Guo Wengui / Miles Guo — bankruptcy case · ORDER · ECF #618-1

METADATA

Defendant: Guo Wengui / Miles Guo / Ho Wan Kwok
Court: CTB
Case No.: 22-50073
ECF #: 618
Type: ORDER
Filed: 2022-07-27

FULL TEXT

#### **UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION**

| In re: | | |--------------|---------------------| | | Chapter 11 Case No. | | HO WAN KWOK1 | 22-50073 (JAM) | | Debtor. | July 27, 2022 | | | |

### **DECLARATION OF PETER FRIEDMAN IN SUPPORT OF PACIFIC ALLIANCE ASIA OPPORTUNITY FUND L.P.'S POSITION STATEMENT IN JOINT RESPONSE TO (I) DEBTOR'S MOTION FOR RELIEF FROM ORDER APPOINTING LUC A. DESPINS AS CHAPTER 11 TRUSTEE, AND (II) APPLICATION OF CHAPTER 11 TRUSTEE FOR ENTRY OF ORDER, PURSUANT TO BANKRUPTCY CODE SECTIONS 327, 328, AND 330 AND BANKRUPTCY RULES 2014 AND 2016, AUTHORIZING AND APPROVING RETENTION AND EMPLOYMENT OF PAUL HASTINGS LLP AS COUNSEL TO CHAPTER 11 TRUSTEE**

I, Peter Friedman, declare:

1. I am an attorney admitted to practice law in the State of New York and

Washington, D.C. and am a partner at the law firm of O'Melveny & Myers, 7 Times Square,

New York, NY 10036, counsel for Pacific Alliance Asia Opportunity Fund L.P. ("PAX"). I

respectfully submit this Declaration in support of *Pacific Alliance Asia Opportunity Fund L.P.'s*

*Position Statement in Joint Response to (I) Debtor's Motion for Relief from Order Appointing*

*Luc A. Despins as Chapter 11 Trustee, and (II) Application of Chapter 11 Trustee for Entry of*

*Order, Pursuant to Bankruptcy Code Sections 327, 328, and 330 and Bankruptcy Rules 2014*

*and 2016, Authorizing and Approving Retention and Employment of Paul Hastings LLP as*

*Counsel to Chapter 11 Trustee*.

2. Attached as Exhibit 1 is a true and correct copy of the transcript of the July 8,

1 The last four digits of the Debtor's taxpayer identification number are 9595.

2022 hearing before the Honorable Julie A. Manning.

3. Attached as Exhibit 2 is a true and correct copy of the transcript of the July 21, 2022 status conference before the Honorable Julie A. Manning.

4. Attached as Exhibit 3 is a true and correct copy of the July 22, 2022 Interrogatories from Debtor to PAX in this action.

5. Attached as Exhibit 4 is a true and correct copy of the Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of April 22, 2021, filed in *In re TECT Aerospace Group Holdings, Inc.*, Case No. 21-10670-KBO (Bankr. D. Del. May 4, 2021), ECF No. 120.

6. Attached as Exhibit 5 is a true and correct copy of the Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) And 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of July 20, 2019, filed in *In re Tintri, Inc*., Case No. 18-116250-LSS (Bankr. D. Del. Aug. 7, 2018), ECF No. 132.

7. Attached as Exhibit 6 is a true and correct copy of the Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of June 4, 2019, filed *In re JRV Group USA L.P.*, Case No. 19-11095-KBO (Bankr. D. Del. Jun. 20, 2019), ECF No. 84.

8. Attached as Exhibit 7 is a true and correct copy of the Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 3 of 253

Dickinson (US) LLP as Counsel Effective as of September 18, 2019, filed in *In re Fred's Inc*., Case No. 19-11984-CTG (Bankr. D. Del. Oct. 18, 2019), ECF No. 352.

9. Attached as Exhibit 8 is a true and correct copy of the Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of February 5, 2020, filed in *In re BL Restaurants Holding, LLC*, Case No. 20-10156-CTG (Bankr. D. Del. Mar. 4, 2020), ECF No. 241.

10. Attached as Exhibit 9 is a true and correct copy of the Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of February 4, 2020, filed in *In re Lucky's Market Parent Company*, *LLC*, Case No. 20-10166-JTD (Bankr. D. Del. Feb. 21, 2020), ECF No. 237.

11. Attached as Exhibit 10 is a true and correct copy of the Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of October 29, 2021, filed in *In re Red River Waste Solutions, LP*, Case No. 21-42423 (Bankr. N.D. Tex. Nov. 18, 2021), ECF No. 157.

12. Attached as Exhibit 11 is a true and correct copy of the United States Trustee's Statement Concerning Suri Realty, LLC's and Carla's Pasta, Inc.'s Applications to Retain Locke Lord LLP as Their Bankruptcy Counsel filed in *In re Carla's Pasta, Inc. and Suri Realty, LLC,* Case Nos. 21-20111, 20-21270 (Bankr. D. Conn. March 10, 2021), ECF No. 252.

13. Attached as Exhibit 12 is a true and correct copy of the February 9, 2022 Decision and Order in *PAX v. Kwok,* Index No. 652077/2017 (N.Y. Sup. Ct.), NYSCEF Doc. No. 1181.

253

Dated: July 27, 2022 New York, New York Respectfully submitted,

#### */s/ Peter Friedman*

Peter Friedman pfriedman@omm.com O'MELVENY & MYERS LLP Seven Times Square New York, NY 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061

*Attorney for Pacific Alliance Asia Opportunity Fund L.P.*

# **EXHIBIT 01**

Transcript of July 8, 2022 Hearing

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| | UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT | | |----------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | | BRIDGEPORT DIVISION | | | In Re | * Case No. 22-50073 (JAM) * | | | HO WAN KWOK, | * Bridgeport, Connecticut * July 8, 2022 | | | Debtor. * * * * * * * * * * * * * * * * | * * | | | | | | | | TRANSCRIPT OF APPLICATION FOR ORDER APPROVING APPOINTMENT OF CHAPTER 11 TRUSTEE BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE | | | APPEARANCES: | | | | For the Debtor: | WILLIAM R. BALDIGA, ESQ. Brown Rudnick, LLP Seven Times Square New York, NY 10036 | | | For the Creditor, Pacific Alliance Asia Opportunity Fund L.P.: | PETER FRIEDMAN, ESQ. STUART M. SARNOFF, ESQ. O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, NY 10036 | | | | PATRICK BIRNEY, ESQ. Robinson & Cole 28 Trumbull Street Hartford, CT 06103 | | | produced by transcription service. | Proceedings recorded by electronic sound recording, transcript | | | Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992 | | |

APPEARANCES Cont'd: For the Creditors Committee: IRVE GOLDMAN, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For the Creditor, Rui Ma: KRISTEN MAYHEW, ESQ. McElroy Deutsch Mulvaney & Carpenter 225 Liberty Street 36th Floor New York, NY 10281 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 HK International Funds STEPHEN R. KINDSETH, ESQ. Investments (USA) Limited, Zeisler & Zeisler LLC: 10 Middle Street, 15th FL. Bridgeport, CT 06604 For the Creditor, JAY MARSHALL WOLMAN, ESQ. Logan Cheng: Randazza Legal Group, PLLC 100 Pearl Street, 14th Floor Hartford, CT 06103

| | 3 | |----|--------------------------------------------------------------| | 1 | (Proceedings commenced at 10:02 a.m.) | | 2 | THE CLERK: Case No. 22-50073, Ho Wan Kwok. | | 3 | THE COURT: Okay. Good morning. If we could have | | 4 | appearances for the record, please, starting with the | | 5 | debtor's counsel. | | 6 | MR. BALDIGA: Good morning, Your Honor. William | | 7 | Baldiga, Brown Rudnick, for the debtor. | | 8 | THE COURT: Good morning. | | 9 | Counsel for PAX, please. | | 10 | MR. FRIEDMAN: Good morning, Your Honor. Peter | | 11 | Friedman, from O'Melveny & Meyers, on behalf of Pacific | | 12 | Alliance Group. I see Mr. Sarnoff and Mr. Birney, of the | | 13 | Robinson & Cole firm as well this morning, on behalf of PAX. | | 14 | THE COURT: Good morning. | | 15 | Counsel for the creditors committee? | | 16 | MR. GOLDMAN: Good morning, Your Honor. Irve | | 17 | Goldman, Pullman & Comley, representing the creditors | | 18 | committee. | | 19 | THE COURT: Good morning. | | 20 | Counsel for Rui Ma? | | 21 | MS. MAYHEW: Good morning, Your Honor. Kristen | | 22 | Mayhew, McElroy Deutsch Mulvaney & Carpenter, on behalf of | | 23 | creditors Rui Ma, Zheng Wu and Weican Meng. | | 24 | THE COURT: Good morning. | | 25 | The Office of the United States Trustee? | | | |

| 253 | |-----| |-----|

MS. CLAIBORN: Good morning, Your Honor. Holley Claiborn for the U.S. Trustee. And also with me this morning is the Chapter 11 trustee candidate, Attorney Luc Despins. THE COURT: Good morning. Good morning to both of you. MR. DESPINS: Good morning, Your Honor. THE COURT: Okay. I also see counsel for HK International. MR. KINDSETH: Yes, Your Honor. Good morning. Stephen Kindseth, Zeisler & Zeisler, for HK International Funds Investments. THE COURT: Good morning. And Attorney Wolman? I see you today -- MR. WOLMAN: Good morning, Your Honor. THE COURT: -- so I didn't forget to say hello. But I often -- for some times the screen cuts you off for some reason, but I see you this morning. So go right ahead. MR. WOLMAN: Thank you, Your Honor. Good morning. This is Jay Wolman, of Randazza Legal Group, for creditor Logan Cheng. THE COURT: Good morning. So I think that's everyone that has -- everyone that I see, anyway, has noted their appearance. Is that correct?

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| 1 | (No audible response.) | |----|----------------------------------------------------------------| | 2 | THE COURT: Okay. So we'll proceed with this | | 3 | hearing this morning on the United States Trustee's motion | | 4 | -- application for the order approving the United States | | 5 | Trustee's appointment of a Chapter 11 trustee. | | 6 | Attorney Claiborn, you -- please proceed. | | 7 | MS. CLAIBORN: Thank you, Your Honor. Good | | 8 | morning. | | 9 | Before the Court this morning is the United States | | 10 | Trustee's application for an order approving the appointment | | 11 | of Mr. Despins as the Chapter 11 trustee. Mr. Despins has a | | 12 | significant Chapter 11 history practice in his firm and in | | 13 | his past. He's been a member of the bar for over 30 years. | | 14 | And the U.S. Trustee has attached to the | | 15 | application a declaration of disinterestedness, which sets | | 16 | forth his connections and his contacts with various parties | | 17 | in this case, and with creditors and with the debtor. | | 18 | And based upon that the U.S. Trustee's requested | | 19 | the Court approve the application this morning. | | 20 | I do, however, want to bring to the Court's | | 21 | attention that this morning we learned there are some | | 22 | additional disclosures that need to be made and will be made | | 23 | by Attorney Despins as to connections with entities that are | | 24 | connected to, we believe, PAX. | | 25 | And Mr. Despins can put a finer point on that and |

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address the Court and explain. And, again, that will be followed by a supplemental disclosure that will be filed with the Court as soon as possible in the hope that that is within a matter of just a day or two. So, with that, Your Honor, if I could ask Mr. Despins to address the Court about the supplemental disclosures that are not yet before the Court in writing? THE COURT: Yes, please. Go right ahead. MR. DESPINS: Good morning, Your Honor. As I stated in paragraph 11 of my declaration, I said that to the extent we learned of new connections that were not known to us at the time I submitted the declaration, we would update our disclosure statement and I will do that in writing. But I wanted to make sure today that I mentioned to the Court that we discovered last night that we have in the past represented entities that have -- that are -- have the acronym PAG in them, P-A-G. Unbeknownst to our conflict system, PAG means Pacific Asia Group. And those entities -- and, again, as I said, these are representations that were completed, but these entities are unrelated to the Kwok matter in any way. However, PAX is probably managed by a similar or a PAG entity of some kind. We're trying to figure out exactly which one.

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But it doesn't change anything from our point of view in a sense that we still believe we're disinterested, we can be adverse to PAX, not that we are seeking that, but we're -- we can be adverse to PAX. And, therefore, it doesn't change the declaration. But given that these P-A-G entities are somehow related to PAX, I wanted to bring that to the attention of the Court early on this morning. And I did, by the way, not only with the U.S. Trustee, but I mentioned this to Mr. Friedman, you know, around 8:45 this morning. THE COURT: Okay. Thank you. And when you say we, you're speaking of the firm of Paul Hastings? MR. DESPINS: Yes. Yes. Yes. Yes. But personally, I've never had any representation of PAG. I didn't even know it existed frankly until last night. THE COURT: Understood. Understood, obviously, with the firm having offices in different areas of the world. That's why I was asking when you said we, you mean Paul Hastings, not you individually? MR. DESPINS: That's correct, Your Honor. THE COURT: Okay. Thank you. I see a gentleman. Mr. Bassett, are you a counsel in this case? I don't recognize you and I'm sorry if I should, but I don't.

MR. BASSETT: Your Honor, I'm with Paul Hastings. THE COURT: Okay. MR. BASSETT: I would be serving as counsel to Mr. Despins in his capacity as trustee. THE COURT: Okay. Well, Mr. Despins, I don't think you need to file an appearance because you're the Chapter 11 trustee. If Mr. Bassett and/or your firm is going to be proposed to be counsel to you, acting as the Chapter 11 trustee, as you know, you'll have to file an application. And Mr. Bassett and any other members of Paul Hastings will have to file notices of appearance and/or pro hac motions, depending upon whether they're admitted to the District Court of Connecticut. And you'll take care of that. MR. DESPINS: Yes. THE COURT: So that's why I didn't recognize Mr. Bassett. You haven't been involved in any of the other hearings. So that's -- I'm glad at least that it was -- that I was correct that I hadn't seen you before. But in any event, with regard to the United States Trustee's application to -- for an order approving the appointment of a Chapter 11 trustee, does any party wish to be heard? MR. FRIEDMAN: Your Honor, it's Peter Friedman Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 13 of

from O'Melveny. We don't have an issue directly with Mr. Despins. We just -- Mr. Despins just mentioned he disclosed at 8:45 this morning that his firm had had some involvement with the parent of our client, which I think is actually -- the correct terminology for that is Pacific Alliance Group, which is slightly different than our fund, Pacific Asia Opportunity Fund, but we do obviously need to consult with our client as to the nature of the relationship. I don't -- I'm not saying that there is an issue. It is midnight or 10 p.m. in Hong Kong already, which is where our client is located. And to the extent that our client needs to look at any files -- I don't know if that's doable over the weekend -- but I think that might be a Paul Hastings issue as opposed to a trustee issue. But this is a, you know, a late-breaking development. And I guess that I can't say it's a concern, but I do think it's important to mention to the Court in this context that, you know, it's just something that we'll have to look at in the context of a retention of Paul Hastings. And, you know, Your Honor, I think, just as I said at every hearing we will be constructive. We will work closely with Mr. Despins, who I have encountered over the years in other Chapter 11 cases.

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I have high respect for Mr. Despins. He was counsel to the creditors committee in Puerto Rico where I represented the debtor. So I've been adverse to him and on the same side of the (indiscernible) over the last five years. You know, we are concerned about expense. We will do everything we can. And we hope everything can be done by Mr. Despins and Paul Hastings to -- you know, especially in light of the circumstances of this debtor having a very limited available -- readily available fund. We really hope that there will be, you know, as much cost efficiency as possible given the size of the estate at current. And, you know, with those comments, we look forward to hopefully a successful trustee appointment. And if there are issues relating to past retention or employment of Paul Hastings by our client, we will obviously have to address those in the future. THE COURT: Okay. Thank you, Attorney Friedman. Does anyone else wish to be heard? MR. GOLDMAN: Your Honor, Irve Goldman for the committee. This is the first time I'm hearing about this additional disclosure. I would have the same caveat as Mr. Friedman and would hope that he would share his diligence with the committee so we can take a closer look and evaluate

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this additional connection. We're not looking to upset this appointment, but just with the same ideas Mr. Friedman articulated, we'd just want to consider it further. THE COURT: Well, do you agree that it's an issue with regard -- as Attorney Friedman said -- that it would be an issue with regard to the retention of Paul Hastings as counsel versus Mr. Despins as Chapter 11 trustee? MR. GOLDMAN: Yes, I do. He's made it clear that he had no connection, wasn't even aware of the existence of this entity. So with that, I agree it's an retention issue. THE COURT: Okay. Thank you. Does anyone else wish to be heard? MR. BALDIGA: Yes, Your Honor. William Baldiga, Brown Rudnick, for the debtor. THE COURT: Go right ahead. MR. BALDIGA: We have the same qualification concern. We share Brown Rudnick's great respect for Paul Hastings, and Mr. Despins more specifically, but we will need to understand the new disclosures exactly given that PAG is the business behind the fund which is PAX. And PAX is obviously the largest creditor by far of the estate. So I think we all need to understand that. THE COURT: Do you, Mr. Baldiga, agree with what

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| | 12 | |----|----------------------------------------------------------------| | 1 | -- the question I just asked Attorney Goldman? | | 2 | Then is your concern more with regard to Paul | | 3 | Hastings being retained as counsel and not with Mr. Despins | | 4 | serving as the Chapter 11 trustee? Or do you have a concern | | 5 | even with Mr. Despins serving as the Chapter 11 trustee? | | 6 | MR. BALDIGA: I don't know yet. I think -- I'm | | 7 | not sure we're going to have -- going to have any concerns. | | 8 | But to the extent we do, I think it's premature to assess | | 9 | what those would be exactly until we see the disclosure and | | 10 | have an opportunity to talk to the client about that. | | 11 | THE COURT: And that's fine, because the | | 12 | bankruptcy code has provisions with regard to if someone | | 13 | thought that the trustee as appointed should no longer serve | | 14 | as the trustee. So I don't -- I do not see an impediment to | | 15 | the appointment of Mr. Despins as the Chapter 11 trustee | | 16 | today unless someone wants to persuade me otherwise. | | 17 | MR. BALDIGA: We just haven't seen anything, so we | | 18 | -- it's hard to do a persuasive argument, Your Honor, with | | 19 | just finding out about this during the course of the | | 20 | hearing. | | 21 | THE COURT: I understand. I do understand what | | 22 | you're saying. | | 23 | But I'm talking about right now, today, the only | | 24 | thing before the Court is the appointment of Mr. Despins as | | 25 | the Chapter 11 trustee. | | | |

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And no one has put forth any reason at this point as to why that should not occur. And if it occurs and then you find some reason, then you have remedies under the bankruptcy code to address those reasons. We're not going to wait any longer for the appointment of a Chapter 11 trustee. I mean, the decision was issued on June 15th. It's July 8th. My understanding -- and maybe that's why Attorney Kindseth is here today -- is that the yacht is in Bridgeport Steelpointe Harbor. So the Lady May is here. It arrived on the 6th at night is my understanding. So there's plenty for Mr. Despins to do as soon as an order enters. And I don't see any reason for delay. So unless someone has some other concern or argument that they want to advance about Mr. Despins being the Chapter 11 trustee, then I'm going to grant the United States Trustee's application and enter an order approving the appointment of Mr. Despins as the Chapter 11 trustee in this case. So I'm giving everyone one last opportunity to tell me why I should not do that. MR. BALDIGA: Your Honor, William Baldiga again. We have nothing further to add other than what I already said. THE COURT: Okay. Thank you.

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| | 14 | |----|--------------------------------------------------------------| | 1 | MR. BALDIGA: And that's just we don't have the | | 2 | disclosure to make a final decision on that. | | 3 | THE COURT: Okay. Thank you. | | 4 | Anyone else wish to be heard? | | 5 | (No audible response.) | | 6 | THE COURT: All right. Then, Mr. Despins, I know | | 7 | you will continue to review the issues that you've already | | 8 | discussed on the record and that you've already set forth in | | 9 | your affidavit. Whenever you have an opportunity in the | | 10 | next -- you know, soon to make further disclosures, please | | 11 | do. | | 12 | But as of now, as of 10:19 a.m., on July 8th, the | | 13 | Court is ordering that the application of the U.S. Trustee | | 14 | is granted and that you're appointed as the -- you will be | | 15 | serving as the Chapter 11 trustee in this case. And I | | 16 | appreciate your willingness to do so. | | 17 | As I noted for the record, and, Attorney Kindseth, | | 18 | you should correct me if I'm wrong, but one of the -- I | | 19 | don't know what you've looked at, if anything, Mr. Despins, | | 20 | yet, but one of the issues in this case that's now almost | | 21 | five months old, but not quite, was the debtor's pledge of a | | 22 | -- of this yacht, the Lady May, to a plan, which of course | | 23 | is not on track at the moment. But there was also an | | 24 | agreement that the Lady May would be brought back into the | | 25 | navigable waters of Connecticut. |

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And my understanding is that occurred on July -- I suppose I could go outside and go look quite frankly. It's not that far away -- on July 6th. And that is -- that was an issue of contention among the parties, both before this Chapter 11 case was filed and after the Chapter 11 case was filed. So there seems to me, in addition to the yacht, the Lady May, other issues that there are plenty of things that you could become -- that you could become involved in fairly quickly, if not immediately, in this matter. MR. DESPINS: Yes, Your Honor. We are aware of the situation. In fact, we have already contacted counsel that were parties to the stipulation, docket number 299, that Your Honor entered a while ago, and I've asked them to consent to the trustee having the same rights as PAX and the official committee under that stipulation. We received some response that request but notfrom everyone, so we expect to obviously -- to us it's a no brainer that that needs to happen. But we expect to be back in front of the Court to modify the stipulation to ensure that the trustee has exactly the same rights as PAX or the official committee. Thank you, Your Honor. THE COURT: Thank you. MR. FRIEDMAN: Your Honor, on the record -- it's

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Peter Friedman on behalf of PAX -- THE COURT: Yes. MR. FRIEDMAN: -- we consent to that. We consent to that request. THE COURT: Okay. Thank you. And I would note that there are, Mr. Despins, other provisions of that stipulation that I believe anyway, but I don't have it in front of me, and you're all the lawyers so you will figure it out, but that still need to be -- there still needs to be compliance with other provisions in that stipulation once the boat was returned to the navigable waters. So there are other issues that still need to be addressed in that stipulation now that the yacht is back in the navigable waters of Connecticut. So in any event, to let you all know, Monday, Tuesday and Wednesday of next week, I have to attend required meetings. But if there is a need for a hearing, I could -- I could have one at some point during any of those three days at some time, but I will be remote, as will you. But once we get over this hurdle of the next few days, then, you know, our hearings are going to be in person for the most part. This is a case where we need to make sure that we're all on the same page. And while I truly agree that remote hearings serve

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| | 17 | |----|--------------------------------------------------------------| | 1 | a very valuable purpose and can be very helpful, given what | | 2 | has occurred in this case, we're going to be coming together | | 3 | in person. Okay? | | 4 | So, I mean, there may be a situation if we're | | 5 | having a five-minute discussion that we could turn to | | 6 | remote, but I would like everyone to understand that we are | | 7 | going to be here in person. Okay? | | 8 | MR. DESPINS: Yes, Your Honor. | | 9 | THE COURT: All right. Is there anything further | | 10 | we should address today? | | 11 | Attorney Claiborn, your order approving | | 12 | appointment of Chapter 11 trustee that was attached to the | | 13 | application, I actually -- I would like to change it to an | | 14 | order granting the appointment and that's what I'm going to | | 15 | do. Otherwise, the proposed order is fine with me. | | 16 | Are there any other changes that anyone else | | 17 | wanted to make to the order, Attorney Claiborn, that you're | | 18 | aware of? | | 19 | MS. CLAIBORN: No, Your Honor. | | 20 | THE COURT: Anyone else wish to be heard on the | | 21 | proposed order that Attorney -- | | 22 | Oh, the only thing, Attorney Claiborn, that -- the | | 23 | amount of the bond, that may have to change during the | | 24 | course of this case I would assume. | | 25 | MS. CLAIBORN: It is a fluid issue, Your Honor. | | | |

THE COURT: Okay. MS. CLAIBORN: And that is just a starting point for the cash that we know that will be coming to Mr. Despins hopefully in short order from the debtor. But it will have to be adjusted upward in the event that there is money that comes to the estate that Mr. Despins is responsible for. THE COURT: Great. I just -- I mean, your order does say that, but I wanted to be clear on that, that I would anticipate that there would have to be a change in the amount of the bond during the case. Okay? MS. CLAIBORN: Yes, Your Honor. MR. KINDSETH: Your Honor, would you like an update on the Lady May? THE COURT: Sure. MR. KINDSETH: Thank you very much. So as Your Honor noted, the Lady May returned to Connecticut, specifically to Bridgeport, on July 6th. In the week prior -- a week or two prior -- I reached out to counsel for the creditors committee and counsel for PAX, concerning the inspection that they are entitled to conduct. Just to remind Your Honor, the other elements of the stipulation are that the captain and the yacht management company are served with this court's order, they signed a declaration attesting to certain items that are set

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forth in the stipulation, and that this court provides for repair reserves to fund the remaining repairs to the Lady May. All the repairs were done except for the -- to my knowledge -- the replacement of the sea inlet valves. We're in the process of obtaining two estimates for the cost of that, which would guide us with respect to proposing a repair reserve. We are also in touch, as I said, with counsel for PAX and the creditors committee to coordinate their inspection. So hopefully their inspection will take place next week. We're hoping that we can have a joint proposed motion approving the repair reserve. Once the repair reserve is put in place, I can then file the certification that each of the elements of the stipulation that my client is obligated to perform has been performed. The various other parties would then have 15 days from the filing of that certification to object. I spoke to the then proposed trustee, the now trustee, Mr. Despins, this morning and expressed tentatively my client's understanding and agreement that he would be having the same rights and obligations and really a party to the stipulation. Our hope is that we would be drafting a proposed stipulated modification to the existing order simply having

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Mr. Despins as an additional party to the existing stipulation. And so that's the status of the Lady May. THE COURT: Thank you. The other provision that I believe you didn't -- you did not mention with regard to the stipulation was that the captain and the -- I don't remember what the other name -- whether it was a harbor master, whomever, would also be restrained, agreed to be restrained, from removing the boat from the navigable waters of Connecticut once it arrived. MR. KINDSETH: That's one of the elements of the declaration, yes. THE COURT: Okay. MR. KINDSETH: The declaration has multiple elements, one of which is that they understand they're restrained from removing the yacht from the navigable waters of Connecticut. THE COURT: I just -- I think that's an important provision to note for especially Mr. Despins who's just become involved so that he's aware of that. MR. KINDSETH: Agreed. THE COURT: Okay? All right. Anything further that we need to address today in the Kwok matter? MS. CLAIBORN: No, Your Honor. THE COURT: All right. Then the United States

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 26 of 253 | |----|------------------------------------------------------------------------------------------------| | | 21 | | 1 | Trustee's application for an order approving the appointment | | 2 | of a Chapter 11 trustee is granted and the proposed order | | 3 | will enter. | | 4 | MS. CLAIBORN: Thank you, Your Honor. | | 5 | THE COURT: All right. Thank you, all. | | 6 | MR. DESPINS: Thank you, Your Honor. | | 7 | THE COURT: And that is the last matter on the | | 8 | calendar this morning, so court is adjourned. | | 9 | (Proceedings concluded at 10:28 a.m.) | | 10 | I, CHRISTINE FIORE, court-approved transcriber and | | 11 | certified electronic reporter and transcriber, certify that | | 12 | the foregoing is a correct transcript from the official | | 13 | electronic sound recording of the proceedings in the above | | 14 | entitled matter. | | 15 | | | 16 | | | 17 | July 13, 2022 | | 18 | Christine Fiore, CERT | | 19 | Transcriber | | 20 | | | 21 | | | 22 | | | 23 | | | 24 | | | 25 | | | | |

# **EXHIBIT 02**

Transcript of July 21, 2022 Status Conference

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| | UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION | |----------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------| | In Re | * Case No. 22-50073 (JAM) | | HO WAN KWOK, | * * Bridgeport, Connecticut * July 21, 2022 | | Debtor. | * * | | * * * * * * * * * * * * * * * * | | | | TRANSCRIPT OF STATUS CONFERENCE BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE | | APPEARANCES: | | | For the Debtor: | DYLAN P. KLETTER, ESQ. Brown Rudnick, LLP 185 Asylum Street Hartford, CT 06103 | | | ERIC HENZY, ESQ. AARON ROMNEY, ESQ. Zeisler & Zeisler 10 Middle Street, 15th Floor Bridgeport, CT 06604 | | For HK International Funds Investments (USA) Limited, LLC: | STEPHEN M. KINDSETH, ESQ. Zeisler & Zeisler 10 Middle Street, 15th Floor Bridgeport, CT 06604 | | For the Creditor, Pacific Alliance Asia Opportunity Fund, L.P.: | PETER FRIEDMAN, ESQ. STUART M. SARNOFF, ESQ. O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, NY 10036 | | produced by transcription service. | Proceedings recorded by electronic sound recording, transcript | | Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992 | |

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APPEARANCES Cont'd: For the Creditor, Pacific PATRICK M. BIRNEY, ESQ. Asia Alliance Opportunity Robinson & Cole LLP Fund, L.P.: 280 Trumbull Street Hartford, CT 06103 For the Creditors Committee: IRVE GOLDMAN, ESQ. Pullman & Comley 850 Main Street, 8th Floor Bridgeport, CT 06604 For the Creditor, Rui Ma, KRISTEN MAYHEW, ESQ. Zheng Wu and Weican Meng: McElroy Deutsch Mulvaney & Carpenter 30 Jeliff Lane Southport, CT 06890 CAROLLYNN H.G. CALLARI, ESQ. Law firm of Callari Partners One Rockefeller Plaza, 10th Fl. New York, NY 10020 Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings, LLP 200 Park Avenue New York, NY 10166 For the Chapter 11 Trustee: DOUGLAS S. SKALKA, ESQ. PATRICK R. LINSEY, ESQ. Neubert, Pepe & Monteith, P.C. 195 Church Street, 13th Floor New Haven, CT 06510 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

Ho Wan Kwok - July 21, 2022 3 (Proceedings commenced at 10:06 a.m.) THE COURTROOM DEPUTY: Case No. 22-50073, Ho Wan Kwok. THE COURT: Good morning. If we could have appearances for the record starting with the debtor's counsel, please. MR. HENZY: Your Honor, for Ho Wan Kwok, Eric Henzy, of Zeisler & Zeisler. THE COURT: Hold on just one second. Where's Mr. Baldiga or someone from -- MR. KLETTER: Hi. Good morning. Dylan Kletter, from Brown Rudnick, here to deal with the motion to withdraw as counsel. THE COURT: Okay. Okay. And who else? I'm sorry, sir. Go ahead. MR. ROMNEY: Aaron Romney, Zeisler & Zeisler, also for the debtor, Your Honor. THE COURT: Okay. Thank you. MR. KINDSETH: And Stephen Kindseth for the debtor, Ho Wan Kwok. THE COURT: Okay. Thank you. Go right ahead, Counsel. MR. DESPINS: Good morning, Your Honor. Nice to meet you in person. Luc Despins, Chapter 11 Trustee. THE COURT: Good morning, Mr. Despins. I'm sorry. Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 30 of

Ho Wan Kwok - July 21, 2022 4 We only did see each other on Zoom, so I didn't meet you in person before today, so welcome. MR. SKALKA: Good morning, Your Honor. Douglas Skalka, of Newbury, Pepi and Monteith, as proposed local counsel for the Chapter 11 trustee. THE COURTROOM DEPUTY: Attorney Skalka, I cannot hear you. MR. SKALKA: I am sorry. THE COURT: That's okay. If you could say that again, please. MR. SKALKA: Yes, Your Honor. Douglas Skalka, Neubert, Pepe & Monteith, as proposed local counsel for the Chapter 11 trustee. MR. LINSEY: And Patrick Linsey, also Neubert, Pepe & Monteith, local counsel for the trustee, Your Honor. Good morning. THE COURT: Good morning. MR. SKALKA: Good morning. MS. CLAIBORN: Good morning. Holley Claiborn for the U.S. Trustee. THE COURT: Good morning. MR. FRIEDMAN: Good morning, Your Honor. Peter Friedman, from O'Melveny & Meyers, on behalf of Pacific Alliance Group. THE CLERK: I'm sorry, Attorney Friedman, I can't Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 31 of

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Ho Wan Kwok - July 21, 2022 5 hear you. MR. FRIEDMAN: I'm sorry. THE COURT: It's kind of hard because we only have a few microphones and we have a lot of people. So, I'm sorry. MR. FRIEDMAN: Good morning, Your Honor. It's Peter Friedman, from O'Melveny & Meyers, on behalf of Pacific Asia Alliance. I'm joined by Mr. Sarnoff. THE COURT: Good morning. MR. FRIEDMAN: And Mr. Birney from the Robinson & Cole firm, our Connecticut counsel, is also here. THE COURT: Good morning. MR. GOLDMAN: Good morning, Your Honor. Irve Goldman, Pullman & Comley, representing the creditors committee. THE COURT: Good morning. MS. MAYHEW: Good morning, Your Honor. Kristen Mayhew, McElroy Deutsch Mulvaney & Carpenter, on behalf of creditors Rui Ma, Zheng Wu and Weican Meng. And with me is co-counsel Carollyn Callari. THE COURT: Good morning to both of you. Okay. The Court scheduled a status conference today in accordance with the memorandum of decision denying the motion to dismiss without prejudice and appointing a Chapter 11 trustee.

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| | 253 | |----|--------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 6 | | 1 | That memorandum of decision indicated that within | | 2 | 14 days of the appointment of a Chapter 11 trustee that a | | 3 | status conference would be held so that the Chapter 11 | | 4 | trustee could report to the Court on where things stand from | | 5 | the Chapter 11 trustee's perspective and to also talk about | | 6 | specific issues that the Chapter 11 trustee may be | | 7 | addressing, reviewing, analyzing and to give the Court some | | 8 | idea of where you think, Mr. Despins, we're heading with | | 9 | regard to this case. | | 10 | I also set the status conference because there was | | 11 | a flurry of papers filed after the appointment that -- the | | 12 | order appointing you, Mr. Despins, about your firm's | | 13 | application -- your application to employ your firm, Paul | | 14 | Hastings, and then also the motion to withdraw attorney | | 15 | filed by Brown Rudnick, which was filed after the order | | 16 | entered appointing Mr. Despins. | | 17 | So I would like to hear from you, Mr. Despins, | | 18 | first about the status of what you've been able to do, what | | 19 | you would -- what you're intending to do, what the next | | 20 | steps might in this case. | | 21 | We will address the application insofar as to | | 22 | discuss at least the application to employ your firm. | | 23 | And then we will discuss the motion to withdraw as | | 24 | counsel -- the debtor's counsel who's been involved in the | | 25 | case since the beginning, Brown Rudnick. Okay? | | | |

Ho Wan Kwok - July 21, 2022 7 So, Mr. Despins, if you would proceed, please. MR. DESPINS: Thank you, Your Honor. THE COURT: And if you'd like to come forward. And the other thing, Mr. Despins, if you -- if you want at any time, if it would be helpful to you at any time, for the Court to pull up any pleadings that you need to look at, you can just let us know and the courtroom deputy can do that for you. MR. DESPINS: Thank you, Your Honor. So we have a presentation for the Court. THE COURT: Please. MR. DESPINS: I expect that it would take no more than 15 minutes, but we have a visual aid, meaning that -- in written form -- THE COURT: Okay. MR. DESPINS: -- that would help the Court in following the presentation. So if we could, distribute -- we have copies for everyone in the courtroom and for -- THE COURT: Sure. That would be great if you would do that. And then we can -- we can mark the presentation as Trustee Exhibit 1. (Trustee written presentation copy marked Trustee Exhibit 1.) MR. DESPINS: Yeah. I want to be clear, this is not evidence. It's just a work plan -- Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 34 of

| Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 35 of 253 | |------------------------------------------------------------------------------------------------| | Ho Wan Kwok - July 21, 2022 8 | | THE COURT: Understood. | | MR. DESPINS: Okay. | | THE COURT: It's just demonstrative, but it's | | something that will help the Court, and we can put it in the | | record. Okay? | | MR. DESPINS: Absolutely, Your Honor. | | And if -- Your Honor, would you like us to file it | | as well? | | THE COURT: No. It's all right. | | MR. DESPINS: Okay. | | THE COURT: We can take care of that. Thank you. | | MR. DESPINS: Thank you. Thank you, Your Honor. | | Okay. So I -- first of all, thank you, Your Honor, for | | hearing from us on this matter. | | So I will start with -- on page 2 with | | administrative matters. And some of this stuff, Your Honor, | | is fairly routine and boring so I will not spend a lot of | | time on it. You know it already. | | But just to confirm, we posted the bond for | | \$25,000. We opened the bank account, that's item number | | two. Number three is just a reminder that there were three | | Section 341 meetings on March 21st, on April 6th, but they | | were not completed, so another one needs to be scheduled by | | the U.S. Trustee. So I wanted you to be aware of that. | | THE COURT: Thank you. | | |

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Ho Wan Kwok - July 21, 2022 9 MR. DESPINS: And then still in this list of matters, the monthly operating reports, there are two reports that are still due by the debtor prior to our appointment and, therefore, these need -- I don't know if it goes to the Brown Rudnick motion to be recused or somebody else is going to pick that up, but this needs to be done. And that's listed on page 2.

I just want to point out though at the bottom of page 2 is the monthly operating reports, this is in bold there, reflect that a third party has made disbursements for the benefit of the debtor in amounts that averages approximately 115,000 per month. I think that's an important data point.

Next page, Your Honor, bar date. There was a lot of back and forth on a bar date. And I know you were considering at that time the dismissal of the case so it made no sense to enter an order for a bar date when the case might be dismissed, but at this point the case is not being dismissed and I think the bar date order should be entered.

I think you have the revised -- I'm told that you have a revised version and we would encourage the Court to enter the order because we need to know who's out there, especially in terms of governmental entity, we need to understand that. So that's the bar date order.

Under item number six, that's the update on the

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| | 253 | |----|---------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 10 | | 1 | Lady May inspection. So there was an inspection, Your | | 2 | Honor, on July 13th with PAX's expert and an expert I hired | | 3 | to basically oversee PAX's expert. So let me explain this. | | 4 | Obviously, we have no money and the estate has | | 5 | zero dollars. And PAX was doing its own review with a very | | 6 | reputable expert and they're paying for that and we | | 7 | appreciate that. | | 8 | However, given the dynamic of this case, I could | | 9 | not go to the inspection and say I'm relying on PAX's expert | | 10 | alone, even though directionally we're aligned in the same | | 11 | direction in the sense that both we and PAX want to know if | | 12 | this yacht has problems or not. | | 13 | So what I did is I hired Mr. Paul Derecktor, who | | 14 | is a -- I don't know if Your Honor is aware of this -- | | 15 | THE COURT: Yes. | | 16 | MR. DESPINS: -- that company was in -- | | 17 | THE COURT: I am aware. | | 18 | MR. DESPINS: Were you -- | | 19 | THE COURT: I mean, once you said the name. I | | 20 | didn't know you hired that person, but I -- I'm aware of the | | 21 | company. | | 22 | MR. DESPINS: I don't know. Were you the judge on | | 23 | that case? | | 24 | THE COURT: No. | | 25 | MR. DESPINS: Okay. | | | |

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| | 253 | |----|---------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 11 | | 1 | THE COURT: No, I was not. | | 2 | MR. DESPINS: Okay. So he's a -- he has a | | 3 | shipyard in the area. He really knows boats. But he agreed | | 4 | to look over the shoulder of PAX's expert for the sum of | | 5 | \$2,500. I figured that that was a modest sum to invest just | | 6 | to make sure nobody would criticize us relying entirely on | | 7 | PAX's expert. So we've done that. | | 8 | There are still discussions that need to happen, | | 9 | and let me tell you the nature of these discussions. | | 10 | Basically, what Mr. Derecktor has told me is, he, | | 11 | said, look, anybody buying a ship of this size would | | 12 | actually take it off -- out of the water to inspect the | | 13 | hull. And I said, well, how much does that cost? Oh, | | 14 | \$400,000. Forget about that. We can't do that. Is there a | | 15 | plan B? | | 16 | He said, well, you could send divers to go | | 17 | underneath and inspect the hull because the ship came back | | 18 | from Europe and often in the ocean you hit, you know, all | | 19 | sorts of things, potentially. And that would cost \$2,500, | | 20 | the divers. So we were having discussions with PAX as to | | 21 | does that make sense to do that. | | 22 | And the second thing he mentioned is that we | | 23 | should really do a sea trial. And at first I thought we're | | 24 | not going to take the ship out at sea. He said, no, just | | 25 | basically it's like -- it's like for a car. Take it out for | | | |

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 39 of 253 | |----|------------------------------------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 12 | | 1 | a spin for half an hour just to make sure -- | | 2 | THE COURT: I'm familiar with a sea trial. | | 3 | MR. DESPINS: Okay. I was not. And so that's | | 4 | still being considered, Your Honor. | | 5 | So at this stage we need to get together with | | 6 | PAX's expert to combine our common views and go back to the | | 7 | entity that's the registered ship owner. So that's the | | 8 | status of the inspection at this time, Your Honor. | | 9 | But it was obvious, you know I'm not a ship | | 10 | expert, that there's damage to the boat because you could | | 11 | see when you just walked by it there's a, you know, a | | 12 | portion of the front of the boat that was hit by something. | | 13 | But, anyway, we'll -- that's proceeding. | | 14 | Still, on the list of matters, you know, page 4, | | 15 | automatic stay letters. I directed my firm to send more | | 16 | than 20 letters to various parties that are at the periphery | | 17 | of this case. | | 18 | So, for example, an entity called Golden Spring | | 19 | New York, which Your Honor may recall has been providing | | 20 | some of the funding in some situations. I'm not | | 21 | -- I don't want to go into the details, but they're clearly | | 22 | within the universe of debtor related companies. | | 23 | And then Bravo Luck, that's the entity that | | 24 | allegedly has a trust agreement that provides that they own | | 25 | the Sherry Netherland apartment. |

Ho Wan Kwok - July 21, 2022 13 So they're all listed there. Well, some of them are listed there. But we also sent the same thing to Brown Rudnick, which was acknowledged by them, and a firm in Greenwich, Connecticut, Whitman Breed. That was actually very interesting because I received permission from the person who sold the house to the debtor to get access to the closing statements, the wire transfers, et cetera. But when I called Whitman Breed, there's all we can't give that to you because we're representing the debtor on other matters. I said, well, what does that have to do with anything? You didn't represent them in the sale, did you? No. But we're not going to give you any documents. So that means they are representing the debtor on other matters. And obviously we want them to preserve those documents and us to get access to that. So there were a number of these letters that were sent, this is since our appointment, probably 20 of those. Page 5, still (indiscernible) matters. Just so Your Honor knows, reaching out to key parties, obviously, we started with the debtor. So on the first day after the appointment, I called Brown Rudnick and I said -- and by the way, I'm not going to reveal any settlement discussion other than to say Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 40 of

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| | 253 | |----|------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 14 | | 1 | that my first approach was to reach out to them and say why | | 2 | don't we have a meeting to see if there's a global | | 3 | settlement that could be done before we get into this very | | 4 | expensive and very extensive process, and the next thing I | | 5 | heard after that is that they were no longer counsel to Mr. | | 6 | -- to the debtor. | | 7 | But I want to make sure the approach -- our | | 8 | approach is we don't have to spend money on this if we don't | | 9 | -- if we don't have to. I know it's going to be really | | 10 | expensive if we have to go to all these jurisdictions | | 11 | because there are a bunch of jurisdictions involved. | | 12 | But we wanted to see if there was a number at | | 13 | which there could be a global settlement and that didn't -- | | 14 | at least, to date, has not panned out. | | 15 | So we reached out to counsel for the debtor. We | | 16 | reached out obviously to Mr. Goldman, counsel to the | | 17 | committee, who has given us very good advice on the case and | | 18 | all that. Same with Pacific Alliance, Mr. Friedman. | | 19 | We reached out to counsel to Genever Holdings, | | 20 | that's the Chapter 11 entity, Your Honor. Another | | 21 | interesting conversation because I asked him who do you take | | 22 | direction from in that case?. He said, oh, Miles. I didn't | | 23 | know that was the way he used names -- he's known. So I | | 24 | said, who's Miles? He said, oh, that's the Chapter 11 | | 25 | debtor. | | | |

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| | 253 | |----|-----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 15 | | 1 | So he's taking direction in that case from this | | 2 | debtor. So I said, well, I'm the Chapter 11 trustee now. | | 3 | So he said, well, I guess I'm taking directions from you. I | | 4 | said, well, we'll -- you know, to be continued. | | 5 | But, you know, I'll come back to that later, but | | 6 | there's a lot of things to be discussed about that issue. | | 7 | But I'll come back to it in a second. So we reached out to | | 8 | him. | | 9 | We also reached out to former Judge Cyganowski who | | 10 | was the court-appointed sales agent in that case. And I | | 11 | want it to be clear -- and I'll cover that later -- the | | 12 | trustee is not taking the position that the sale should be | | 13 | halted. So that's not part of our game plan. But I wanted | | 14 | to reach out to her to introduce myself and also to get | | 15 | feedback on what's happening with the property. And she did | | 16 | tell me, by the way, that the debtor is occupying that | | 17 | property, the Sherry-Netherland in New York. | | 18 | Then counsel to creditors. Rui Ma and Zheng Wu | | 19 | and, Carollyn Callari, obviously, we reached out to her as | | 20 | one of the important constituency. | | 21 | Since the failed attempt with Brown Rudnick, we've | | 22 | asked new debtor's counsel to have a meeting with the | | 23 | debtor, not necessarily to discuss settlement, but because | | 24 | we need to have a serious discussion with the debtor to make | | 25 | sure the debtor understands the regime he's operating under | | | |

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| | 253 | |----|---------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 16 | | 1 | now. And we've asked for that last Friday. We haven't | | 2 | heard back a response to date. Maybe we will soon. | | 3 | Next, Your Honor, still on page -- now at page 6, | | 4 | still administrative matters, management of pending | | 5 | adversary proceedings. | | 6 | So there are a number of adversary proceedings, | | 7 | Your Honor. Most of them relate to non-dischargeability. | | 8 | And I want to be clear, because we approached the debtor to | | 9 | say, hey, we would like to -- I'm not sure -- it's not | | 10 | informal intervention, we would like a stay of these | | 11 | proceedings. And the initial reaction, well, it's not your | | 12 | business. This is a fight between the creditors and the | | 13 | debtor. | | 14 | And generally that's probably right, so maybe | | 15 | they'll like that concession, except that from a court | | 16 | efficiency and a point of view I think it would be a really | | 17 | poor investment of the Court's time, and we would need to be | | 18 | involved, and our time to go through now a non | | 19 | dischargeability complaint. Because in order to do that, | | 20 | you need to go through the claim. And essentially you need | | 21 | to say I have a claim, a good claim and it's non | | 22 | dischargeable. Well, that would be duplicative of the | | 23 | process that could take place later on on claims allowance. | | 24 | And my point is why go through that brain damage | | 25 | when there's no assets in the estate today, meaning when | | | |

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| | Ho Wan Kwok - July 21, 2022 17 | |----|----------------------------------------------------------------| | 1 | there are assets to fight over, then by all means all these | | 2 | proceedings should happen. But to do that today would be, | | 3 | you know -- obviously, you are the judge, you will decide | | 4 | your calendar, but to us it seems like a really bad use of | | 5 | the Court's time and of our time as well because we might be | | 6 | in a position where we now need to go through the claims | | 7 | allowance process while there are no assets in the estate, | | 8 | which, you know, I believe firmly that there will be assets | | 9 | in the estate one day, but today there are none. And I | | 10 | think it would be, you know -- anyways. So that's our view, | | 11 | Your Honor. So I wanted to make sure you understood why we | | 12 | filed this motion for a stay. | | | |

But we're not going to go and get involved against a particular creditor on the issue of non-dischargeability or for or against the debtor on that. That's not our goal. Our goal is from the case management point of view to make sure that there's a good use of everyone's time including Your Honor's time on these matters.

Page 7, number nine, there's another adversary proceeding, and that's the one by the registered ship owner, HK International. They filed -- and that was the Zeisler firm that represented the plaintiff and now they represent the plaintiff and the defendant -- that's a little joke -- until now I'm going to be substituted as the defendant in that action. And I'll come back to that towards the end,

Ho Wan Kwok - July 21, 2022 18 but they gave us a 30-day extension to answer or to otherwise move in that case. Page 8, Your Honor, number ten, intervention appearance and other litigation. The debtor has 25 active lawsuits. I'm not -- and I don't want to be cavalier about this -- I'm not that concerned today about the ones where he's a defendant because the stay, you know, applies. It's the litigation where he's a plaintiff. We need to get our arms around value if any of those claims and we've started reaching out to those people. But I don't mislead, Your Honor. We have not made a lot of progress on that. That is something that we need to do over the next, you know, month or so. So the concept there is to go and talk to counsel for the debtor in -- where the debtor's a plaintiff to see what is the nature of litigation. Is there value there for example? If there is, I want to know sure Your Honor knows this. There's a, I think, a \$1 billion -- that's the asserted number -- where he's suing UBS in the U.K., and so obviously I reached out to counsel and hopefully we'll have a discussion with them to say what is the litigation about, understanding that, et cetera. So that's one example of those. Next, number eleven, is contact with the Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 45 of

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 19 | | 1 | Securities and Exchange Commission. | | 2 | So I don't know if Your Honor saw this -- you | | 3 | probably don't spend your time looking at the claims docket | | 4 | -- but there was a claim filed by the SEC and basically -- | | 5 | and it's described there -- they are saying they've | | 6 | conducted an investigation for, you know, where they may -- | | 7 | for violation of securities laws. And that's not good news, | | 8 | not only for -- | | 9 | THE COURT: They didn't assert any dollar amount? | | 10 | They said that they're investigating, is that what it says? | | 11 | MR. DESPINS: Yeah. Well, it's -- we have the | | 12 | quote there I think, but, you know, they're investigating, | | 13 | and they may actually file a civil action against the debtor | | 14 | to seek disgorgement and all that. | | 15 | So I've dealt with the SEC before, and I'm saying | | 16 | this with all due respect to them, my concern is the diluted | | 17 | effect that could have on claims of, you know, Mr. Goldman | | 18 | represents for example. | | 19 | And so I've reached out to the SEC and we're at a | | 20 | very preliminary stage. There have been no substantive | | 21 | discussions, but I want to understand exactly what is their | | 22 | issue, what is it related to, and also whether they're aware | | 23 | of any assets that we're not aware of. So that is -- and, | | 24 | again, I don't want to mislead you -- that just started this | | 25 | week so not a lot of progress on that front. That's the |

Ho Wan Kwok - July 21, 2022 20 SEC. THE COURT: Didn't they just -- and this claim that they filed, it was recent, wasn't it? MR. DESPINS: Yes. It was I'm going to say five days ago, six days ago. THE COURT: Right. Okay. MR. DESPINS: Something like that. Yeah. THE COURT: Okay. Thank you. MR. DESPINS: Okay. Moving on to page 9, number twelve, dealing with inbound inquiries. We've received inquiries, Your Honor, from people saying -- basically tips saying this guy is hiding assets here or there. And I want to be clear with Your Honor. I've done a lot of these cases and I would say these often fall into three categories. The first category, what I'll call the crazies. Meaning these types of cases attract all sorts of people, some of them are completely irrational. So that could be door number one. Door number two -- I'm not saying this applies in this case but in that case, the target itself sends these things anonymously just to send us to Africa, for example, to spend money there when there's nothing to be -- to be looked at. Door number three, you can get a real tip, and Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 47 of

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| | 21 Ho Wan Kwok - July 21, 2022 | |----|---------------------------------------------------------------| | 1 | that's what we're investigating. Some of them are very | | 2 | specific as to persons holding funds. And as I said, I | | 3 | cannot validate those now. I don't want to mislead the | | 4 | Court and say, oh, well, we have -- we found \$5 billion | | 5 | here. No, I can't say that. | | 6 | But it shows that the Chapter 11 trustee process | | 7 | is working because people are coming out of the woodwork to | | 8 | say you should check the following things, things that we | | 9 | would have never found ourselves initially at this stage | | 10 | anyway. As I said, these could be made up so we have to be |

very careful about that, so I don't want to exaggerate the importance of these.

Next, Your Honor, retention of professionals. Well, you know we filed for the retention of Paul Hastings. And obviously we retained Mr. Skalka and Linsey. And the point there is we're going to try -- and you'll see there's no Paul Hastings lawyer other than myself here -- we're going to rely heavily on them to handle a lot of the -- of the matters before Your Honor. And, you know, obviously you know that firm very well.

Page 10, this is where we get into really more meaty matters, Your Honor. They titled theirs Exercising Corporate Governance Rights. The debtor lists various entities as 100 percent owned by the debtor. And one of these entities is the Genever BVI entity, the British Virgin

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 22 | | 1 | Island entity. And we've asked the debtor's counsel, all | | 2 | three of them, meaning Brown Rudnick, the one in between, | | 3 | and now, the Zeisler firm, to produce to us the corporate | | 4 | governance documents relating to that entity. To date, | | 5 | nothing. | | 6 | But that entity, you'll recall, BVI, owns the | | 7 | Genever in the U.S., the Chapter 11 debtor. And as I told | | 8 | you, debtor's counsel believes he's taking instructions from | | 9 | the debtor, at least until now. | | 10 | And our point is we have -- the trustee jumps into | | 11 | the corporate governance rights of the debtor. That's horn | | 12 | book law. But nevertheless we probably will have to file | | 13 | something with the Court to seek a confirmation of that, but | | 14 | there are many cases that hold that. And that means that we | | 15 | can participate eventually in the Genever USA Chapter 11 | | 16 | case. Obviously, we would never ask you to grant us relief | | 17 | with respect to that. We would go to Judge Garrity. | | 18 | And one of the things we mention here is that we | | 19 | will ask for a status conference in front of Judge Garrity | | 20 | to say we're here, it's not the same landscape anymore. We | | 21 | need to complete our analysis of the Sherry-Netherland and | | 22 | this issue of the trust that was -- for the son's company, | | 23 | and we need to finalize that. But the likelihood is that we | | 24 | will appear there and say, Judge, this is a different | | 25 | landscape. |

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Ho Wan Kwok - July 21, 2022 23 But as I said at the beginning, we're not trying to change the sale. That's been preordained. There's a sale process. We're not going to try to touch that. But he might say so what could you be doing? Well, as I told you, Judge -- former Judge Cyganowski told me that the debtor is still in that apartment. Well, if I control that entity that owns the apartment, I want rental income from whoever I can get rental income for. So if the debtor doesn't want to pay rental income -- by the way that would be thousands of dollars. It's not like \$5,000 a month. It would be -- you know, I don't want to exaggerate, but it would be a very large amount. If the debtor wants to occupy the property, he needs to pay the piper. The piper is Genever and that's the company we now control. If the -- and if he doesn't want to pay, then somebody else will rent this property for -- subject to approval by the board of the Sherry-Netherland, et cetera, but this is a property that would pay top dollars to rent, because this -- this apartment is not going to be sold tomorrow. These are very expensive apartments. You need to -- you know, I don't how to say that, but the market for that is a very different market and it could take several

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Ho Wan Kwok - July 21, 2022 24 months before it's sold. And by several months I mean really several months. So I'm not making a prediction as to when it's going to sell, but it would be incredible for this estate not to enjoy the benefit of rental income of a -- through a subsidiary that we control. So I'm not asking you to comment or to rule on that. I'm sure my friends at Zeisler will have different views of that, but I want to tell you that that's coming. And by the way, Genever is an example, but there are other companies as well. And the issue there is we need to get all the documents to understand exactly what's going on. We need to get bank accounts for these entities. We need to understand all the transfers that were made. And that's, you know, that's something that we certainly started with the corporate governance documents. And we have not received anything at this point, but we intend to pursue that. Page 11, number two, is what I just said. We will seek relief from this court to -- for the Court to confirm that. And on top of that, Your Honor, we would like to be appointed under Section 1505. And this is a bizarre section in the sense that Chapter 15 -- what does this have to do with this? We're not in Chapter 15. But that's a

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 52 of 253 | |----|------------------------------------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 25 | | 1 | section -- and I'm embarrassed to say I learned that -- I | | 2 | relearned that recently -- that doesn't apply only in | | 3 | Chapter 15. | | 4 | That basically says, and it's quoted on page 11 | | 5 | there, "That a trustee may be authorized by the Court to act | | 6 | in a foreign country on behalf of an estate created under | | 7 | Section 541. And an entity authorized to act under this | | 8 | section may act in any way permitted by the applicable | | 9 | foreign law." So that would mean us going to the BVI to do | | 10 | whatever we have to do there to get control of that entity. | | 11 | And obviously we're trying to avoid going to court | | 12 | if we have to because, you know, there's no money, but it's | | 13 | not limited to the BVI. | | 14 | There are other -- and that depends on the | | 15 | targets, the tips we've gotten -- there are other potential | | 16 | countries where we would seek discovery from parties and, | | 17 | therefore, we will seek a broad ruling from the Court | | 18 | appointing us under 1505 as the foreign representative, but | | 19 | for the sole purpose of either getting documents or | | 20 | recovering assets. Again, that's to come. I just want to | | 21 | give you a heads-up on our plans on that. | | 22 | At the bottom of 11, Your Honor, we would also | | 23 | mention that it is typical in these cases for the Court, | | 24 | meaning Your Honor, to enter a paragraph seeking the | | 25 | assistance of foreign courts in getting the relief that a |

| Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 53 of 253 | | |------------------------------------------------------------------------------------------------|-----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 26 | | 1 | trustee would seek. And you might say, well, why would -- | | 2 | why do I need to do that? | | 3 | First of all, it's kind of a gratuitous, you know, | | 4 | request because it doesn't bind the Court in anyway. But | | 5 | it's -- in foreign courts, it's hugely important to be able | | 6 | to point to a paragraph to say, look, the Court is asking | | 7 | you or asking for your assistance in proceeding as quicky as | | 8 | possible. So you might say why is that necessary? | | 9 | I'll give you an example. BVI, god bless them, | | 10 | they have a summer recess. August, nothing happens. I'd | | 11 | love to have that system here too, but we don't. | | 12 | So the only exception to that is if we can move on | | 13 | an emergency basis. So I'm not asking -- I'm just telling | | 14 | you that if you ever see that, you'll know why we're asking | | 15 | for that -- because that's the only way to get their | | 16 | attention on an emergency basis during the month of August. | | 17 | And, by the way, you know, August is just around the corner. | | 18 | We may not need that for BVI, but in other countries we | | 19 | might need it. So we'll obviously come back to court on | | 20 | that. | | 21 | Page 12, the request for corporate governance. | | 22 | I've already covered that. We've asked for that. This has | | 23 | not been produced. | | 24 | Page 13, item C, identify and if appropriate seek | | 25 | turn over estate assets. This is important. You know, a | | | |

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| | 253 | |----|---------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 27 | | 1 | Rule 2004 motion, obviously we'll do that. But Mr. Goldman | | 2 | has already obtained that relief so we are -- we're going to | | 3 | try to piggyback off of that to avoid duplication of effort | | 4 | because he's already done a lot of that work. So that's | | 5 | certainly directionally what we want to do. | | 6 | But the next point is the more important point, | | 7 | Your Honor, which is that as part of this, we will seek | | 8 | attorney/client privilege and work product of firms like | | 9 | Brown Rudnick because the courts are pretty clear on that | | 10 | that the trustee controls the privilege, especially for the | | 11 | period where the debtor was a debtor in possession. | | 12 | So you might say why do you want that? | | 13 | Well, for example, the prepared schedules of assets and | | 14 | liabilities, there may have been some exchanges there that | | 15 | would be interesting to us. And it's not limited to Brown | | 16 | Rudnick. | | 17 | By the way, I'm not -- I don't want to point | | 18 | fingers at Brown Rudnick. It's not a -- it's just an | | 19 | example. But certainly the firm in Greenwich, we -- you | | 20 | know, they represent the debtor. | | 21 | By the way, they didn't say we represent the wife | | 22 | of the debtor or that company called Greenwich Land Trust. | | 23 | They said they represented the debtor. We want to | | 24 | understand what they're working on and what's the work | | 25 | product there because we believe that the trustee controls |

Ho Wan Kwok - July 21, 2022 28 that. I'm sure that my colleagues will have different views on that, but I want to make sure you know that's coming, because I believe that as part of the investigation that could produce results. Now, page 14, still on identifying assets and seeking turnover of assets for the estate. The Lady May. So I'm not going to read everything that's there, but basically, Your Honor, we're quoting from Judge Ostrager's decision in the New York Supreme Court. And they're pretty -- and I don't want to be -- I'm not here to argument this thing because we're still reviewing this and we will review it one more time, but it appears that there are pretty strong findings there as to the daughter, who of course is the sole shareholder of the registered owner of the ship, and the debtor in terms of control and beneficial ownership of the ship. And what we're saying on page 15 is that subject to finalizing our review, we believe that these findings should be found to be binding by this court on the ship, the registered shipowner company, even though that company itself was not a party to that action. But the daughter was the witness. Her lawyer cross-examined witnesses, et cetera, et cetera, was a full participant in that trial. And the New York Appellate Division had sent back

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered |----|-------------------------------------------------------------- | | Ho Wan Kwok - July 21, 2022 29 | 1 | the case to Judge Ostrager asking that he make finding on | 2 | ownership of the ship. So they had clear, clear, you know, | 3 | notice that the judge was going to do that. And, in fact, | 4 | he did. | 5 | And at that point, again, subject to further | 6 | review, we believe that there's collateral estoppel even | 7 | though the company that's the registered owner was not a | 8 | party to the action because there privity. It's the same | 9 | parties. | 10 | And the fact that -- sorry for my friends at | 11 | Zeisler & Zeisler, but they -- now they represent the | 12 | registered owner and Mr. Kwok that, you know, it's almost | 13 | like -- I'm joking -- almost summary judgment on that point | 14 | -- meaning that, yes, they are the same, they're all | 15 | together in this. | 16 | So in terms of collateral estoppel we believe that | 17 | should be binding. Again, this is for later, but I wanted | 18 | to give you a heads-up because we don't believe they get to | 19 | do a do-over and like a ten-day trial here to put the same | 20 | people on, et cetera, et cetera, for the same issue. | 21 | Page 16, Your Honor, the Sherry-Netherland, I've | 22 | mentioned. I told you what the game plan is there. The | 23 | Greenwich homes. You know, these are recent, you know, 2020 | 24 | purchases by a company owned 100 percent by the wife of the | 25 | debtor. Two houses. And of course we want to know the 07/27/22 11:47:37 Page 56 of 253 | ----------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | |

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Ho Wan Kwok - July 21, 2022 30 details of where the money came from. And then point five, other assets. I want to be clear that we're not limiting ourselves to these three buckets. I will come back to the Court and update our work product on that later, but I want to be clear the message is not left that it's only the Sherry-Netherland and the yacht. There are -- there are other assets that need to -- and the Greenwich properties -- there are other assets that need to be -- to be investigated. Page 17, Your Honor, the claims review and allowance process. This is the same thing as I said before. Everyone would like to have their claims allowed tomorrow in the dream world, but it would be so counter productive to go through that at this stage in terms of, you know, no money to do that and to what end if we -- unless -- until we bring money to fight over, let's not fight over that, but that's just our view of the world. So the timing of that, Your Honor, I would say that's months away. I don't want to mislead you and say, oh, we'll get that done next month. No. We're going to try not to focus on that in the coming months because the sole focus is on bringing assets into the estate. The sole, short-term focus. And then the last page is really a Chapter 11 plan. The same thing, Your Honor, we're -- I don't want to

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 58 of 253 | |----|------------------------------------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 31 | | 1 | -- you know, I've always been told by my boss when I was a | | 2 | young lawyer, you know, under promise and over deliver. I | | 3 | don't want to mislead you. | | 4 | This will take -- unless there's a global | | 5 | settlement, which we would welcome, this is going to take | | 6 | months. I don't want to mislead the Court on that. I wish | | 7 | that were not the case, but I have a sense of how things are | | 8 | going to go and I think that's the way it's going to go | | 9 | unfortunately. | | 10 | So that completes our presentation, Your Honor. | | 11 | I'm happy to answer any questions you may have. | | 12 | THE COURT: Okay. Well, at the moment, I do have | | 13 | a question or two, but I do appreciate very much the | | 14 | presentation. | | 15 | One of the reasons that in the memorandum of | | 16 | decision that there was a status conference to be scheduled | | 17 | was to have the trustee do exactly what you've done, which | | 18 | is to come in and tell the Court where the trustee believes | | 19 | things stand, what issues need to be addressed and what will | | 20 | be coming, and what the ultimate goal may be. | | 21 | And even if it's not reachable, I understand that, | | 22 | you know, we're in Chapter 11, so obviously the ultimate | | 23 | goal is some form of a plan if we get to that point. So I | | 24 | appreciate it. | | 25 | Given what you've said it seems to me from your | | | |

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Ho Wan Kwok - July 21, 2022 32 perspective one of the most important things you'd like the Court to address is to get an order issued setting a bar date for claims.

And that was on hold somewhat during the -- before your appointment because of issues regarding the possible dismissal of the case, as you indicated in your presentation, and because there was also a possibility of conversion of the case.

There were other issues that the Court had to consider, and so the bar date issue -- there were two issues with regard to it.

There was -- there was an issue that the Court was concerned that it was too short at that point in time because the case was developing. But now the case is five months old. There's a Chapter 11 trustee appointed because of the information and pleadings submitted by various parties in the case and the evidence presented during the case. And the record supported that.

So I agree with you that the Court will turn in short order to that setting of a bar date. And my thought on that is the service of that order, who gets served?

You know, we can do publication and we might do publication. That might be something that you're interested in.

But one of the things that I am concerned about is

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 33 | | 1 | the schedules and statements of affairs that were filed had | | 2 | many qualifications associated with them. I don't know if | | 3 | the -- and I'm not sure you know either, so I'm not | | 4 | suggesting that you would -- if the list of people who would | | 5 | actually get served with the notice of bar date would be | | 6 | sufficient in this matter? | | 7 | So I think what we may do, and I'd like to think | | 8 | about it, is consider how that order would be served, and | | 9 | whether or not publication is appropriate in addition to | | 10 | service and how publication would be accomplished, where | | 11 | publication would actually be made? | | 12 | And I'd ask you to think about that. I don't know | | 13 | the answer to those questions. As I sit here right now, I'm | | 14 | raising those issues in order for all of us to think about | | 15 | the fulsomeness of the notice that would be provided on a | | 16 | bar date for filing claims. | | 17 | MR. DESPINS: Your Honor, you raise a very good | | 18 | point. I would like to be able to revert back to the Court | | 19 | on that, especially the publication aspect and where, how. | | 20 | So I said that it would be important to (indiscernible) | | 21 | order, but it's not a matter of days. You know, but we will | | 22 | revert back to the Court on that point. | | 23 | THE COURT: I appreciate that. And I will think | | 24 | about it as well. You know, there have been cases over the | | 25 | years and cases recently issued in different circuits about | | | |

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 34 | | 1 | actual notice versus constructive notice and -- on a bar | | 2 | date and things of that nature, so I want to make sure that | | 3 | we are all thinking -- we're doing the best we can under the | | 4 | circumstances as presented so that people have appropriate | | 5 | notice with regard to the filing of a proof of claim. | | 6 | So with regard to the rest of the information that | | 7 | you've submitted, again, I appreciate it very much. This is | | 8 | what the Court was looking for with regard to the -- I | | 9 | haven't looked yet, but I see in your report or your | | 10 | presentation the adversary proceeding issues. | | 11 | So have you filed a motion to stay in every | | 12 | adversary proceeding? There was just an adversary | | 13 | proceeding filed yesterday. | | 14 | MR. DESPINS: Yesterday. | | 15 | THE COURT: And the day before. | | 16 | MR. DESPINS: So we filed in three, but we will | | 17 | file a supplemental -- | | 18 | THE COURT: Okay. | | 19 | MR. DESPINS: -- motion to stay in the others. | | 20 | THE COURT: And I'll have to look at those | | 21 | obviously. And the way that our motion practice works in | | 22 | adversary proceedings under our local rules is that parties | | 23 | have 21 days to -- there's a responsive -- there's a | | 24 | responsive date of 21 days to object or not object, you | | 25 | know, to do whatever they feel is appropriate with regard to |

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| | 253 | |----|---------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 35 | | 1 | a motion and then the Court would determine whether or not | | 2 | there would need to be a hearing. | | 3 | Now, I believe in some of the earlier adversary | | 4 | proceedings that 21-day period might run into a time frame | | 5 | that might present a problem. | | 6 | So I will take a look at those adversary | | 7 | proceedings. And if there's some issue as to waiting for | | 8 | that response period to pass, I could I believe issue some | | 9 | kind of order either extending the response period or | | 10 | extending the periods of time that are already in existence | | 11 | subject to a ruling on the motion to stay the proceeding. | | 12 | Or, of course, if you have the consent of the | | 13 | parties on the staying of the adversary proceeding, then I | | 14 | would not understand -- or I would be surprised as to why I | | 15 | would not grant a stay of those adversary proceedings. | | 16 | MR. DESPINS: Thank you. And to be -- to be fair, | | 17 | we just started with the stay process. But for the life of | | 18 | me, I don't know why the debtor would want to forward with | | 19 | that or why the people seeking the non-dischargeability want | | 20 | a ruling on that today or spend a lot of money on that | | 21 | today. But it's their prerogative, so we will seek the | | 22 | consent. | | 23 | THE COURT: Right. But if you are able -- if the | | 24 | parties in each of the adversary proceedings consent to the | | 25 | stay, then the stay will be granted -- | | | |

Ho Wan Kwok - July 21, 2022 36 MR. DESPINS: Yeah. THE COURT: -- subject to, you know, further order of the Court and the progress of the case. I agree with you that it is not the goal of the Court to have the party -- all parties, no matter what their issues may be, to spend money needlessly. No one wants that. But we need -- but we need to just make sure that the process is properly followed and that the Federal Rules of Civil Procedure are properly followed. But if you obtain the agreement of the parties in those adversary proceedings to stay the adversary proceedings, then they will be stayed. Okay? MR. DESPINS: Thank you, Your Honor. THE COURT: All right. I'm not sure that there's anything else I have a question about. I understand that there are a lot of things that you're reviewing and different steps that you may be taking in short order and the Court will attempt to address those as quickly as they come before the Court. I'm just looking to make sure that there's nothing else that I have any questions about. I'm just looking at your presentation again. (Pause) THE COURT: I think those were the two issues that stuck out to me, were the bar date order and the stay -- the Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 63 of

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 37 | | 1 | stay motions in the adversary proceedings. Because I do | | 2 | agree with you that many of the other things that you've | | 3 | discussed are developing and that you're addressing them in | | 4 | due course, and that you will be seeking relief from the | | 5 | Court when it -- you believe it's necessary to do so and | | 6 | appropriate to do so. | | 7 | So I don't have any other questions at the moment, | | 8 | sir. Thank you very much. | | 9 | MR. DESPINS: Thank you. Thank you, Your Honor. | | 10 | MR. HENZY: Your Honor, may I be heard? | | 11 | THE COURT: Mr. Henzy, you may be heard, but we | | 12 | still have some issues that I -- we need to resolve from the | | 13 | Court's perspective and the United States Trustee's Office's | | 14 | perspective on the issue of who represents the debtor. | | 15 | And right now, Brown Rudnick represents the | | 16 | debtor. Brown Rudnick didn't state any reason in its motion | | 17 | to withdraw as to why it's withdrawing its appearance. | | 18 | And Brown Rudnick had to go through the process | | 19 | that every debtor's counsel has to go through which is to | | 20 | file an application to be employed, to submit a | | 21 | disinterested affidavit, to comply with Bankruptcy Section | | 22 | 327(a) and Rule 2014, and our local Rule 2014. And there's | | 23 | nothing in the order appointing them that says that they can | | 24 | file a motion to withdraw as debtor's counsel. | | 25 | So while I understand you want to be heard, you | | | |

Ho Wan Kwok - July 21, 2022 38 are not at this point debtor's counsel. And -- MR. HENZY: No. I am. I absolutely am, Your Honor. THE COURT: Well, you're not in the -- how are you debtor's counsel under the bankruptcy code -- MR. HENZY: The debtor -- the debtor -- THE COURT: -- Mr. Henzy? MR. HENZY: The debtor's now out of possession and does not need to file an application under 327 to -- THE COURT: Where's the case law that says that, Mr. Henzy? THE COURT: It's, Your Honor, 327 itself provides -- 327(a) provides -- THE COURT: So you can be counsel even if you're disinterested and you have a conflict just because the debtor's no longer in possession? MR. HENZY: Absolutely. THE COURT: I'd like to see a case law that says that. MR. HENZY: I'm not going to be able to have case law for you, Your Honor, because 327 -- I think 327(a) makes us the trustee, and in parens, debtor in possession, because debtor in possession has powers of a trustee -- has to -- has to retain counsel pursuant to court order. But there is no requirement -- and, Your Honor, in Chapter 7 cases, Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 65 of

Ho Wan Kwok - July 21, 2022 39 debtors are not retained -- THE COURT: We're not in a Chapter 7 case, Mr. Henzy. MR. HENZY: I understand. But this is -- this is now a debtor out of possession. I don't think -- I mean, I don't -- I hate to -- I want to be careful, Your Honor, and with all due respect, you're asking me to give you cases that say 327(a) says what it says, but I'm not aware of any cases -- THE COURT: No. I'm asking you to give me a case where there's a Chapter 11 trustee appointed and debtor's counsel, who was debtor's counsel, can just withdraw and someone else can step in without having to meet any of the requirements of the bankruptcy code -- MR. HENZY: The -- THE COURT: -- let me just finish, please -- of the bankruptcy code and the rules and have a conflict of interest where they represent an entity that's owned by the debtor's daughter who's clearly an insider under the bankruptcy code. MR. HENZY: Your Honor, there are cases -- I don't believe that there are cases that I'm aware of which -- let me put it this way. I'm not aware of any cases that say that a debtor out of possession does not need to file a retention application with respect to its counsel. Because, again, I Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 66 of

Ho Wan Kwok - July 21, 2022 40 think the plain language of 327(a), and I don't know if any counsel here would say the contrary, only provides a debtor in possession has to do that. I do know that there are cases, and we can get those to you, dealing with whether a counsel for a debtor post appointment of a Chapter 11 trustee may be paid by the bankruptcy estate. And generally the answer to that question is no. And the basis for that is that debtor's -- counsel for debtor out of possession is not retained pursuant to 327(a) and is not covered by 330 and 331. There are cases where courts haves said that counsel for a debtor out of possession may be paid, but really on a substantial contribution type of basis as opposed to their counsel retained under 327(a) and subject to the requirements of 330 and 331. And I can get you those cases, Your Honor. But I -- that's a little bit different. Those cases are saying that counsel for a debtor out of possession is not 327 counsel and not subject to 333, 330 and 331 in the context of saying usually you can't get paid by the bankruptcy estate. So I will get you those cases. THE COURT: Okay. Is that the Office of the United States Trustee's position? There's no conflict here? Zeisler & Zeisler can represent the debtor because the debtor's no longer a debtor in possession? Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 67 of

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 68 of 253 | |----|------------------------------------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 41 | | 1 | MS. CLAIBORN: Your Honor, the U.S. Trustee is | | 2 | still evaluating that issue. | | 3 | I do think there's one issue that I want to raise | | 4 | with the Court that I don't think Attorney Henzy would | | 5 | dispute which is that as counsel to a debtor they have an | | 6 | obligation to disclose the compensation agreements or | | 7 | otherwise that they have with the debtor. | | 8 | THE COURT: That's absolutely going to happen, so | | 9 | you don't have to make that argument. | | 10 | MR. HENZY: Yeah. I don't -- I don't -- | | 11 | THE COURT: Mr. Henzy, if you're -- if you're | | 12 | accurate, if you're correct, then whomever pays you could | | 13 | take whatever money that might be available to creditors of | | 14 | the estate and just continue to pay you. | | 15 | MR. HENZY: That's not true. I think that's not | | 16 | correct. | | 17 | THE COURT: How is that not true? | | 18 | MR. HENZY: So I can't -- I a hundred percent | | 19 | agree we need to file our 329 2016(b) statement. My | | 20 | understanding is I have 14 days from the time I filed my | | 21 | appearance to do that and we will do that. | | 22 | I can't -- again, back to the cases that I'm | | 23 | mentioning, I can't get paid from estate assets. | | 24 | THE COURT: Where in 329 does it say you file an | | 25 | application to be employed? |

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| | 253 | |----|--------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 42 | | 1 | MR. HENZY: Oh, it doesn't, Your Honor. | | 2 | THE COURT: Right. | | 3 | MR. HENZY: No. I'm not -- I'm sorry. | | 4 | THE COURT: So how is 329 applicable? | | 5 | MR. HENZY: Oh, I -- under 329, I believe what | | 6 | Attorney Claiborn was referring to, I still have to file the | | 7 | statement required by 329 and Rule 2016(b). | | 8 | THE COURT: So if you're a debtor -- let's carry | | 9 | your thought process out. If you're no longer a debtor-in | | 10 | possession and you don't have to be subject to any of the | | 11 | Court, any of the oversight of the Court that's in the | | 12 | bankruptcy code or the rules, then why do you have standing | | 13 | to say anything? | | 14 | MR. HENZY: Because I represent the debtor out of | | 15 | possession. The debtor out of possession -- | | 16 | THE COURT: Okay. You represent the debtor out of | | 17 | possession. In your Chapter 7 cases that you're talking | | 18 | about, the Chapter 7 debtor has no standing unless and until | | 19 | it's proven that there be some surplus for the Chapter 7 | | 20 | debtor. | | 21 | And at this point, we all know -- everybody knows | | 22 | -- Mr. Despins knows, he took on this assignment knowing | | 23 | that there's no money in this estate, so how do you have | | 24 | standing to argue anything. If you take your argument to | | 25 | its fullest extent, you're not subject to disinterestedness, | | | |

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Ho Wan Kwok - July 21, 2022 43 you're not subject to conflicts, all you have to do is disclose where your money -- the money you pay -- get came from, then why do you get to say anything? MR. HENZY: I think on certain issues, Your Honor, I don't disagree with you. The debtor may have no standing. And you may tell me to the extent I want to be heard on such issues that you're not going to listen to me. And I would understand that. I think that a debtor out of possession does have standing with respect to certain issues. THE COURT: Which ones? MR. HENZY: Mr. Despins addressed the 523 actions that are pending and his motion for stay with respect to those actions and made certain representations to the Court about the debtor's position on those. Certainly Mr. Kwok has standing in the -- THE COURT: I don't think he made any representations -- MR. HENZY: Oh, he -- THE COURT: -- about the debtor's positions. He said that -- MR. HENZY: I think he did. He did. THE COURT: This is a -- this was a -- this is a -- I didn't say this was evidence, number one. I said it was a demonstrative pleading that I would allow to be admitted on -- in the record as Exhibit 1. That's all. I

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Ho Wan Kwok - July 21, 2022 44 didn't say I'm going to make any findings or rulings or anything based upon what Mr. Despins provided to us today. MR. HENZY: Understood, Your Honor. I was answering your question. I don't think that you would say that the debtor doesn't have standing in the 523 actions. THE COURT: Okay. But if the actions are stayed, let's -- let me just -- presume the actions are stayed, then there's nothing for the debtor to worry about until they're not stayed, correct? MR. HENZY: I don't agree with that necessarily. But I -- THE COURT: Well, there's no pleadings requirement or anything that the debtor would need to undertake while the actions are stayed, correct? MR. HENZY: If the actions get stayed, that may be correct. I was trying to answer your question, Your Honor, on standing. THE COURT: Okay. MR. HENZY: There may be matters that the debtor does not have standing to be heard on. I don't disagree with you. And there -- I think there will be matters that the debtor does have standing to be heard on. And the example -- because it was in Mr. Despins' presentation -- was talking about the 523 actions. If we're talking about

Ho Wan Kwok - July 21, 2022 45 the 523 actions, I don't think that Your Honor would say that the debtor does not have standing. THE COURT: Well, we're not talking about the 523 actions right now, right? You didn't rise to talk to me about the 523 actions. MR. HENZY: Actually, I did. THE COURT: Oh, you did. Okay. MR. HENZY: I did. THE COURT: Then go right ahead. MR. HENZY: Okay. I rose to make a very few points. THE COURT: Okay. Go right ahead. MR. HENZY: Okay. One point, I want to be clear because I have not been involved in this case. I have reviewed some of the record, but my sense is that people are or parties want to make certain characterizations about Mr. Kwok and about his approach to things. On the 523 actions, what the trustee's asked us, the trustee's position to us initially was that upon his appointment he was substituted into the 523 actions. That's just -- I believe that's just incorrect, Your Honor. I don't think that the trustee becomes a defendant -- the defendant in the 523 action. THE COURT: Okay. MR. HENZY: So our response to counsel for the Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 72 of

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| | 253 | |----|------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 46 | | 1 | trustee was we think you're -- because we were being asked | | 2 | what's -- we want the -- we want a stay, what's your | | 3 | position? And our response -- because we're now the | | 4 | defendant in these actions -- and our response was no, | | 5 | you're not. In some sense, we don't -- we don't know what | | 6 | you're talking about. Okay. | | 7 | So it's not that -- Mr. Kwok is not refusing to | | 8 | answer sort of a basic question like that or trying to be | | 9 | difficult just for difficulties' sake. I think that point | | 10 | is important to make. Again, I think the parties are -- | | 11 | have or are going to characterize Mr. Kwok's approach in | | 12 | certain ways that I think are not fair. | | 13 | Again, with respect to the 523 actions, we were | | 14 | asked will you agree to a stay are actions that creditors | | 15 | have filed against Mr. Kwok. | | 16 | And to your point, Your Honor, if those actions | | 17 | are stayed, you said Mr. Kwok would have nothing to worry | | 18 | about. Okay. I don't know that I necessarily want to agree | | 19 | with the trustee that these actions are going to be stayed | | 20 | and be criticized by the people who filed them. | | 21 | Again, my point here is not to litigate or argue | | 22 | whether a stay should enter, or the basis for those 523 | | 23 | actions, or what rights the trustee may or may not have in | | 24 | those actions. I just wanted to respond to Mr. Despins' | | 25 | presentation on the 523 actions because to the extent | | | |

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 74 of 253 | |----|------------------------------------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 47 | | 1 | possible I want to avoid an unfair characterization of how | | 2 | Mr. Kwok is approaching things. | | 3 | We do -- we are counsel for HK International, | | 4 | okay, which is the title owner of the Lady May. And | | 5 | notwithstanding that Mr. Despins said he was not going to | | 6 | argue, he argued. I just want to be clear. | | 7 | And Your Honor made the point, there's been no | | 8 | evidence taken today that the document, that was handed up | | 9 | is not in evidence, Mr. Despins' presentation is not | | 10 | evidence. So that's all fine. | | 11 | I do want to make the point that we absolutely, HK | | 12 | International, absolutely disputes that anything that | | 13 | happened in New York is binding in this court. | | 14 | You know, the document handed up takes snippets | | 15 | out of lengthy proceedings and lengthy rulings by the judge | | 16 | there. The ownership of the Lady May is going to be | | 17 | litigated. So I just want that to be -- | | 18 | MR. HENZY: How are you going to represent both HK | | 19 | International and Mr. Kwok in that adversary proceeding that | | 20 | HK International filed against Mr. Kwok and the bankruptcy | | 21 | estate as to the title to the Lady May? Isn't that an | | 22 | absolute and obvious conflict of interest? | | 23 | MR. HENZY: Here it is not, Your Honor. | | 24 | THE COURT: How is that? | | 25 | MR. HENZY: And one thing I absolutely agree with | | | |

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Ho Wan Kwok - July 21, 2022 48 Mr. Despins on is that upon his appointment he automatically became the defendant in that action and Mr. Kwok is no longer a defendant in that action. THE COURT: But you still represented -- it doesn't matter. You represent HK International and now you represent Mr. Kwok. How is -- whether you're no longer involved in that adversary proceeding doesn't matter. MR. HENZY: No. He's no longer involved. THE COURT: It doesn't matter. MR. HENZY: It does matter. THE COURT: No. It actually doesn't. MR. HENZY: Under the rules of -- THE COURT: It's an actual conflict of interest. You are -- you cannot represent -- you took on the representation of Mr. Kwok when there was an adversary proceeding pending against Mr. Kwok that your firm filed on behalf of HK International. MR. HENZY: We took on the representation of Mr. Kwok after Mr. Despins -- THE COURT: But, see, you want to have it both ways. You want to say, oh, in that adversary proceeding, Mr. Despins is automatically the defendant, but in the 523's, he's not. MR. HENZY: Well, I -- THE COURT: That's what you're arguing, right?

Ho Wan Kwok - July 21, 2022 49 MR. HENZY: That is what I'm arguing. And I think that that is black letter law, Your Honor. THE COURT: Where? Really? MR. HENZY: I don't -- THE COURT: I'd like you to show me that black letter law. MR. HENZY: I don't think Mr. Despins is going to tell you that he is a defendant -- THE COURT: I'm not asking Mr. Despins. I'm asking you. MR. HENZY: Your Honor, he is not the defendant in the 523 actions. I think that that is black letter law. THE COURT: Okay. I'd love to see that black letter law, please. MR. HENZY: I don't know if I'm going to find cases that say that because I don't know that -- I don't know that anybody would take the position that a trustee becomes -- is the defendant in a 523 action, Your Honor. I don't -- that doesn't even make any sense to me. Again, with all due respect, Your Honor, that -- I don't know how a trustee could ever be a defendant in a 523 action. THE COURT: Okay. I understand what you said. MR. HENZY: Okay. THE COURT: Go ahead. MR. HENZY: Okay. So I -- Mr. Kwok is no longer Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 76 of

Ho Wan Kwok - July 21, 2022 50 the defendant in the Lady May adversary proceeding. I think Mr. Despins' position is that he now is the party that -- THE COURT: All right. Well, let's move on from the 523. There's a stipulation regarding the Lady May in which the debtor and HK are parties to. MR. HENZY: Mm-hmm. THE COURT: Okay. Are you -- so Mr. -- you're saying you're not representing the debtor anymore in connection with that stipulation, that it's Mr. Despins? MR. HENZY: I think the answer is yes and I think that's Mr. Despins' position is that. THE COURT: Okay. So you're saying your conflict of interest is non-existent because Mr. Despins was appointed as a Chapter 11 trustee? MR. HENZY: Yes. THE COURT: And you can, therefore -- okay, that's your argument? MR. HENZY: That's my argument. THE COURT: Okay. MR. HENZY: Under Rule 1.7 in the Rules of Professional Responsibility that -- that is my argument. And I -- THE COURT: I'm not looking at 1.7 in the Rules of Professional Responsibility. I'm looking at the bankruptcy Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 77 of

Ho Wan Kwok - July 21, 2022 51 code and the bankruptcy rules. MR. HENZY: I'm not aware of anything in the bankruptcy code and the bankruptcy rules, Your Honor, that would -- that would govern this at this point. I think it is -- THE COURT: So the only place you have standing right now is in a 523 cause of action, isn't that correct? MR. HENZY: I don't -- I'm not prepared, Your Honor, to think about every issue that might come up in this case and tell you the debtor does or doesn't have standing. THE COURT: Well, you've argued that Mr. Despins shouldn't be the Chapter 11 trustee. MR. HENZY: And I think -- I think the debtor does have standing -- THE COURT: Where do you have standing to argue that? MR. HENZY: I don't know how a debtor would not have standing to take a position that a trustee should not be the trustee or that a trustee should be removed. THE COURT: I'd like to see some case law on that because I don't think you're -- I understand your argument, but I don't see support for your argument. You're not persuading me that you have a right -- that the debtor has a right. You had a right to object to the appointment of a Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 78 of

Ho Wan Kwok - July 21, 2022 52 Chapter 11 trustee, which Brown Rudnick did. They objected to it. They actually asked that the case be dismissed. I considered all of their arguments. I considered all of the arguments of all the creditors on conversion, appointment of a Chapter 11 trustee, whatever the issue may be. The Court decided, rightfully or wrongfully, to appoint a Chapter 11 trustee. No one appealed that order. Brown Rudnick even made a point of that that they didn't appeal that order. You're now attacking that order after the appeal period has run. And you're saying that you can do that because you don't have to be subject to -- and when I say you, I mean the law firm now supposedly representing the debtor. Which, by the way, Brown Rudnick's motion hasn't been granted, so just understand that, that you don't have to be -- you don't have to submit yourself to the same standards that Brown Rudnick did because the Chapter 11 trustee's been appointed. And the Chapter 11 trustee steps into your shoes in all these other situations, including in the HK adversary versus Mr. Kwok and PAX, but that you have standing to say he can't be the trustee. That's your argument? MR. HENZY: I think, Your Honor -- I think you're Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 79 of

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Ho Wan Kwok - July 21, 2022 53 conflating two issues. THE COURT: Okay. Well, tell me how I'm conflating them, please. MR. HENZY: So I don't think the standing issue is about do I have standing or -- THE COURT: No. No. On behalf of Mr. Kwok. MR. HENZY: Okay. THE COURT: I'm not -- MR. HENZY: So does -- THE COURT: But I -- MR. HENZY: -- the -- THE COURT: I'm not sure you're Mr. Kwok's lawyer yet. I'm not sure yet. MR. HENZY: I'm sure I'm Mr. Kwok's lawyer. THE COURT: I know you are. MR. HENZY: I understand you're -- I understand you're not. THE COURT: I know you are, but I'm not sure you are for purposes of this case. You might be for other purposes. MR. HENZY: I believe, Your Honor, that a debtor has standing to challenge the appointment of a trustee. And let me say I understand that the appeal period on the order -- I guess I'll call it granting the trustee motion, okay -- that's passed and no one appealed and Mr.

Ho Wan Kwok - July 21, 2022 54 Kwok is not challenging that order in any way, shape or form. There's a separate order that Your Honor entered -- THE COURT: I agree with you. MR. HENZY: Okay. THE COURT: I agree. MR. HENZY: -- approving Mr. Despins' appointment by the U.S. Trustee. And the 60(b) motion was filed. I believe it was within seven days after. THE COURT: No. I agree. MR. HENZY: Okay. THE COURT: I mean, if I -- if I accept your argument, I'm not suggesting your 60(b) motion was untimely. MR. HENZY: Okay. THE COURT: Okay? MR. HENZY: I believe that a debtor has standing to challenge the appointment of a trustee or to seek to remove a trustee. I mean, among other things, there is case law that says that a trustee may not have any bias or prejudice towards any party including a debtor. And if that is correct -- and, again, I think the case law is clear on that -- then I don't know how a debtor couldn't have standing to tell a court I think this trustee has a bias or prejudice Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 81 of

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Ho Wan Kwok - July 21, 2022 55 against me. And that's a basis to remove a trustee. The U.S. Trustee's handbook on panel trustees -- and I understand Mr. Despins is not a panel trustee -- states that trustees may have no bias or prejudice towards anybody involved in the case. So if there's a -- as debtor, debtor has a right to have a trustee who is not biased or prejudiced against debtor. Where there is a right, there is a remedy. I don't know how a debtor could not have standing to raise that issue with the Court. So I -- THE COURT: Did you -- did you -- why didn't you file a removal of the trustee under section 324 of the code then? MR. HENZY: Your Honor, our judgment was that this was an easier way, a quicker way. I don't think there's anything wrong with -- THE COURT: Well, what happens if I deny it? If I deny your motion, then all you can do is file a notice of appeal at that point. MR. HENZY: Yes. That's right. I think the basis -- the basis for the 60(b) motion, Your Honor, is the same basis that there would be for a 324 motion. If you -- if you said I'm going to deny this -- THE COURT: I'm not sure that's true actually. I

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 83 of 253 | |----|------------------------------------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 56 | | 1 | think the standards under those sections are different. | | 2 | MR. HENZY: Actually, I agree with you. So I | | 3 | misspoke. | | 4 | And, look -- look, the reason we filed the 60(b) | | 5 | motion is because we think that there is information that | | 6 | should have been put in front of the Court that was not put | | 7 | in front of the Court. And -- | | 8 | THE COURT: Okay. I understand that. And we're | | 9 | not having a hearing on ultimately that today. Okay? | | 10 | MR. HENZY: We're not. | | 11 | THE COURT: So you rose to tell me that you | | 12 | believe that the debtor -- you are debtor's counsel | | 13 | regardless of the actual conflict of interest that exists -- | | 14 | MR. HENZY: I didn't -- I didn't rise to tell you | | 15 | that because I wasn't questioning that. | | 16 | THE COURT: Okay. I'm sorry. | | 17 | MR. HENZY: But you told me that I might not be. | | 18 | THE COURT: I apologize. | | 19 | MR. HENZY: Yeah. | | 20 | THE COURT: You rose to tell me what then? That | | 21 | you believe that Mr. Despins made arguments that | | 22 | characterize Mr. Kwok that you think are unfair? | | 23 | MR. HENZY: That's right. | | 24 | THE COURT: Okay. And then -- and that your | | 25 | client has standing in the -- because I had asked Mr. | | | |

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 57 | | 1 | Despins questions about the adversary proceedings and the | | 2 | stay issue, that your client has standing in the 523 | | 3 | actions, and doesn't -- and you -- and your assertion is | | 4 | that Mr. Despins does not automatically become the defendant | | 5 | in the 523 actions, but does in the action brought by HK | | 6 | International? | | 7 | MR. HENZY: Absolutely. | | 8 | THE COURT: Okay. | | 9 | MR. HENZY: Yeah. | | 10 | THE COURT: And then what else did you want to | | 11 | tell me? | | 12 | MR. HENZY: And on behalf of HK International, I | | 13 | wanted to tell you, because I think Mr. Despins did make | | 14 | argument that, just for the record, that HK International | | 15 | agrees with -- sorry -- disagrees with his argument. That's | | 16 | all. | | 17 | THE COURT: Okay. | | 18 | MR. HENZY: Yeah. | | 19 | THE COURT: All right. Is there anything further | | 20 | that you wanted to tell me? | | 21 | MR. HENZY: Not right now, Your Honor. | | 22 | THE COURT: Okay. Thank you. | | 23 | MR. HENZY: Thank you, Your Honor. | | 24 | THE COURT: Mr. Kindseth? | | 25 | MR. KINDSETH: Your Honor, on behalf of HK | | | |

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 58 | | 1 | International, I would just like to just clarify some -- | | 2 | with respect to the inspection of the Lady May, I just would | | 3 | like to make sure there's no misunderstanding. | | 4 | The trustee used the term that the yacht was | | 5 | damaged and I think that left a lot open. And I think it's | | 6 | appropriate for Your Honor to hear with respect to the | | 7 | particular issues that the yacht was not damaged in the | | 8 | crossing. And we permitted the inspection on a very short | | 9 | order. | | 10 | Pacific Alliance had three inspectors there. The | | 11 | trustee had one inspector there. They were allowed | | 12 | unfettered access to the entire ship. Our chief engineer | | 13 | and the captain were available. The chief engineer was with | | 14 | all the inspectors continuously answering their questions. | | 15 | Additionally, they were permitted unfettered | | 16 | access to the books and records of the yacht. And they went | | 17 | through the records and obtained all the information they | | 18 | sought. | | 19 | And to my knowledge, being present and witnessing | | 20 | what transpired, the only known issues with respect to the | | 21 | Lady May are first the sea valves, which we've been | | 22 | apprising the Court of for quite some time. We had an | | 23 | estimate to do the work in France, but time did not permit | | 24 | it. So we know there's some rusted bolts on some sea valves | | 25 | that need to be replaced and we fully intend to reserve for | | | |

Ho Wan Kwok - July 21, 2022 59 that. Unfortunately, one of the fuel pumps broke outside New York. We disclosed that before the inspection. And we're getting quotes for that and we intend to reserve for that. And, additionally, the boat being damaged was that some paint came off the hull during the crossing. And we're fully intending to have that inspected and an estimate received for the cost of that. So those are the three items. And, again, I was personally there. The inspectors discussed, the chief engineer discussed, there were no other issues. That is the extent of the, quote, "damage" that was referred to by the trustee. And in accordance with the stipulation, we're going to come to -- with an estimate. We'll present the estimates to Your Honor and we'll ask Your Honor to order that the -- those amounts be reserved. Thank you, Your Honor. THE COURT: Okay. Thank you. With regard to HK's -- the books and records of HK as a whole, I -- apparently -- I shouldn't say apparently -- none of what's happened today is evidence before the Court obviously. We're hearing different reports, which is what the Court wanted to hear. But HK International is going to

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 87 of 253 | |----|------------------------------------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 60 | | 1 | be subject to some requirement to turn over those records to | | 2 | the trustee. | | 3 | MR. SKALKA: Yes. My apologies, Your Honor. And | | 4 | I'm sure, you know, Attorney Henzy meant to address this. | | 5 | With respect to the corporate books and records | | 6 | and so forth, we received the request from the trustee. We | | 7 | fully understand our obligations and the debtor understands | | 8 | the debtor's obligations post trustee appointment while the | | 9 | debtor is out of possession under the code and the | | 10 | bankruptcy rules to cooperate with the trustee. And we're | | 11 | in the process of assembling information and records. | | 12 | And HK International, although not a debtor | | 13 | entity, it's owed -- it's owned by the daughter. | | 14 | As counsel, I understand that the records will | | 15 | need to be produced and we fully intend to cooperate with | | 16 | the trustee in that process. | | 17 | THE COURT: Okay. Thank you. | | 18 | Now, with regard to the status conference, the | | 19 | other matter -- two other matters -- we turn first to Brown | | 20 | Rudnick on the motion to withdraw as attorney. | | 21 | So, counsel, I'm not sure which of the two of you | | 22 | would like to be heard, but there is no -- unless I missed | | 23 | something, which is very possible --- I don't see any reason | | 24 | set forth in the motion to be -- to withdraw as debtor's | | 25 | counsel in the case. |

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Ho Wan Kwok - July 21, 2022 61 So I'd ask you why -- why is it that you believe that you are entitled -- your firm is entitled -- and all the individuals who filed appearances in the case entitled to withdraw as debtor's counsel at this point? MR. KLETTER: Sure. And just to clarify, Mr. Romney is with the Zeisler firm. Again, this is Dylan Kletter. THE COURT: Oh, yes. I'm sorry, Mr. Romney. MR. KLETTER: That's okay. This is Dylan Kletter from Brown Rudnick. You're right. It does not go into detail for why, but I believe the Zeisler firm has accurately described now that he's out of possession it's his prerogative to terminate his counsel and that is what he did. And he has replaced it with substitute counsel of the Zeisler firm, a Mr. Mitchell. And then it is our position that the Zeisler firm, as you can tell, is obviously working the file and we have an unobjected to motion to withdraw as counsel. THE COURT: Well, I don't know that you have an unobjected to motion to withdraw as counsel because it hasn't been set for a hearing and no one's been required to file any response to your motion. And even if you have an unobjected to motion to withdraw as counsel, that doesn't mean that the Court

Ho Wan Kwok - July 21, 2022 62 doesn't have an independent duty to determine whether or not that motion should be granted or denied or granted with conditions. Your firm subjected itself to the Court and to the processes of the bankruptcy case. Your firm received a million dollar retainer from some source that I'm not -- I don't recall -- maybe there is evidence in the record about the source, I don't recall -- and I'm sorry at the moment that I don't -- but you also, you know, would need to file a fee application and you'd have to have those fees approved and you'd have to establish that the retainer has not been drawn down on and all of those kinds of things. So while maybe it ultimately will be a motion -- and unopposed motion to withdraw as attorney, it is not at that -- this point in time because it was not brought before the Court properly as far as getting it either through our contested matter procedure or on the calendar for a hearing. That's how our local rules work in Connecticut. So we can -- I'm going to hear from other parties, sir, but there will be a process. And maybe it will be granted. But at the very least, if it is granted, you will -- your firm will be obligated to comply with the requirements of the bankruptcy code and the rules and that would be at the very least filing a fee application which Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 89 of

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| | 253 | |----|--------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 63 | | 1 | would be subject to objections and further hearing and | | 2 | determination by the Court the fees and expenses incurred by | | 3 | the firm. Okay? | | 4 | MR. SKALKA: Understood. | | 5 | THE COURT: Mr. Friedman, I see you have risen. | | 6 | Go right ahead, please. | | 7 | MR. FRIEDMAN: Thank you, Your Honor. | | 8 | Madam Court Reporter Deputy, can you hear me from | | 9 | here or do you want me to go -- | | 10 | THE COURT: Maybe it would make sense if you don't | | 11 | mind, Mr. Friedman. | | 12 | MR. FRIEDMAN: Good afternoon, Your Honor. It's | | 13 | Peter Friedman from O'Melveny & Myers. | | 14 | THE COURT: Good afternoon. | | 15 | MR. FRIEDMAN: I want to make three quick points | | 16 | on things you've heard from -- on so far and then I would | | 17 | like to come back to address any issues related to the | | 18 | scheduling with respect to the retention motion and the | | 19 | 60(b) motion. | | 20 | THE COURT: Go right ahead. | | 21 | MR. FRIEDMAN: First is to answer your question. | | 22 | Lamp Capital made a loan -- | | 23 | THE COURT: Thank you. | | 24 | MR. FRIEDMAN: -- which is where the funding came | | 25 | from. | | | |

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Ho Wan Kwok - July 21, 2022 64 The second is with respect to 523 and those complaints. My view -- obviously everybody's offered what they think is the right answer -- is we don't even know if this debtor is going to propose, I'm sorry, the trustee is going to propose a plan that has a discharge so it seems to me like a stay is particularly warranted in light of that. Why waste time litigating over an action that may be constitutionally not ripe. I think it's actually to me like a pretty serious question as to ripeness for any of those claims if we don't know if the debtor -- if a discharge is going to be proposed. I have a hard time seeing one being proposed by the trustee unless there's something pretty close to full satisfaction of claims. I don't know what the trustee is going to do on that. But that seems to me an independent reason to consider the parties potentially agreeing to stay those matters. With respect to the HK lawsuit over the boat, you know, PAX is a defendant. I'm hoping that we can stipulate that PAX doesn't need to be a defendant. We never claimed to own the boat. We can't assert the debtor's rights. We can't levy because of the automatic stay which remains in place. So, you know, PAX has had to spend a lot of resources already in this case. It would be great if we

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| | 253 | |----|--------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 65 | | 1 | cannot have to spend resources on a suit where we're not | | 2 | really appropriately a defendant given sort of the current | | 3 | context of this case. | | 4 | So those are the three points I wanted to make. | | 5 | I do want to be heard on the retention issues and | | 6 | the 60(b) motion because we do have some things to say. | | 7 | THE COURT: Go right ahead. | | 8 | MR. FRIEDMAN: When it's time. You know. I don't | | 9 | know if you want me to -- | | 10 | THE COURT: Well, you can -- you can tell me what | | 11 | you'd like to tell me now. I mean, we are going to -- you | | 12 | go right ahead. | | 13 | MR. FRIEDMAN: Okay. So, Your Honor, a couple of | | 14 | -- a couple of things. | | 15 | On the -- on both of them, whether it's with | | 16 | respect to Paul Hastings or with respect to Mr. Despins, I | | 17 | think our big concern is -- with respect to the issues Mr. | | 18 | Kwok has raised in his letters and on his social media | | 19 | account, which I don't know if you've had -- maybe it's not | | 20 | appropriate for the Court to look at it -- but on those | | 21 | things like PAG has committed fraud by colluding with DOJ is | | 22 | littered all over his Gettr account. | | 23 | I think his most recent Gettr post is, you know, | | 24 | Mr. Miles Guo will initiate a series of motions and appeals | | 25 | to expose the CCP's infiltration of the U.S. Judiciary and | | | |

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 66 | | 1 | the black hands of the U.S. Judiciary. There's an | | 2 | accusation that I've colluded with the CCP. | | 3 | I certainly want to say with respect to PAG and | | 4 | with respect to me -- | | 5 | THE COURT: With respect to PAG, P-A-G? | | 6 | MR. FRIEDMAN: Yeah. | | 7 | THE COURT: Okay. | | 8 | MR. FRIEDMAN: -- and all of its affiliates, and | | 9 | me, if there is any repetition of those in a pleading signed | | 10 | by counsel, we will seek Rule 11 sanctions. I just want to | | 11 | put people on notice of that. Okay? | | 12 | As an officer of the Court I will tell you that | | 13 | I'm the only person who spoke -- maybe Mr. Sarnoff did, but | | 14 | our client never spoke to the Department of Justice about | | 15 | the appointment. We actually recommended people other than | | 16 | Mr. Despins. | | 17 | We, for reasons having to do with costs, didn't | | 18 | actually want somebody from a big law firm to be involved in | | 19 | this case as a trustee because of expense. We were very | | 20 | clear that there were people we supported to be trustee. | | 21 | They were not selected. Either of the people who were | | 22 | selected, neither one was selected. We would have been okay | | 23 | with Mr. Whitley. | | 24 | We're not thrilled with Mr. Despins for the cost | | 25 | reasons, for the fact they put in now our client is a former | | | |

Ho Wan Kwok - July 21, 2022 67 client of ours that I think is, you know, wasn't something that our client thought was so great to be deemed a former client, but it is what it is. But I just want to be really clear that if anybody makes those allegations in a signed pleading it will be Rule 11 sanctionable because it's just not true. More broadly speaking on both though, Your Honor, the Court obviously has control over how it deals with those motions and what it permits to be raised. If it involves subjecting us to discovery, obviously, you know, we think that's extremely unfair and unwise. We think that if it involves frankly forcing people to go down rabbit holes to deal with, you know, Paul Hastings' connection with companies that operate in China on the sort of rabbit hole, crazy theories that are being raised about collusion with the CCP, that the Court should just consider going in a different direction, if it's going to indulge that kind of discovery because it's a -- you know, Paul Hastings, they're going to bill for that -- that eats into creditor recoveries. It distracts us from the intention -- attention to what ought to be done in this case. And I don't think it's right to give Mr. Kwok the ability to do that. That will be -- discovery, et cetera,

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| | 253 | |----|-----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 68 | | 1 | will all be argued later. But if the Court's going to -- we | | 2 | would rather see the Court go in a different direction with | | 3 | the trustee because it's not in the best interest of the | | 4 | estate rather than go down those rabbit holes because of the | | 5 | expense issue and because of the delay issues. | | 6 | Again, I think the allegations are not -- are | | 7 | frivolous allegations that could subject counsel and clients | | 8 | and anybody who's sort of sponsoring them to real problems. | | 9 | But we just, you know -- as you know, PAX has been | | 10 | waiting since 2009 to get paid. Spending more time on a war | | 11 | over these issues which really aren't germane to what are | | 12 | Mr. Kwok's assets and how can they get into the hands of | | 13 | creditors seems just -- you know, can't possibly be in the | | 14 | interest of the estate. | | 15 | As to cost more broadly -- and, you know, I've | | 16 | expressed this to Mr. Despins, you know, we are concerned | | 17 | about the rate structure and the expense. He's obviously | | 18 | done a lot of work, which is great, and I think his | | 19 | presentation was important, but, you know, we are concerned. | | 20 | I think to the extent that we can and we will, you | | 21 | know, if we need to, we will file an objection with respect | | 22 | to -- if we have to -- with respect to the costs and perhaps | | 23 | propose something. I'm not sure. But I don't want anybody | | 24 | to be surprised about that. I try not to surprise people, | | 25 | you know, particularly other, you know, members of the bar | | | |

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 69 | | 1 | on sensitive -- I understand fees are sensitive issues, | | 2 | rates are sensitive issues, but it is important to PAX as a | | 3 | party with, you know, \$260 million plus in judgments and the | | 4 | largest creditor. | | 5 | I think that's really all I wanted to say, Your | | 6 | Honor. I appreciate you giving me the opportunity to speak. | | 7 | THE COURT: Okay. Before you step back, I -- as | | 8 | you know, this is a status conference so we are going to be | | 9 | setting some hearings on different matters, specifically on | | 10 | Brown Rudnick's motion to withdraw. | | 11 | And I have to look at -- there's a lot of thing | | 12 | that have been filed since Mr. Despins was appointed as the | | 13 | Chapter 11 trustee that we will look at. | | 14 | Are you asking the Court to do anything different | | 15 | than what the Court is planning on doing or you're just | | 16 | asking that you reserve your rights to be heard on whatever | | 17 | happens? | | 18 | MR. FRIEDMAN: The latter. And the other thing I | | 19 | would just ask is if the Court can -- I would be unavailable | | 20 | I think on August 5th. I think the -- | | 21 | THE COURT: The 5th? | | 22 | MR. FRIEDMAN: -- the Friday, that Friday of that | | 23 | week is -- I'm unavailable. Other than that, I'm available | | 24 | at the Court's disposal. | | 25 | THE COURT: Okay. Thank you. | | | |

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Ho Wan Kwok - July 21, 2022 70 MR. FRIEDMAN: Thank you, Your Honor. THE COURT: Mr. Goldman? MR. GOLDMAN: Thank you, Your Honor. I'll be -- THE COURT: Would you come up here too, please. MR. GOLDMAN: Yes. Certainly. THE COURT: Just because I think it's easier for the courtroom deputy to pick up your voice. Please. Thank you. MR. GOLDMAN: Just a few brief points, Your Honor. The committee is aligned with PAX in terms of the cross concerns that Mr. Friedman articulated with respect to the trustee and his firm. We want to reserve our rights on that application. We're also aligned in terms of how we view the 9024 motion that the debtor filed, which we view as a complete distraction and without merit. We need to get on to the business of administering this five month old case and we've had enough litigation thus far. These issues that are raised in our view are just not meritorious and we shouldn't be spending a lot of -- a lot of time on that. Just in terms of giving Your Honor an idea of the magnitude of the claims thus far in the case, even though a proof of claim deadline hasn't been set, the claims register

Ho Wan Kwok - July 21, 2022 71 shows 80 -- approximately \$83 million in proofs of claim that have already been filed. That doesn't include PAX's claim of approximately 254 million. The class action 523 complaint that was just filed yesterday states that their claim is in the collective amount of \$114 million. That relates to I believe the securities, the alleged securities violations, with respect to GTV. That may also be the same claim that the SEC filed a proof for although I'm not completely sure. And so if you include those two claims, which haven't been filed yet, we're up to around \$450 million in gross amount of claims. And so we really do need to get on with the business of trying to get a recovery for those claims. And I don't want to minimize we have a great deal of confidence in Mr. Despins and what he's done thus far, but there is a correlative concern about the magnitude of the rates and the fees, which of course he will be getting as trustee under section 326 based on what he recovers. And if his firm is hired they'll be getting compensated that way as well. So with -- THE COURT: A question about -- and I meant to ask Mr. Kindseth this as well -- and probably should have asked Mr. Despins this as well -- the stipulation with regard to Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 98 of

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 72 | | 1 | the Lady May, there are still other obligations that have to | | 2 | be met. There's still \$37 million being held in escrow. | | 3 | There are -- the other stipulation provisions have | | 4 | not been met yet that I see. Only the stipulation provision | | 5 | that has been met is the reporting that HK has done, and | | 6 | they have done that timely, and the return of the boat, the | | 7 | yacht, prior to the date in the stipulation. | | 8 | But there are other provisions in that stipulation | | 9 | that have not been resolved yet. | | 10 | And so when you talk about getting on with the | | 11 | administration of the estate, which is what the Court found | | 12 | when determining that a Chapter 11 trustee should be | | 13 | appointed -- there needs to be some attention to what is | | 14 | going to happen here with regard to the yacht and/or the \$37 | | 15 | million. That money is still subject to the jurisdiction of | | 16 | this court. | | 17 | And there are -- there are still issues with | | 18 | regard to certifications and things that I think need to be | | 19 | filed in which there are time frames to object. | | 20 | And so it would seem to me that the parties need | | 21 | to focus on those issues. Because the longer those issues | | 22 | lay dormant, the longer it's going to take to administer the | | 23 | estate. | | 24 | MR. GOLDMAN: Yeah. We are certainly aligned with | | 25 | Your Honor on that. | | | |

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| | 253 | |----|---------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 73 | | 1 | THE COURT: Okay. All right. All right. I | | 2 | appreciate what you've said. And is there anything further | | 3 | you'd like to state for the record this afternoon? | | 4 | MR. GOLDMAN: No, Your Honor. Thank you. | | 5 | THE COURT: Okay. Thank you. | | 6 | Does the Office of the United States Trustee wish | | 7 | to be heard? | | 8 | MS. CLAIBORN: Not at this time, Your Honor. | | 9 | THE COURT: Okay. Well, I am going to ask the | | 10 | Office of the United States Trustee to file a brief on why | | 11 | -- and I'm going to -- actually, I'm going to have Attorney | | 12 | Henzy's firm do the same thing simultaneously -- and anyone | | 13 | else that wants to, you may, but you don't have to -- as to | | 14 | why the debtor is entitled to retain Attorney Henzy's firm | | 15 | without that firm having to comply with the provisions of | | 16 | the bankruptcy code 327(a) and 2014. | | 17 | And at some point, after this status conference, | | 18 | I'm going to schedule a hearing on the motion to withdraw | | 19 | filed by Brown Rudnick which will have an objection deadline | | 20 | for parties to file an objection, if any, to Brown Rudnick's | | 21 | motion. | | 22 | And then, Mr. Despins, with regard to the bar date | | 23 | issue and the publication issue, you indicated when we | | 24 | talked on the record that you'd like to think about those | | 25 | issues. I think it may make sense to schedule a hearing, a | | | |

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| | 253 | |----|-----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 74 | | 1 | further hearing, on that motion so we can finalize it and | | 2 | get that order entered. And I can do that. I would assume | | 3 | I can do that in short order in the next week or two. | | 4 | Would that give you enough time to analyze the | | 5 | issue, Mr. Despins? | | 6 | MR. DESPINS: Yes, Your Honor. | | 7 | THE COURT: Okay. Thank you. | | 8 | With regard to Mr. Despins' application to employ | | 9 | Paul Hastings and to employ Neubert, Pepe & Monteith, I | | 10 | think those have to be set for a hearing as well with an | | 11 | objection deadline. | | 12 | The likelihood is -- but I don't know this until I | | 13 | go back and review everything, that we will have a day set | | 14 | in the future to address all of these matters, which | | 15 | obviously will be a day because there's a lot of matters to | | 16 | address. | | 17 | I agree that we need to move ahead with the | | 18 | administration of this case which is why the Court made a | | 19 | determination about the appointment of a Chapter 11 trustee. | | 20 | I want to look at the calendar for a moment if | | 21 | everyone would bear with me, please, for a moment. | | 22 | MR. DESPINS: And, Your Honor, if I could be heard | | 23 | on timing? | | 24 | THE COURT: Sure. Please. | | 25 | MR. DESPINS: So we had filed -- thank you, Your | | | |

Ho Wan Kwok - July 21, 2022 75 Honor. We had filed a motion to expedite which obviously has not been granted. Understand that the reason being is that we're going full out right now. And the 30day rule doesn't help us if the Court, you know, in the future says, well -- by the way, I'm making this up as a slight joke -- but if the Court says, well, we think you're a member of the communist party so we're not going to approve the retention -- it's a joke, Your Honor -- so then I'm not protected by the 30 day rule. So there's a real prejudice to the firm in being -- and that's, by the way, that's exactly why the debtor has not scheduled -- has not moved for a hearing on their motion to recuse me or to remove me because they love the uncertainty and to continue that. So for us, you know, we filed our motion on the 12th. Even under regular, non-accelerated days, that would bring us to August 1st or something like that, on the 20-day -- so personally from the 3rd to the 22nd, I'm -- I could not be in court. I mean, I could participate by Zoom. But if there -- if there's a real contested hearing, I could not be there. So we would urge the Court -- you know, PAX had said they were okay with a hearing next Monday. Of course, that's probably too short at this point. But anytime next

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 76 | | 1 | week or August 1st, we would urge the Court, if it's at all | | 2 | possible, to schedule it then because that will have been | | 3 | plenty of time for these issues to have been figured out. | | 4 | Thank you, Your Honor. | | 5 | THE COURT: Thank you. | | 6 | MR. HENZY: Your Honor, may I be heard? | | 7 | THE COURT: Yes. | | 8 | MR. HENZY: Thank you, Your Honor. | | 9 | Just to be clear, I will file a motion to expedite | | 10 | right away on our 9024 motion. We're not trying to have | | 11 | that float out there. We think it should be taken up at the | | 12 | same time as the Paul Hastings application will be taken up | | 13 | because there will be a lot of overlap. | | 14 | We do need to take discovery in connection with | | 15 | our motion and the Paul Hastings application. We're | | 16 | prepared to serve discovery immediately. | | 17 | THE COURT: I'm not sure you're entitled to | | 18 | discovery, Attorney Henzy. | | 19 | It's a motion for relief for a judgment order. | | 20 | Based upon, again, an issue of whether or not your client | | 21 | actually has standing to oppose this person being appointed | | 22 | as a Chapter 11 trustee in a case where your client has | | 23 | stated under penalty of perjury that they have \$3,400 and | | 24 | some odd dollars as assets. | | 25 | So I understand your assertion, but I'm not sure I | | | |

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Ho Wan Kwok - July 21, 2022 77 agree with it at this point. I also -- as I started to say, I'm not sure that you don't have to meet the requirements of debtor -- a debtor's counsel under 327(a). I understand your argument, but no one has put forth anything in front of me to show me why you don't have to meet that requirement. Number one. Number two, even if you didn't have to meet the requirement, there's -- I don't know why it isn't a conflict of interest that you represent both HK International and Mr. Kwok. I don't -- I don't understand that. I'm having difficulty understanding that. And I'm having difficulty understanding that because of many reasons, including the fact that there is an adversary proceeding pending filed by your firm on behalf of HK International claiming that Mr. Kwok has no -- well, asking for a declaratory judgment that it owns the boat. So there's a lot of issues here and we're not going to get derailed on discovery on the presumption that you're entitled to do all these things to begin with. Those issues have to be addressed first. And I'm not going to allow discovery to drag out what was clearly before the debtor and Brown Rudnick as debtor's counsel since the U.S. Trustee filed a motion for the appointment of an examiner or in the alternative a trustee I believe back in February or early March. I can

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Ho Wan Kwok - July 21, 2022 78 look at the docket. It won't take me very long to find it. So that's not going to happen in this case. This case -- your client voluntarily submitted himself to the jurisdiction of this court with all the benefits and burdens associated with that and that doesn't mean that your client, who as you have stated now on the record a few times, who's no longer in possession -- can now stall the process by insisting that you need discovery in connection with your allegations that Mr. Despins -- Mr. Despins -- now, we're talking about -- I made this point at the last hearing but you weren't here because you weren't counsel -- even though the trustee had -- the motion to appoint the trustee had been granted, that the difference between a conflict of Mr. Despins acting as the Chapter 11 trustee and Paul Hastings acting as Mr. Despins' counsel are two different things. And no one has put forth any information in this record to show that Mr. Despins has a conflict of interest. No one. And Mr. Despins has stated and sworn under penalty of perjury that he has no conflict, that the issues with regard to Paul Hastings that have been raised by you in your brief in your -- not your brief, but in your motion -- are things he did not know of and was not aware of personally. But, yes, his firm has offices in China. And,

Ho Wan Kwok - July 21, 2022 79 yes, they represent parties that somehow are related -- could be related to Mr. Kwok, but not in connection with this case in any way. I'm not going to allow discovery to derail the process of the Chapter 11 trustee appointment and his duties and responsibilities to carry out his affairs in this case. And I'm certainly not going to do that unless and until I determine whether you're correct or not that you can represent the debtor without having to address the disinterestedness issues. Even if you can, I still have no understanding of -- I'm having very -- it's very difficult for me to understand how your firm does not have an actual conflict of interest in the simultaneous representation of HK International and Mr. Kwok. MR. HENZY: Thee's a lot -- THE COURT: There is a lot there. MR. HENZY: -- to unpack there, Your Honor. THE COURT: I agree with you. MR. HENZY: If I could -- if I could -- THE COURT: There is -- this case has a lot. It always has a lot. MR. HENZY: To show that I can joke too, I like it that you refer to Mr. Kwok as, you said, your client. Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 106 of

You're not bound by it. But --

Ho Wan Kwok - July 21, 2022 80 THE COURT: Well, that's what you assert. That's what you assert, Mr. Henzy. MR. HENZY: That's what I assert. But, again, to show I can -- I can joke too. There's a lot to unpack there, Your Honor. I mean, in the sense that -- and I understand you're not agreeing with this but, you know, I believe Mr. Kwok does have standing to challenge the appointment of Mr. Despins. And just to be clear -- THE COURT: I didn't -- I didn't even say -- I didn't even argue with you on that -- MR. HENZY: Okay. THE COURT: -- at this point. MR. HENZY: If he -- THE COURT: At this point. All I said is you're not getting discovery. MR. HENZY: Well, but if -- THE COURT: It's not being derailed with discovery. It's not happening. MR. HENZY: But if he -- if he has standing -- the rule 60 motion is a contested matter -- if he has standing to press that motion, and he has standing to object -- THE COURT: It's not a new trial. It's not a new trial. Right? Rule 60 isn't a new trial. MR. HENZY: This is not a new trial. Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 107 of

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| | 253 | |----|-------------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 81 | | 1 | THE COURT: Rule 60 is you want relief -- | | 2 | MR. HENZY: That's right. | | 3 | THE COURT: -- from a judgment or order. | | 4 | MR. HENZY: That is correct. | | 5 | THE COURT: That's right. | | 6 | MR. HENZY: That's correct. | | 7 | THE COURT: So it's not a new trial. You're not | | 8 | saying there's newly discovered evidence that -- | | 9 | MR. HENZY: But it -- | | 10 | THE COURT: -- the Court didn't consider when | | 11 | taking this all into effect -- into account. | | 12 | And Mr. Despins has, as you know, as any party | | 13 | does, a continuing obligation to disclose issues, which he | | 14 | did. Which he did. He filed a supplemental affidavit. He | | 15 | filed that. | | 16 | And so there is no new -- this isn't -- the | | 17 | standard under Rule 60 and the standard under Rule 59 are | | 18 | completely different. | | 19 | MR. HENZY: It's a Rule 60(b)(2), Your Honor. | | 20 | It's -- | | 21 | THE COURT: I understand what it is. | | 22 | MR. HENZY: It's newly discovered evidence. And | | 23 | this is -- | | 24 | THE COURT: It's not newly discovered evidence. | | 25 | MR. HENZY: How could the debtor -- how could the | | | |

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Ho Wan Kwok - July 21, 2022 82 debtor -- THE COURT: What's the evidence? MR. HENZY: Given -- THE COURT: Tell me what the evidence is. MR. HENZY: Sure. And counsel can say that this is all frivolous, but -- THE COURT: I'm don't want to -- I don't -- I'm not worried about him right now. MR. HENZY: Okay. THE COURT: I'm worried about you. MR. HENZY: Okay. THE COURT: Tell me what the evidence is. MR. HENZY: There is a public record that the government of China, the Communist Party of China, Mr. Kwok is on the wrong side of the government of China. I don't think -- I don't know that anybody would dispute that. Okay? I think that it is now known -- and I don't know that Mr. Kwok knew or could have known this given the time line on Mr. Despins' appointment -- I think there was one day between the U.S. Trustee filing that motion and the hearing taking place that Paul Hastings -- THE COURT: I agree with you. MR. HENZY: -- Paul Hastings has offices as I understand it in China. Paul Hastings represents companies

Ho Wan Kwok - July 21, 2022 83 that are affiliated with the Chinese government. That is -- I believe that is true. THE COURT: Okay. MR. HENZY: I also, from reading the newspaper, okay, have an understanding that being a citizen of the world, that China exercises a different degree of influence over entities doing business in China than let's say the United States government exercises over entities doing business in the United States. I think that is a fair statement for me to make. So I don't think it's frivolous or crazy or baseless -- THE COURT: But where's the evidence? What's your evidence? MR. HENZY: I -- THE COURT: That the newspaper says that China exerts control over -- and I'm not trying to be flip, Mr. Henzy, but -- MR. HENZY: Well, do you -- do you disagree with that, Your Honor, that the -- THE COURT: I don't -- I don't have to agree or disagree with anything. MR. HENZY: -- that the government of China -- I mean -- THE COURT: All I have to do is make findings of Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 110 of

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Ho Wan Kwok - July 21, 2022 84 fact, right? And I made those findings of fact when I appoint -- when I granted the motion for the appointment of a Chapter 11 trustee. I made those findings. Okay? Now, Mr. Despins has stated in the -- on the record, subject to penalty of perjury, that he personally has no conflict, doesn't represent the government of China. Yes, works for an international firm that has offices in China. Yes, the firm has business -- has as a past client, I believe is the exact language -- PAG, P-A-G, which is related to and/or -- Mr. Friedman can correct me -- but I think is the -- may be described as the parent company of PAX. What's the evidence there? How is that -- how is that enough evidence for this court to say he should be -- Mr. Despins should be removed? MR. HENZY: I can't give you the evidence -- THE COURT: Right. MR. HENZY: -- unless I can do discovery. THE COURT: But I'm not going to derail the process -- MR. HENZY: Unless -- THE COURT: -- so you can go make -- do discovery. What discovery? What possible -- what are you going to do? Are you going to depose people from the government of China? MR. HENZY: If Mr. Despins wants to stipulate as to all of Paul Hastings' connections in China, who they --

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Ho Wan Kwok - July 21, 2022 85 how many parties they represent -- THE COURT: Why would he have to do that? MR. HENZY: Your Honor, you can, today, tell me that I'm just wrong, that Paul Hastings -- and Mr. Despins is a partner at Paul Hastings. I don't -- I don't think you just separate him and say if Paul Hastings is not -- is not disinterested, that Mr. -- I don't see how Paul Hastings could be not disinterested and have Mr. Despins not be disinterested. That doesn't make sense to me. Okay? But if you're going to say that notwithstanding these apparent connections that Paul Hastings hasn't -- with the Chinese government, with -- THE COURT: That have nothing to do with Mr. Kwok. Where's the connection? MR. HENZY: The connection is that the Chinese government -- the allegation is that the Chinese government is -- has persecuted Mr. Kwok and has persecuted his family. The allegation is that the Chinese government exercises a great deal of influence over entities that do business in China and that that puts Paul Hastings in a compromised position. And Mr. Despins, as a partner of Paul Hastings, in a compromised position. Your Honor, you can say I don't -- I don't agree

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| | 253 | |----|-----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 86 | | 1 | with you that the Chinese government exercises influence | | 2 | over entities in China that are doing business in China. | | 3 | You could say that. Okay. And I -- I'm not going to go do | | 4 | discovery on that. But this raises a significant issue. | | 5 | I don't -- I don't know if someone's going to | | 6 | stand up and say -- and defend -- in this court and defend | | 7 | the way the Chinese government deals with entities that do | | 8 | business in China and say, no, that's not true. The Chinese | | 9 | government doesn't exercise any influence over people -- | | 10 | THE COURT: If your client didn't -- if your | | 11 | client -- if you're allowed to represent this client in this | | 12 | court didn't want to subject himself to the jurisdiction of | | 13 | this court then he shouldn't have filed a Chapter 11 case. | | 14 | MR. HENZY: I don't think, Your Honor, that has | | 15 | anything to do -- | | 16 | THE COURT: Well, how does it not have anything to | | 17 | do with it? Because you're saying that he -- the Chinese | | 18 | government influences everything that happens with regard to | | 19 | Mr. Kwok. That's what you're saying. | | 20 | MR. HENZY: No, I'm not saying that. | | 21 | THE COURT: Then what are you saying? | | 22 | MR. HENZY: What I'm saying is that the Chinese | | 23 | government exercises a great deal of influence over anybody | | 24 | who does business in China. I think that's a fair statement | | 25 | for me to make. | | | |

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 87 | | 1 | THE COURT: Okay. | | 2 | MR. HENZY: Okay. And Paul -- | | 3 | THE COURT: And how does that result in a conflict | | 4 | of interest that allows that Mr. Despins can't -- can't be | | 5 | the Chapter 11 trustee? | | 6 | MR. HENZY: And Paul Hastings does business in | | 7 | China. | | 8 | THE COURT: Okay. | | 9 | MR. HENZY: Okay. | | 10 | THE COURT: Okay. | | 11 | MR. HENZY: And the Chinese government -- | | 12 | THE COURT: And so what -- what control -- you | | 13 | have no evidence of what control they have. You just make a | | 14 | blanket -- and I'm not saying you just -- but the statement | | 15 | that you just made is the Chinese government has control | | 16 | over people who do business with them. Well, the control | | 17 | might be that they want the company to produce 12 cars as | | 18 | opposed to 20. How does that affect Mr. Kwok and Paul | | 19 | Hastings? | | 20 | MR. HENZY: Your Honor, the argument is that Paul | | 21 | Hastings does business in China. It represents entities | | 22 | connected with the Chinese government, therefore, the | | 23 | Chinese government is going to have influence or control -- | | 24 | THE COURT: So you're saying Mr. Despins is a -- | | 25 | is a puppet of the Chinese government? | | | |

Ho Wan Kwok - July 21, 2022 88 MR. HENZY: No. That's completely unfair, Your Honor. I didn't say -- THE COURT: Well, then what are you saying? MR. HENZY: I did not say that. THE COURT: Well, then -- but then what are you saying? MR. HENZY: What I'm saying is that there's a disinterestedness issue here and we have a right to explore that issue. THE COURT: Okay. MR. HENZY: Okay. THE COURT: I'm not sure I agree with you. MR. HENZY: Okay. THE COURT: But I understand your point. MR. DESPINS: Your Honor, if I could, could I be heard for two seconds? THE COURT: Certainly. Certainly. MR. DESPINS: This argument is insane. Why? Let's assume he's right. Let's assume he's right on all -- so what's the discussion? So the Chinese communist party comes to our office in China and says what? Go easy on him or go hard on him? I'm going to go -- let me be very clear, I'm going to go and try to get all his assets. That's my job as the trustee. Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 115 of

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Ho Wan Kwok - July 21, 2022 89 So what's the conflict? Meaning, first of all, I'm not agreeing for a second that they would do that or that we would be susceptible to that. But let's assume that's the case, let's follow that to its logic. Unless I -- unless his point is that we would somehow work with them to arrest him or to bring him -- that's insane. This is a civil case. My job is not retribution. It's collection. I want to collect -- I want to be clear -- as much as I can for the holders of valid claims. That's the (indiscernible). And Paul Hastings will do the same. So this argument that we're subject to the influence, which way does that cut? Meaning that they would -- one way or another, they would say go harder? I'm going to -- I don't need the CCP to tell me that. I'm going to go hard to get all his assets. That's my job. So I don't understand the influence. I'm sorry. MR. HENZY: Can I -- can I just -- can I respond to that quickly, Your Honor? THE COURT: Yes, you can. MR. HENZY: Okay. And, again, this is public record. THE COURT: Public record where? MR. HENZY: I can give you -- I'll give you citations, Your Honor.

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| | 253 | |----|--------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 90 | | 1 | THE COURT: But tell me what it is. Are we | | 2 | talking about a social media website? | | 3 | MR. HENZY: Absolutely not, Your Honor. We're | | 4 | talking about statements from the United States Department | | 5 | of Justice. | | 6 | THE COURT: Okay. | | 7 | MR. HENZY: Okay. | | 8 | THE COURT: What part of the United States | | 9 | Department of Justice? | | 10 | MR. HENZY: Different parts. | | 11 | THE COURT: Okay. | | 12 | MR. HENZY: And I can -- | | 13 | THE COURT: Go ahead. | | 14 | MR. HENZY: And I can tell -- okay. | | 15 | Mr. Steven Wynn, who is I think a well-known | | 16 | casino/hotel person, has -- the DOJ has filed a civil | | 17 | enforcement action against him to compel him to register | | 18 | under the Foreign Registration Act as an agent of the | | 19 | Peoples Republic of China and a senior official of the PRC's | | 20 | Ministry of Public Security, and the citation is -- it's a | | 21 | Justice Department -- it's in our motion -- it's a web, ww | | 22 | -- I can try to give it to you, but I -- | | 23 | THE COURT: No, it's all right. | | 24 | MR. HENZY: Okay. | | 25 | THE COURT: You don't have to give it to me. | | | |

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Ho Wan Kwok - July 21, 2022 91 MR. HENZY: And -- THE COURT: And how does that impact Mr. Wynn, I mean -- Mr. Wynn, I know how it impacts Mr. Wynn -- MR. HENZY: Okay. I'm -- THE COURT: -- how does it impact Mr. Despins and Paul Hastings? MR. HENZY: I'm responding to Mr. Despins' statement that it's insane to say that the Chinese government would exercise influence over someone doing business in China. THE COURT: That's not what he said. MR. HENZY: Okay. I think it is what he said. THE COURT: No. MR. DESPINS: No. THE COURT: That's actually not what he said. MR. HENZY: Okay. But if I could finish? THE COURT: He said your argument is insane. Because here's what he said. This is at least the way I interpret it. And you can disagree with me. He said your argument is insane because what -- the only two things that could happen is the Chinese government either tells him to go hard and get all of Mr. Kwok's assets or to do nothing and leave him alone. And Mr. Despins said, but I -- my job is to go hard and get all of his assets. So what's the problem?

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Ho Wan Kwok - July 21, 2022 92 MR. HENZY: So then the argument is that Mr. Despins -- Mr. Despins' interest and the Chinese government's interest are aligned and, therefore, to the extent -- THE COURT: That doesn't mean there's a conflict. MR. HENZY: -- to the extent -- wait -- to the extent that there otherwise would be a disinterestedness issue, there's no issue, because if anything the Chinese government would tell him go hard, go hard, go hard. That's not the analysis though, Your Honor. That's not -- THE COURT: How is he -- how is he not disinterested even if his -- even if his goals are aligned with the Chinese government, how is he not disinterested? MR. HENZY: If there is -- if there is a party that exercises any kind of undue influence over a trustee, then that trustee is not disinterested. THE COURT: How are -- where is the proof that they're exercising undue influence over Mr. Despins? MR. HENZY: I don't have proof today -- THE COURT: Okay. MR. HENZY: -- and I don't know how I could have proof today because -- THE COURT: Well, the bankruptcy code -- MR. HENZY: -- because I have --

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Ho Wan Kwok - July 21, 2022 93 THE COURT: Here's what happens. The bankruptcy code allows you to bring that issue forth if you believe it to be true and then it will be addressed appropriate. A Rule 60(b) motion is not the appropriate way for that to happen. There is no newly discovered evidence. The only thing that came out is the continuing obligation -- and first of all, we're talking about Mr. Despins. I raised this at the first hearing. Maybe you could argue, but we're not arguing that today, there's a problem with Paul Hastings. Maybe you can argue that. But we're not arguing that. We're talking about Mr. Despins individually acting as a trustee. So your argument is that no matter who was the Chapter 11 trustee, whatever individual, if that individual works for a firm that somehow has business relationships with China, so had a purchase and sale agreement to buy toys from China, that they would be not -- they would disinterested because -- because every single person that does business with the Chinese government is unduly influenced by the Chinese government. That's your argument. MR. HENZY: Depends on facts and circumstances, but potentially, yes. THE COURT: Well, what's the facts and -- well, how are the facts and circumstances of the scenario I just

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| | 253 | |----|-----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 94 | | 1 | presented to you any different from what Mr. Despins has | | 2 | said in his -- in his disclosures? | | 3 | MR. HENZY: I might say that that party is unduly | | 4 | influenced by the Chinese government. | | 5 | THE COURT: Buying toys? | | 6 | MR. HENZY: Yes. I might -- yes. | | 7 | THE COURT: Okay. | | 8 | MR. HENZY: I might say that. Yeah. | | 9 | THE COURT: Okay. You can say that, but I might | | 10 | disagree with you. | | 11 | MR. HENZY: And you might disagree with me. | | 12 | THE COURT: Okay. | | 13 | MR. HENZY: Yeah. | | 14 | THE COURT: All right. | | 15 | MR. HENZY: Look, I think we're not arguing the | | 16 | 60(b) motion today. I think. I think anyway we're arguing | | 17 | is does Mr. Kwok have a right to take discovery and I think | | 18 | he does. | | 19 | THE COURT: Yes. And I'm finding he does not have | | 20 | the right to take discovery. And you can appeal that if | | 21 | you'd like -- | | 22 | MR. HENZY: Yeah. | | 23 | THE COURT: -- when I rule on the motion, but | | 24 | we're not going to do this. | | 25 | See, here's the problem. There's \$37 million in | | | |

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 95 | | 1 | an escrow account. And there's a boat, a yacht, somewhere | | 2 | over there, right, that your client stipulated to would come | | 3 | to this jurisdiction. | | 4 | And before the Court didn't acquiesce to the plan | | 5 | of how the professionals were going to be paid \$8 million in | | 6 | a very short amount of time without establishing the need to | | 7 | pay them and to pay them on a weekly basis outside of the | | 8 | provisions of the bankruptcy code. The boat was going to be | | 9 | pledged as -- to the plan to creditors. | | 10 | Now we're in a situation where your alleged client | | 11 | -- and it may be it may be he may be your client doesn't | | 12 | want anything else to happen. | | 13 | Doesn't want the boat to become part of the | | 14 | estate, but doesn't want the \$37 million to become part of | | 15 | the estate either. And the way that that's going to be | | 16 | accomplished is to challenge Mr. Despins through a Rule | | 17 | 30(c) -- Rule 60 motion. That's not going to happen. | | 18 | MR. HENZY: I disagree with that, Your Honor. | | 19 | THE COURT: You may disagree. | | 20 | MR. HENZY: I just disagree. | | 21 | THE COURT: But that's not what's going to happen. | | 22 | MR. HENZY: Mr. -- | | 23 | THE COURT: You take your client, your client that | | 24 | you claim is your client, as you find him, correct? And you | | 25 | found him, as did Brown Rudnick, subject to orders of a | | | |

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| | 253 | | | | | | |----|----------------------------------------------------------------|--|--|--|--|--| | | Ho Wan Kwok - July 21, 2022 96 | | | | | | | 1 | state court of New York that found after evidentiary | | | | | | | 2 | hearings -- and I'm not saying they have collateral estoppel | | | | | | | 3 | effect, I'm not saying any of that, I'm talking about how | | | | | | | 4 | you found your client -- that found that not only was he -- | | | | | | | 5 | did he take the Fifth -- and the inferences could be drawn | | | | | | | 6 | in favor of the creditors with regard to him taking the | | | | | | | 7 | Fifth -- but that he established and created a network of | | | | | | | 8 | corporations to keep his assets out of the reach of | | | | | | | 9 | creditors, including PAX, who's been fighting with him since | | | | | | | 10 | 2009. | | | | | | | 11 | Then your client decides to file a Chapter 11 case | | | | | | | 12 | at the time that the sanction imposition by Justice Ostrager | | | | | | | 13 | is continuing to accrue. And the point -- and the argument | | | | | | | 14 | is, well, the accrual, that's stayed. I filed a Chapter 11, | | | | | | | 15 | the accrual of that is stayed. | | | | | | | 16 | So the argument then becomes that your client in | | | | | | | 17 | some way, shape or form, depending upon the relief sought by | | | | | | | 18 | the creditors, should either have an examiner appointed, a | | | | | | | 19 | Chapter 11 trustee appointed, or there be a conversion of | | | | | | | 20 | the case. | | | | | | | 21 | Then your client says, no, no, we'll agree to | | | | | | | 22 | dismissal. After coming to this court, negotiating -- being | | | | | | | 23 | part of a negotiation, which allegedly a separate and | | | | | | | 24 | distinct corporate entity owned by his daughter also | | | | | | | 25 | participated in, to bring the boat here, and then says, no, | | | | | | | | | | | | | |

Ho Wan Kwok - July 21, 2022 97 you know what, why don't you just dismiss the case, judge. We'll agree to dismissal. Well, that -- you know, your client made a decision, an informed decision, when he decided to file Chapter 11. That's what he did. He could have addressed all of this through the state court process and could have appealed everything, and did appeal things and lost, got -- it was referred back to Justice Ostrager for Justice Ostrager to make a determination about the ownership of the boat. And then Chapter 11 case gets filed, and HK International, the alleged separate and distinct legal entity that is alleged to be the registered owner of the boat, files an adversary proceeding against your client, Mr. Kwok, saying that it wants a declaratory judgment that HK International owns the boat and it's not property of this debtor's estate. I already addressed all those issues by finding that a Chapter 11 trustee should be appointed. Your argument is that Mr. Despins is disinterested -- is not a disinterested person because his firm, not him, but his firm has offices in China and the Chinese government is out to get -- and by the way, maybe the Chinese government is out to get Mr. Kwok. I don't need to make findings about that, okay. Maybe they are, but that doesn't Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 124 of

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Ho Wan Kwok - July 21, 2022 98 impact Mr. Despins' role and his responsibilities under the bankruptcy code. And to argue otherwise is to attempt to derail Mr. Despins from carrying out his responsibilities. So I guess what you need from me at some point -- and maybe, you know, as I said, I've got to look at all these thing that were filed since July 8th. I'm going to set hearings on different matters -- the motion to withdraw as attorney -- I want you and the United States Trustee's Office to submit a brief on -- as to why you don't need to comply with 327(a). Maybe you're right, but I -- I don't see anything in front of me that convinces me of that at the moment. And then, we're -- and we'll probably have a hearing on your Rule 60(b) motion. And I think we should have it quickly, because if I'm going to deny it, you need to appeal. You need to appeal. And then you need to figure out how you're going to proceed from there. But this case cannot be stalled any longer. This court has a responsibility, as does Mr. Despins now at this point, to try to protect the interests of creditors in connection the parameters of the bankruptcy code, the bankruptcy rules, the Federal Rules of Civil Procedure, and applicable non-bankruptcy law. And to argue that Mr. Despins is disinterested because the Chinese government influences every party with

Ho Wan Kwok - July 21, 2022 99 whom it does business is not persuasive to me at this point. MR. HENZY: I understood. And just a couple points, Your Honor. I wasn't involved in Mr. Kwok's decision to file Chapter 11. THE COURT: I didn't say you were. MR. HENZY: Okay. THE COURT: I said you took your client as you found him. MR. HENZY: I took -- THE COURT: That's what I said. Didn't I start the whole thing off by saying that? MR. HENZY: Yeah. And we are where we are today. But I don't think that Mr. Kwok decided to file Chapter 11. And just to be clear, he didn't appeal your decision on -- that a trustee would be appointed. And I'll state on the record if Mr. Whitley had been the appointed person, he would not have -- we would not be having this discussion, okay, because his understanding is some of the issues that we think exist with Paul Hastings and Mr. Despins do not exist with Mr. Whitley. So this is not -- this is not that Mr. Kwok was going to oppose anybody who got appointed and wants to obstruct a Chapter 11 trustee from doing his or her job. He understands completely that there is going to be a Chapter Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 126 of

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| | 253 | |----|----------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 100 | | 1 | 11 trustee. So I think it's not correct to say that he's | | 2 | just trying to obstruct -- | | 3 | THE COURT: I didn't say -- I said -- | | 4 | MR. HENZY: -- for those purposes. | | 5 | THE COURT: I didn't say he was trying to | | 6 | obstruct. I said I'm not going to let this be derailed. | | 7 | That's what I said. Those were the words I used. | | 8 | MR. HENZY: I think -- I think if a different | | 9 | person had been appointed we wouldn't be having this | | 10 | discussion. And I -- and there are -- | | 11 | THE COURT: Well -- | | 12 | MR. HENZY: Look, you can disagree, Your Honor. | | 13 | We think there are bona fide significant issues here. | | 14 | I understand you may disagree, but I don't -- it's | | 15 | not correct. I don't think that because Mr. Kwok decided to | | 16 | file Chapter 11 that he doesn't have a right to say, wait a | | 17 | second, there's been a trustee appointed, understood, but he | | 18 | should just have to accept whoever gets appointed even when | | 19 | he believes that there are significant conflicts that that | | 20 | person has. | | 21 | I mean, just because you file Chapter 11 doesn't | | 22 | mean -- and subject yourself to the jurisdiction of the | | 23 | Court -- doesn't mean that you have to just sort of accept | | 24 | any and everything that comes along, even if you believe | | 25 | that it is not fair and is prejudicial to you. | | | |

Ho Wan Kwok - July 21, 2022 101 THE COURT: Okay. Thank you. MR. HENZY: So I guess, Your Honor, are you ruling today -- THE COURT: No, I'm not ruling. MR. HENZY: -- that we cannot take discovery in connection with -- THE COURT: If you take any discovery before I rule on the 60(b) motion, then I will -- I'm not allowing you to take any discovery before I rule on the 60(b) motion. MR. HENZY: And on the Paul Hastings retention application? THE COURT: And on the Paul Hastings retention application. MR. HENZY: Okay. So you're ruling that today. THE COURT: That's correct. MR. HENZY: Okay. THE COURT: There is going to be no discovery. This is not -- these are not matters that are -- we're going to allow to have happen. That's not going to happen. We'll have a hearing. We'll hear your matter. And if we rule against you, then -- if I rule against you, then you'll appeal. MR. HENZY: Your Honor, I would ask that there be at least a docket entry on that so ordering that we do not -- Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 128 of

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Ho Wan Kwok - July 21, 2022 102 THE COURT: Well, this is a status conference, so I'm not going to enter a docket entry on that right now. I'm telling you -- MR. HENZY: But if I don't have -- THE COURT: I'm telling you if you seek discovery before I rule on these matters, then I'm not going to make the other side comply. MR. HENZY: Okay. But, Your Honor, I don't want to go through the exercise of -- I don't know -- anybody -- THE COURT: This motion isn't even on the calendar -- MR. HENZY: I understand. THE COURT: -- so it's inappropriate to start discovery with regard to something that's not even -- This is a status conference. This was -- this was specifically scheduled as a status conference in connection with the motion, excuse me, the memorandum of decision and order appointing the Chapter 11 trustee. You filed documents after that -- this status conference was scheduled. None of your documents have been set for a hearing. Okay? So you can do whatever you think is appropriate once those matters are set for a hearing. MR. HENZY: Understood, Your Honor. What I don't want to do is have us serve discovery and put other parties in a position of having to file motions with this court and

Ho Wan Kwok - July 21, 2022 103 the Court then ruling on those motions and saying you don't get to take the discovery. I want to, I guess, just end -- THE COURT: You can do whatever you think is appropriate, Mr. Henzy. I am not -- this was not a hearing on which rulings were going to come out of it other than what I told you. I'm going to back and I'm going to issue -- I'm going to schedule hearings indifferent matters. And I'm going to require you in one of those orders to file briefs as to why you can represent this debtor without complying with 327 and when you have -- when you have what appears to be an actual conflict of interest. MR. HENZY: Understood, Your Honor. THE COURT: And when I say you, I mean Zeisler & Zeisler. Okay? MR. HENZY: Understood, Your Honor. On the discovery issue, okay, what I don't -- what I don't want to do -- THE COURT: I understand. MR. HENZY: -- I don't want to serve discovery after you've told me I'm not going to get discovery -- THE COURT: You can serve discovery at your own -- your decision. You do whatever you think, Counsel, but -- MR. HENZY: I thought you were about to say you Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 130 of

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Ho Wan Kwok - July 21, 2022 104 can serve discovery at your own peril, but -- THE COURT: I almost did actually. MR. HENZY: -- which I don't -- THE COURT: Yeah. MR. HENZY: -- which, again, I don't want to do that. But I don't think it's fair to tell me I -- I'm not going to let you serve discovery, but go do whatever you're going to do -- THE COURT: Where does it say under Rule 60 that you're entitled to discovery by the way? MR. HENZY: I think the motion is governed by Rule 9014, Your Honor. THE COURT: Right. 9014 means people have an opportunity to respond. And that until that response is filed, why would you be entitled to discovery? MR. HENZY: Your Honor, I'm trying to not delay a hearing on these matters. I'm trying to have this go as fast as it can. Mr. Kwok's goal is not to delay the final appointment of a trustee. It's not to delay final retention of counsel for a trustee. We want to get to the issues as much as everybody else wants to get to the issues. Okay. So I understand that until someone files an objection to my Rule 60 motion, arguably, why am I taking discovery? I've a pretty good

Ho Wan Kwok - July 21, 2022 105 idea that there are going to be objections to my Rule 60 motion and I'm trying to move this along as quickly as I possibly can. I don't want to serve discovery and put people in a position of having to file motions with the Court and have the Court potentially have a hearing or not have a hearing and rule on the motion to give me then whatever rights I have with respect to the Court's ruling. Which is why I -- for me, it would be much preferable -- it may be preferable for other parties -- if the Court's going to rule that is to rule that today and get it out of the way. THE COURT: Well, I'll consider that. MR. HENZY: Thank you, Your Honor. THE COURT: Okay. MR. GOLDMAN: Your Honor? THE COURT: Yes. MR. GOLDMAN: May I be heard briefly? THE COURT: Can you -- make sure you can speak into the microphone. MR. GOLDMAN: Yeah. Can you hear me? THE COURT: Yes. Thank you. MR. GOLDMAN: Yeah. One idea I'd like to offer for the Court's consideration as a potential way to resolve this motion -- Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 132 of

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| | 253 | |----|-------------------------------------------------------------| | | Ho Wan Kwok - July 21, 2022 106 | | 1 | THE COURT: What concern? | | 2 | MR. GOLDMAN: -- and concern -- | | 3 | THE COURT: The 60(b) motion? | | 4 | MR. GOLDMAN: Yes. Yes. And the concern about | | 5 | the Chinese government, not that that's an issue that I | | 6 | think -- I don't want to give it credence by proposing a | | 7 | solution, but the Court could simply provide that if Mr. | | 8 | Despins or Paul Hastings is contacted by the Chinese | | 9 | government with a threat of adverse action for purposes of | | 10 | influencing in any way the administration of this case that | | 11 | they would file a supplemental affidavit with the Court so | | 12 | indicating and we could take it from there because we are | | 13 | simply dealing with speculation. | | 14 | THE COURT: Mr. Despins already has that | | 15 | obligation, Mr. Goldman. He already has that obligation | | 16 | under his disclosure requirements under the code and the | | 17 | rules. | | 18 | I mean, I understand what you're saying, but I | | 19 | think it does give it credence where I haven't ruled on | | 20 | anything yet. | | 21 | And I'll consider what you said and I appreciate | | 22 | the -- raising the issue, but every lawyer, every trustee, | | 23 | has a continuing obligation. | | 24 | Mr. Despins has already stated under penalty of | | 25 | perjury that he doesn't have these connections. | | | |

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Ho Wan Kwok - July 21, 2022 107 So I appreciate it. I'm not sure how far that will go. If you all want to talk about it, that would be something that would work out for you, that's fine. I'm happy to entertain it if that's something that everybody wants to have entertained. But I'm not -- we're going to move this case forward and it's not going to be held up by matters that can't be addressed in other ways under the bankruptcy code and rules. Mr. Despins and any other person that would serve in that role understands the responsibilities of the role, understands the disclosures made under penalty of perjury, And if someone comes forth with some evidence that Mr. Despins is being influenced by the Chinese government, then they can bring that evidence forward. But to argue that without any evidence in the record and then say -- and I want discovery to stop the process I find that very unlikely that that will happen. MR. GOLDMAN: Well, I certainly am in agreement with Your Honor's position on that. I was just trying to address the Zeisler speculation. THE COURT: No. I appreciate the offer. As I said, you know, it doesn't look like anybody wants to go to talk together, right? I mean, I can take a recess if you want to have a discussion.

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Ho Wan Kwok - July 21, 2022 108 But this is -- we've been here now for almost two and a half hours. We need to let Mr. Despins go do his job. Okay? That's what this is all about. That's why a Chapter 11 trustee was appointed so that this could happen. What is in the record, whether or not it impacts any decision that is made by this court, Mr. Henzy, is what I started off my discussion with you a few minutes ago, which is you took your client as you found him. I'm sure you've read everything that has occurred in the New York State Court. Those are allegations that continue to be made here by the parties that were in that proceeding and by other parties. Your client has to make some decisions. And, you know, this court is here to support parties as much as the Court can, but the Court also has to move things forward if parties aren't moving together down the same path. And I'm not saying you should. I'm not saying that should happen. I'm saying otherwise why am I here? You can all go fight it out outside. Right? I mean, the point is we have to move the case along one way or another. Either your client makes decisions about trying to come up with a way to make this case work or not. And if he doesn't want to, that's fine. That is his prerogative. And I agree with you on that that that is his right. But he

Ho Wan Kwok - July 21, 2022 109 takes those steps with the understanding that the Court may not agree with him. MR. HENZY: Understood, Your Honor. THE COURT: Okay. And that's -- that's where we are. I don't want to spend any more time today -- I mean, I will if you want to talking about it, but I think it's important to understand we have to move forward. MR. HENZY: Your Honor, Mr. Kwok does not disagree with that, but we have -- I think -- I think the Court would agree we have to move forward the right way. THE COURT: I have to give everybody an opportunity to respond to these different motions, right? So what I'm looking at -- and I think I heard Mr. Friedman and Mr. Despins tell me, and everybody else is going to have to make themselves available, that we're going to have a hearing on August 1st. That's a Monday. Okay? That's a week and a day from today, business days. We're going to have a hearing on August 1st and I'm going to rule on these issues if there isn't agreement. With regard to the motion to withdraw as attorney, with regard to Brown Rudnick's, again, whether or not that's going to be allowed, I don't know. But if it is, it's definitely with conditions. And I think the U.S. Trustee should be opining on Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 136 of

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| | 253 | | | | | | |----|-----------------------------------------------------------------|--|--|--|--|--| | | Ho Wan Kwok - July 21, 2022 110 | | | | | | | 1 | that. I don't know how the U.S. Trustee -- the U.S. Trustee | | | | | | | 2 | has to opine on that. There's a -- there's a -- that's what | | | | | | | 3 | the role of the U.S. Trustee is with regard to professionals | | | | | | | 4 | in a Chapter 11 case. In every case, but certainly in a | | | | | | | 5 | Chapter 11 case. | | | | | | | 6 | With regard to the Rule 60(b) motion, I'm going to | | | | | | | 7 | give everybody an -- but you all have to understand, you all | | | | | | | 8 | don't -- I'm not getting pleadings filed on Friday the 29th | | | | | | | 9 | and you're expecting me to read them and be ready to rule on | | | | | | | 10 | Monday the 1st. That's not going to happen. So you're | | | | | | | 11 | going to have to address these issues in short order whether | | | | | | | 12 | you agree with that or not. That's what's going to happen. | | | | | | | 13 | Okay? | | | | | | | 14 | With regard to the application to employ Paul | | | | | | | 15 | Hastings and Neubert, Pepe, that's going to be set for a | | | | | | | 16 | hearing as well. All that's going to be set for hearing. | | | | | | | 17 | I understand -- I have to look at the stay | | | | | | | 18 | motions. I don't remember whether I think those should be | | | | | | | 19 | set for hearing. I might be setting 20 things for hearing | | | | | | | 20 | on August 1st. Okay? But we need to move this case along. | | | | | | | 21 | It's just that simple. And that's what's going to happen. | | | | | | | 22 | So if I look at the docket -- and I did try to | | | | | | | 23 | look at it before we came out today, but we had another | | | | | | | 24 | hearing -- I mean, we do have other hearings as I know you | | | | | | | 25 | all know. And the problem with why I want you to get -- why | | | | | | | | | | | | | |

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Ho Wan Kwok - July 21, 2022 111 I'm going to make you all respond earlier than the 29th, and probably by the 27th, which is next Wednesday, which isn't a lot of time, we have Chapter 13 day on the 28th. I mean, there are other issues that the Court has to address. Even though this case is extremely important to all of you -- and I completely appreciate that -- we do have other matters that we have to address. Okay? So I see that there are, you know, motions to appear pro hac vice in connection with these pending motions. Motions to appear pro hac vice are routinely granted. But if there's really going to be an objection to -- I'm going to let whoever wants to talk talk. Whether I think you're the lawyer or not, Mr. Henzy, I obviously let you talk today, right? I'm going to let you speak. But we have to make rulings on who represents what and in what context and who's going to appear in this case on a going forward basis. MR. HENZY: Your Honor, just to be clear, there will be no objection to the pro hac motions. I've never objected to a pro hac motion in my career and I don't expect I ever will. THE COURT: Okay. Thank you. MR. HENZY: So those I think probably -- THE COURT: Well, then, maybe we can at least move

Ho Wan Kwok - July 21, 2022 112 those along. Okay? MR. HENZY: So, Your Honor, evidence that I want to move this case along, there it is. MR. LINSEY: Those are, Your Honor, 530 -- rather 533 -- THE COURT: I have them. MR. LINSEY: Yes. THE COURT: I have them, Attorney Linsey. Thank you. All right. Is there anything else that anyone would like to state for the record this afternoon? (No audible response.) THE COURT: All right. I don't see anyone. Oh, Mr. Henzy? MR. HENZY: So I just want to be clear -- THE COURT: I didn't -- I didn't leave as fast as I should have I suppose. MR. HENZY: I just want to be clear on what's on the schedule for August 1st. Is it everything? Everything? THE COURT: I don't know yet. MR. HENZY: Okay. THE COURT: That's what I said. Well, I can tell you what's going to be on. MR. HENZY: Okay. THE COURT: What I think is going to be on. The Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 139 of

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Ho Wan Kwok - July 21, 2022 113 motion to withdraw as attorney, Brown Rudnick. Mr. Despins' application to employ Paul Hastings and Neubert, Pepe. Your Rule 60(b) motion. Anything else, I'm not sure about yet. The stay motions, things like that, I've got to go back. Unless somebody is telling me -- I'm giving you all the opportunity right now to tell me what else should be heard on August 1st. I don't know if I'll agree with you, but I'm giving -- And you, Attorney Henzy, and the U.S. Trustee's Office are going to have to file briefs by -- I think the response date on everything is going to the 27th, on why you can -- you have to convince me of your argument that you don't need to comply with 327 because you're -- because the debtor's no longer a debtor in possession. And why you don't -- and regardless of that, why you don't have an actual conflict of interest in representing HK International and Mr. Kwok simultaneously. MR. HENZY: I just want to be -- when you said you'll let me speak on August 1t, I mean, I wouldn't want to get here -- THE COURT: Yeah. You're going -- I'm going to let you make your argument. MR. HENZY: I wouldn't want to get here on August 1st and have you say I've decided you can't represent Mr. Kwok and then Mr. Kwok is not ready -- he's not --

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| | 253 | | | | | | | |----|-----------------------------------------------------------|--|--|--|--|--|--| | | Ho Wan Kwok - July 21, 2022 114 | | | | | | | | 1 | THE COURT: We're not going to do that. | | | | | | | | 2 | MR. HENZY: He's not represented. | | | | | | | | 3 | THE COURT: It's a hearing on whether or not you | | | | | | | | 4 | can do that. Okay? | | | | | | | | 5 | MR. HENZY: Okay. | | | | | | | | 6 | THE COURT: I'm not going to -- I would never say | | | | | | | | 7 | that you were not going to be allowed to speak. | | | | | | | | 8 | MR. HENZY: I didn't think you would, Your Honor. | | | | | | | | 9 | THE COURT: Okay. | | | | | | | | 10 | MR. HENZY: But I just don't want him to be not | | | | | | | | 11 | represented at that hearing. | | | | | | | | 12 | THE COURT: I understand. Well, Brown Rudnick's | | | | | | | | 13 | going to be here anyway. | | | | | | | | 14 | MR. HENZY: I don't think Brown Rudnick is | | | | | | | | 15 | intending to prepare for that -- a hearing on August 1st. | | | | | | | | 16 | THE COURT: They may not be intending to prepare | | | | | | | | 17 | for that hearing, but they're going to have to be here on | | | | | | | | 18 | their motion to withdraw as attorney. | | | | | | | | 19 | MR. HENZY: Understood. | | | | | | | | 20 | THE COURT: Okay. | | | | | | | | 21 | MR. HENZY: Understood. | | | | | | | | 22 | THE COURT: And so if I don't grant their motion | | | | | | | | 23 | to withdraw as attorney, then they're still his attorney. | | | | | | | | 24 | MR. HENZY: Okay. | | | | | | | | 25 | THE COURT: Okay? | | | | | | | | | | | | | | | |

Ho Wan Kwok - July 21, 2022 115 MR. HENZY: Okay. THE COURT: All right. Anything further from anyone? (No audible response.) THE COURT: All right. That concludes the Kwok matter for today. That is the last matter on today's calendar. Court is adjourned. (Proceedings concluded at 1:28 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. 16 July 25, 2022 17 Christine Fiore, CERT Transcriber Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 142 of

| | Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 253 | Page 143 of | |----|----------------------------------------------------------------------------------|-------------| | | Ho Wan Kwok - July 21, 2022 | 116 | | 1 | | | | 2 | I N D E X | | | 3 | | PAGE | | 4 | EXHIBITS FOR THE TRUSTEE: | | | 5 | 1 Trustee written presentation copy | 7 | | 6 | | | | 7 | | | | 8 | | | | 9 | | | | 10 | | | | 11 | | | | 12 | | | | 13 | | | | 14 | | | | 15 | | | | 16 | | | | 17 | | | | 18 | | | | 19 | | | | 20 | | | | 21 | | | | 22 | | | | 23 | | | | 24 | | | | | | | | | | |

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# **EXHIBIT 03**

July 22, 2022 Interrogatories from Debtor to PAX

#### **UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION**

| In re: | Chapter 11 | |-----------------------------------------------------------------|-------------------------| | HO WAN KWOK, | Case No: 22-50073 (JAM) | | Debtor. | | | | | | HO WAN KWOK, | | | Movant, | | | v. | | | WILLIAM K. HARRINGTON, UNTIED STATES TRUSTEE FOR REGION 2 | | | and | | | LUC A. DESPINS, CHAPTER 11 TRUSTEE | | | Respondents. | |

#### **INTERROATORIES**

Pursuant to Fed. R. Civ. P. 33, made applicable to this Contested Matter by Fed. R. Bankr. P. 9014 and 7033, and D. Conn. L. Civ. R. 26, made applicable to this Contested Matter by D. Conn. Local Bankr. R. 1001-1 and 7026-1, Ho Wan Kwok ("Mr. Kwok" or the "Debtor"), the debtor in the above-captioned chapter 11 case and Movant on the July 15, 2022, Motion for Relief From Order Appointing Luc A. Despins as Chapter 11 Trustee (the "Motion for Relief"), by and through his undersigned counsel, demands that Pacific Alliance Asia Opportunity Fund ("PAX") answer the following interrogatories, completely and under oath, and serve said answers on the

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law offices of Zeisler & Zeisler, P.C., 10 Middle Street, 15th Floor, Bridgeport, Connecticut 06604, Attention**:** Eric A. Henzy and Aaron A. Romney, on or before July 26, 2022.

#### **INSTRUCTIONS AND DEFINITIONS**

1. The term "all/each" shall both be construed as all and each.

2. The term "and/or" shall be construed either disjunctively or conjunctively as necessary to bring within the scope of the Requests all responses that might otherwise be construed to be outside their scope.

3. The singular form of any word includes the plural and vice versa.

4. Unless otherwise defined herein, all terms used herein shall have the meanings set forth in D. Conn. L. Civ. R. 26(c), made applicable to this proceeding by Local Bankruptcy Rule 1001-1(b).

5. Unless otherwise specified herein, the rules of construction set forth in D. Conn. L. Civ. R. 26(d), made applicable to this proceeding by Local Bankruptcy Rule 1001-1(b), shall apply to the terms used herein.

6. "Paul Hastings" means Paul Hasting, LLP, and includes its partners, members, managers, managing partners, managing members, officers, employees, and agents.

7. "PAG Entities" means and includes PAG Holdings Limited, PAG Real Estate Asia, PAG Real Estate, PAG Assets (Real Estate) Limited, PAG Real Estate Investments, Ltd., BT Cayman Ltd., Super Alliance, Real Estate L.P, Sunstone KB (HKSAR) Ltd., PAG Private Equity, PAG Real Assets, PAG Credits and Markets, PAG Asia Capital, PAG Growth Capital, Secured Capital Real Estate Partners ("SCREP") V, SCREP VI, SCREP VI Management LLC, SCREP VII, PAG Real Estate Partners I, PAG Real Estate Partners II, Polymer Capital, Pacific Alliance Asia Opportunity Fund ("PAX"), Capital Structure Opportunities Fund, Pegasus Fund, RE Strategic Investments Pte. Ltd., Strategic Investment LP, RES Investments GP, Spirit Cayman, BT

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Cayman, and any other entity, regardless of form, managed by PAG or controlled by PAG Holdings Limited.

#### **II. INTERROGATORIES**

1. Identify each matter for which Paul Hastings has provided services to any PAG Entity since January 1, 2017, by listing the date of the representation, general description of the representation, e.g., financing, securities transaction, litigation, etc., and whether, for each matter identified, the services have concluded, are on-going, or have yet to commence, *i.e.,* Paul Hastings has been retained to provide services to a PAG Entity for a particular matter but the work has not yet begun.

2. State, by individual matter, the total fees paid to Paul Hastings for services it rendered in each matter identified in response to Interrogatory numbered 1 .

Dated at Bridgeport, Connecticut this 22nd day of July, 2022.

#### **THE DEBTOR, HO WAN KWOK**

*/s/ James M. Moriarty* Eric Henzy (ct12849) Stephen M. Kindseth (ct14640) Aaron A. Romney (ct28144) James M. Moriarty (ct21876) John L. Cesaroni (ct29309) 10 Middle Street, 15th Floor Bridgeport, Connecticut 06604 Telephone: (203) 368-4234 Facsimile: (203) 368-5487 Email: [ehenzy@zeislaw.com](mailto:ehenzy@zeislaw.com) [skindseth@zeislaw.com](mailto:skindseth@zeislaw.com) [aromney@zeislaw.com](mailto:aromney@zeislaw.com) jmoriarty@zeislaw.com [jcesaroni@zeislaw.com](mailto:jcesaroni@zeislaw.com)

#### **CERTIFICATE OF SERVICE**

I hereby certify that on this 22nd day of July, 2022, a copy of foregoing was served on counsel of record who have appeared in the Debtor's Bankruptcy Case via email to the email address generated via the delivery of ECF notices.

> */s/ James M. Moriarty* James M. Moriarty (ct21876)

# **EXHIBIT 04**

Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of April 22, 2021, filed in *In re TECT Aerospace Group Holdings, Inc.*

#### **IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE**

In re:

TECT AEROSPACE GROUP HOLDINGS, INC., *et al.*,

Debtors.1

Chapter 11

Case No. 21-10670 (KBO)

Jointly Administered

**Hearing Date: May 25, 2021 at 10:00 a.m. (ET) Objection Deadline: May 18, 2021 at 4:00 p.m. (ET)**

### **APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY CODE SECTIONS 328(a) AND 1103 AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS CO-COUNSEL EFFECTIVE AS OF APRIL 22, 2021**

The Official Committee of Unsecured Creditors (the "Committee") appointed in the chapter 11 bankruptcy cases (the "Chapter 11 Cases") of the above-captioned debtors and debtorsin-possession (the "Debtors"), hereby submits this application (the "Application") for entry of an order, substantially in the form attached hereto as Exhibit A, pursuant to sections 328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as amended and applicable to the above-captioned case, the "Bankruptcy Code") and Rule 2014(a) of the Federal Rule of Bankruptcy Procedure (the "Bankruptcy Rules"), and the United States Trustee's *Appendix B - Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases* (the "Appendix B Guidelines"), authorizing and approving the employment and retention of Womble Bond Dickinson (US) LLP ("WBD"), as co-counsel for the Committee, effective as of April 22, 2021. In support of this Application, the Committee submits the *Declaration of Matthew P. Ward*, a partner of WBD,

1 The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, are: TECT Aerospace Group Holdings, Inc. (9338); TECT Aerospace Kansas Holdings, LLC (4241); TECT Aerospace Holdings, LLC (9112); TECT Aerospace Wellington Inc. (4768); TECT Aerospace, LLC (8650); TECT Hypervelocity, Inc. (8103); and Sun Country Holdings, LLC (6079). The Debtors' mailing address is 300 W. Douglas, Suite 100, Wichita, KS 67202.

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attached hereto as Exhibit B (the "Ward Declaration"), and the *Declaration of Committee Co-Chairperson John Mullen in Support of Application of the Official Committee of Unsecured Creditors for an Order Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Co-Counsel Effective as of April 22, 2021*, attached hereto as Exhibit C (the "Committee Chairperson Declaration"), and respectfully states as follows:

#### **BACKGROUND**

1. On April 5, 2021 (the "Petition Date"), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Court"), commencing these Chapter 11 Cases. Since the Petition Date, the Debtors have remained in possession of their assets and have continued to operate and manage their businesses as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in the Chapter 11 Cases.

2. On April 20, 2021, the Office of the United States Trustee appointed the Committee pursuant to section 1102(a)(1) of the Bankruptcy Code. *See* Docket No. 76. The Committee is comprised of the following five (5) members: (i) Niigata Machine Techno USA, Inc.; (ii) All Metal Services Limited; (iii) Quality Stamping & Machining, Inc.; (iv) Wm. F. Hurst Co., LLC; and (v) Mecadaq Tarnos. On April 22, 2021, the Committee selected Kilpatrick Townsend & Stockton LLP to serve as its lead counsel and WBD to serve as its Delaware cocounsel. The Committee also selected Province, LLC to serve as its financial advisor.

3. Information regarding the Debtors' history, business operations, capital structure, primary secured indebtedness, and the events leading up to the commencement of these Chapter 11 Cases can be found in the *Declaration of Shaun Martin in Support of Chapter 11 Petitions and First Day Pleadings* [Docket No. 13].

#### **JURISDICTION AND VENUE**

4. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory predicates for the relief sought herein are Bankruptcy Code sections 328 and 1103. The requested relief is also appropriate pursuant to Bankruptcy Rule 2014.

#### **RELIEF REQUESTED**

5. By this Application, the Committee respectfully requests that the Court enter an order, substantially in the form attached hereto as Exhibit A, authorizing and approving the employment of WBD as its co-counsel to perform services relating to these Chapter 11 Cases, effective as of April 22, 2021.

6. Bankruptcy Code section 328(a) empowers a committee appointed under Bankruptcy Code section 1102, with the Court's approval, to employ attorneys under Bankruptcy Code section 1103 on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, or on a contingent fee basis, to perform services for such committee.

7. Pursuant to Bankruptcy Code section 1103(b), an attorney employed to represent a committee may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case, (though the Bankruptcy Code clarifies that representation of one or more creditors of the same class as represented by the committee shall not per se constitute the representation of an adverse interest). WBD has advised the Committee that WBD does not represent any other entity having an adverse interest in connection with these Chapter 11 Cases and does not have any disabling connections with the United States Trustee, any person employed by the Office of the United States Trustee, or the Bankruptcy Judge to whom these cases are assigned. Submitted herewith is the Ward Declaration, which sets forth WBD's connections with the Debtors, their creditors, and other parties-in-interest.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 153 of Case 21-10670-KBO Doc 120 Filed 05/04/21 Page 4 of 7 253

8. The Committee has selected WBD as its Delaware co-counsel because of its

attorneys' experience and knowledge before this Court. The Committee believes that WBD is

well-qualified to represent the Committee in these Chapter 11 Cases.

9. The professional services that WBD will provide to the Committee include,

but are not limited to, the following:

- providing legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Bankruptcy Code section 1102; - assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, potential claims, and any other matters relevant to the case, to the sale of assets, or to the formulation of a plan of reorganization or liquidation (a "Plan"); - participating in the formulation of a Plan; - providing legal advice as necessary with respect to any disclosure statement and Plan filed in these Chapter 11 Cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; - preparing on behalf of the Committee, as necessary, applications, motions, objections, complaints, answers, orders, agreements, and other legal papers; - appearing in Court to present necessary motions, applications, objections, and pleadings, and otherwise protecting the interests of those represented by the Committee; - assisting the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and - performing such other legal services as may be required and as are in the best interests of the Committee and creditors. - 10. Subject to the Court's approval and pursuant to Bankruptcy Code sections

330 and 331, the Bankruptcy Rules, the Local Rules of Bankruptcy Practice and Procedure of the

United States Bankruptcy Court for the District of Delaware (the "Local Rules"), and any other

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rules and procedures that this Court may fix, the Committee requests that WBD be compensated on an hourly basis, plus reimbursement of the actual and necessary expenses that WBD incurs. WBD requests that it receives such compensation in accordance with the ordinary and customary rates which are in effect on the date the services are rendered.

11. WBD's current hourly rates are as follows:

| Partners | \$325 - \$950 | |----------------|---------------| | Of Counsel | \$330 - \$925 | | Associates | \$280 - \$685 | | Senior Counsel | \$125 - \$765 | | Counsel | \$100 - \$675 | | Paralegals | \$50 - \$495 |

12. Subject to Court approval, WBD expects that the following attorneys will be primarily responsible for representing the Committee in this matter: Matthew P. Ward, Morgan L. Patterson, and Lisa B. Tancredi. The attorneys' hourly rates are \$665, \$525, and \$515, respectively.

13. The charges set forth herein are based upon actual time charges on an hourly basis and based upon the experience and expertise of the attorney or legal assistant involved. The Committee understands that the hourly rates set forth are subject to periodic, typically annual, adjustments to reflect economic, and other conditions.

14. The Committee understands that any compensation and expenses paid to WBD must be approved by this Court upon application consistent with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any orders of this Court respecting compensation of professionals.

15. To the best of the Committee's knowledge and subject to the Ward Declaration and Committee Chairperson Declaration submitted herewith, WBD has informed the

Committee that it represents no other entity having an adverse interest in connection with these Chapter 11 Cases.

#### **CONSENT TO JURISDICTION**

16. Pursuant to Local Rule 9013-1(f), the Committee consents to the entry of a final judgment or order with respect to this Application if it is determined that the Court would lack Article III jurisdiction to enter such final order or judgment absent consent of the parties.

#### **NOTICE**

17. Notice of this Application will be provided to: (i) proposed counsel for the Debtors, Richards, Layton & Finger, P.A., One Rodney Square, 920 N. King Street, Wilmington, Delaware 19801 (Attn: Daniel J. DeFranceschi, Paul N. Heath, and Amanda R. Steele); (ii) the Office of the United States Trustee for the District of Delaware, 844 King Street, Suite 2207, Wilmington, Delaware 19801 (Attn: Linda J. Casey); (iii) counsel for The Boeing Company: (a) Perkins Coie LLP, 1201 Third Avenue, Suite 4900, Seattle, Washington 98101-3099 (Attn: Alan D. Smith) and 1888 Century Park East, Suite 1700, Los Angeles, California 90067-1721 (Attn: Amir Gamliel), and (b) Young Conaway Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, Delaware 19801 (Attn: Edmon L. Morton and Kenneth J. Enos); and (iv) any party that has requested notice pursuant to Bankruptcy Rule 2002. Because of the nature of the relief requested, the Committee respectfully submits that no further notice of the Application is necessary or required under the circumstances.

18. No previous application for relief sought herein has been made to this or any other Court.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 156 of Case 21-10670-KBO Doc 120 Filed 05/04/21 Page 7 of 7 253

WHEREFORE, the Committee respectfully requests that this Court enter an order,

substantially in the form attached hereto as Exhibit A, authorizing the Committee to retain and employ Womble Bond Dickinson (US) LLP, as Delaware co-counsel to the Committee, effective as of to April 22, 2021, and grant such further relief as the Court deems just or proper.

Dated: May 4, 2021 Wilmington, Delaware

#### **Wm. F. Hurst Co., LLC**

Solely in its capacity as a Committee Co-Chairperson and not in its individual capacity

*/s/ John Mullen*

By: John Mullen, as representative of Wm. F. Hurst Co., LLC

# **EXHIBIT 05**

Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) And 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of July 20, 2019, filed in *In re Tintri, Inc*.

#### **IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE**

) ) ) ) ) ) )

In re:

TINTRI, INC.,1

Debtor.

Chapter 11

Case No. 18-11625 (KJC)

**Hearing Date: August 28, 2018 at 1:30 p.m. ET Objections Due: August 21, 2018 at 4:00 p.m. ET**

The Official Committee of Unsecured Creditors (the "Committee") of Tintri, Inc.

(the "Debtor"), submits this application (the "Application") for an order pursuant to sections

328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as amended and

applicable to the above-captioned case, the "Bankruptcy Code") and Rule 2014(a) of the Federal

Rule of Bankruptcy Procedure (the "Bankruptcy Rules") authorizing and approving the

employment and retention of Womble Bond Dickinson (US) LLP ("WBD"), as counsel for the

Committee, nunc pro tunc to July 20, 2018. In support of the Application, the Committee

respectfully represents as follows:

#### **BACKGROUND**

1. On July 10, 2018 (the "Petition Date"), the Debtor filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court in the District of Delaware (the "Court").

The Debtor and the last four digits of its taxpayer identification numbers are (6978). The headquarters and service address for the Debtor is 303 Ravendale Dr., Mountain View, CA 94043.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 159 of Case 18-11625-LSS Doc 132 Filed 08/07/18 Page 2 of 6 253

2. The Debtor has continued in possession of its properties and has continued to operate and manage its business as a debtor in possession pursuant to Bankruptcy Code sections 1107(a) and 1108.

3. On July 20, 2018, the Office of the United States Trustee appointed the Committee pursuant to Bankruptcy Code section 1102(a)(1) [Docket No. 78]. The members of the Committee are as follows: (i) Flextronics International USA, Inc.; (ii) Clari, Inc.; and (iii) NCR Corporation. After its appointment, the Committee selected and authorized the employment of WBD as its counsel.

#### **JURISDICTION AND VENUE**

#### **RELIEF REQUESTED**

5. By this Application, the Committee respectfully requests the entry of an order, substantially in the form attached hereto, authorizing and approving the employment of WBD as its counsel to perform services relating to the Debtor's bankruptcy case (the "Chapter 11 Case"), effective as of July 20, 2018.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 160 of Case 18-11625-LSS Doc 132 Filed 08/07/18 Page 3 of 6 253

7. Pursuant to Bankruptcy Code section 1103(b), an attorney employed to represent a committee may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case. WBD has advised the Committee that WBD does not represent any other entity having an adverse interest in connection with the Chapter 11 Case and does not have any disabling connections with the United States Trustee, any person employed by the Office of the United States Trustee, or the Bankruptcy Judge to whom this case is assigned. Submitted herewith is the Declaration of Matthew P. Ward, Esq., a partner of WBD, which sets forth WBD's connections with the Debtor, its creditors, and other parties-ininterest (the "Declaration").

8. The Committee has selected WBD because of its attorneys' experience and knowledge. The Committee believes that WBD is well-qualified to represent the Committee in the Chapter 11 Case.

9. The professional services that WBD will provide to the Committee

include, but are not limited to, the following:

- providing legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Bankruptcy Code section 1102; - assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, potential claims, and any other matters relevant to the case, to the sale of assets, or to the formulation of a plan of reorganization or liquidation (a "Plan"); - participating in the formulation of a Plan; - providing legal advice as necessary with respect to any disclosure statement and Plan filed in this case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; - preparing on behalf of the Committee, as necessary, applications, motions, objections, complaints, answers, orders, agreements, and other legal papers; - appearing in Court to present necessary motions, applications, objections, and pleadings, and otherwise protecting the interests of those represented by the Committee; - assisting the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 161 of Case 18-11625-LSS Doc 132 Filed 08/07/18 Page 4 of 6 253

- performing such other legal services as may be required and as are in the best interests of the Committee and creditors. - 10. Subject to the Court's approval and pursuant to Bankruptcy Code sections

330 and 331, the Bankruptcy Rules, the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"), and any other rules and procedures that this Court may fix, the Committee requests that WBD be compensated on an hourly basis, plus reimbursement of the actual and necessary expenses that WBD incurs. WBD requests that it receives such compensation in accordance with the ordinary and customary rates which are in effect on the date the services are rendered.

| 11. | WBD's hourly rates are as follows: | | | |-----|------------------------------------|---------------------|--| | | Partners | \$320 - \$825 | | | | Of Counsel | \$225 - \$810 | | | | Senior Counsel | \$125 - \$665 | | | | Counsel | \$100 - \$585 | | | | Associates | \$230 - \$580 | | | | Paralegals | \$41 - \$415 | | | | | | |

12. The charges set forth herein are based upon actual time charges on an hourly basis and based upon the experience and expertise of the attorney or legal assistant involved. The hourly rates set forth are subject to periodic adjustments to reflect economic and other conditions.

13. The Committee understands that any compensation and expenses paid to WBD must be approved by this Court upon application consistent with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any orders of this Court respecting compensation of professionals.

14. To the best of the Committee's knowledge and subject to the Declaration submitted herewith, WBD has informed the Committee that it represents no other entity in

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 162 of Case 18-11625-LSS Doc 132 Filed 08/07/18 Page 5 of 6 253

connection with this case and does not hold or represent any interest adverse to the Debtor with respect to the matters upon which it is to be employed.

#### **NOTICE**

15. The Committee has provided notice of this Application to (i) the Debtor; (ii) proposed counsel for the Debtor, (a) Pachulski Stang Ziehl & Jones, 919 N. Market Street, 17th Floor, Wilmington, DE 19801, Attn: James E. O'Neill, Esq. (b) Pachulski Stang Ziehl & Jones, 150 California Street, 15th Floor, San Francisco, CA 94111, Attn: John D. Fiero, Esq.; (iii) the office of the United States Trustee for the District of Delaware, J. Caleb Boggs Federal Building, 844 King Street, Suite 2207, Lockbox 35, Wilmington, DE 19801, Attn: Timothy J. Fox, Esq.; (iv) counsel to Silicon Valley Bank, (a) Riemer & Braunstein LLP, Times Square Tower, Seven Times Square, Suite 2506, New York, NY 10036, Attn: Steven E. Fox, Esq. and (b) Ashby & Geddes, 500 Delaware Avenue, P.O. Box 1150, Wilmington, DE 19801, Attn: Gegory A. Taylor, Esq.; (v) counsel to TriplePoint Capital LLC, (a) McDermott Will & Emery, 340 Madison Avenue, New York, NY 10173, Attn: Riley T. Orloff, Esq., (b) McDermott Will & Emery, 2049 Century Park East, Suite 3800, Los Angeles, CA 90067, Attn: Gary B. Rosenbaum, Esq., and (c) Posinelli PC, 222 Delaware Avenue, Suite 1101, Wilmington, DE 19801, Attn: Christopher A. Ward, Esq., and (vi) all parties who have filed requests for notice pursuant to Bankruptcy Rule 2002 in this Chapter 11 Case. The Committee submits that no other or further notice is necessary or required.

16. No previous application for relief sought herein has been made to this or any other Court.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 163 of Case 18-11625-LSS Doc 132 Filed 08/07/18 Page 6 of 6 253

WHEREFORE, the Committee respectfully requests that this Court enter an

Order, substantially in the form filed herewith, authorizing the Committee to retain and employ

Womble Bond Dickinson (US) LLP, as counsel to the Committee, nunc pro tunc to July 20,

2018, and grant such further relief as the Court deems just or proper.

THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF TINTRI, INC.

Date: August 7, 2018

**Flextronics International USA, Inc.**

Solely in its capacity as Committee Chairperson and not in its individual capacity

*/s/ Todd Atkinson*

By: Todd Atkinson Counsel to Flextronics International USA, Inc. and Proxy

Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 164 of 253

# **EXHIBIT 06**

#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

) ) ) ) ) ) )

In re:

JRV GROUP USA L.P., a Delaware limited partnership,1

Debtor.

Chapter 11

Case No. 19-11095 (CSS)

Hearing Date: July 11, 2019 at 2:00 p.m. ET Objections Due: July 5, 2019 at 4:00 p.m. ET

#### APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY CODE SECTIONS 328(a) AND 1103 AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS COUNSEL NUNC PRO TUNC TO JUNE 4, 2019

The Official Committee of Unsecured Creditors (the "Committee") of JRV Group

USA L.P. (the "Debtor"), submits this application (the "Application") for an order pursuant to

sections 328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as

amended and applicable to the above-captioned case, the "Bankruptcy Code") and Rule 2014(a)

of the Federal Rule of Bankruptcy Procedure (the "Bankruptcy Rules") authorizing and

approving the employment and retention of Womble Bond Dickinson (US) LLP ("WBD"), as

counsel for the Committee, nunc pro tunc to June 4, 2019. In support of the Application, the

Committee respectfully represents as follows:

#### BACKGROUND

1. On May 13, 2019 (the "Petition Date"), the Debtor filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court in the District of Delaware (the "Court").

1The last four digits of the Debtor's taxpayer identification numbers are (5218). The headquarters and service address for the above-captioned Debtor is 1945 Burgundy Place, Ontario, CA 91761.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 166 of Case 19-11095-KBO Doc 84 Filed 06/20/19 Page 2 of 6 253

2. The Debtor has continued in possession of its properties and has continued to operate and manage its business as a debtor in possession pursuant to Bankruptcy Code sections 1107(a) and 1108.

3. On June 4, 2019, the Office of the United States Trustee appointed the Committee pursuant to Bankruptcy Code section 1102(a)(1) [Docket No. 59]. The members of the Committee are as follows: (i) Beaver Motors; (ii) Foothill Autobody; and (iii) Laser Tech. After its appointment, the Committee selected and authorized the employment of WBD as its counsel.

#### JURISDICTION AND VENUE

#### RELIEF REQUESTED

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 167 of Case 19-11095-KBO Doc 84 Filed 06/20/19 Page 3 of 6 253

7. Pursuant to Bankruptcy Code section 1103(b), an attorney employed to represent a committee may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case. WBD has advised the Committee that WBD does not represent any other entity having an adverse interest in connection with the Chapter 11 Case and does not have any disabling connections with the United States Trustee, any person employed by the Office of the United States Trustee, or the Bankruptcy Judge to whom this case is assigned. Submitted herewith is the Declaration of Matthew P. Ward, Esq., a partner of WBD, which sets forth WBD's connections with the Debtor, its creditors, and other parties-in-interest (the "Declaration").

8. The Committee has selected WBD because of its attorneys' experience and knowledge. The Committee believes that WBD is well-qualified to represent the Committee in the Chapter 11 Case.

9. The professional services that WBD will provide to the Committee

include, but are not limited to, the following:

- providing legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Bankruptcy Code section 1102; - assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, potential claims, and any other matters relevant to the case, to the sale of assets, or to the formulation of a plan of reorganization or liquidation (a "Plan"); - participating in the formulation of a Plan; - providing legal advice as necessary with respect to any disclosure statement and Plan filed in this case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; - preparing on behalf of the Committee, as necessary, applications, motions, objections, complaints, answers, orders, agreements, and other legal papers; - appearing in Court to present necessary motions, applications, objections, and pleadings, and otherwise protecting the interests of those represented by the Committee;

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 168 of Case 19-11095-KBO Doc 84 Filed 06/20/19 Page 4 of 6 253

- assisting the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and - performing such other legal services as may be required and as are in the best interests of the Committee and creditors. - 10. Subject to the Court's approval and pursuant to Bankruptcy Code sections

11. WBD's hourly rates are as follows:

| Partners | \$325 - \$900 | |----------------|---------------| | Of Counsel | \$325 - \$855 | | Associates | \$245 - \$600 | | Senior Counsel | \$125 - \$625 | | Counsel | \$100 - \$625 | | Paralegals | \$50 - \$440 |

13. The Committee understands that any compensation and expenses paid to WBD must be approved by this Court upon application consistent with the Bankruptcy Code, the

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 169 of Case 19-11095-KBO Doc 84 Filed 06/20/19 Page 5 of 6 253

Bankruptcy Rules, the Local Rules, and any orders of this Court respecting compensation of professionals.

14. To the best of the Committee's knowledge and subject to the Declaration submitted herewith, WBD has informed the Committee that it represents no other entity in connection with this Chapter 11 Case and does not hold or represent any interest adverse to the Debtor with respect to the matters upon which it is to be employed.

#### NOTICE

15. The Committee has provided notice of this Application to (i) the Debtor; (ii) counsel for the Debtor, (a) Pachulski Stang Ziehl & Jones, 919 N. Market Street, 17th Floor, Wilmington, DE 19801, Attn: Colin Robinson, Esq. (b) Pachulski Stang Ziehl & Jones, 10100 Santa Monica Boulevard, 13th Floor, Los Angeles, CA 90067, Attn: Jeffrey Dulberg, Esq. and Robert Saunders, Esq.; (iii) the office of the United States Trustee for the District of Delaware, J. Caleb Boggs Federal Building, 844 King Street, Suite 2207, Lockbox 35, Wilmington, DE 19801, Attn: Linda Casey, Esq.; (iv) counsel to Corner Flag LLC, (a) Cravath, Swaine & Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, NY 10019, Attn: George Zobitz, Esq. and Paul Sandler, Esq. and (b) Richards, Layton & Finger, P.A., One Rodney Square, 920 North King Street, Wilmington, DE 19801, Attn: Paul Heath, Esq. and Zachary Shapiro; and (v) all parties who have filed requests for notice pursuant to Bankruptcy Rule 2002 in this Chapter 11 Case. The Committee submits that no other or further notice is necessary or required.

16. No previous application for relief sought herein has been made to this or any other Court.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 170 of Case 19-11095-KBO Doc 84 Filed 06/20/19 Page 6 of 6 253

WHEREFORE, the Committee respectfully requests that this Court enter an

Order, substantially in the form filed herewith, authorizing the Committee to retain and employ

Womble Bond Dickinson (US) LLP, as counsel to the Committee, nunc pro tunc to June 4, 2019,

and grant such further relief as the Court deems just or proper.

THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF JRV GROUP USA L.P.

Date: June 20, 2019

Beaver Motors Solely in its capacity as Committee Chairperson and not in its individual capacity

/s/ Michael Andretta

By: Michael Andretta Beaver Motors

Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 171 of 253

# **EXHIBIT 07**

#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

FRED'S, INC., et al.

Debtors.1

Jointly Administered

Case No. 19-11984 (CSS)

Chapter 11

Hearing Date: November 19, 2019 at 2:00 p.m. (ET) Objections Due: November 1, 2019 at 4:00 p.m. (ET)

The Official Committee of Unsecured Creditors (the "Committee") appointed in

the bankruptcy cases of the above-captioned debtors and debtors-in-possession (the "Debtors"), hereby submits this application (the "Application") for an order pursuant to sections 328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as amended and applicable to the above-captioned case, the "Bankruptcy Code") and Rule 2014(a) of the Federal Rule of Bankruptcy Procedure (the "Bankruptcy Rules") authorizing and approving the employment and retention of Womble Bond Dickinson (US) LLP ("WBD"), as counsel for the Committee, nunc pro tunc to September 18, 2019. In support of this Application, the Committee submits the Declaration of Matthew P. Ward, Esq. (the "Ward Declaration"), a partner of WBD, attached hereto as Exhibit A, and the Declaration of Committee Chairperson in Support of Application of the Official Committee of Unsecured Creditors for an Order Authorizing and Approving the

1 The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtor's federal tax identification number, are: Fred's, Inc. (4010); Fred's Stores of Tennessee, Inc. (9888); National Equipment Management and Leasing, Inc. (4296); National Pharmaceutical Network, Inc. (9687); Reeves-Sain Drug Store, Inc. (4510); Summit Properties-Jacksboro, LLC (9161); Summit Properties-Bridgeport, LLC (2200); and 505 N. Main Opp, LLC (5850). The Debtors' address is 2001 Bryan Street, Suite 1550, Dallas, Texas 75201.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 173 of Case 19-11984-CTG Doc 352 Filed 10/18/19 Page 2 of 6 253

Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Nunc Pro Tunc to September 18, 2019, attached hereto as Exhibit B, and respectfully states as follows:

#### BACKGROUND

1. On September 9, 2019 (the "Petition Date"), the Debtors each filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Court") commencing these cases (the "Chapter 11 Cases"). No trustee or examiner has been appointed in the Chapter 11 Cases.

2. Pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, the Debtors continue to manage their properties and operate their businesses as debtors in possession.

3. On September 18, 2019, the Office of the United States Trustee appointed the Committee pursuant to section 1102(a)(1) of the Bankruptcy Code. See Docket No. 127. The Committee is comprised of three members: (a) Bradley Wooldridge, (b) BWI Companies, Inc., and (c) WIN Properties, Inc. On the same day, the Committee selected Lowenstein Sandler LLP to serve as its lead counsel and WBD to serve as its Delaware counsel. The Committee subsequently selected Alvarez & Marsal North America, LLC to serve as its financial advisor in the Chapter 11 Cases.

4. Information regarding the Debtors' history, business operations, capital structure, primary secured indebtedness, and the events leading up to the commencement of these Chapter 11 Cases can be found in the Declaration of Mark A. Renzi, Chief Restructuring Officer of Fred's, Inc., in Support of Chapter 11 Petitions and First Day Motions [Docket No. 17].

#### JURISDICTION AND VENUE

5. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory predicates for the relief sought herein are Bankruptcy Code sections 328 and 1103. The requested relief is also appropriate pursuant to Bankruptcy Rule 2014.

#### RELIEF REQUESTED

6. By this Application, the Committee respectfully requests the entry of an order, substantially in the form attached hereto, authorizing and approving the employment of WBD as its counsel to perform services relating to these Chapter 11 Cases, effective as of September 18, 2019.

7. Bankruptcy Code section 328(a) empowers a committee appointed under Bankruptcy Code section 1102, with the Court's approval, to employ attorneys under Bankruptcy Code section 1103 on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, or on a contingent fee basis, to perform services for such committee.

8. Pursuant to Bankruptcy Code section 1103(b), an attorney employed to represent a committee may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case. WBD has advised the Committee that WBD does not represent any other entity having an adverse interest in connection with these Chapter 11 Cases and does not have any disabling connections with the United States Trustee, any person employed by the Office of the United States Trustee, or the Bankruptcy Judge to whom these cases are assigned. Submitted herewith is the Ward Declaration, which sets forth WBD's connections with the Debtors, their creditors, and other parties-in-interest.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 175 of Case 19-11984-CTG Doc 352 Filed 10/18/19 Page 4 of 6 253

9. The Committee has selected WBD as its Delaware counsel because of its

attorneys' experience and knowledge before this Court. The Committee believes that WBD is

well-qualified to represent the Committee in these Chapter 11 Cases.

10. The professional services that WBD will provide to the Committee

include, but are not limited to, the following:

- providing legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Bankruptcy Code section 1102; - assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, potential claims, and any other matters relevant to the case, to the sale of assets, or to the formulation of a plan of reorganization or liquidation (a "Plan"); - participating in the formulation of a Plan; - providing legal advice as necessary with respect to any disclosure statement and Plan filed in these Chapter 11 Cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; - preparing on behalf of the Committee, as necessary, applications, motions, objections, complaints, answers, orders, agreements, and other legal papers; - appearing in Court to present necessary motions, applications, objections, and pleadings, and otherwise protecting the interests of those represented by the Committee; - assisting the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and - performing such other legal services as may be required and as are in the best interests of the Committee and creditors. - 11. Subject to the Court's approval and pursuant to Bankruptcy Code sections

330 and 331, the Bankruptcy Rules, the Local Rules of Bankruptcy Practice and Procedure of the

United States Bankruptcy Court for the District of Delaware (the "Local Rules"), and any other

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| 12. | WBD's hourly rates are as follows:2 | | | |-----|-------------------------------------|---------------|--| | | Partners | \$325 - \$925 | | | | Of Counsel | \$330 - \$890 | | | | Senior Counsel | \$125 - \$625 | | | | Counsel | \$100 - \$650 | | | | Associates | \$255 - \$710 | | | | Paralegals | \$50 - \$475 | |

13. The charges set forth herein are based upon actual time charges on an hourly basis and based upon the experience and expertise of the attorney or legal assistant involved. The hourly rates set forth are subject to periodic adjustments to reflect economic and other conditions.

15. To the best of the Committee's knowledge and subject to the Declaration submitted herewith, WBD has informed the Committee that it represents no other entity in connection with these Chapter 11 Cases and does not hold or represent any interest adverse to the Debtors with respect to the matters upon which it is to be employed.

2 On October 1, 2019, WBD adjusted hourly rates. The rates reflected herein are the rates in effect as of October 1, 2019.

#### NOTICE

16. The Committee has provided notice of this Application to (a) counsel for the Debtors, Kasowitz Benson Torres, LLP, 1633 Broadway, New York, NY 10019, Attn: Adam L. Shiff, Esq., AShiff@kasowitz.com, Robert M. Novick, Esq., RNovick@kasowitz.com, and Matthew B. Stein, Esq., MStein@kasowitz.com, and Morris Nichols, Arsht & Tunnell LLP, 1201 North Market Street, 16th Floor, Wilmington, DE 19899-1347, Attn: Derek C. Abbott, Esq., dabbott@mnat.com, Andrew R. Remming, Esq., aremming@mnat.com, Matthew B. Harvey, Esq., mharvey@mnat.com, and Joseph C. Barsalona II, Esq., jbarsalona@mnat.com; (b) Office of the U.S. Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington, DE 19801; (c) counsel to the DIP Agent; and (d) all other parties that have requested notice pursuant to Bankruptcy Rule 2002. The Committee submits that no other or further notice is necessary or required.

17. No previous application for relief sought herein has been made to this or any other Court.

WHEREFORE, the Committee respectfully requests that this Court enter an Order, substantially in the form filed herewith, authorizing the Committee to retain and employ Womble Bond Dickinson (US) LLP, as counsel to the Committee, nunc pro tunc to September 18, 2019, and grant such further relief as the Court deems just or proper.

#### THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF FRED'S INC.

Date: October 18, 2019

By: /s/ Bradley Wooldridge

Bradley Wooldridge, solely in his capacity as the Chairperson of the Official Committee of Unsecured Creditors and not in his personal capacity

# **EXHIBIT 08**

Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of February 5, 2020, filed in *In re BL Restaurants Holding, LLC*

#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

BL RESTAURANTS HOLDING, LLC, et al., 1

Debtors.

Chapter 11

Case No. 20-10156 (MFW)

(Jointly Administered)

Hearing Date: April 7, 2020 at 11:30 a.m. (ET) Objection Deadline: March 18, 2020 at 4:00 p.m. (ET)

### APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY CODE SECTIONS 328(a) AND 1103 AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS COUNSEL NUNC PRO TUNC TO FEBRUARY 5, 2020

The Official Committee of Unsecured Creditors (the "Committee") appointed in the bankruptcy cases of the above-captioned debtors and debtors-in-possession (the "Debtors"), hereby submits this application (the "Application") for entry of an order, substantially in the form attached hereto as Exhibit A, pursuant to sections 328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as amended and applicable to the above-captioned case, the "Bankruptcy Code") and Rule 2014(a) of the Federal Rule of Bankruptcy Procedure (the "Bankruptcy Rules"), and the United State Trustee's Appendix B - Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases (the "Appendix B Guidelines"), authorizing and approving the employment and retention of Womble Bond Dickinson (US) LLP ("WBD"), as counsel for the Committee, nunc pro tunc to February 5, 2020. In support of this Application, the Committee submits the Declaration of Matthew P. Ward, a partner of WBD, attached hereto as Exhibit B (the

1 The Debtors in these chapter 11 cases, along with the last four digits of each of the Debtors' respective federal tax identification numbers, are as follows: BL Restaurants Holding, LLC (6665); BL Restaurant Operations, LLC (7062); BL Restaurant Franchises, LLC (6923); and BL Hunt Valley, LLC (9513). The Debtors' headquarters and mailing address is: 4550 Beltway Drive, Addison, TX 75001.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 180 of Case 20-10156-CTG Doc 241 Filed 03/04/20 Page 2 of 7 253

"Ward Declaration"), and the Declaration of Anthony Marougi in Support of Application of the Official Committee of Unsecured Creditors for an Order Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Nunc Pro Tunc to February 5, 2020, attached hereto as Exhibit C (the "Committee Chairperson Declaration"), and respectfully states as follows:

#### BACKGROUND

1. On January 27, 2020 (the "Petition Date"), the Debtors each filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Court") commencing these cases (the "Chapter 11 Cases"). No trustee or examiner has been appointed in the Chapter 11 Cases.

2. Pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, the Debtors continue to manage their properties and operate their businesses as debtors in possession.

3. On February 5, 2020, the Office of the United States Trustee appointed the Committee pursuant to section 1102(a)(1) of the Bankruptcy Code. See Docket No. 98. The Committee is comprised of the following five (5) members: (a) A&Z Novi LLC, (b) Edward Don & Company, (c) NCR Corporation, (d) Brookfield Property REIT, Inc., and (e) Bradley Alverson. On the same day, the Committee selected Kelley Drye & Warren LLP to serve as its lead counsel and WBD to serve as its Delaware counsel. The Committee subsequently selected Province Inc. to serve as its financial advisor in the Chapter 11 Cases.

4. Information regarding the Debtors' history, business operations, capital structure, primary secured indebtedness, and the events leading up to the commencement of these Chapter 11 Cases can be found in the Declaration of Howard Meitiner in Support of Debtors' First Day Motions and Applications [Docket No. 4].

#### JURISDICTION AND VENUE

#### RELIEF REQUESTED

6. By this Application, the Committee respectfully requests that the Court enter an order, substantially in the form attached hereto as Exhibit A, authorizing and approving the employment of WBD as its counsel to perform services relating to these Chapter 11 Cases, effective as of February 5, 2020.

9. The Committee has selected WBD as its Delaware counsel because of its

attorneys' experience and knowledge before this Court. The Committee believes that WBD is

well-qualified to represent the Committee in these Chapter 11 Cases.

10. The professional services that WBD will provide to the Committee include,

but are not limited to, the following:

- providing legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Bankruptcy Code section 1102; - assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, potential claims, and any other matters relevant to the case, to the sale of assets, or to the formulation of a plan of reorganization or liquidation (a "Plan"); - participating in the formulation of a Plan; - providing legal advice as necessary with respect to any disclosure statement and Plan filed in these Chapter 11 Cases and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; - preparing on behalf of the Committee, as necessary, applications, motions, objections, complaints, answers, orders, agreements, and other legal papers; - appearing in Court to present necessary motions, applications, objections, and pleadings, and otherwise protecting the interests of those represented by the Committee; - assisting the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and - performing such other legal services as may be required and as are in the best interests of the Committee and creditors. - 11. Subject to the Court's approval and pursuant to Bankruptcy Code sections

330 and 331, the Bankruptcy Rules, the Local Rules of Bankruptcy Practice and Procedure of the

United States Bankruptcy Court for the District of Delaware (the "Local Rules"), and any other

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12. WBD's current hourly rates are as follows:

| Partners | \$325 - \$925 | |----------------|---------------| | Of Counsel | \$330 - \$890 | | Senior Counsel | \$125 - \$750 | | Counsel | \$100 - \$650 | | Associates | \$255 - \$710 | | Paralegals | \$50 - \$475 |

15. To the best of the Committee's knowledge and subject to the Ward Declaration and Committee Chairperson Declaration submitted herewith, WBD has informed the Committee that it represents no other entity in connection with these Chapter 11 Cases and does not hold or represent any interest adverse to the Debtors with respect to the matters upon which it is to be employed.

#### CONSENT TO JURISDICTION

#### NOTICE

17. The Committee has provided notice of this Application to (a) proposed counsel for the Debtors, Klehr Harrison Harvey Branzburg LLP, 919 North Market Street, Suite 1000, Wilmington, Delaware 19801 (Attn: Domenic E. Pacitti and Michael W. Yurkewicz); (b) counsel for the DIP Agent and the Prepetition First Lien Secured Agent, Latham & Watkins LLP, 330 N. Wabash Avenue, Suite 2800, Chicago, Illinois 60611 (Attn: James Ktsanes and Jeramy D. Webb) and Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North King Street, Wilmington, Delaware 19801 (Attn: Michael R. Nestor and Andrew L. Magaziner); (c) counsel to the Prepetition Second Lien Secured Agent, Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania 19103 (Attn: Barbara J. Shander); (d) the Office of the United States Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington, Delaware 19801 (Attn: David L. Buchbinder), and (e) all other parties that have requested notice pursuant to Bankruptcy Rule 2002. The Committee submits that no other or further notice is necessary or required.

18. No previous application for relief sought herein has been made to this or any other Court.

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# **EXHIBIT 09**

Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of February 4, 2020, filed in *In re Lucky's Market Parent Company*, *LLC*

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#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

LUCKY'S MARKET PARENT COMPANY, LLC, et al., 1

Debtors.

Chapter 11

Case No. 20-10166 (JTD)

(Jointly Administered)

Hearing Date: March 13, 2020 at 10:00 a.m. (ET) Objection Deadline: March 6, 2020 at 4:00 p.m. (ET)

#### NOTICE OF APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY CODE SECTIONS 328(a) AND 1103 AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS COUNSEL NUNC PRO TUNC TO FEBRUARY 4, 2020

PLEASE TAKE NOTICE that, on February 21, 2020, the Official Committee of

Unsecured Creditors (the "Committee") appointed in the bankruptcy cases of the above-captioned

debtors and debtors-in-possession (the "Debtors") filed the attached Application of the Official

Committee of Unsecured Creditors for an Order Authorizing and Approving the Employment and

Retention of Womble Bond Dickinson (US) LLP as Counsel Nunc Pro Tunc to February 4, 2020

(the "Application").

PLEASE TAKE FURTHER NOTICE that objections or responses, if any, to the Application must be (i) filed with the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 3rd Floor, Wilmington, Delaware 19801, and (ii) served upon the undersigned counsel to the Committee, on or before March 6, 2020 at 4:00 p.m. (prevailing Eastern Time).

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, are Lucky's Market Parent Company, LLC (2055), Lucky's Farmers Market Holding Company, LLC (5480), Lucky's Market Operating Company, LLC (7064), LFM Stores LLC (3114), Lucky's Farmers Market, LP (0828), Lucky's Farmers Market Resource Center, LLC (7711), Lucky's Market Holding Company 2, LLC (0607), Lucky's Market GP 2, LLC (9335), Lucky's Market 2, LP (8384), Lucky's Market of Longmont, LLC (9789), Lucky's Farmers Market of Billings, LLC (8088), Lucky's Farmers Markets of Columbus, LLC (3379), Lucky's Farmers Market of Rock Hill, LLC (3386), LFM Jackson, LLC (8300), Lucky's Farmers Market of Ann Arbor, LLC (4067), Lucky's Market of Gainesville, LLC (7877), Lucky's Market of Bloomington, LLC (3944), Lucky's Market of Plantation, LLC (4356), Lucky's Market of Savannah, GA, LLC (1097), Lucky's Market of Traverse, City, LLC (2033), Lucky's Market of Naples, FL, LLC (8700), and Sinoc, Inc. (0723).

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 188 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 2 of 34 253

PLEASE TAKE FURTHER NOTICE that a hearing with respect to the Application will be held on March 13, 2020 at 10:00 a.m. (prevailing Eastern Time) before the Honorable John T. Dorsey, United States Bankruptcy Judge, at the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 5th Floor, Courtroom #5, Wilmington, Delaware 19801.

PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER NOTICE OR A HEARING.

Wilmington, Delaware

#### Dated: February 21, 2020 WOMBLE BOND DICKINSON (US) LLP

/s/ Matthew P. Ward Matthew P. Ward (Del. Bar No. 4471) Morgan L. Patterson (Del. Bar No. 5388) 1313 North Market Street, Suite 1200 Wilmington, Delaware 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 Email: matthew.ward@wbd-us.com morgan.patterson@wbd-us.com

-AND-

HAHN & HESSEN LLP

Mark S. Indelicato (admitted pro hac vice) Mark T. Power (admitted pro hac vice) Jeffrey Zawadzki (admitted pro hac vice) Emma Fleming (admitted pro hac vice) 488 Madison Avenue New York, New York 10022 Telephone: (212) 478-7200 Facsimile: (212) 478-7400 Email: mindelicato@hahnhessen.com mpower@hahnhessen.com jzawadzki@hahnhessen.com efleming@hahnhessen.com

Proposed Counsel to the Official Committee of Unsecured Creditors of Lucky's Market Parent Company, LLC, et al.

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#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

LUCKY'S MARKET PARENT COMPANY, LLC, et al., 1

Debtors.

Chapter 11

Case No. 20-10166 (JTD)

(Jointly Administered)

Hearing Date: March 13, 2020 at 10:00 a.m. (ET) Objection Deadline: March 6, 2020 at 4:00 p.m. (ET)

The Official Committee of Unsecured Creditors (the "Committee") appointed in the

bankruptcy cases of the above-captioned debtors and debtors-in-possession (the "Debtors"), hereby submits this application (the "Application") for entry of an order, substantially in the form attached hereto as Exhibit A, pursuant to sections 328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as amended and applicable to the above-captioned case, the "Bankruptcy Code") and Rule 2014(a) of the Federal Rule of Bankruptcy Procedure (the "Bankruptcy Rules"), and the United State Trustee's Appendix B - Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases (the "Appendix B Guidelines"), authorizing and approving the

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 190 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 4 of 34 253

employment and retention of Womble Bond Dickinson (US) LLP ("WBD"), as counsel for the Committee, nunc pro tunc to February 4, 2020. In support of this Application, the Committee submits the Declaration of Matthew P. Ward, a partner of WBD, attached hereto as Exhibit B (the "Ward Declaration"), and the Declaration of Nicholas Leitzes in Support of Application of the Official Committee of Unsecured Creditors for an Order Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Nunc Pro Tunc to February 4, 2020, attached hereto as Exhibit C (the "Committee Chairperson Declaration"), and respectfully states as follows:

#### BACKGROUND

2. Pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, the Debtors continue to manage their properties and operate their businesses as debtors in possession.

3. On February 4, 2020, the Office of the United States Trustee appointed the Committee pursuant to section 1102(a)(1) of the Bankruptcy Code. See Docket No. 94. The Committee is comprised of the following three (3) members: (a) United Natural Foods, Inc., (b) Harvest Meat Company, Inc., and (c) Benderson Development Company, LLC. On the same day, the Committee selected Hahn & Hessen LLP to serve as its lead counsel, WBD to serve as its Delaware counsel, and Norton Rose Fulbright US LLP to serve as its special litigation counsel. The Committee subsequently selected Province, Inc. to serve as its financial advisor in the Chapter 11 Cases.

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4. Information regarding the Debtors' history, business operations, capital structure, primary secured indebtedness, and the events leading up to the commencement of these Chapter 11 Cases can be found in the Declaration of Andrew T. Pillari, Chief Financial Officer of Debtors, in Support of Chapter 11 Petitions and First Day Pleadings [Docket No. 15].

#### JURISDICTION AND VENUE

#### RELIEF REQUESTED

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these cases are assigned. Submitted herewith is the Ward Declaration, which sets forth WBD's connections with the Debtors, their creditors, and other parties-in-interest.

9. The Committee has selected WBD as its Delaware counsel because of its

attorneys' experience and knowledge before this Court. The Committee believes that WBD is

well-qualified to represent the Committee in these Chapter 11 Cases.

10. The professional services that WBD will provide to the Committee include,

but are not limited to, the following:

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11. Subject to the Court's approval and pursuant to Bankruptcy Code sections 330 and 331, the Bankruptcy Rules, the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"), and any other rules and procedures that this Court may fix, the Committee requests that WBD be compensated on an hourly basis, plus reimbursement of the actual and necessary expenses that WBD incurs. WBD requests that it receives such compensation in accordance with the ordinary and customary rates which are in effect on the date the services are rendered.

12. WBD's current hourly rates are as follows:

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 194 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 8 of 34 253

not hold or represent any interest adverse to the Debtors with respect to the matters upon which it is to be employed.

#### CONSENT TO JURISDICTION

#### NOTICE

17. Notice of this Application has been provided to the Debtors and their counsel, the Office of the United States Trustee for the District of Delaware, Kroger, and all parties entitled to notice pursuant to Local Rule 9013-1(m). The Committee submits that no other or further notice is required.

18. No previous application for relief sought herein has been made to this or any other Court.

WHEREFORE, the Committee respectfully requests that this Court enter an order, substantially in the form attached hereto as Exhibit A, authorizing the Committee to retain and employ Womble Bond Dickinson (US) LLP, as Delaware counsel to the Committee, nunc pro tunc to February 4, 2020, and grant such further relief as the Court deems just or proper.

[Signature on following page]

Dated: February 21, 2020 Wilmington, Delaware

#### United Natural Foods, Inc.

Solely in its capacity as Committee Chairperson and not in its individual capacity

#### /s/ Nicholas Leitzes

By: Nicholas Leitzes, As representative of United Natural Foods, Inc.

# EXHIBIT A

Proposed Order

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#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

LUCKY'S MARKET PARENT COMPANY, LLC, et al., 1

Debtors.

Chapter 11

Case No. 20-10166 (JTD)

(Jointly Administered)

Related Docket No.: \_\_\_\_

### ORDER AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS COUNSEL FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS NUNC PRO TUNC TO FEBRUARY 4, 2020

Upon the application (the "Application")2of the Committee for entry of an order authorizing the Committee to employ and retain WBD as counsel in the above-captioned cases nunc pro tunc to February 4, 2020; and upon the Declaration of Matthew P. Ward filed in support of the Application and the Declaration of the Nicholas Leitzes filed in support of the Application; and it appearing that proper notice of the Application has been given and that no further notice or hearing is required; and the Court being satisfied based on the representations made in the Application and the declarations that (i) WBD represents no interest adverse to the Debtors' estates or the Debtors' creditors, other than its representation of the Committee in these Chapter 11 Cases, and (ii) the employment of WBD is necessary and would be in the best interests of the Committee

2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Application.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 198 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 12 of 34 253

and the estates, and after due deliberation thereon, and sufficient cause appearing therefor, it is hereby:

#### ORDERED, ADJUDGED, AND DECREED that:

1. The Application is hereby APPROVED.

2. In accordance with Bankruptcy Code section 1103(a), the Committee is hereby authorized to employ and empowered to retain WBD as its counsel, nunc pro tunc to February 4, 2020, to represent the Committee in the Debtors' Chapter 11 Cases.

3. WBD's compensation for services (including, but not limited to hourly rates) and reimbursement of expenses shall be subject to review pursuant to Bankruptcy Code sections 330 and 331, the Bankruptcy Rules, the Local Rules, and such other procedures as may be fixed by order of this Court.

4. The Court shall retain jurisdiction to hear and determine all matters arising from the implementation of this Order.

### EXHIBIT B

Ward Declaration

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#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

LUCKY'S MARKET PARENT COMPANY, LLC, et al., 1

Debtors.

(Jointly Administered)

Case No. 20-10166 (JTD)

Chapter 11

### DECLARATION OF MATTHEW P. WARD IN SUPPORT OF APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY CODE SECTIONS 328(a) AND 1103 AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS COUNSEL NUNC PRO TUNC TO FEBRUARY 4, 2020

Matthew P. Ward, pursuant to 28 U.S.C. § 1746, certifies as follows:

1. I am a partner of the law firm of Womble Bond Dickinson (US) LLP

("WBD")2 which maintains an office for the practice of law at 1313 Market Street, Suite 1200,

Wilmington, Delaware 19801, as well as offices in California, the District of Columbia, Georgia,

Maryland, Massachusetts, North Carolina, South Carolina, Texas, and Virginia. I am admitted to

practice before this Court, and will assume primary responsibility within WBD for its engagement

in these Chapter 11 Cases.

2. I am familiar with the facts hereinafter stated, and submit this declaration

(the "Declaration") in support of the application (the "Application") of the Official Committee of

2 Capitalized terms not defined herein shall have the meanings ascribed to them in the Application.

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Unsecured Creditors (the "Committee") of the above-captioned debtors (the "Debtors") for entry of an Order authorizing and approving the employment and retention of WBD, as counsel to the Committee, nunc pro tunc to February 4, 2020.

3. I am fully familiar with the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules, and I am sufficiently competent to handle whatever might foreseeably be expected of the Committee's counsel in this matter.

4. The professional services that WBD will provide to the Committee include those set forth in the Application. Subject to the Court's approval and pursuant to Bankruptcy Code sections 330 and 331, the Bankruptcy Rules and Local Rules, and any other rules and procedures that this Court may fix, WBD will seek compensation on an hourly basis, plus reimbursement of the actual and necessary expenses that WBD incurs. WBD requests that it receive such compensation in accordance with the ordinary and customary rates that are in effect on the date the services are rendered.

5. Set forth below is a schedule of hourly rates of certain professionals at

WBD:

6. The charges for the attorneys and legal assistants who will render services to the Committee are based upon actual time charges on an hourly basis. The hourly rates for such professionals are based upon the experience and expertise of the attorney or legal assistant involved and are subject to periodic adjustments to reflect economic and other conditions.

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7. Insofar as I have been able to ascertain, except as described herein, the other attorneys of WBD and I have no interest adverse to and no connections to the Committee, the Debtors' estates, their creditors, the United States Trustee, any person employed by the Office of the United States Trustee, the Bankruptcy Judge to whom these Chapter 11 Cases are assigned, or any other party in interest herein or their respective attorneys and accountants.3 Although WBD from time to time has represented and in the future may represent various entities that are creditors of the Debtors or otherwise have had or have an interest in the Debtors in matters wholly unrelated to these bankruptcy cases, WBD will not, while employed by the Committee, represent any other entity having an adverse interest in connection with these Chapter 11 Cases, absent further disclosure and to the extent that such representation would be permissible under Bankruptcy Code section 1103.

#### A. WBD's Conflict Check System

8. In connection with preparing this Declaration, WBD submitted the names of the individuals and entities that are currently known to be material parties and parties-in-interest in these cases (the "Parties-in-Interest") for review in the computerized conflict database system maintained by WBD. WBD maintains and systematically updates its conflict check system in the regular course of business of the firm, and it is the regular practice of the firm to make and maintain these records. The conflict check system maintained by WBD is designed to include every matter on which the firm is now or has been engaged, the entity for which the firm is now or has been engaged, and in each instance, the identity of related parties and adverse parties and the attorney in the firm that is knowledgeable about the matter. It is the policy of WBD that no new

3 WBD appears in numerous cases involving a substantial number of creditors and parties-in-interest. WBD is reviewing the parties-in-interest in this proceeding and will make every effort to disclose all connections to these parties as they become known to WBD. Although it is not possible to guarantee that each and every connection is disclosed, WBD will file additional and supplemental disclosure statements in the event that WBD becomes aware of any additional connections. In addition, it is possible that some creditors or parties-in-interest herein are creditors or parties-in-interest with de minimis interest in other cases in which WBD plays a role.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 203 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 17 of 34 253

matter may be accepted or opened within the firm without completing and submitting to those charged with maintaining the conflict check system the information necessary to check each such matter for conflicts, including the identity of the prospective client, as well as related and adverse parties. Accordingly, the database is regularly updated for every new matter undertaken by WBD.

9. A list of the names of the Parties-in-Interest described above, which was submitted to the conflict check system, is attached hereto as Schedule 1.

#### B. WBD's Relationship with Parties-in-Interest in Unrelated Matters

10. A list of the Parties-in-Interest or their affiliates with respect to which WBD serves or has served as counsel is set forth on Schedule 2 attached hereto. A significant part of WBD's practice includes representations of creditors' committees. Accordingly, this exhibit includes persons that may have been members of any creditors' committee represented by WBD, in addition to WBD current and/or past clients.

11. As disclosed in this exhibit, WBD and its partners, counsel, and associates have in the past represented, currently represent, and may in the future represent entities that are creditors of the Debtors, or other parties-in-interest in the Debtors' Chapter 11 Cases in matters unrelated to these bankruptcy cases. Further, WBD appears in cases, proceedings, and transactions involving a substantial number of different attorneys, accountants, financial consultants, and investment bankers, some of which now or may in the future represent creditors or parties-ininterest in these cases.

12. WBD has not agreed to share (a) any compensation it may receive with another party or person, other than with the partners, counsel, associates and other employees of WBD, or (b) any compensation another person or party has received or may receive.

13. WBD did not receive a retainer with respect to its representation of the Committee.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 204 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 18 of 34 253

14. Consistent with the Appendix B Guidelines, which became effective on

November 1, 2013, I state as follows:

- (a) WBD did not agree to a variation of its standard and customary billing arrangements for the engagement; - (b) WBD's professionals included in the engagement have not varied their rates based on the geographic location of these Chapter 11 Cases; - (c) WBD did not represent the Committee prior to the Petition Date; and - (d) WBD is developing a staffing plan and is currently developing a prospective budget for the Chapter 11 Cases (the "Budget and Staffing Plan") to comply with any requests for information and additional disclosures by the U.S. Trustee and any other orders of the Court, recognizing that, during the course of the Chapter 11 Cases, there may be unforeseeable fees and expenses that will need to be addressed by the Committee and WBD. WBD and the Committee will review the Budget and Staffing Plan throughout these Chapter 11 Cases to determine any adjustments required to the Budget and Staffing Plan. - 15. Based upon the information available to me, and except as otherwise

described herein, WBD holds no interest adverse to the Committee, the Debtors, their estates, or

creditors as to the matters in which it is to be employed.

16. If WBD discovers any connection with any interested party or enters into

any new relationship with any interested party, the firm will promptly supplement its disclosure to

the Court.

I hereby declare under the penalty of perjury that the foregoing statements made by

me are true and correct to the best of my knowledge, information, and belief.

Dated: February 21, 2020

/s/ Matthew P. Ward Matthew P. Ward (DE Bar No. 4471) **Schedule 1**

#### **Parties in Interest Searched**

#### **AGENT**

Asia America Direct Bui Tran Tu Chang Chia Yu Chen Liqin Dae Yang Immigration Corporation Dexiu Hu Gao Lin Goldmax Immigration Consulting Co., Ltd. Ho-Ping Lin KZC Global Connect Limited Le Long Hoang Liu Jianxin Mason's Immigration Services Mei-Ling Chang Min Zhang Mu Yajia Nana Mei Ngar Kwan Wee Ngo Thi Tuyet Hong Nguyen Thi Thu Hong Orient & Pacific Vietnam Pacific York Paul Bernadou & Co Ray Immigration Ren Guorong Shanghai Can-Achieve Consultants Ltd Shi Hui Chiang Sun Chenggang Sycamore International Consulting Co. Truong Nguyen Thuy Tram Tsai Hsinlun US-Connect Van Chau Vu Lam Wai Man Ho Wei Wang Xu Kai Yang Wei Younghoon Park Yuen Hing Lam Yuwei Gu

**Bank** JP Morgan Chase Meta Bank Signature Stockman Bank

Sun Trust

#### **Director/Officers**

Darling, Christopher Gilliland, Patrick Phillips, Michael Pillari, Andrew Schlotman, J. Michael Schulte, Christopher Seitz, Andrew Sharon, Jason B Woods, Maria

#### **Government Regulatory**

Colorado Unclaimed Property Division Florida Unclaimed Property Division Georgia Unclaimed Property Division Indiana Unclaimed Property Division Kentucky Unclaimed Property Division Michigan Unclaimed Property Division Missouri Unclaimed Property Division Montana Unclaimed Property Division Ohio Unclaimed Property Division Wyoming Unclaimed Property Division

#### **Insurance**

American Zurich Insurance Company Argonaut Great Central Insurance Company Argonaut Insurance Company Beazley Great American Insurance Company Lloyd's of London Marsh USA, Inc. Ohio Bureau of Work Comp Pinnacol Assurance Queen City Assurance SterlingRisk Vine Court Assurance Wyoming Bureau of Work Comp

#### **Known Affiliates - JV**

LFM Jackson, LLC (Colorado) LFM Stores LLC Lucky's Farmers Market Holding Company, LLC Lucky's Farmers Market of Ann Arbor, LLC (CO) Lucky's Farmers Market of Billings, LLC (Montana) Lucky's Farmers Market of Columbus, LLC (Ohio) Lucky's Farmers Market of Rock Hill, LLC (Colo) Lucky's Farmers Market Resource Center, LLC Lucky's Farmers Market, LP Lucky's Market 2, LP Lucky's Market GP 2, LLC Lucky's Market Holding Company 2, LLC Lucky's Market of Bloomington, LLC(CO) Lucky's Market of Gainesville, LLC(CO) Lucky's Market of Longmont, LLC (Colorado) Lucky's Market of Naples, FL, LLC(CO) Lucky's Market of Plantation, LLC (Colorado) Lucky's Market of Savannah, GA, LLC(CO) Lucky's Market of Traverse City, LLC(CO) Lucky's Market Operating Company, LLC Lucky's Market Parent Company, LLC Sinoc, Inc

### **LANDLORD**

1916 LLC 425SC, LLC 7978 Associates VII, LLC (Benderson) ARC Clorlf1001, LLC ATA Forum Louisville KY LLC Benderson Properties, Inc Blackfox Parkway Associates LLC Bre Mariner Hunters Creek, LLC BRNK Bradenton LLC Buffalo Ridge Center South LLC Conis Development Co Conis Inc CORE Sycamore Town Center LLC

Dale Company LLC Dania Live 1748, LLC DDR KM Shopping Center LLC DDRTC Cypress Trace LLC Dixit Properties LLC EBP 2800 North High LLC Glades 95th LLC Glenstone Marketplace LLC GLL Selection II Florida LP Griffin Farm at Midtown II, LLC Gunbarrel Properties LLC Halifax Associates LLC West Park Shopping Center LLC Woolbright Wekiva LLC WR-I Associates LTD

### **LENDER**

BBIF Subsidiary CDE 3, LLC Gilliland, Michael The Kroger Co.

### **Lien Holder**

U.S Bank Equipment Finance Litigation Bryan Cave Leighton Paisner LLP Casias, Charlotte Fisher & Phillips LLP Hypower, Inc. Linkhorst & Hockin, P.A. Napoleon, Marie Sturgis, Kathleen Welch, Tyler Zukoski, Margaret

### **PROFESSIONALS**

Alvarez and Marsal Great American Group Omni Agent Solutions PJ Solomon Polsinelli P.C. Weil, Gotshal, and Manges LLP

### **SIGNIFICANT SHAREHOLDER**

Lucky's Founders Holdings, LLC The Kroger Co. UTILITIES AEP Ohio

Ameren Missouri American Waste Beaches Energy Blue Stream Bright House Networks CenturyLink Charlotte County Utilities Charter Communications (Spectrum Business) Cima Energy Solutions LLC (Supreme Energy Inc) City of Ann Arbor Water Utilities City of Billings City of Bloomington City of Boca Raton City of Boulder City of Clermont Florida Utilities City of Cleveland Division of Water City of Columbia City of Columbus City of Fort Collins Utilities City of Iowa City City of Longmont Utilities City of Missoula City of Neptune Beach City of Oakland Park City of Ormond Beach City of Panama City Utilities Dept City of Plantation City of Sarasota City of Savannah City of St Petersburg City of Tallahassee City of West Melbourne City of Winter Park City Utilities of Springfield Collier County Public Utilities Department Columbia Gas of Kentucky Columbia Gas of Ohio Comcast Constellation Energy Services Cox Communications Inc DirecTV Dish Network Dominion Energy Ohio

DTE Energy Duke Energy Federal International Recycling And Waste Solutions, LLC Fireside Natural Gas LLC Florida Natural Gas Florida Power & Light Florida Public Utilities FPL Energy Services Gainesville Regional Utilities Georgia Power Grand Traverse County DPW Gulf Power Illuminating Company JEA Kentucky American Water Kentucky Utilities Company Lake Apopka Natural Gas District Lee County Utilities Lexington-Fayette Urban County Government LG&E Louisville Water Company Lower Valley Energy Market at McKnight 1 LLC MCI Communications Mediacom MidAmerican Energy Company Missoula Compost Collection LLC Missoula Water Montana-Dakota Utilities Company National Exemption Service Northeast Ohio Regional Sewer District Northwestern Energy Orange County Utilities Organix Recycling LLC Orlando Utilities Commission Republic Services Royal Waterworks, Inc. Rumpke Inc Silver Star Communications Smithville Communications Spectrum Spire, Inc. TECO Energy TECO Peoples Gas Think Utility Services

Time Warner Cable Traverse City Light & Power Vectren Waste Management Waste Pro WCA Waste Systems Inc West Bank Sanitation Western Disposal Services Wheat Ridge Sanitation District Wheat Ridge Water District Xcel Energy XO Communications

#### **Vendor**

5 Star Refrigeration & Air Conditioning A-1 Daylighting LLC ABS Facility Maintenance Advanced Refrigeration & Air Advertising With Wit Inc Alberts Organics Inc Amazon American Outdoor Products Inc Americana Companies Inc Ampro Aramark & Career Apparel Group Barbers Inc. Benderson Properties, Inc. Blackhawk Network, Inc Bluebird Botanicals Bluesoho Boiron USA Inc Borden Dairy Company Brad Fisher Breadworks Briggs Distributing Co Inc Bunzl Holdings, Inc. Burkhardt Distributing Co Inc Burts Bees Caito Foods LLC Caito Foods Service Captiveaire Systems Inc Carbamericas Inc. Cardlytics Inc Carroll Distributing Company Case Contracting Company Cavalier Distributing

CBDRX Inc Central Bag & Burlap Century Fire Protection Ceridian HCM,Inc. Champion Brands Inc Charlies Produce Chelan Fresh Marketing City Beverages Coastal Beverage Ltd Coker Construction Cone Distributing Inc Conis Development Co Continental Flowers Cornerstone On Demand Inc Country Life LLC Cozzini Bros Inc Crosset Company LLC CV Sciences Inc CWB Holdings Inc Dade Paper & Bag Co Design Design Inc Digital Evolution Group, LLC Divisions Maintenance Group Double Eagle Distribution EAN Services LLC Ecolab Pest Elimination Division Farm Boy Produce LLC Farmer Mikes Produce Inc FBC of Denver LLC Flexprint LLC Flora Fine Foods Florida Distribution Company Florida Power & Light Flowers Baking Co of Bradenton Frangiosa Farms LLC Freshpoint of Central Florida Freshpoint of Denver Full Spectrum Distribution Gaia Herbs Inc Garda CL Inc Garden of Life Georges Distributing Gexpro Global Axiom, Inc. Gold Coast Beverage Gourmet Foods International

Gourmet International Ltd Granite Telecommunications Great Bay Distributors Inc Great Lakes Wine & Spirits - General Wine Great Plains Beef LLC GSP Marketing Technologies Inc Halperns Steak & Garys Seafood Harvest Meat Company Inc Heidelberg Dist High Country Beverage Corporation Horizon Food Equipment Inc Hussmann Corporation Hydro Flask USA 1G Consulting, LLC Imperial Beverage Co - Elite B Insignia Systems Inc Intermountain Dist Co International Wine and Spirits Irwin Naturals Iverify Inc J Raymond Construction Corp Jackson Hole/Teton Distributing Jarrow Formulas Inc JDA Software Inc JJ Taylor Distributing Florida John Boos & Co Johnson Brothers Kikkerland Design Inc KPS Global LLC Kronos Incorporated Lewan & Associates Inc Loco Food Distribution Lohmiller & Company Lohr Distributing Company Inc Magnolia River Manufacturing C Major Brands Mcclains Old Florida Gourmet MCG Architecture Mcgregor's Greens LLC Megafood Mettler-Toledo LLC Middleby Advantage Mineral Fusion Natural Brands Mission Foods Murphy Company Natural Products Group

Neelands USA Ltd Nikko Enterprise Corporation Nordic Naturals Inc North Bay Produce, Inc. North Florida Sales Now Foods Nutraceutical Corporation Nutranext Business LLC 0 & W Inc Onesource Magazine Dist LLC Online Freight Services Inc Opici Family Distributing Organicgirl, LLC Orvino Imports & Distributing Osprey Beverages LLC Pacifica Beauty Paycom Payroll LLC PCM Sales Inc PDF Foods LLC Pepsi Beverages Prairie Farms Dairy Prairie Farms Dairy Missouri Premier Beverage Company LLC Produce Exchange, Co., Inc. Progressive Distribution LLC Proguard Service and Solutions PTM Consulting LLC PTR Baler and Compactor Compan Pure Hothouse Foods Inc. Pure Water Technologies #1 LLC Purevision Technology Inc Quality Casing Company Inc Rave Associates Inc Reed Transport Services, Inc. Reliance Vitamin Co Inc Renew Life Formulas, Inc. Republic National Distributing Company Republic Services Restorative Botanicals LLC Rocky Mountain Eggs Inc Rocky Mountain Reserve Royal Crest Dairy Inc Schmid Construction Schwabe North America Inc Seasons-4 Inc Seattle Fish Company

Seattle Fish Company Int Shamrock Foods Company Sherwood Food Distributors Siemens Industry Inc Snyder Construction Inc Softchoice Corporation Source Refrigeration & HVAC Inc Southern Glazers Wine and Spir Southern Style Spices Southgate Mall Montana II LLC Staples Business Advantage Summit Beverage Suncity Produce Co Superior Beverage Group Sysco Central Florida Inc Sysco Denver Inc Sysco Detroit LLC Sysco Food Services Cleveland Sysco Grand Rapids Sysco Gulf Coast Inc Sysco Indianapolis LLC Sysco Intermountain Sysco Jacksonville Inc Sysco Kansas City Inc Sysco Louisville Inc Sysco Montana Inc Sysco Southeast Florida Sysco St Louis LLC Sysco West Coast Florida Inc Tarrant Lighting Teague Freyaldenhoven Freyalde Architects & Planners LLP Tennant Sales and Service Company The Kroger Co. Thomas Sign and Awning Company Thomas Sign And Awning Company Inc Toshiba Global Commerce Solutions Inc Trade Fixtures LLC Tri-Eagle Sales Trillium Service Companies LLC Troyers of South Florida Truno Retail "technology Solutions Tundra Restaurant Supply Inc UNFI Van Solkema Produce of Georgia Vintage Wine

Vital Proteins LLC Vitality Works Inc Wasserstrom Waste Management WD Partners Inc Western Paper Distributors Inc Winebow Wyoming Liquor Division

#### Schedule 2 Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 212 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 26 of 34 253

| Party In Interest | Role in Case | Connection | |-------------------------------------------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------| | AEP Ohio | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Alvarez & Marsal | Professional | Womble has in the past represented this professional in matters unrelated to these chapter 11 cases. | | Amazon | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | American Zurich Insurance Company | Insurance | Womble Bond Dickinson (UK) LLP and Womble currently does and in the past has represented this entity in matters unrelated to these chapter 11 cases. | | Aramark | Vendor | Womble Bond Dickinson (UK) LLP and Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Argonaut Great Central Insurance Company | Insurance | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Beazley | Insurance | Womble Bond Dickinson (UK) LLP and Womble currently does and in the past has represented this entity in matters unrelated to these chapter 11 cases. | | Blackhawk Network, Inc. | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Bryan Cave Leighton Paisner LLP | Lien Holder | Womble currently does and has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Caito Foods LLC | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Cardlytics | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | CenturyLink | Utility | Womble currently does and has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | Champion Brands Inc. | Vendor | Womble currently does and has in the past represented this entity and certain of its affiliates in matters unrelated to these chapter 11 cases. | | Charter Communications | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Cima Energy Solutions LLC (Supreme Energy Inc.) | Utility | Womble has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | Comcast | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Cornerstone On Demand Inc. | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Cox Communications, Inc. | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | DDRTC Cypress Trace LLC | Landlord | Womble has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | DirecTV | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Dish Network | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. |

#### Schedule 2 Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 213 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 27 of 34 253

| Party In Interest | Role in Case | Connection | |----------------------------------|--------------|-----------------------------------------------------------------------------------------------------------------------------------------| | Domninion Energy | Utility | Womble currently does and has in the past represented this affiliates of this entity in matters unrelated to these chapter 11 cases. | | Duke Energy | Utility | Womble currently does and has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Fisher & Phillips LLP | Lien Holder | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Florida Power & Light | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Freshpoint | Vendor | Womble has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | Georgia Power Company | Utility | Womble currently does and has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Granite Telecommunications | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Great American | Professional | Womble has in the past represented this professional in matters unrelated to these chapter 11 cases. | | Great American Insurance Company | Insurance | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Halperns Steak & Garys Seafood | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Hypower, Inc. | Lien Holder | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Irwin Naturals | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | JP Morgan Chase | Bank | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Kroger | Lender | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Kronos Incorporated | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Lloyd's of London | Insurance | Womble currently does and has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Marsh USA, Inc. | Insurance | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | MCI Communications | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Mediacom | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Meta Bank | Bank | Womble has in the past represented this entity and certain of its affiliates in matters unrelated to these chapter 11 cases. |

#### Schedule 2 Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 214 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 28 of 34 253

| Party In Interest | Role in Case | Connection | |----------------------------------------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------| | Mettler-Toledo LLC | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Michael Philips | Directors/Officers | Womble has in the past represented individuals by this name. | | Nutraceutical Corporation | Vendor | Womble Bond Dickinson (UK) LLP has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Pepsi | Vender | Womble currently does and has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Polsinelli | Professional | Womble has in the past represented this professional in matters unrelated to these chapter 11 cases. | | Republic Services | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Siemens Industry Inc. | Vendor | Womble currently does and has in the past represented this entity and certain of its affiliates in matters unrelated to these chapter 11 cases. | | Signature Bank | Bank | Womble has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | Silver Star Communications | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Spectrum | Utility | Womble has in the past represented this entity and its affiliates in matters unrelated to these chapter 11 cases. | | Staples Inc. | Vendor | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | SterlingRisk | Insurance | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Sysco | Vendor | Womble has in the past represented this entity and certain of its affiliates in matters unrelated to these chapter 11 cases. | | Time Warner Cable | Utility | Womble has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | Toshiba Global Commerce Solutions Inc. | Vendor | Womble has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | U.S. Bank Equipment Finance Litigation | Lien Holder | Womble currently does and has in the past represented this entity and affiliates of this entity in matters unrelated to these chapter 11 cases. | | Vectren | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Waste Management | Utility | Womble has in the past represented affiliates of this entity in matters unrelated to these chapter 11 cases. | | Waste Pro USA, Inc. | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. | | Weil Gotshal & Manges | Professional | Womble has in the past represented this professional in matters unrelated to these chapter 11 cases. | | XO Communications | Utility | Womble has in the past represented this entity in matters unrelated to these chapter 11 cases. |

## EXHIBIT C

Leitzes Declaration

#### IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

LUCKY'S MARKET PARENT COMPANY, LLC, et al., 1

Chapter 11

Case No. 20-10166 (JTD)

(Jointly Administered)

Debtors.

#### DECLARATION OF NICHOLAS LEITZES IN SUPPORT OF APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS COUNSEL NUNC PRO TUNC TO FEBRUARY 4, 2020

I, Nicholas Leitzes, representative of United Natural Foods, Inc., solely in my

capacity as the Chairperson of the Official Committee of Unsecured Creditors (the "Committee")

appointed in the above-captioned cases (the "Chapter 11 Cases"), hereby submits this declaration

pursuant to 28 U.S.C. 1746 and respectfully states as follows:

1. I am over the age of 21 years old and a representative of Chairperson of the

Committee. The Committee was appointed by the Office of the United States Trustee for the

District of Delaware (the "U.S. Trustee") on February 4, 2020.

2. I have read and am familiar with the contents of the Application of the

Official Committee of Unsecured Creditors for an Order Authorizing and Approving the

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 217 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 31 of 34 253

Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Nunc Pro Tunc to February 4, 2020 (the "Application")2 filed contemporaneously herewith.

3. This Declaration is provided pursuant to ¶ D.2 of the Appendix B Guidelines. I am informed by Committee counsel that the Appendix B Guidelines request that any application for employment of an attorney under 11 U.S.C. §§ 327 or 1103 be accompanied by a verified statement from the client that addresses the following:

- (a) The identity and position of the person making the verification. - (b) The steps taken by the client to ensure that the applicant's billing rates and material terms for the engagement are comparable to the applicant's billing rates and terms for other non-bankruptcy engagements and to the billing rates and terms of other comparably skilled professionals. - (c) The number of firms the client interviewed. - (d) If the billing rates are not comparable to the applicant's billing rates for other non-bankruptcy engagements and to the billing rates of other comparably skilled professionals, then the circumstances warranting the retention of that firm. - (e) The procedures the client has established to supervise the applicant's fees and expenses and to manage costs. If the procedure for the budgeting, review and approval of fees and expenses differ from those the client regularly employs in nonbankruptcy cases to supervise outside general counsel, explain how and why. In addition, describe any efforts to negotiate rates, including rates for routine matters, or in the alternative to delegate such matters to less expensive counsel.

### A. Identity of the Declarant

4. On February 4, 2020, I was appointed to the Committee and was subsequently elected Chair of the Committee. Under the Bylaws of the Official Committee of Unsecured Creditors of Lucky's Market Parent Company, LLC, et al. (the "Bylaws"), the Chair of the Committee, by and through its representatives, has the authority to sign documents on behalf

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Application.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 218 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 32 of 34 253

of, and to bind the Committee as appropriate to implement decisions of the Committee made in accordance with the Bylaws. I am authorized to make this Declaration on behalf of the Chair of the Committee.

5. The Committee interviewed several firms for the position of its counsel in these Chapter 11 Cases on February 4, 2020. At the conclusion of the interviews, the Committee selected Hahn & Hessen LLP to serve as its lead counsel, Womble Bond Dickinson (US) LLP ("WBD") to serve as its Delaware counsel, and Norton Rose Fulbright US LLP to serve as its special litigation counsel in these Chapter 11 Cases. Each retention is subject to Court approval. In connection with the interviews, the Committee evaluated the breadth of the firms' experience and particular areas of expertise, the firms' prior history of representing committees in chapter 11 cases, and the anticipated attorneys' fees to be billed in connection with these cases.

6. The Committee selected WBD as its Delaware counsel because of the firm's extensive experience and knowledge in representing various constituents this Court.

#### B. Steps Taken to Ensure Comparability of Engagement Terms

7. WBD has informed the Committee that its currently hourly rates are its standard hourly rates for work of this nature. WBD further informed the Committee that its hourly rates are subject to periodic, typically annual, adjustments to reflect economic and other conditions. WBD confirmed that, while its billing rates vary from attorney to attorney based on such facts as the attorney's seniority and position with the firm (e.g., partner, counsel, or associate), years of experience, and the demand for services in the attorney's particular area of expertise, the billing rates quoted to the Committee are WBD's customary billing rates.

8. The Committee has discussed a prospective budget and staffing plan for the Committee's professionals these cases, recognizing that in the course of large cases like these

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 219 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 33 of 34 253

Chapter 11 Cases, it is possible and in fact may be likely that there may be a number of unforeseen fees and expenses that will need to be addressed by the Committee and its counsel and that the budget and staffing plans may need to be amended and modified.

#### C. Procedures Established to Supervise Fees and Expenses and Manage Costs

9. The Committee recognizes that it is its responsibility to review the billing practices of its counsel to ensure that the fees and expenses paid by the Debtors' estates remain consistent with the Committee's expectations and the exigencies of these Chapter 11 Cases.

10. The Committee will review the invoices that WBD submits and, together with the Committee's advisors, as necessary, will periodically amend the budget and staffing plans as these Chapter 11 Cases develop.

11. The Committee understands that WBD's fees and expenses: (a) will be subject to review, comment and objection (if warranted), and Court approval; and (b) will be subject to the periodic review on an interim and final basis during the course of these Chapter 11 Cases by the U.S. Trustee and the Debtors, as well as by the Committee.

#### Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 220 of Case 20-10166-JTD Doc 237 Filed 02/21/20 Page 34 of 34 253

I declare under penalty of perjury that the foregoing is true and correct to the best of my

knowledge and belief.

Dated: February 21, 2020 Wilmington, Delaware

#### **United Natural Foods, Inc.**

Solely in its capacity as Committee Chairperson and not in its individual capacity

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Nicholas Leitzes

By: Nicholas Leitzes, As representative of United Natural Foods, Inc.

# **EXHIBIT 10**

Application of the Official Committee of Unsecured Creditors for an Order Pursuant to Bankruptcy Code Sections 328(a) and 1103 Authorizing and Approving the Employment and Retention of Womble Bond Dickinson (US) LLP as Counsel Effective as of October 29, 2021, filed in *In re Red River Waste Solutions*, *LP*

WOMBLE BOND DICKINSON (US) LLP Todd A. Atkinson (Texas Bar No. 24121426) 811 Main Street, Suite 3130 Houston, Texas 77002 Telephone: (346) 998-7801 Facsimile: (346) 998-5901 Email: todd.atkinson@wbd-us.com

Matthew P. Ward (admitted *pro hac vice*) 1313 North Market Street, Suite 1200 Wilmington, Delaware 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 Email: matthew.ward@wbd-us.com

*PROPOSED COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS*

### **IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION**

In re:

Chapter 11

RED RIVER WASTE SOLUTIONS, LP,1

Debtor.

Case No. 21-42423 (ELM)

#### **APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER PURSUANT TO BANKRUPTCY CODE SECTIONS 328(a) AND 1103 AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF WOMBLE BOND DICKINSON (US) LLP AS COUNSEL EFFECTIVE AS OF OCTOBER 29, 2021**

**A HEARING WILL BE CONDUCTED ON THIS MATTER ON DECEMBER 16, 2021 AT 1:30 P.M. (CENTRAL TIME) BEFORE THE HONORABLE EDWARD L. MORRIS, IN THE ELDON B. MAHON U.S. COURTHOUSE, AND MAY BE ATTENDED REMOTELY (BY VIDEO AND TELEPHONE VIA THE COURT'S WEBEX PLATFORM) AS SET FORTH IN GENERAL ORDER 2021-06. IF YOU OBJECT TO THE RELIEF REQUESTED, YOU MUST RESPOND IN WRITING, SPECIFICALLY ANSWERING EACH PARAGRAPH OF THIS**

1 The last four digits of the Debtor's taxpayer identification number are 8719. The Debtor's principal office is located at 4004 East Hwy, 290 West, Dripping Springs, Texas 78620.

**PLEADING. UNLESS OTHERWISE DIRECTED BY THE COURT, YOU MUST FILE YOUR RESPONSE WITH THE CLERK OF THE BANKRUPTCY COURT WITHIN TWENTY-THREE (23) DAYS FROM THE DATE YOU WERE SERVED WITH THIS PLEADING. YOU MUST SERVE A COPY OF YOUR RESPONSE ON THE PERSON WHO SENT YOU THE NOTICE; OTHERWISE, THE COURT MAY TREAT THE PLEADING AS UNOPPOSED AND GRANT THE RELIEF REQUESTED.**

**WEBEX CONNECTION INFORMATION AND INSTRUCTIONS MAY BE FOUND IN GENERAL ORDER 2021-06 AND CLERK'S NOTICE 21-05. WEBEX HEARING INSTRUCTIONS FOR THE HONORABLE EDWARD L. MORRIS MAY BE FOUND AT THE FOLLOWING WEB ADDRESS:**

http

#### **For WebEx Video Participation/Attendance:**

Link: http

#### **For WebEx Telephonic Only Participation/Attendance:**

Dial-In: 1.650.479.3207

Meeting ID: 473 581 124

#### **ALL PARTIES MAY ACCESS COPIES OF THE DEBTOR'S FILINGS ON THE WEBSITE OF THE DEBTOR'S PROPOSED CLAIMS AND NOTICING AGENT AT: http OR CALL (855) 287-3382.**

The Official Committee of Unsecured Creditors (the "Committee") appointed in the bankruptcy case of the above-captioned debtor and debtor-in-possession (the "Debtor") hereby submits this application (the "Application") for entry of an order, substantially in the form attached hereto as Exhibit A, pursuant to sections 328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101 *et seq.* (as amended and applicable to the above-captioned case, the "Bankruptcy Code"), Rule 2014(a) of the Federal Rule of Bankruptcy Procedure (the "Bankruptcy Rules"), Rule 2014-1 of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Northern District of Texas (the "Local Bankruptcy Rules"), and the United States Trustee's *Appendix B - Guidelines for Reviewing Applications for Compensation*

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*and Reimbursement of Expenses Filed Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases* (the "Appendix B Guidelines"), authorizing and approving the employment and retention of Womble Bond Dickinson (US) LLP ("WBD"), as counsel for the Committee, effective as of October 29, 2021. In support of this Application, the Committee submits the *Declaration of Matthew P. Ward in Support of the Application*, attached hereto as Exhibit B (the "Ward Declaration"), and the *Declaration of Richard Sedory in Support of the Application*, attached hereto as Exhibit C (the "Committee Chairperson Declaration"), and respectfully states as follows:

#### **BACKGROUND**

1. The Debtor, on October 14, 2021 (the "Petition Date"), commenced its chapter 11 case by filing a voluntary petition in this Court under chapter 11 of the Bankruptcy Code (the "Chapter 11 Case"). The Debtor continues to operate its business and manage its properties as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in this Chapter 11 Case.

2. On October 28, 2021, the United States Trustee appointed the Committee in this Chapter 11 Case pursuant to section 1102(a)(1) of the Bankruptcy Code. *See* Docket Nos. 86, 89. The Committee is comprised of the following five (5) members: (i) Isolina Ball; (ii) Best One Kentuckiana; (iii) Interstate Billing Service, Inc.; (iv) Pico Propane Operating, LLC; and (v) Toter, LLC. On October 29, 2021, the Committee selected WBD to serve as its counsel. The Committee has selected Rock Creek Advisors LLC to serve as its financial advisor.

3. Additional information regarding the Debtor's business, capital structure, and the circumstances leading to the commencement of this Chapter 11 Case is set forth in the

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*Declaration of James Calandra in Support of Chapter 11 Petitions and First Day Motions* [Docket No. 2].

#### **JURISDICTION AND VENUE**

#### **RELIEF REQUESTED**

5. By this Application, the Committee respectfully requests that the Court enter an order, substantially in the form attached hereto as Exhibit A, authorizing and approving the employment of WBD as counsel to the Committee to perform services relating to this Chapter 11 Case, effective as of October 29, 2021.

7. Pursuant to Bankruptcy Code section 1103(b), an attorney employed to represent a committee may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case. WBD has advised the Committee that WBD does not represent any other entity having an adverse interest in connection with this Chapter 11 Case and does not have any disabling connections with the United States Trustee, any person employed by the Office of the United States Trustee, or the Bankruptcy Judge to whom these cases are assigned. Submitted herewith is the Ward Declaration, which sets forth WBD's connections with the Debtor, its creditors, and other parties-in-interest.

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8. The Committee has selected WBD as its counsel because of its attorneys'

experience and knowledge before this Court and U.S. Bankruptcy Courts nationwide. The Committee believes that WBD is well-qualified to represent the Committee in this Chapter 11 Case.

9. The professional services that WBD will provide to the Committee

include, but are not limited to, the following:

- providing legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Bankruptcy Code section 1102; - assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, potential claims, and any other matters relevant to the case, to the sale of assets, or to the formulation of a plan of reorganization or liquidation (a "Plan"); - participating in the formulation of a Plan; - providing legal advice as necessary with respect to any disclosure statement and Plan filed in this Chapter 11 Case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; - preparing on behalf of the Committee, as necessary, applications, motions, objections, complaints, answers, orders, agreements, and other legal papers; - appearing in Court to present necessary motions, applications, objections, and pleadings, and otherwise protecting the interests of those represented by the Committee; - assisting the Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and - performing such other legal services as may be required and as are in the best interests of the Committee and creditors. - 10. Subject to the Court's approval and pursuant to Bankruptcy Code sections

330 and 331, the Bankruptcy Rules, the Bankruptcy Local Rules, and any other rules and

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procedures that this Court may fix, the Committee requests that WBD be compensated on an hourly basis, plus reimbursement of the actual and necessary expenses that WBD incurs. WBD requests that it receive such compensation in accordance with the ordinary and customary rates which are in effect on the date the services are rendered.

11. WBD's current hourly rates are as follows:

| Timekeeper Position | Hourly Rate | |---------------------|---------------| | Partners | \$325 - \$995 | | Of Counsel | \$370 - \$985 | | Senior Counsel | \$125 - \$710 | | Counsel | \$100 - \$740 | | Associates | \$285 - \$755 | | Paralegals | \$50 - \$500 |

12. The charges set forth herein are based upon actual time charges on an hourly basis and based upon the experience and expertise of the attorney or paraprofessional involved. The Committee understands that the hourly rates set forth are subject to periodic, typically annual, adjustments to reflect economic and other conditions.

13. The Committee understands that any compensation and expenses paid to WBD must be approved by this Court upon application consistent with the Bankruptcy Code, the Bankruptcy Rules, the Bankruptcy Local Rules, and any orders of this Court respecting compensation of professionals.

14. To the best of the Committee's knowledge and subject to the Ward Declaration and Committee Chairperson Declaration submitted herewith, WBD has informed the Committee that it represents no other entity having an adverse interest in connection with this Chapter 11 Case.

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#### **NOTICE**

15. Notice of this Application will be served on (a) counsel to the Debtor, (b) the Office of the United States Trustee, and (c) any party that has requested notice pursuant to Bankruptcy Rule 2002.

16. No previous application for relief sought herein has been made to this or any other Court.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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WHEREFORE, the Committee respectfully requests that this Court enter an order, substantially in the form attached hereto as Exhibit A, authorizing the Committee to retain and employ Womble Bond Dickinson (US) LLP as counsel to the Committee, effective as of October 29, 2021, and grant such further relief as the Court deems just or proper.

Dated: November 18, 2021 **TOTER, LLC**

Solely in its capacity as Committee Chairperson and not in its individual capacity

By: Richard Sedory As representative of Toter, LLC

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#### **CERTIFICATE OF SERVICE**

I certify that on November 18, 2021, I caused a copy of the foregoing document to be served by the Electronic Case Filing System for the United States Bankruptcy Court for the Northern District of Texas.

> */s/ Todd A. Atkinson* Todd A. Atkinson (Texas Bar No. 24121426)

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# **EXHIBIT 11**

United States Trustee's Statement Concerning Suri Realty, LLC's and Carla's Pasta, Inc.'s Applications to Retain Locke Lord LLP as Their Bankruptcy Counsel filed in *In re Carla's Pasta, Inc. and Suri Realty, LLC*

#### **UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT HARTFORD DIVISION**

**In re: Chapter 11**

**CARLA'S PASTA, INC., and Case No. 21-20111 (JJT) SURI REALTY, LLC, Case No. 20-21270 (JJT)**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**Debtors. (Jointly Administered)**

#### **UNITED STATES TRUSTEE'S STATEMENT CONCERNING SURI REALTY, LLC'S AND CARLA'S PASTA, INC.'S APPLICATIONS TO RETAIN LOCKE LORD LLP AS THEIR BANKRUPTCY COUNSEL**

William K. Harrington, United States Trustee for Region 2 ("United States Trustee"), in furtherance of his duties and responsibilities set forth in 28 U.S.C. § 586(a)(3) and (5), respectfully files this Statement, through his undersigned counsel, concerning Carla's Pasta, Inc.'s ("Carla's") and Suri Realty, LLC's ("Suri") (collectively "Debtors") Applications to Retain Locke Lord, LLP as its bankruptcy counsel. In support of his Statement, the United States Trustee, through his undersigned counsel, states the following:

#### **I. GENERAL BACKGROUND**

1. On October 29, 2020, a Chapter 7 involuntary petition for relief was failed against Suri. Case No. 20-21270, ECF 1. On November 24, 2020, Suri filed a "Response to the Involuntary Petition and Request to Convert . . . to a Voluntary Chapter 11 Case." Case No. 20-21270, ECF 9. On December 17, 2020, the Bankruptcy Court entered an Order converting Suri's alleged involuntary Chapter 7 case to a voluntary case under Chapter 11. Case No. 20- 21270, ECF 30. On January 22, 2021, Suri filed its Application to Retain Locke Lord, LLP as its bankruptcy counsel. Case No. 20-21270, ECF 48.

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2. On February 8, 2021, Carla's filed a "bare-bones" voluntary petition for relief under Chapter 11 of the Bankruptcy Code. ECF 1. On February 24, 2021, Carla's filed its bankruptcy schedules and Statement of Financial Affairs. ECF 161 and 162, respectively. Carla's Meeting of Creditors was held on March 5, 2021 and was continued to March 26, 2021 at 2:00 p.m. to allow for the filing of amendments and for further testimony. ECF 234.

3. On February 12, 2021, the Court entered an Order granting the Debtors respective bankruptcy cases joint administration under Case No. 21-20111. ECF 91. On February 18, 2021, the United States Trustee appointed an Official Committee of Unsecured Creditors ("Committee") in the Carla's case. ECF 131. The Committee has proposed the law firm of Green & Sklarz, LLC as its bankruptcy counsel. ECF 214 and 215.

4. The United States Trustee's instant statement addresses the two Applications filed by the Debtors: (a) Suri's Application to Retain Locke Lord, LLP ("Locke Lord") Case No. 20-21270, ECF 48, and (b) Carla's Application to Retain Locke Lord. ECF 122.

5. Suri is a wholly owned subsidiary of Carla's. Suri is the fee simple owner of the two real estate parcels upon which Carla's conducts its manufacturing and sales operation. Until approximately 2017, the real property now owned by Suri was owned in fee simple by the majority shareholder of Carla's – Carla Squatrito. Suri was created in or around 2017 to hold the real property which Carla Squatrito transferred to it in or around 2017 and which it now owns in fee simple.

6. Up until approximately the time Carla Squatrito transferred her ownership interest in the two real property parcels where Carla's presently conducts business to Suri, one or more leases existed between Carla Squatrito, as landlord and Carla's as tenant existed. Carla's

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employees have testified, and Carla's proposed counsel has represented that those leases are no longer in effect and have not been in effect for "years,"

7. Also, according to the testimony of Carla's employees and the representation of Carla's proposed counsel, Suri has not "paid" traditional rent at least since the time of the expiration of the former leases.

#### **II. SPECIFIC FACTS AND ISSUES**

#### **Intercompany Claims:**

8. Carla's employees have testified, and it has been represented by Carla's proposed counsel that Suri did not pay its obligations when such became due but depended upon Carla's to pay Suri's obligations. It has been suggested, but not established that payments made by Carla's on behalf of Suri were or should be treated as "in lieu of rent" payments. Debtors' employees testified and Debtors' proposed counsel suggest that there is a "use and occupancy" agreement between Suri and Carla's; however, the United States Trustee has not been given a copy of such an agreement. ECF 122, ¶ 19. The United States Trustee has no evidence of how long such a "use and occupancy" agreement, whether oral or written, has been in place.

9. There has been no determination, or the United States Trustee is unaware of such, as to what an appropriate "market rate" of rent which should have or should be paid to Suri by Carla's since the last payment made under the former leases between Suri and Carla's.

10. Suri's and Carla's creditor bodies, except for secured creditors BMO Harris Bank ("BMO Harris") and Peoples United Bank "PUB") (collectively "Banks"), are not the same with, for example, Dennis Engineering ("Dennis") has a claim of more than \$13 million against Suri but not Carla's and Carla's listed over \$14 million in trade, service and professional claims on its Schedule E/F which are not shared by Suri.

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11. The Banks, jointly, assert a pre-petition claim of more than \$37 million against both Suri and Carla's which is secured by all the Debtors' assets with the possible statutory exception of purchase-money security interests on individual assets. As debtor-in-possession lenders, the Banks may claim that they have a super-priority administrative claim and secured claim superior even to any such purchase-money security interests. As part of the Bank's "super-priority" claims for providing debtor-in-possession financing, the Banks claim a lien on Chapter 5 claims to the extent of their \$800 Thousand post-petition lending. ECF 189.

12. At the present time, it does not seem likely that the total value of Debtors' assets including Suri's real property and Carla's business assets and good-will reach beyond the Bank's pre-petition claims.

13. The Debtors, with the Bank's consent, are presently seeking to market and sell substantially all the Debtors' assets on or before April 30, 2021 which sale process, if approved by the Court, will test the combined value of Debtors' bankruptcy estates' assets. ECF 28.

#### **Possible Claims Against Debtors' Insiders**

14. It has not yet been established when the Debtors' became "insolvent." The Debtors' employees have testified that at least three members of the Squatrito family, all significant shareholders of Carla's, received salaries of \$500 Thousand per annum for serving as managers of Carla's prior to taking reductions in salary as the bankruptcy filings approached. There has been no analysis, or the United States Trustee is unaware of one, of whether the any portion of the \$1.5 Million annual salaries of the owner/managers may be subject to avoidance by the Debtors' or more likely by the Committee should the Committee request and the Court approve such authority.

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#### **Possible Conflicts of Interest**

15. Locke Lord admits to past and present representation of secured creditor PUB. ECF 122, ¶ 15. Locke Lord states that it has conflict waivers from both PUB and the Debtors; however, Locke Lord has neither filed those conflict waivers for inspection nor otherwise made them available to the Court, Committee, United States Trustee, creditors, or other parties in interest. ECF 122, ¶ 16.

16. Locke Lord states that it has "built" a "wall" between those employees representing the Debtors and those representing other clients with interests adverse to the Debtors which Locke Lord calls "screened employees." ECF 122, ¶ 17. Locke Lord, however, has neither supplied a list of which of its employees have either recently worked for a client with an interest adverse to the Debtors, including but not limited to PUB, nor which of its employees have recently worked, are presently working, or are expected to work for the Debtors in their bankruptcy cases which will allow the Court, Committee, United States Trustee, creditors and other parties in interest to determine, independent of Locke Lord's assurances to the contrary, that such a "wall" has not, is not and will not be breached.

17. Although, Locke Lord states that it has implemented "procedures" to block its screened employees from accessing Debtors-related materials stored in its electronic document management system, there is no description as to how that is being accomplished. ECF 122, ¶ 18.

18. The Debtors' state that to the best of their knowledge, there were no crossclaims between the Debtors as of the petition date. ECF 122, ¶ 19. As stated in paragraphs 8 and 9 above, there is reason to believe that a possible crossclaim for rent due Suri from Carla's may exist, at least during the period of Debtors' pre-petition insolvency, which has yet to be vetted

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either by the Debtors or the Committee. The Debtors have not filed an amendment to their respective schedules to acknowledge this possible claim. *See* Case Dockets, respectively.

19. Contrary to the Debtors' statement in paragraph 18 above that they know of no crossclaims between them, the Debtors then admit that "intercorporate obligations" between an affiliated landlord and affiliated business operating tenant "are common." ECF 122, ¶ 19(c). The Debtors go further and acknowledge that "use and occupancy obligations" are an issue in Debtors' cases but do not consider such issues to be material. *Id*.

20. The United States Trustee, and hopefully the Committee, does see the possible "use and occupancy obligation" of Carla's to Suri, at least during the time of the Debtors' prepetition insolvency, to be an issue especially in a case where any dividend to general unsecured creditors in either of the Debtors' Chapter 11 cases will largely, if not wholly, depend upon potential Chapter 5 or other recoveries against "insiders."

#### **Locke Lord's Pre-petition Receipt of Fees from the Debtors**

21. Locke Lord has filed a Rule 2016(b) form which states that it has received and has expended the sum of \$209,149.50 from the two Debtors "as of the petition date." ECF 122- 2, page 22. The Rule 2016(b) form also states that Locke Lord is not holding any retainer given by the Debtors. *Id*.

22. In Locke Lord's Rule 2016(b) statement in Carla's case, it states that it did not accept (or receive) a retainer. ECF 122-2, page 22. In Locke Lord's Rule 2016(b) statement in Suri's case, it states that it did not accept (or receive) a retainer. Case No. 20-21270, ECF 48-1, page 12. Locke Lord's statements that it has not received a retainer from either of the Debtors must be questioned as upon the "transfer" of one or both Debtor's representation from Mintz

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Levin Cohn Ferris Glovsky and Popeo, P.C. to Locke Lord, a "retainer balance" of approximately \$68 Thousand was transferred to Locke Lord. ECF 122, page 9, fn 3.

23. Locke Lord has filed its retention agreement with the Debtors dated January 27, 2021 which confirms its attorney/clients relationship. ECF 122-2, pages 25 – 33. It appears that Carla's principal shareholder and manager Carla Squatrito signed the "acceptance" of the Locke Lord retention on January 19, 2021. *Id*. at page 33.

24. The United States Trustee has not yet requested or otherwise received the prepetition hourly billing and support thereof from Locke Lord but expects to do so to examine whether Locke Lord's pre-petition billings and receipt of \$209,149.50 was appropriate and not subject to recapture by the Debtors or the Committee for the benefit of the Debtors' respective bankruptcy estates.

#### **Locke Lord's Range of Hourly Fees:**

25. Locke Lord discloses that its "current hourly rates for professionals anticipated to dedicate material time to this engagement range from \$570 - \$620 for associates and \$690 - \$765 for partners." ECF 122, ¶ 22. The Locke Lord Application does not identify which partners and associates are either presently assigned or are anticipated to be assigned to work on the Debtors' bankruptcy cases or states the hourly rates of those attorneys. In a footnote, Locke Lord states that as a courtesy to the Debtors, it is giving Debtors a "discount" of 10 percent. It is not at all clear whether the hourly rates noted above include the Locke Lord "discount" or not.

26. The United States Trustee suggests that the hourly fees for professionals by Locke Lord far exceed those charged for a similarly experienced firm for the work that is required by the Debtors which is simply the sale of substantially all their assets in approximately 90 days at

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the "request" of the Banks utilizing the additional services of an investment banker, a financial analyst, and an outside Chief Restructuring Officer.

27. It appears that the hourly fee range requested for Locke Lord's associates exceeds that normally charged in the District of Connecticut by law firm partners with decades of experience in complex Chapter 11 bankruptcy practice1 . Thus far in the Debtors' cases, the United States Trustee has not observed the necessity of a skill level above that regularly practiced in this Court by firms representing other middle-market Chapter 11 bankruptcy debtors especially given that the "plan" here is just to effectuate a liquidation of substantially all the Debtors' assets through an asset sale.

28. Although the reasonableness of a law firm's range of hourly fees is often left until

the time of the interim or final applications for compensation, the United States Trustee

believes that it is only fair to raise the issue at the time of retention so that all parties, especially

1 The *In re Armaos Property Holding LLC/Olympic Hotel Corp.* cases, Case Nos.19-20134 and 35, closely resembles the facts and situations in the present cases whereby one debtor holds the real property while the other affiliated debtor operates an active business thereupon and where substantially all both Debtors property is to be sold with the assistance of a national-known professional and where it is expected that there will be no proceeds for general unsecured creditors. In the Armaos/Olympic cases, the law firm of Zeisler & Zeisler P.C.'s partner fees top out at \$500 per hour and the associate hourly fee top out at \$395.

The *In re Donna Barnes* case, 19-20400, involves the sale of Debtor's Rhode Island resort property with several contests with admitted secured creditors and with those claiming a security interest. With the assistance of a nationally known auctioneer and an extensive marketing campaign, that property sold for \$10,403,000.00. In the Barnes case, the law firm of Reid and Riege, PC partner and of counsel hourly fees top out at \$495 and \$465, respectively.

The *Mystic Transportation, Ltd*. case, 20-20531 involved the development, filing and confirmation of a plan of reorganization involving millions of dollars of wrongful death claims, trade debt, personal injury claims, and insufficient liability insurance coverage for a debtor which had woefully insufficient asset value to satisfy even a small portion of the claims against it. Through the efforts of debtor's counsel and the SubChapter V trustee after intensive negotiations utilizing local mediators, the debtor was able to reach a consensual plan of reorganization which treated all constituencies fairly, extended dividends to creditors far beyond the bankruptcy estate's asset value and allowed the debtor to continue its business to make plan payments and keep its employees working. The law firm of Coan, Lewendon, Gulliver & Miltenberger's hourly fees for partners topped out at \$430.

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the professionals involved, are made aware of the issue and can address it with the Bankruptcy Court early in the case.

29. "There is an inherent public interest that must be considered in awarding fees in a bankruptcy case. Accordingly, the Code imposes upon [the] Court a supervisory obligation not only to approve the employment of professionals, but also to ensure that the fees sought by those professionals in a bankruptcy case are reasonable." *In re Fibermark, Inc.*, 349 B.R. 385, 393 (Bankr. D.Vt. 2006) (internal citations omitted).

30. "The reasonableness of the hour rate is determined by considering that fee which is customarily charged in the local community by someone who possesses similar skill, experience, expertise, stature and reputation who is faced with similarly novel and complex issues and who procures comparable results." *In re Korea Chosun Daily Times, Inc.*, 337 B.R. 758, 767 (Bankr. E.D.N.Y. 2005) (citations omitted). *See also In re Relativity Fashion, LLC*, 565 B.R. 50, 67 (Bankr. S.D.N.Y. 2017) ("The reasonableness of an hourly rate . . .is established through comparison with prevailing rates in the legal community for similar services by lawyers of reasonably comparable skill, experience, and reputation.")

31. The reasonableness of a law firm's hourly rates can be affected by the "complexity and importance of the matter being handled. A complicated, fast-paced, 'bet the company' litigation requires counsel of higher caliber (and expense) than a routine case that has little at stake." *In re Relatively Fashion, LLC*, 565 B.R. at 68. The United States Trustee sees the Debtors' cases as ones in which success will be determined by simply liquidating substantially all the Debtors' assets in a short three-month time frame and paying back as much of the Banks' claims as possible before the sale proceeds run out by utilizing either a "Stalking Horse" and a possible auction or by holding an auction without the participation of a Stalking

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Horse and by closing the sale no later than April 30, 2021. Such should not be considered "rocket science" to an experienced Chapter 11 bankruptcy firm in the District of Connecticut.

#### **Conclusion on Locke Lord's Retention Applications**

32. Locke Lord has several potential conflicts of interest in that it currently actively represents several of Debtors' unsecured creditors and a "participant" in its largest secured claim where that secured claimant (PUB) is insisting on actions which are likely to harm the chances of its unsecured creditors to receive a dividend in Debtors' cases by pushing the Debtors into a very quick sale of substantially all their assets.

33. To the public, there will appear to be a conflict of interest when Locke Lord represents both the Debtors and their primary "antagonist" PUB. Such appearances, even if managed and minimized to the extent possible, undermines the public's faith in the fairness and objectivity of their Courts.

34. The "wall" which Locke Lord has "built" to keep its employees working for PUB away from its employees working for the Debtors does not seem to extend to those Locke Lord employees doing work for Debtors' unsecured creditors which hold claims against the Debtors.

35. While it does appear that the Debtors and PUB have allegedly executed waivers of any conflict of interest in favor of Locke Lord. It does not appear that waivers of conflicts of interest have been solicited or received from the other Locke Lord active clients who hold claims against the Debtors.

36. Conflicts of interest may not be mature at the time the retention of Debtors' counsel is being considered; however, if such potential conflicts ripen into active conflicts, Locke Lord risks losing all or a portion of its compensation depending on the circumstances arising from any active conflicts.

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37. It appears that Debtors' bankruptcy cases will be short-lived but could generate a million dollars or more in professional fees to attorneys, financial analysts, the CFO, and the investment banker. All those parties should have equal access to payment for services both during the pendency of the case from the Debtors' budgeted funds and from the Banks' \$500 Thousand "carve out" for professionals as contained in the DIP Financing and Cash Collateral Order. By favoring Locke Lord with an enhanced range of hourly fees over those charged by other counsel, those other professionals will suffer reduced availability of both budgeted funds and carve-out funds to fund their respective compensation requests.

38. The United States Trustee suggests that the Bankruptcy Court place a cap on the range of hourly fees charged by Locke Lord which more accurately reflects the hourly rates charged by law firms providing similar services at a similar level of expertise for the range of services required by the Debtors and suggests that the allowed "range" top out at \$600 per hour for partners and \$500 for associates which still provides a premium over the hourly fees charged by equally competent counsel regularly in the Courts of the District of Connecticut. Dated: February 10, 2021 Respectfully submitted,

> WILLIAM K. HARRINGTON UNITED STATES TRUSTEE FOR REGION 2

By: /s/ Steven E. Mackey Steven E. Mackey/ct09932 USDOJ Trial Attorney Office of the United States Trustee Giaimo Federal Building, Room 302 150 Court Street New Haven, CT 06510 (202) 934-4049

Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 243 of 253

# **EXHIBIT 12**

February 9, 2022 Decision and Order in *PAX v. Kwok* (N.Y. Sup. Ct.)

#### **FILED: NEW YORK COUNTY CLERK 02/09/2022 04:33 PM** INDEX NO. 652077/2017 NYSCEF DOC. NO. 1181 RECEIVED NYSCEF: 02/09/2022 Case 22-50073 Doc 618-1 Filed 07/27/22 Entered 07/27/22 11:47:37 Page 244 of 253

# **SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY**

| PRESENT: | HON. BARRY R. OSTRAGER | PART | IAS MOTION 61EFM | |-------------------------------------------|------------------------------------------------------------------------------------|----------------------------|------------------| | | Justice | | | | | ---------------------------------------------------------------------------------X | | | | | PACIFIC ALLIANCE ASIA OPPORTUNITY FUND | | | | L.P., | | INDEX NO. | 652077/2017 | | | Plaintiff, | | | | | - v - | MOTION DATE | | | KWOK HO WAN, a/k/a KWOK HO, a/k/a GWO WEN | | | | | | GUI, a/k/a GUO WENGUI, a/k/a GUO WEN-GUI, a/k/a | 019 MOTION SEQ. NO. | | | WAN GUE HAOYUN, a/k/a MILES KWOK, a/k/a | | | | | HAOYUN GUO, GENEVER: HOLDINGS LLC, and | | DECISION + ORDER ON MOTION | | | | GENEVER HOLDINGS CORPORATION, | | | | | | | |

Defendants. ---------------------------------------------------------------------------------X HON. BARRY R. OSTRAGER

In this 2017 case with 1,180 docket entries – almost all of which involve defendant Kwok Ho Wan's ("Kwok") efforts to avoid and deceive his creditors by parking his substantial personal assets with a series of corporations, trusted confidants, and family members -- this Court is called upon to determine whether the plaintiff, Pacific Alliance Asia Opportunity Fund L.P. ("PAX"), has met the burden of establishing that the Court should enter a final Order of Civil Contempt against Kwok. For the reasons that follow, this Court is simultaneously issuing a final Order of Civil Contempt.

PAX secured a judgment against Kwok in the sum of \$116,402,019.57 on February 3, 2021 (NYSCEF Doc. No. 716). Thereafter, PAX undertook a year's long effort to enforce its judgment by first identifying and then attempting to levy upon Kwok's assets in the United States. PAX encountered difficulty identifying assets over which Kwok exercised control because Kwok, who is a self-declared multi-billionaire, had secreted his assets in a maze of corporate entities and with family members. This scheme has enabled Kwok to assert that he has no assets despite his lavish lifestyle, which plaintiff has catalogued with material from social

media clippings, photographs and videotapes showing Kwok living large and boasting of his wealth, expensive homes, private plane, and yacht. As noted in the transcript of proceedings of February 2, 2022, this evidence is of little probative value, as the witnesses sponsoring this evidence have no first-hand knowledge of the authenticity of this "evidence" other than that it is accessible on various websites.

On February 2, 2022, this Court held an evidentiary hearing at which seven witnesses submitted direct testimony by affidavit and were made available for cross-examination. The hearing followed protracted proceedings by PAX to locate and levy upon assets owned by defendant Kwok. Those proceedings established, among other things, that Kwok exercised dominion and control over a yacht called the Lady May and resulted in a series of orders restraining Kwok and/or the registered owners of the yacht called Lady May from removing the Lady May from the Court's jurisdiction. The first such Order was issued on September 30, 2020, as described in detail *infra,* and was followed by an October 15, 2020 Order that restrained "Mr. Kwok and/or the registered owners of . . . the yacht, the 'Lady May'" from leaving the jurisdiction. (NYSCEF Doc. No. 630). As detailed *infra*, Kwok spent much of July, August and September of 2020 on the Lady May. Contemporaneously with the proceedings resulting in the September 30 and October 15, 2020 restraining Orders, Kwok and his cohorts made arrangement for the Lady May to sail to Florida in early October 2020 and, thereafter, to the Bahamas. On March 16, 2021, the Court issued a conditional order of civil contempt which directed that if Kwok failed to return the Lady May to the jurisdiction of this Court by May 31, 2021, he would be subject to a \$500,000.00 fine for each day that the Lady May remained outside the jurisdiction of this Court.

The Appellate Division, First Department, affirmed this Court's order holding Kwok in conditional civil contempt, finding that "the daily fine of \$500,000.00 was intended to strongly

encourage defendant to purge himself of the contempt, which, despite being permitted to accomplish, he has shown no interest in doing. . ." NYSCEF Doc. No. 953, 199 AD3d 423 (2021). The Appellate Division further held:

The motion court acted within its discretion in holding defendant in civil contempt, as plaintiff established by clear and convincing evidence that defendant violated a lawful, clear mandate of the court, of which he had knowledge, and that such violation resulted in prejudice to plaintiff's rights (*see El-Dehdan v El-Dehdan*, 26 NY3d 19, 29 [2015]; Judiciary Law § 753). … The motion court is instructed to proceed with an evidentiary hearing to resolve a dispute as to ownership and control of the yacht, and to assess appropriate penalties.

Pursuant to the Appellate Division's Order, this Court scheduled the February 2, 2022 evidentiary hearing to resolve the issue of whether Kwok beneficially owns and controls the yacht. Kwok failed to testify at the February 2, 2022 hearing, having previously invoked his Fifth Amendment right to decline to testify or respond to discovery requests relating to the Lady May in response to PAX's asset discovery efforts. PX 27, 28, 29, 30.1 This invocation of the Fifth Amendment notwithstanding, Kwok is an active litigant in multiple fora and he has given prior testimony in this and other proceedings.

Kwok also filed a complaint in this court captioned *Guo Wengui a/k/a Miles Kwok v Hong Zeng*, 157025/2020, which references a blog post from Freebeacon.com dated September 8, 2017 in which Kwok complains about "several incidents involving *his* 152-foot motor yacht, Lady May..." (Complaint ¶ 8, NYSCEF Doc. No. 001) ("the Zeng Complaint"). The Zeng Complaint describes Kwok as an "outspoken critic of the CCP" who has gone to great "lengths to expose the rampant corruption within the CCP and the Chinese government." The *Washington Post* reported that a former advisor to President Trump, Steve Bannon, was arrested in 2020 while on board the Lady May, and described Mr. Bannon as a friend and business

1 "PX" refers to Plaintiff's Trial Exhibits.

associate of Kwok, "a vocal online critic of the Chinese government who was once close with that country's intelligence service but is now wanted by authorities in Beijing on charges of fraud, blackmail and bribery." Other news outlets have reported that Mr. Bannon utilized Kwok's private jet on more than one occasion to travel to political rallies.

The testimony adduced at the hearing out of the mouths of defendants' witnesses clearly and convincingly demonstrated that Kwok beneficially owns and controls the Lady May and has utter contempt for this Court and the judicial process.

Kwok once was the sole shareholder of Hong Kong Investments Limited ("HK International"). The testimony adduced at the hearing established that in 2014 Kwok transferred a 100% interest in HK International to one Qu Guo Jiao for no consideration. Ms. Qu was a trusted business associate of the Kwok family. Thereafter, Kwok fled China and on February 23, 2015, HK International purchased the Lady May for £ 28 million GBP. No testimony adduced at the hearing established the source of funds to purchase the Lady May, but the uncontradicted testimony of Kwok's daughter Mei Guo established that Ms. Qu did not provide the funds to purchase the yacht. Tr. 44. 2 Consequently, a reasonable inference is that Kwok provided the funds to HK International which were used to purchase the yacht. It is undisputed that Ms. Qu transferred the ownership of the Lady May to Kwok's daughter, Mei Guo, on or around June 17, 2017, for \$1 or no consideration. Tr. 47. According to Ms. Guo's affidavit (NYSCEF Doc. No. 1162), Ms. Guo ultimately transferred ownership of the Lady May to the current title holder HK International Funds Investments (USA) Limited, LLC ("HK USA"). Ms. Guo further avers that she is the sole owner of HK USA, although all of the multi-million dollar annual expenses for the

2 "Tr." refers to the transcript of the evidentiary hearing, efiled at NYSCEF Doc. No. 1179.

Lady May, including fuel, maintenance, and the captain and crew are paid by Golden Spring (New York) Ltd. ("Golden Spring."), which is allegedly the Kwok family office.

At the hearing Ms. Guo testified that her brother had bought the Lady May for her. Tr. 46. The Court cannot credit this testimony as there is no evidence that Ms. Guo's brother was involved with the corporate transactions leading to Ms. Guo's acquisition of the title to the yacht. And, indeed, in response to a question from the Court, Ms. Guo acknowledged that her brother was not involved in any of the transfers that occurred before she acquired the yacht. Tr. 47.

Other testimony adduced at the hearing established that Kwok was repeatedly on the yacht every summer and that Ms. Guo was infrequently on the yacht. Trial Tr. 88:8-20. The Lady May's captain testified that Kwok was aboard the yacht for a significant portion of the months of July, August and September in 2020 and that this was consistent with his usual practice in the summer. Trial Tr. 87:24-88:7. Subsequent to this Court's September 30, 2020 restraining Order, in October 2020 the Lady May was sent to Florida and then the Bahamas for repairs and was subsequently dispatched to Italy in October 2021, purportedly at the direction of Golden Spring. Ms. Guo acknowledged that she was aware of both this Court's September 30, 2020 restraining Order and this Court's subsequent March 16, 2021 Order directing that the Lady May be returned to the Court's jurisdiction Tr. 55; 57-60; 62.

Ms. Guo testified that on the one hand, she directed the Lady May's itinerary but, on the other hand, testified that security for Kwok was such a concern that there would be no memorialization of any itinerary. Tr. 52. She further testified that when her father was on the yacht unaccompanied by her he had the freedom to choose wherever he wanted to go. Tr. 50. The fundamental issue, however, is who directed the yacht to be removed from this Court's jurisdiction in October 2020. Ms. Guo claims that in early October 2020 she no longer wished to

use the yacht and relayed that instruction to Golden Spring which, in turn, relayed her directive to the then captain of the ship, Captain Heaslop. Tr. 53.

Upon further questioning, Ms. Guo admitted that it was Golden Spring that advised her that the yacht needed to be moved to a warmer place. Tr. 55. Ms. Guo then repeated her retracted testimony that her brother had given her the yacht, and she stated that her brother is the sole owner of Golden Spring. Tr. 56. This testimony is not credible given that on September 30, 2020 the Court entered a temporary restraining order restraining Kwok

. . . from making or causing any sale, assignment, transfer, or interference with any property in which he has an interest, or from paying over or otherwise disposing of any debt now due or thereafter coming due to him, subject to the exceptions set forth in CPLR 5222 and in the ordinary course.

NYSCEF Doc. No. 591. Significantly, Captain Heaslop, the then Captain of the Lady May, testified that Mr. Kwok told Captain Heaslop that Kwok would no longer be a guest on the Lady May "a few days" before the Lady May departed for Florida in early October 2020 (and apparently after the issuance of this Court's September 30, 2020 Order). Tr. 89. Captain Heaslop also contradicted Ms. Guo's testimony that Ms. Guo gave Captain Heaslop instructions about the yacht's movement. Tr. 94.

Ms. Guo also acknowledged having subsequently read the Court's March 16, 2021 Order requiring the Lady May to be returned to the Court's jurisdiction by May 31, 2021 (NYSCEF Doc. No. 728). She further acknowledged that she had discussed the Order with her lawyer (whose services were paid for by Golden Spring) and that she had *ignored* the Order.

Russell Stockil, the Yacht Management Director for Yachtzoo SARL, testified that his company had a management contract with HK USA dated May 2021 and that he communicated with HK USA and Golden Spring, but never with Ms. Guo. Tr. 78. This was also the testimony of successor Captain Momchil Ivanov. Tr. 82. In short, Ms. Guo's testimony that she owns and

controls the Lady May cannot be credited in any respect. Ms. Guo appears to be a woman in her twenties, has introduced no evidence that she exercised dominion and control of the Lady May, and provided no confirmation that she came into possession of the Lady May, other than as a ruse to shield the Lady May from being levied upon by her father's creditors.

The machinations associated with the shell game Kwok has orchestrated with respect to the Lady May are of a piece with every other evasive and contemptuous act Kwok has taken during the five years this litigation has been pending, which is why there are 1,180 docket entries in this case.

The Court has the authority to hold Kwok in civil contempt under Judiciary Law

§ 753—and "to punish [him], by fine and imprisonment"—where, as here, the Court "expressly find[s] that [Kwok's] actions were calculated to or actually did defeat, impair, impede, or prejudice the rights or remedies of a party to a civil proceeding." *Oppenheimer v. Oscar Shoes, Inc.*, 111 A.D.2d 28, 28 (1st Dep't 1985) (citing N.Y. Judiciary Law § 753). Section 753 sets forth four requirements:

[T]o find that contempt has occurred in a given case, it must be determined that [1] a lawful order of the court, clearly expressing an unequivocal mandate, was in effect. [2] It must appear, with reasonable certainty, that the order has been disobeyed . . . [3] Moreover, the party to be held in contempt must have had knowledge of the court's order, although it is not necessary that the order actually have been served upon the party . . . [4] Finally, prejudice to the right of a party to the litigation must be demonstrated.

*Fleetwood Fin. v Walter J. Dowd, Inc.*, 2016 WL 11546917, at \*2 (N.Y. Sup. Ct. Sept. 14, 2016) (citing *McCormick v Axelrod*, 59 N.Y.2d 574, 583, *amended*, 60 N.Y.2d 652 (1983)). The testimony adduced in this case satisfies each element of this standard. Indeed, the Appellate Division intimated as such. *See Pacific Alliance Asia Opportunity Fund L.P*., 199 A.D.3d 423 (1 st Dep't 2021) ("[PAX has] established by clear and convincing evidence that [Kwok] violated

a lawful, clear mandate of the court, of which he had knowledge, and that such violation resulted in prejudice to plaintiff's rights. . .").

The extent of PAX's ongoing "prejudice" turns on whether PAX has demonstrated that it could ultimately levy on the Lady May to satisfy its now centi-million dollar judgment against Kwok. Under CPLR § 5225, "money or other personal property" is leviable where the debtor holds the requisite "interest." To satisfy this requirement, "[i]t is not necessary that the judgment debtor have legal title to the property; a beneficial interest is sufficient." Weinstein, Korn & Miller, New York Civil Practice: CPLR ¶ 5225.09. "A beneficial interest is '[a] right or expectancy in something . . . as opposed to legal title to that thing.'" *Peterson v. Islamic Rep. of Iran*, 2013 WL 1155576, at \*30 (S.D.N.Y. Mar. 13, 2013) (citing Black's Law Dictionary, Interest (9th ed. 2009)). Kwok has much more than a beneficial interest in the Lady May. Not only does Kwok control the yacht, it appears he provided the funds to purchase it and he is the person who principally enjoys the use of the yacht.

The key factor is whether "the property benefitted [the beneficial owner] as if he had received the property directly." *Id*. (quoting *Exp.-Imp. Bank of U.S. v. Asia Pulp & Paper Co., Ltd.*, 609 F.3d 111, 120 (2d Cir. 2010); *see also Gliklad v. Chernoi*, 129 A.D.3d 604 (1st Dep't 2015) (upholding rejection of the judgment debtor's contention that he no longer held an interest in property because he transferred his interest to his daughters); *Colfin Bulls Funding B, LLC v. Ampton Invs., Inc*., 112 N.Y.S.3d 868 (Table), at \*2, 6 (N.Y. Sup. Ct. 2018) (granting judgment creditor's turnover motion notwithstanding judgment debtor's assertion that he transferred property to a corporation, because even if true, the evidence showed that he "retained control and/or an interest" in the property).

The evidence clearly and convincingly demonstrates that Kwok holds a beneficial interest in and controls the Lady May. In the latter connection, the Court takes notice of the filing of the Zeng case and draws an inference from all the record facts that Kwok has taken extraordinary steps to shield the yacht from his creditors. Moreover, Kwok's "family office" funds the yacht's day-to-day operations and maintenance.

The Court finds that Ms. Guo's testimony was not only internally inconsistent and dissembling, but also significantly undermined by the testimony of Captains Heaslop and Ivanov and Mr. Stockil, who stated that they have never taken yacht-related direction from Ms. Guo in the four and-a-half years that she directly or indirectly held title to the yacht.

In addition, it is established New York law that a party's invocation of the Fifth Amendment in a civil proceeding "may form the basis of an adverse factual inference." *DeBonis v. Corbisiero*, 155 AD2d 299, 300 (1st Dep't 1989). An adverse inference may be applied whenever a factual determination is necessary or permitted, including in the context of contempt motions. *S.E.C. v. Durante*, No. 01 Civ. 9056 (DAB) (AJP), 2013 WL 6800226, at \*10 (S.D.N.Y. Dec. 19, 2013), *aff'd*, 641 F. App'x 73 (2d Cir. 2016); *LiButti v. United States*, 107 F.3d 110, 120–25 (2d Cir. 1997).

Similarly, under the missing witness rule, "[a] trier of fact may draw the strongest inference that the opposing evidence permits against a witness who fails to testify." *Crowder v. Wells & Wells Equip., Inc.*, 11 A.D.3d 360, 361 (1st Dep't 2004) (applying adverse inference where defendant who failed to appear "would be knowledgeable about a material issue raised by the evidence").

PAX is entitled to an adverse inference under both of these avenues. Kwok has invoked his Fifth Amendment right against self-incrimination in response to PAX's post-judgment discovery, including in response to requests specifically about the Lady May. While Kwok

argues that an adverse inference is not appropriate here because "[o]nly after a threshold showing that a piece of evidence is authentic is a party obligated to respond to it," this contention fails of its own weight. PAX has proffered substantial admissible evidence that Kwok has the requisite beneficial interest in and control of the Lady May. *See People v. Primo*, 96 N.Y.2d 351, 753 N.E.2d 164 (2001) (explaining that evidence is probative if it "tends to prove the existence or non-existence of a material fact, *i.e.*, a fact directly at issue in the case").

As of February 7, 2022, the Lady May has remained outside the jurisdiction of the Court for 268 days. Based on the daily fine of \$500,000 imposed by this Court and affirmed by the Appellate Division, the resultant fine would amount to \$134,000,000.00, which is more than PAX's outstanding judgment of nearly \$120 million and a multiple of the GBP £ 28 million purchase price of the Lady May. Nevertheless, if billionaire litigants can simultaneously seek to use Court process in New York and elsewhere in the United States while knowingly and intentionally violating Court orders, there is no rule of law. Kwok must remit \$134,000,000.00 to PAX within five business days of the service of this Court's Order with Notice of Entry. The Court is prepared to exercise its full authority under Judiciary Law § 753 in the event the fine is not timely paid.

Dated: February 9, 2022

**CHECK ONE: CASE DISPOSED** X **NON-FINAL DISPOSITION** X **GRANTED DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE**