So I'll start establishing a background, but if | | 17 | the courtroom deputy could find Docket 3034, I think it will | | 18 | be helpful because -- | | 19 | THE COURT: I'll find it, Trustee Despins -- | | 20 | MR. DESPINS: Okay. | | 21 | THE COURT: -- because we don't have anybody | | 22 | available today to do that, but that's fine. Just give me a | | 23 | second, okay. | | 24 | MR. DESPINS: Okay. | | 25 | THE COURT: 3034? | | | |

| | Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 15 of 31 | |----|-------------------------------------------------------------------------------------------------| | | 14 | | 1 | MR. DESPINS: That's correct, Your Honor. | | 2 | THE COURT: All right. If everybody just bears | | 3 | with me for a moment, please. | | 4 | (Pause) | | 5 | THE COURT: Because there are so many docket | | 6 | entries, it does take a moment for the docket to load, which | | 7 | probably wouldn't surprise anyone. | | 8 | (Pause) | | 9 | THE COURT: Almost there. | | 10 | (Pause) | | 11 | THE COURT: All right. I am there. | | 12 | What would you like me to look at? | | 13 | MR. DESPINS: Well, let me just start with a | | 14 | background and then we can go and focus on paragraph 6 in a | | 15 | minute or two. | | 16 | So, Your Honor, this is the application to have | | 17 | their fees and expenses approved. The fees are not an issue, | | 18 | so it's just the expenses. And the expenses at issue are, | | 19 | that's globally at issue, there are 14,148.35 Swiss francs. | | 20 | But of that, the only issue relates to about 8500 Swiss | | 21 | francs, and that's why, Your Honor, we didn't want to file a | | 22 | response on this because it was just, you know, too | | 23 | expensive, given the amount involved. | | 24 | So, the issue -- the U.S. Trustee filed a limited | | 25 | objection at Docket 4131. And you will recall, this is the | | | |

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| 1 | Swiss law firm, and in our application, we had said that it's | |----|----------------------------------------------------------------| | 2 | customary for them in Switzerland to have a flat fee that | | 3 | they add to their fees to cover their costs. And in | | 4 | Footnote 3 of our application at 2931, we said: | | 5 | "Prager Dreifuss does not maintain internal | | 6 | processes that would allow it to track its administrative | | 7 | expenses, such as photocopying, printing, et cetera." | | 8 | So what they do is they have a flat fee. It's | | 9 | usually 3 percent of the fees. They've agreed to reduce it | | 10 | to 2 percent. The U.S. Trustee objected to that saying that | | 11 | all expenses should be detailed. | | 12 | And we ended up with, and this is where we go to | | 13 | paragraph 6 of the order at 3034, Your Honor. | | 14 | THE COURT: I'm looking right at it. I see | | 15 | paragraph 6. | | 16 | MR. DESPINS: At the end, it says: | | 17 | "Notwithstanding Section 4.1 of the engagement | | 18 | letter to the contrary, Prager Dreifuss shall also be | | 19 | entitled to (a) a flat fee for disbursements in an amount | | 20 | equal to 2 percent of total fees charged and (b) | | 21 | reimbursement of reasonable and documented travel expenses | | 22 | (if any)." | | 23 | And the problem we have is that, frankly, we | | 24 | shouldn't have used travel expenses as -- we could have used | | 25 | it as an example, but the point is that this was supposed to | | | |

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1 2 3 4 cover outside vendors. So the issue we have is that, in fact, it doesn't cure expenses with an outside vendor, a private investigator -- that's the 85,000 -- sorry -- 8500 Swiss francs.

5 6 7 The U.S. Trustee is saying, Look, the order says, "travel expenses." It's not a travel expense, therefore, you cannot get reimbursed for this.

8 9 10 11 12 13 So, Your Honor, I think what we need to do is amend the order to clarify that it's as to external vendors, third-party vendors, including local process servers, court, and other registration fees, local investigators, et cetera, and travel expenses; they can get paid if they're documented and are reasonable because that was never the issue.

14 15 16 17 The issue was always that they don't have the ability to track their own internal disbursements, but the outside disbursements, third-party vendors, they can absolutely track that because they get invoices.

18 19 20 The U.S. Trustee is saying, No, we have travel expenses; you have to live with that. And I think that proves too much. I'll give you an example.

21 22 23 24 25 If there's 4,000 Swiss francs that have to be paid as a court fee, let's say, yesterday, and they paid that, they would have to eat that; that cannot be the intent of this, because that's not their expense. That's not an internal cost like copying, phones, overtime, secretaries, et

| Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 18 of 31 | |-------------------------------------------------------------------------------------------------| | 17 | | cetera, et cetera; that's an outside vendor. | | So, what we would like to do, Your Honor, if we | | can is -- I don't know if I can do that -- I'll try to share | | the screen here. Only the host can share this, so I don't | | know if somebody -- | | THE COURT: What do you want me to look at? I | | might be able to see it. | | MR. DESPINS: I want to post a proposed amendment | | to the order on the screen so you can see the changes that | | we're seeking. | | THE COURT: Okay. Hold on. We might be able to | | allow you to do that. | | We're -- are we trying to allow Mister -- Trustee | | Despins to be the co-host? | | (No verbal response) | | THE COURT: Okay. Yes, you can do that now. | | MR. DESPINS: Okay. I'll do that. | | And so, that is paragraph 6, as we think it should | | be modified. But, basically, it says in paragraph (b): | | "Reimbursement of reasonable and documented | | expenses, with respect to services provided by third-party | | vendors, including local process servers, court and other | | registration fees," by the way, that's a real issue, "local | | investigators, and travel expenses, if any." | | We didn't expect these other charges, outside | | |

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| 1 | charges at the time we used "travel expenses." We shouldn't | |----|-----------------------------------------------------------------| | 2 | have used -- it was used as a shorthand; we should have, you | | 3 | know, should have said, "such as travel expenses," rather | | 4 | than saying, "only travel expenses." That was never the | | 5 | intent because, again, that would prove too much. | | 6 | The example I gave is exactly the real example, | | 7 | which is that if they paid \$4,000 -- 4,000 Swiss francs in | | 8 | Court fees, they shouldn't have to eat that, because that | | 9 | should be part of the 2 percent. That was never the intent | | 10 | of this; this was supposed to be an internal cost. | | 11 | So that's the issue, Your Honor, in a nutshell. | | 12 | So, I guess I'll turn it over to the U.S. Trustee, unless you | | 13 | have questions. | | 14 | THE COURT: I have no questions at this time, | | 15 | thank you. | | 16 | MS. CLAIBORN: Thank you, Your Honor. | | 17 | Holley Claiborn for the U.S. Trustee. | | 18 | Your Honor, I would like to frame this discussion | | 19 | a little differently. At the time that the trustee asked to | | 20 | employ Prager Dreifuss, they filed an application at ECF 2931 | | 21 | and that application asked to not itemize expenses and to be | | 22 | reimbursed on a flat-percentage basis, calculated as a | | 23 | percentage of the overall fees that were billed by Prager | | 24 | Dreifuss. And the application asked for a 3 percent of total | | 25 | fees. | | | |

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1 2 3 4 5 6 The U.S. Trustee had conversations with Trustee Despins and his counsel about the fact that that's not customary and that the ordinary process described by Section 330, 331 and the Rules are that you itemize your expenses and you get reimbursed for what is actual and necessary.

7 8 9 10 11 12 13 We couldn't reach a resolution on that and we put it to the Court. The U.S. Trustee filed an objection at ECF 2997 and the U.S. Trustee said the exact same thing, that all expenses should be itemized and should be particularized and that a flat-fee percentage approach to reimbursement of expenses was not appropriate or consistent with the Code and the Rules.

14 15 16 17 18 19 20 21 22 The trustee proposed, after discussions, to reduce the percentage rate from 3 percent to 2 percent and gave the Court a proposed order that was filed on the docket at ECF 3004. The order that was entered by the Court in approving the employment of Prager Dreifuss was actually that same proposed revised order submitted. So the order at ECF 3034 has the language that says what Trustee Despins just itemized for the Court and it says 2 percent of the total fees charged.

23 24 25 And now we're at a fee application process and Prager Dreifuss is seeking reimbursement, not only of the 2 percent flat-fee calculation of disbursements based on its

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1 2 3 fees, but also itemized expenses. The itemized expenses are a total of 8,590 and I would say 3 cents, except they're Swiss francs.

4 5 6 7 8 9 10 11 And so, if the Court disapproved those itemized expenses because the 2 percent amount has already been requested and be approved, pursuant to the application and the retention order, then Prager Dreifuss doesn't go home with zero; Prager Dreifuss just goes home with the 2 percent that's allowed. And for monetary purposes, I'll tell you what the two-percent figure turns into: 5,558.32 Swiss francs.

12 13 14 15 16 17 18 So, Your Honor, the U.S. Trustee's position is that the application sought flat-rate percentage reimbursement. The U.S. Trustee opposed it. The Court sided with the trustee and gave a flat-percentage reimbursement process and now the application for the fees is seeking more than they're entitled to, because they're asking for both, the flat-rate percentage approach and itemized fees.

19 20 21 22 23 And absent a Court order that modifies the terms of the retention, which we do not have and has not yet been requested, to approve the reimbursement in a way that's inconsistent with the retention order, would not be appropriate.

24 25 MR. DESPINS: So, Your Honor, if I may? We're making an oral motion to amend the retention

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1 2 3 4 5 6 7 order. These are outside-vendor charges. We list -- as we said in our application at Footnote 3, that this was -- that the 2 percent or 3 percent at the time that was reduced to 2 percent, was to cover its, the firm's administrative expenses, such as photocopying, printing, et cetera, et cetera. Never, was this contemplated to cover outside vendors.

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And so I'll grant the trustee that there's a "gotcha" there because it says that you can get paid for outside vendors if they're travel expenses; that's the current state of play, but that's just not the right fee. That's not fair to the firm, because that means that they have to eat outside costs, but also, practically, what it would lead me to is I would need to send the money directly myself to, for example, courts in Switzerland or other thirdparty vendors, which is really not practical. They should be receiving reimbursement for outside vendors. It has nothing to do with their own internal structure. This is -- these are third-party vendors and we're asking the Court to amend the order, as you can do, to add the language that we have on the screen now, to provide for the reimbursement of documents and reasonable outside vendor expenses; otherwise, the argument of the U.S. Trustee proves too much. It basically says, Okay, if it's not travel expenses, you get zero. So it could be fees, court fees of,

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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 let's say, 10,000; you have to eat that. That just makes no sense. That was never the issue at stake. I understand the U.S. Trustee's objection to the 2 percent of the deemed expenses. The 2 percent, we understand that, but that ship has sailed; the Court has already entered an order saying that the 2 percent for their own charges is okay, which, as I understand it, is very different from the way we do things, but it's done in Europe all the time. Now we're dealing with, should the firm be limited to, in terms of outside costs, outside costs documented to reasonable costs, now should be limited because it says, "travel expenses." And we don't think it's fair and we think the Court should amend the order to add that language to clarify that that's what was meant to be. It cannot be that this was, the intention was that, okay, you'll get 2 percent. But everything else, other than travel expenses, from outside vendors, you have eat; that just can't be the case, Your Honor. THE COURT: Attorney Claiborn? MS. CLAIBORN: If I could make one final -- THE COURT: Yes, go right ahead. MS. CLAIBORN: If I could make one final comment, which is that, as I observed in my initial remarks, the proposed order that was submitted and that was adopted and entered by the Court, was an order drafted by the trustee,

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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 not by the U.S. Trustee. And the U.S. Trustee opposed the percentage approach, in general. So, where we are with the order, that is not a product of what the U.S. Trustee's input was. The U.S. Trustee took the position that all expenses should be itemized and documented and that was overruled. We are now where we are. THE COURT: I understand. Trustee Despins, is there anything you'd like to add? MR. DESPINS: No, Your Honor. THE COURT: Does anyone else wish to be heard on the interim fee application of the Swiss law counsel and the trustee's oral motion to amend the prior order, authorizing the retention of Swiss counsel? MR. DESPINS: The only thing I would say, Your Honor, is to the extent -- and I don't know how you intend to deal with this -- but to the extent you want to take this under advisement, which you may very well do, we would ask that an order be entered approving their fees, because they're not in dispute at all, so that that, basically, that's -- from their point of view, that's behind them and the issue of expenses can be left to a later date when Your Honor is ready to make a determination on this issue. THE COURT: Okay. I understand that.

24 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 No one else wishes to be heard? (No verbal response) THE COURT: Okay. Give me one moment, please. (Pause) THE COURT: So, last week, wasn't there something filed by Attorney Skalka -- didn't you file something about these expenses? (No verbal response) THE COURT: He filed a notice of an updated Exhibit C? MR. SKALKA: I did. MR. DESPINS: I think -- Your Honor, we filed detailed time records -- THE COURT: Not anything about the expenses? MR. DESPINS: No, Your Honor, I don't believe so. MS. CLAIBORN: Your Honor, the amendment that was filed last week provided redacted, but improved time entries, because one of the original objections I posed about this fee application was that the time entries were insufficiently clear and they went back and they redid them, and then that's what got filed last week. But there is nothing in that supplement that speaking to the expense issue. MR. DESPINS: That's correct. THE COURT: Okay. Well, this is what I'm going to Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 25 of 31

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1 2 3 4 5 6 do. I understand both parties' positions in connection with the third interim fee application of Swiss counsel. I'm going to do two things. I will enter an order granting the fees of Swiss counsel, since they are not in controversy whatsoever. And so, I'll grant, in part, the third interim fee application.

7 8 9 10 11 12 13 14 And, Trustee Despins, I'll give your office until next Friday, which is, I think, the 7th of March, possibly, or the 8th -- I'm not sure -- to submit a document evidencing or establishing these third-party vendor fees. And if that does establish the amounts, I think you said it was 8500 Swiss francs, then the likelihood is I'm going to grant your oral motion to modify the retention order and then allow those expenses, as well.

15 16 17 But I need to see evidence -- and I'm not suggesting there isn't, but I want the record to reflect -- MR. DESPINS: Yes.

18 19 THE COURT: -- that there is -- these are thirdparty vendor amounts that are due and owing.

20 21 22 23 MR. DESPINS: Yes, Your Honor. We will do that. We may file one of them under seal, the private investigator -- THE COURT: That's fine.

24 25 MR. DESPINS: -- for obvious reasons. But thank you, Your Honor.

| 1 | THE COURT: That's fine. | |----|----------------------------------------------------------------| | 2 | But I understand the U.S. Trustee's position, too. | | 3 | I think, you know, it's an issue that needs to be corrected | | 4 | and as long as you can establish that these are third-party | | 5 | vendor amounts, then I will, it's highly likely I will grant | | 6 | your oral motion and enter an amended retention order, with | | 7 | regard to Swiss counsel, but not until I see -- | | 8 | I would like -- I want the record to be accurate | | 9 | and clear that that's what the Swiss counsel is seeking: to | | 10 | repay third-party vendors, and I understand that, so I think | | 11 | that's fine. | | 12 | MR. DESPINS: Understood, Your Honor. | | 13 | THE COURT: But we'll learn from this lesson, | | 14 | right, we'll all learn from this lesson that we have to | | 15 | careful and be sure when we have outside counsel that they | | 16 | are -- how are they -- if they are retaining someone outside | | 17 | of their firm, they've got to have -- there's got to be a | | 18 | mechanism for payment already in the retention order, okay? | | 19 | MR. DESPINS: Yes, Your Honor. | | 20 | THE COURT: All right. Is there anything else we | | 21 | need to address today? | | 22 | MR. DESPINS: Yes, Your Honor, very briefly. | | 23 | In the adversary proceeding 24-05238, this is the | | 24 | one where we're suing the debtor's son, last week, you | | 25 | entered an order at Docket 29, listing the stay of | | | |

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1 2 3 4 5 6 proceedings. You may recall that -- and thank you very much for doing that -- but I wanted to bring the Court up to speed regarding an issue relating to that, in the sense that you granted the motion to lift the stay and you directed us to serve the debtor's son by March 4th, and for reasons I will explain in a second, there are some issues related to that.

7 8 9 10 11 12 13 14 15 16 17 18 19 20 So, last Friday, for the first time, we saw a pleading or an affidavit from the debtor's son in another proceeding where he clearly disavowed the residence in, his residence in London, saying that the London apartment has not been his residence since 2021. To be clear, we knew, and in 2024, we knew that he had a house in, he had acquired a house in Switzerland and we knew that he had made a corporate filing in the BVI, listing the house in Switzerland as his address. But at the same time, we knew that he filed similar filings, for example, in Cyprus, listing London as his address, and a corporate filing in Hong Kong, listing a Hong Kong house as his address, as well. But now, in this affidavit, he basically says, I've always lived only in Switzerland since 2021.

21 22 23 24 25 We disagree with that, obviously, for all sorts of reasons, but we wanted to bring this to the Court's attention, because there's no doubt that we can accomplish service at the London apartment, but to be clear, he still owns the London apartment. There's no issue about him having

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1 2 3 sold it or anything like that; he still owns the apartment, so we can accomplish service there -- there's no issue -- by March 4th.

4 5 6 7 8 9 10 11 But if we determine that we have to serve in Switzerland, we could not complete service by March 4th. And I said, "if," Your Honor, because this action against him was commenced in February -- February 15th or 14th, 2024 -- long before these indicia of Switzerland ownership appeared, and, therefore, we believe that this was an issue of not initial service, but rather, supplemental service and we need to figure out this thing.

12 13 14 15 16 17 18 We're not asking anything of the Court. We just want to make sure that the Court is aware of that issue. We're dealing with the issue and we'll report back to the Court on that. But we wanted you to know that we, you know, it affects our compliance, perhaps, compliance with that order in the sense that we'll certainly serve him in London, but --

THE COURT: I understand.

20 21 MR. DESPINS: So that's the status report on that, Your Honor.

THE COURT: Okay. Thank you.

23 24 25 And I do understand what you're saying and I'm sure if there is a need to request additional relief or modify an existing order, you will do so.

| | Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 30 of 31 | |----|-------------------------------------------------------------------------------------------------| | | 29 | | 1 | MR. DESPINS: Will do, Your Honor, yes. | | 2 | And that's all we have, Your Honor. | | 3 | THE COURT: Okay. Thank you. | | 4 | Does anyone else wish to be heard on any matters | | 5 | this afternoon? | | 6 | (No verbal response) | | 7 | THE COURT: All right. Then I thank you all. | | 8 | All the matters on today's calendar have been | | 9 | addressed and, therefore, court is adjourned. | | 10 | (Proceedings concluded at 1:45 p.m.) | | 11 | | | 12 | | | 13 | | | 14 | | | 15 | | | 16 | | | 17 | | | 18 | | | 19 | | | 20 | | | 21 | | | 22 | | | 23 | | | 24 | | | 25 | | | | | | | |

| | Case 22-50073 Doc 4338-12 Filed 04/22/25 Entered 04/22/25 10:31:17 Page 31 of 31 | |----|-------------------------------------------------------------------------------------------------| | | 30 | | 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 March 15, 2025 | | 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 | | | | | | | |