Guo Wengui / Miles Guo — bankruptcy case · TRANSCRIPT · ECF #936

METADATA

Defendant: Guo Wengui / Miles Guo / Ho Wan Kwok
Court: CTB
Case No.: 22-50073
ECF #: 936
Type: TRANSCRIPT
Filed: 2022-10-11

FULL TEXT

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \* Case No. 22-50073 (JAM) \* HO WAN KWOK, \* Bridgeport, Connecticut \* September 27, 2022 Debtor. \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* TRANSCRIPT OF CONTINUED STATUS CONFERENCE AND APPLICATION TO EMPLOY FILED BY LUC A. DESPINS ON BEHALF OF LUC A. DESPINS, TRUSTEE BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Debtor, ERIC HENZY, ESQ. HK International and AARON ROMNEY, ESQ. Mei Guo: Zeisler & Zeisler, P.C. 10 Middle Street, 15th Floor Bridgeport, CT 06604 For the Creditor, Pacific STUART SARNOFF, ESQ. Alliance Asia Opportunity O'Melveny & Myers LLP Fund L.P.: Times Square Tower 7 Times Square New York, NY 10036 ANNECCA SMITH, ESQ. Robinson & Cole 28 Trumbull Street Hartford, CT 06103 Proceedings recorded by electronic sound recording, transcript produced by transcription service. **Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992**

APPEARANCES: (Cont'd) For the Creditors Committee: IRVE GOLDMAN, ESQ. Pullman & Comley 850 Main Street Bridgeport, CT 06601 For the U.S. Trustee: HOLLEY CLAIBORN, ESQ. Office of the United States Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT 06510 For the Chapter 11 NICHOLAS BASSETT, ESQ. Trustee: Paul Hastings LLP 200 Park Avenue New York, NY 10166 Chapter 11 Trustee: LUC A. DESPINS, ESQ. Paul Hastings LLP 200 Park Avenue New York, NY 10166

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 3 of 71

| | Ho Wan Kwok - September 27, 2022 3 | |----|------------------------------------------------------------| | 1 | (Proceedings commenced at 2:10 p.m.) | | 2 | THE COURTROOM DEPUTY: Case No. 22-50073, Ho Wan | | 3 | Kwok. | | 4 | THE COURT: Good afternoon. | | 5 | If we could have appearances for the record, | | 6 | please, starting with the Chapter 11 Trustee. | | 7 | MR. DESPINS: Luc Despins, Chapter 11 Trustee. | | 8 | Good afternoon, Your Honor. | | 9 | THE COURT: Good afternoon. | | 10 | MR. LINSEY: Patrick Linsey, Connecticut counsel | | 11 | for the Chapter 11 Trustee. Good afternoon, Your Honor. | | 12 | THE COURT: Good afternoon. | | 13 | MR. GOLDMAN: Good afternoon, Your Honor. Irve | | 14 | Goldman, Pullman and Comley, representing the creditors | | 15 | committee. | | 16 | THE COURT: Good afternoon. | | 17 | MS. SMITH: Good afternoon, Your Honor. | | 18 | MR. BASSETT: Good afternoon, Your Honor. | | 19 | THE COURT: Hold on just a second on the phone. | | 20 | MR. BASSETT: I apologize. | | 21 | THE COURT: Yeah. Hold on. | | 22 | MS. SMITH: Attorney Annecca Smith, Robinson and | | 23 | Cole, for PAX, and on Zoom is Stuart Sarnoff, of O'Melveny | | 24 | and Myers, also for PAX. | | 25 | THE COURT: Thank you. Good afternoon. | | | |

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 4 of 71

Ho Wan Kwok - September 27, 2022 4 MR. SARNOFF: Good afternoon, Your Honor. MR. BASSETT: And, Your Honor, Nick Bassett, from Paul Hastings, on behalf of the Chapter 11 Trustee, also on Zoom today. Thank you. THE COURT: Good afternoon. Attorney Claiborn? MS. CLAIBORN: Good afternoon, Your Honor. Holley Claiborn for the U.S. Trustee. THE COURT: Good afternoon. Attorney Henzy? MR. HENZY: Eric Henzy, for the debtor. THE COURT: Good afternoon. MR. HENZY: Good afternoon, Your Honor. THE COURT: Mr. Kindseth and Mr. Romney? MR. KINDSETH: Good afternoon. Stephen Kindseth, for the debtor, Ho Wan Kwok, as well as the third party, HK International and Mei Guo. MR. ROMNEY: Good afternoon, Your Honor. Aaron Romney Zeisler and Zeisler, for the same parties. THE COURT: Good afternoon. Mr. Romney, when you have a chance, maybe you can just get closer to the microphone when you speak. It's just a little garbled. You don't have to do it right now, but it just came through a little garbled. Okay? MR. ROMNEY: Is that better, Your Honor? THE COURT: That's a little better, yes. It's

Ho Wan Kwok - September 27, 2022 5 just a -- it just sounds like you're far away. And so I just want to make sure the courtroom deputy can pick up your voice clearly. Okay? MR. ROMNEY: Thank you, Your Honor. THE COURT: Thank you. All right. On the calendar, in the Kwok case today, there are three applications to employ and then the continued status conference. Mr. Goldman, I had asked you at a prior hearing about the two applications to employ. And you asked to just set them for hearing today and that you'd report on how you wanted to proceed with regard to those two applications to employ. So the applications to employ are ECF 321 and 325. So how are you intending to proceed today? MR. GOLDMAN: So what I'd like to do, Your Honor, is, since that last hearing, we've had discussions. I've had discussions with the U.S. Trustee and the trustee to try to work out some language that they could accept for the retention of these two professionals consistent with the idea that, you know, the trustee would have -- would have a say in whatever we wanted them to do, if anything. And so we were able to work out language, as of yesterday, that is acceptable to the U.S. Trustee and the trustee that revises those retention orders. Conceptually what the revisions involve are the

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 5 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 6 of 71

Ho Wan Kwok - September 27, 2022 6 idea that the professionals would be retained unqualifiedly for the services they performed in the week or so after they were retained, so from May 3rd. For Coleman, it was May 3rd through May 10th, I believe. And then he stopped working at our request because that -- at that point in time, we knew that the funding -- the DIP motion had been withdrawn, the debtor had consented to dismissal. We thought it was, you know, a prudent course of action to just have those professionals stop working at that time until we knew how the case was going to turn out. For Dundin, it was May 3rd to May 15th that they worked. And so for those two periods the orders would provide that, you know, they were retained and authorized to provide all the services that were identified in the application and the proposed order. But after that, those dates, if the committee wanted the professionals to perform any services, we would first have to consult with the trustee, seek his consent, and if he didn't consent, we would have an opportunity to come to the Court after notice and a hearing to get the approval for those unwanted services, let's say, that the trustee did not consent to. So that really -- those are conceptually the changes. We've worked out the actual language. And I can

Ho Wan Kwok - September 27, 2022 7 submit the orders, in blackline and redline versions as well, from the original orders, to Your Honor at this point unless any other party had an issue with the -- with what I described. THE COURT: Okay. Thank you. That makes sense to me. Does anyone else wish to be heard on the applications to employ the professionals by the committee that were filed back some time ago, I think in early May? Does anyone else wish to be heard? (No response) Okay. Hearing nothing then, Attorney Goldman, you'll submit those revised proposed orders. How much time would you like? MR. GOLDMAN: By Friday? THE COURT: That's fine. Just for the clerk's office, otherwise it will get lost or it could get lost -- MR. GOLDMAN: Sure. THE COURT: -- so I'd like to have a date -- MR. GOLDMAN: That's plenty of time. THE COURT: -- so it's easier for the clerk's office. Okay? So then an order will enter granting the application, and you'll submit that revised, proposed order by Friday, the 30th? Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 7 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 8 of 71

| | Ho Wan Kwok - September 27, 2022 8 | |----|----------------------------------------------------------------| | 1 | MR. GOLDMAN: Yes. | | 2 | THE COURT: Okay. Great. On both -- on both of | | 3 | these applications? | | 4 | MR. GOLDMAN: Both the professionals. Yes. | | 5 | THE COURT: Okay. | | 6 | MR. GOLDMAN: Thank you, Your Honor. | | 7 | THE COURT: Thank you very much. | | 8 | All right. Then, Mr. Despins, you have an | | 9 | application to employ as well, so go right ahead. | | 10 | MR. DESPINS: Thank you, Your Honor. For the | | 11 | record, Luc Despins, Chapter 11 Trustee. | | 12 | It's the retention of Harney's, a British Virgin | | 13 | Island law firm, that we need to use as counsel over there | | 14 | to handle local law issues. That was filed at docket 807 on | | 15 | August 30th. And I'm not going to spend a lot of time on | | 16 | this in the sense that there were no objections by anyone. | | 17 | So the important thing from our point of view is | | 18 | they've agreed to wait to get paid until there are funds in | | 19 | the estate. The same way, you know, subject to the same | | 20 | regime we are, which is a lot of value to us. | | 21 | After we filed this, we disclosed to the U.S. | | 22 | Trustee that their affiliate, which is not a law firm, but | | 23 | it's certainly an affiliate of Harney's, provides director | | 24 | services. That's the way it works in the BVI. You hire | | 25 | these professional directors. | | | |

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 9 of 71

Ho Wan Kwok - September 27, 2022 9 And the U.S. Trustee's view was that we should file not only a full disclosure of that, which we did, but also amend the application to make sure that it's the retention of Harney's as lawyers, but also the retention of that, you know, director services firm, as under 363. And as I said before, I'm not sure that we agree that's required, but we did it. Full disclosure is important. And so we filed this at docket number 855. Their fees are 6,000 -- for the rest of the year, are 6,667. And they also agreed for their future fees to wait to get paid until there's money in the estate. And, again, as we said, that structure is highly advantageous to us. No other firm would give us these discounts unless it was a package deal. And for those reasons, we believe it's appropriate to retain them on the terms set forth in the application and the amended application, Your Honor. THE COURT: Okay. Thank you. Does anyone wish to be heard on the application to employ Harney Westwood? MS. CLAIBORN: Your Honor, Holley Claiborn for the U.S. Trustee. The U.S. Trustee has no objection. THE COURT: Okay. Thank you. Does anyone else wish to be heard on the application to employ Harney Westwood?

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 10 of 71

Ho Wan Kwok - September 27, 2022 10 (No response) THE COURT: Okay. Hearing nothing, I -- The proposed order that was originally submitted, Trustee Despins, with the application, is there any need that that has to be revised because of the -- of what you talked about with the United States Trustee's Office? MR. DESPINS: I'm not 100 percent sure. We probably should. I should look at that. Yes. It's logical. THE COURT: So why don't we do this. I will say that the application is granted, subject to the submission of a revised, proposed order. And then it might be the same order depending upon what the situation is, but you'll submit it. You'll have to look at it. MR. DESPINS: Thank you, Your Honor. THE COURT: All right. And then how much time would you like to do that? MR. DESPINS: Just two days is fine, Your Honor. THE COURT: We'll give you -- we'll give you to Friday. And if you get it in earlier, you get it in earlier. Okay? MR. DESPINS: Thank you. THE COURT: All right. So then we -- the final matter on today's calendar is the status conference. And I know that the trustee has an outstanding

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 11 of 71

Ho Wan Kwok - September 27, 2022 11 application for an expedited hearing on the protective order issue that was filed over the weekend. And I see that the debtor filed an objection to that. I did not rule one way or another because I didn't see it until at some point yesterday. And then I saw the debtor's objection. The debtor's objection is asking for some time to review it. Given where we've been in different situations in this case, I assume that the trustee would have no opposition to giving the debtor some time to review the proposed order. And my thought was -- subject to hearing from -- and I don't know if Attorney Henzy or Attorney Romney are handling the discovery part of it, that we set it for a hearing next Tuesday and give the debtor an opportunity to file any objection it may have to the order by the -- by noon on Monday. That was where I was proposing to go with regard to the protective order. So I don't know. Attorney Henzy or Attorney Romney, which of the two of you are -- or maybe Attorney Kindseth -- I shouldn't say that, I don't know who's handling it, but which of you would like to be heard on that? MR. ROMNEY: Yes, Your Honor. Aaron Romney for the debtor.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 12 of 71

Ho Wan Kwok - September 27, 2022 12 What Your Honor is proposing is all we were looking for. The protective order was filed over the weekend. We hadn't seen it. Some people are out for Jewish holidays. And all we wanted was an opportunity to review it and discuss it with the trustee's counsel. Certainly by early next week, I think Your Honor said, Monday, that would be agreeable to either hear that matter or more likely submit an order on Tuesday. THE COURT: Okay. So even though the motion for expedited hearing is not on today's calendar, what I will do after this hearing, after our status conference is complete, I will -- we will grant that motion for an expedited hearing. We will set it for hearing for next Tuesday. And just bear with me for a moment. I just lost my place. I'm sorry. (Pause) THE COURT: We can have the hearing on Tuesday at noon if you'd -- or any time after that. Whatever anybody would prefer. It's up to the parties. Would you like noon, Trustee Despins, or later? And what's everybody else's schedules? MR. DESPINS: Noon is fine, Your Honor. THE COURT: Okay. Does that work for everyone else? Noon next Tuesday? MR. ROMNEY: Works for me, Your Honor, on behalf

Ho Wan Kwok - September 27, 2022 13 of the debtor. THE COURT: Okay. So then the motion for an expedited hearing will be granted. The hearing will be held at noon on October 4th, and the -- any party who wishes to file an objection to the underlying motion regarding the protective order must do so by noon on Monday, October 3rd. Okay? And then the trustee's counsel will serve the order. But obviously the majority of people will get it electronically and we'll go from there. Okay? Does that make sense to everyone? MR. DESPINS: Yes, Your Honor. THE COURT: Okay. MR. ROMNEY: Yes. Thank you. THE COURT: All right. So, Mr. Despins, you also had a suggested agenda for today's status conference. So I have no problem with you proceeding in the manner in which you suggested, so go right ahead. MR. DESPINS: Okay. So may I approach, Your Honor. THE COURT: Yes, please. Thank you. MR. DESPINS: And, Your Honor, my understanding is that a PowerPoint presentation was provided. I know it was presented to Mr. Henzy before the hearing because I was there, but it was supposed to be emailed to Mr. Romney and Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 13 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 14 of 71

| | Ho Wan Kwok - September 27, 2022 14 | |----|--------------------------------------------------------------| | 1 | Mr. Kindseth some time around two o'clock. I hope they | | 2 | received it from -- I'm not -- I'm not saying then -- | | 3 | THE COURT: I'm just -- | | 4 | MR. DESPINS: It was sent from Mr. Lindsey's firm. | | 5 | THE COURT: Okay. | | 6 | MR. LINSEY: They got it, Your Honor. | | 7 | MR. DESPINS: Okay. | | 8 | MR. ROMNEY: And obviously I have it, Your Honor. | | 9 | THE COURT: Okay. Thank you. | | 10 | MR. ROMNEY: Thank you. | | 11 | MR. DESPINS: And I believe that it was sent to | | 12 | Mr. Sarnoff as well. | | 13 | So an update on the HK USA adversary proceeding. | | 14 | On Friday, we filed our answer and counterclaim, fairly | | 15 | extensive counterclaims. So today is not the trial on that | | 16 | obviously. | | 17 | But at the same time, we also asked for | | 18 | prejudgment remedy to maintain the status quo, particularly, | | 19 | but not only, particularly with respect to the \$37 million. | | 20 | And we had asked for an expedited hearing on that. That may | | 21 | have gotten lost in the shuffle, but I think to get to the | | 22 | punch line on that, we had asked for a hearing on October | | 23 | 7th because that's the hearing scheduled on the Lady May -- | | 24 | THE COURT: Repairs -- | | 25 | MR. DESPINS: -- you know, repairs. | | | |

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 15 of 71

Ho Wan Kwok - September 27, 2022 15 THE COURT: Right. MR. DESPINS: And the debtor's filed an objection, which we -- that was filed yesterday. And just to put people at ease, we're okay not proceeding on the 7th. What we need, however, is the status quo, the legal status quo, to be maintained as it is today. So, therefore, if the debtors want more time to deal with the prejudgment attachment motion, that's fine, but then there needs to be an order, hopefully it would be on consent, that would say the following things will not happen. For example, no notice will be given to the bank that holds -- I forget if it's U.S. Bank or UBS, whatever -- but that holds the \$37 million and things along those lines. And obviously the yacht will not be moved until there's a hearing, whatever that hearing is. THE COURT: May I -- may I ask you a question? When you say not proceed on October 7th, are you saying not proceed at all with anything on October 7th or just the pre -- your request for a prejudgment -- MR. DESPINS: Just the prejudgment attachment. THE COURT: Okay. Okay. Thank you. I wasn't sure. I just wanted to clarify that. MR. DESPINS: The only thing that's not -- that's unclear about what is the legal status quo other than what I

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 16 of 71

Ho Wan Kwok - September 27, 2022 16 just mentioned is with respect to the debtor's daughter, who is now -- the summons has not issued for some reason by the clerk's office. But we did name her in the counterclaim as a defendant, but for some reason, the summons has not issued. But the question is as to -- THE COURT: The clerk's office actually was not open yesterday. They had a meeting offsite, so that's probably -- when did you file the counterclaim, on Friday afternoon? MR. DESPINS: Yes. THE COURT: Yeah. That's probably why. MR. DESPINS: To be fair, evening. THE COURT: But I would assume that you'll get a summons issued. Well, let's stop for a minute though. MR. DESPINS: Yeah. THE COURT: It's your counterclaim, right? MR. DESPINS: Correct. THE COURT: So you need a summons issued because you're now the counterclaiming plaintiff? MR. DESPINS: Correct. THE COURT: And they need to -- okay, okay. I haven't -- MR. DESPINS: No. No. THE COURT: I know it was filed, but I haven't looked at it very much, so that's fine.

Ho Wan Kwok - September 27, 2022 17 MR. DESPINS: Your Honor, it -- THE COURT: We'll make sure the clerk's office takes care of that. MR. DESPINS: It's a beast, so I don't -- didn't expect you to have looked at it or digest it by now. There's a lot of meat in there. So what I was saying is, with respect to her, the question is what is the status quo? Meaning we're not going to be ridiculous here in a sense that we're not interested in personal effects and things like that, but if she has millions of dollars parked somewhere, that money should not be moving until there's a hearing on this. So, you know, -- and I don't know. I mean, they've -- the Zeisler firm represents her so I don't know if they're aware of her personal financial condition, but we know that the debtor typically has parked a lot of cash and a lot of assets with his family so it's certainly a possibility. But if it's -- if she has none, meaning she has regular stuff like clothes and an apartment and things like that, we're not interested in that. We're interested in, you know, things that would move the dial in a material way. So, you know, I guess it's up to I guess to the Zeisler firm to let us know their views on that. So we're not looking for a big production over the Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 17 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 18 of 71

| | Ho Wan Kwok - September 27, 2022 18 | |----|----------------------------------------------------------------| | 1 | issue of the scheduling. We're happy to have a schedule | | 2 | whenever convenient to them as long as there's a clear | | 3 | understanding that nothing is happening with the yacht, the | | 4 | \$37 million, and what I would describe as material assets of | | 5 | the new counterclaim defendant, the daughter's -- the | | 6 | debtor's daughter. | | 7 | So moving on -- I'm sure they'll have comments on | | 8 | this later. | | 9 | The next item on the agenda is the update on Ace | | 10 | Decade and Dawn State, Your Honor. You're familiar with | | 11 | that. I mean, it's been a month now. There's an order in | | 12 | place saying they're supposed to give us all these things. | | 13 | They're not. You know, there was -- I'm not going to be | | 14 | petty about this, but it was first Mr. Henzy and Mr. | | 15 | Kindseth were in New York so they were not available. Then | | 16 | there's COVID. Then there's Rosh Hashanah. | | 17 | The point is there's no reason why we don't have | | 18 | the documentation for Ace Decade and Dawn State. And, | | 19 | again, it's been a month now practically since we've made | | 20 | that request. | | 21 | The order is precise so there's no need for | | 22 | another motion. The order says you shall provide to the | | 23 | trustee all these corporate documents with respect to | | 24 | entities you own. And, in fact, we've provided two or three | | 25 | reference points as to why Mr. Kwok owns these two entities. | | | |

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 19 of 71

Ho Wan Kwok - September 27, 2022 19 So we hope that this will be addressed today. Now, moving on to the -- on page 7, the Rule 2004 discovery. This is not the appropriate forum to go through that in details, but I want Your Honor to know that we're hitting major roadblocks with the debtor's positions. For example, their view is that they only need to provide us discovery with respect to assets that he acknowledges he owns or that are subject to litigation, for example, the apartment in New York or the yacht. But other assets that he may own, or we believe he may own, they don't need to provide us discovery on that. Obviously, that's the whole point of the investigation. That's one thing. Then they take the position that he has no documents, none. Okay. I'm not sure that's possible. And they say, well, how do we know that? Well, we've asked him and he says he has none. Well, you don't need to go very far. There's a video that we referred Your Honor, you know, a long time ago on HBO of the debtor where he goes through is apartment. And on the table there, there are about 12 iPhones. And he's pointing out that he's using those because the Communist party is always listening to him, but he has 12 iPhones. And he stated in the complaint, the UBS complaint that we've given to Your Honor, that he communicated with

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 20 of 71

Ho Wan Kwok - September 27, 2022 20 UBS by WhatsApp, which is an application that people can use on an iPhone or other, you know, intelligent device, so clearly he is using technology. He's always on the internet every day, you know, issuing all sorts of statements so he is very -- he knows what he's doing. And so the concept that he has no documents is a problem because what he does, and that's exactly the way he operates his business, is that every one, you know, these other shell companies that he controls completely, and he has people that are in charge that are his bodyguard, you know, they're the shareholder, but he's -- they're really what -- if you ask them what they do for a living, he's the bodyguard, he's the chef, he's an assistant that has -- does not have a high school degree, these are the shareholders, and these people have everything. But he's saying, well, you know, they have it, we don't have it. He controls it. Under the rules he's supposed to produce it. So today is not the motion to compel, but I want to tell you we're spending a lot of time on this. And you'll hear during the case that the fees generated are very high. And they are very high because we are -- we're facing roadblock after roadblock on all of this. So that's -- that is, again, today is not the motion to compel, but I want to make sure that Your Honor knows that we're hitting these roadblocks.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 21 of 71

Ho Wan Kwok - September 27, 2022 21 And then on the privilege -- you know, so there was a consensual order on privilege, so we thought, hmm, that's going to go smoothly. Well, what's happening is that, for example, Brown Rudnick is saying I'm not producing a document until the debtor's counsel tells me it's okay. Well, they're saying, well, we need to review that. That's going to take, you know, unlimited -- or there's no deadline provided so we don't have any of those documents. And so, again, that's going to probably be teed up through a motion to compel, but I wanted Your Honor to be aware of it. Now, housekeeping matters. The first one, we're troubled by this. There were two houses in Connecticut that were owned by a company called Greenwich Land. And that entity the debtor testified is owned by his wife. It's not demeaning in any way, but she has no money. That money to buy these two houses came from Kwok entities. And what happened pre-bankruptcy is that PAX issued a notice to that company, Greenwich Land, that it was a domestication in Delaware of the order by Judge Ostrager saying you shall not transfer anything. And that notice was valid for one year. It was given in May of 2021, so it was good until May 2022. Well, they sold one of the houses in April 2022.

Ho Wan Kwok - September 27, 2022 22 And, you know, obviously we're going to look into this, but, you know, makes us very concerned about -- and it explains a lot about how we're acting in the case that -- if this is happening. Now, that didn't happen on our watch, meaning that happened in April of this year. There was no trustee in place. And I'm sure they'll say, well, that's the wife's house so, you know, we're free to sell it, but there was -- there was an order preventing the sale of the house as far -- at least the way I understand it, and that house was sold for 2 million plus. Monthly operating report. Well, the deadline has not passed. The other point is the next status conference we had scheduled one for October 4th, but there's no point in doing that on October 4th because we're going to be here on October 7th. So if Your Honor is okay with that, we would move the next status conference. THE COURT: I think that makes sense. MR. DESPINS: But I think, Your Honor -- THE COURT: So you're not having a conference on the 4th? MR. DESPINS: -- we really need to hear about Ace Decade and we need to hear about the prejudgment attachment because we want to avoid a lot of -- and we're volunteering, Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 22 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 23 of 71

| | Ho Wan Kwok - September 27, 2022 23 | |----|-----------------------------------------------------------------| | 1 | you know, on the prejudgment attachment to take much more | | 2 | time than if they want to as long as there's a very tight | | 3 | order that's entered that protects the estate against any | | 4 | dissipation of assets. | | 5 | Thank you, Your Honor. | | 6 | THE COURT: Thank you. | | 7 | Attorney Henzy? | | 8 | MR. HENZY: I'm going to just address the Ace | | 9 | Decade issue, Your Honor. | | 10 | The debtor does not admit, in fact, disputes that | | 11 | he owns Ace Decade. I understand that the trustee has | | 12 | pointed to some things. I can talk about those things. | | 13 | But there is -- right now there is nothing before | | 14 | the Court. This is a status conference. There's no motion | | 15 | that's been filed. So I don't know. | | 16 | One of my I guess questions with these status | | 17 | conferences is -- they're helpful to the Court, that's | | 18 | obviously what matters, but we get in front of you and talk | | 19 | about these things when there's no motion. So there's no | | 20 | motion I would argue. | | 21 | I understand there's the corporate governance | | 22 | order, but the corporate governance order assumes that the | | 23 | debtor owns something. As I said, the debtor disputes that | | 24 | he owns Ace Decade, so I don't -- | | 25 | THE COURT: Well, what do you -- what do you -- | | | |

Ho Wan Kwok - September 27, 2022 24 how do you respond to that issue when your client apparently testified at the 341 meeting that he owned it? MR. HENZY: So, Your Honor, we are getting a -- our own translation of the 341 meeting, but the debtor has reviewed the transcript -- THE COURT: The debtor had a translator at the 341 meeting. MR. HENZY: And, actually, Your Honor -- THE COURT: Yes. MR. HENZY: -- that 341 meeting, I think there was a lot of back and forth about the translation. And I, you know, I've got a bunch of stickies in the transcript that's been produced where there was back and forth between translators and where the -- THE COURT: I don't think there were two translators. There were two translators when we had a hearing in court once. Were there two translators at the 341 meeting? MS. CLAIBORN: Yes. Let me just break it into two pieces. THE COURT: Can you just speak a little bit more into the microphone. I'm sorry. MS. CLAIBORN: Yes. THE COURT: I just couldn't hear you very well. MS. CLAIBORN: This microphone I think is not very Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 24 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 25 of 71

| | Ho Wan Kwok - September 27, 2022 25 | |----|---------------------------------------------------------------| | 1 | good, so I'll have to get very close to it. | | 2 | THE COURT: Sorry. | | 3 | MS. CLAIBORN: At the first 341 meeting, that | | 4 | meeting was held telephonically. The U.S. Trustee had a | | 5 | translator that was on the telephone from a translation | | 6 | service. The debtor was appearing I believe from the Brown | | 7 | Rudnick office with his own translator in person with him at | | 8 | that time. | | 9 | So notwithstanding whatever criticisms there may | | 10 | be of the translator provided by the U.S. Trustee's Office, | | 11 | the debtor had his own personal translator with him that | | 12 | day. And my recollection is that it was Ms. Wilkinson, who | | 13 | is the same translator who appeared before the Court. | | 14 | THE COURT: And we had two translators that day | | 15 | when Mr. Kwok testified in person in this court to alleviate | | 16 | the claim that there -- that the translation might not be | | 17 | correct. | | 18 | And when there was an issue that came up between | | 19 | the two translators, it was discussed in open court and they | | 20 | agreed to what the language was of the question being asked | | 21 | and the answer being provided. | | 22 | So I understand what you said, but I'll tell you | | 23 | it's going to be interesting for Mr. Kwok, who came into | | 24 | this court and said he wanted to resolve his issues with his | | 25 | creditors, and then testified that he owns Ace and now | | | |

Ho Wan Kwok - September 27, 2022 26 claims that he doesn't, that he disputes that. That's going to be a difficult road for him I think. MR. HENZY: So, Your Honor, just to be clear, the 341 that is where the relevant testimony is is the second 341. So I think not -- MS. CLAIBORN: I can speak to that one too if you'd like. MR. HENZY: Yeah. That's April 6th. And, again, I don't know that today's the day, but the -- THE COURT: Well, there is already an order in place, right? And the trustee's already demanded, asked for that information, and you said at a prior conference that you needed time to review it because you didn't know, and that was fair, you didn't know what the status of Ace and Dawn were, the other two plaintiffs in the action in London. The trustee has now shown you the 341 meeting transcript. And maybe I'm -- I could be confused about this point, so let me just say that I'm not sure I'm accurate about what I'm going to say, but I thought there was also something in Mr. Kwok's declaration that he filed back in March or April to support the DIP financing motion and the plan. MR. HENZY: There was not. THE COURT: Well, I don't think -- I'm not -- MR. HENZY: Not on -- not on Ace Decade.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 26 of 71

Ho Wan Kwok - September 27, 2022 27 THE COURT: Okay. Well, other people seem to be nodding their heads. MR. HENZY: Just so -- because there's no -- just so there's no, you know -- THE COURT: Yeah. MR. HENZY: -- the documents are what they are. In the complaint that was filed in the U.K., it's a -- what I'm going to call the equivalent of a verified complaint, I don't -- I don't think it's what they call it there, but there's a complaint signed by counsel, and then someone on behalf of the plaintiffs, each of the three plaintiffs, signed it to say everything in here is true. And in the complaint it says that Mr. Kwok acquired Ace Decade, I think it was in 2014. THE COURT: Two thousand, fourteen. MR. HENZY: Okay. And I've been told that that statement is not correct. And counsel in the U.K. -- THE COURT: You've been told by Mr. Kwok that that statement is not correct? MR. HENZY: Yes. THE COURT: Okay. Well, that's interesting. MR. HENZY: I understand. I understand. THE COURT: That's interesting, because he said -- MR. HENZY: Your Honor, I -- THE COURT: -- he said now in more than one Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 27 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 28 of 71

Ho Wan Kwok - September 27, 2022 28 jurisdiction that he did own -- does own it. MR. HENZY: And in other places, as I understand it, he has said that he doesn't. So, again, we're not -- I don't think we can litigate this today, Your Honor. THE COURT: I'm not trying to litigate it. MR. HENZY: Okay. THE COURT: I'm trying to have the debtor respect the terms and conditions of an order that he hasn't appealed. He didn't appeal the portions of the governance order that said that the Chapter 11 Trustee stepped into his positions as far as governing the entities in which he has an interest or which he is the owner or controller of that entity. And the problem that he has right now is that in this court, in this 341 meeting, a direct question from Ms. Claiborn by the way, Attorney Claiborn -- I mean, I read it. It's more than one question, I think it's two or three -- and he said I -- I don't have to say what he said because it says it in the paper -- but it says that he owns and controls it. That's what he -- he answers the question. And there's no interpreter or anyone somehow saying whatever he said is inaccurate. He didn't raise an objection. The interpreter didn't raise an objection. No one raised an objection.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 29 of 71

| | Ho Wan Kwok - September 27, 2022 29 | |----|----------------------------------------------------------------| | 1 | Now, as you know, the Court isn't at 341 meetings. | | 2 | We're not -- and that's fine. But I've got the | | 3 | representative of the United States Trustee's Office, who | | 4 | conducted these examination of Mr. Kwok two times, and on | | 5 | the second time making -- she, at least from what I can see, | | 6 | was very careful about how she asked the question and he | | 7 | said he owned it. | | 8 | MR. HENZY: May I be -- | | 9 | THE COURT: That's what he said. | | 10 | MR. HENZY: Your Honor, may I be heard? | | 11 | THE COURT: Sure. | | 12 | MR. HENZY: Thank you. | | 13 | Your Honor, I don't speak Chinese. I don't read | | 14 | Chinese. There is an audio of the 341 meeting and the audio | | 15 | has the words on it that it has on it. And as I understand | | 16 | it, different interpreters will interpret from Chinese to | | 17 | English in different ways. | | 18 | And actually if you look at the transcript of the | | 19 | April 6th 341 meeting, there is repeated interjections by | | 20 | the private interpreter that Mr. Kwok had there disagreeing | | 21 | with the interpretations of the interpreter that the U.S. | | 22 | Trustee had there. So different. | | 23 | And I'm not -- I'm not -- I don't know what the | | 24 | proper interpretation of the words that came out of Mr. | | 25 | Kwok's mouth at that 341 are. Again, I don't read Chinese. | | | |

Ho Wan Kwok - September 27, 2022 30 I don't speak Chinese. I can't do that. THE COURT: So how do you communicate with your client? MR. HENZY: There's always an interpreter there. THE COURT: So you're -- so Mr. Kwok didn't tell you that he didn't own it, an interpreter told you after Mr. Kwok told the interpreter that he didn't own it? MR. HENZY: I can only speak to my client through an interpreter, Your Honor. THE COURT: Okay. That's what I'm asking. MR. HENZY: Yeah. I mean, Mr. Kwok -- just so -- THE COURT: So Mr. Kwok hasn't said to you directly that he doesn't own these entities. He said -- the interpreter said that he disputes that he owns the entities, that's what the interpreter told you? MR. HENZY: Your Honor, well, I guess a couple of things. With all due respect, Your Honor, I think that's kind of an odd question. I can't -- THE COURT: I don't think it's an odd question. MR. HENZY: I can't -- THE COURT: You're telling me -- you're saying -- you're coming into this court and you're now saying that your client told you something different that's in the record in five different places, but you're telling me he didn't tell you that directly. He told you that through an

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 30 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 31 of 71

Ho Wan Kwok - September 27, 2022 31 interpreter. MR. HENZY: I don't -- I don't -- he told me that directly. If I speak to my client through an interpreter, I think I'm speaking directly to my client. THE COURT: How do you know? You don't speak Chinese. You just said that. MR. HENZY: I do not. But I -- THE COURT: Okay. MR. HENZY: I'm not sure what -- frankly, I'm not sure what Your Honor's point is. THE COURT: My point is how do you know what you're being told is accurate? You're saying -- MR. HENZY: I guess I -- THE COURT: -- you can't -- MR. HENZY: I guess I -- THE COURT: -- you don't know -- you don't know what's being MR. HENZY: Well -- THE COURT: You're saying you don't know what Mr. Kwok testified to when there were interpreters is accurate, so how do you know what you're being told is accurate? MR. HENZY: It could be the interpreter is misinterpreting. But then the interpreter here could misinterpret. So, I mean, I don't -- I'm not sure -- THE COURT: That's why we had two interpreters in

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 32 of 71

Ho Wan Kwok - September 27, 2022 32 court that day -- MR. HENZY: Well, this wasn't court. THE COURT: -- so that there wouldn't be this argument about misinterpretation of someone's statements. MR. HENZY: Your Honor, I'm really not sure where you're going with this. I'm not. THE COURT: I'm not going anywhere. You're the one who's just come in and said -- MR. HENZY: So I -- THE COURT: -- wait a minute, hold on -- and said Mr. Kwok is disputing that he owns those two entities. MR. HENZY: That is correct. THE COURT: Okay. That's what you said. And I said how do you know that? And you said because he told me. MR. HENZY: That's correct. THE COURT: And I said did he tell you directly or did he tell you through an interpreter? And at one point you said through an interpreter and at one point you said through directly, so I don't know how he told you. MR. HENZY: Okay. THE COURT: But my point is you said you don't understand Chinese. I don't think any of us do. Okay? That's why we have interpreters. And now to come in at this point, months and months and months after a 341 meeting, because the Chapter

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 33 of 71

| | Ho Wan Kwok - September 27, 2022 33 | |----|-----------------------------------------------------------------| | 1 | 11 Trustee's trying to investigate the affairs of the | | 2 | debtor, and say now he disputes that, that doesn't seem -- | | 3 | that's a hard -- that's hard for the Court to understand. | | 4 | MR. HENZY: It may be hard for the Court to | | 5 | understand. And the trustee will I'm sure will file an | | 6 | appropriate motion and we'll have a hearing. | | 7 | THE COURT: Okay. Well, we will -- | | 8 | MR. HENZY: Yeah. | | 9 | THE COURT: -- because then your client will be in | | 10 | violation of a governance order. | | 11 | MR. HENZY: Based on my client's position that he | | 12 | does not own Ace Decade -- that -- | | 13 | THE COURT: Well, then he's going to have to come | | 14 | in here and testify. | | 15 | MR. HENZY: He may have to do that. | | 16 | THE COURT: And show why the interpreter who took | | 17 | the testimony at the 341 meeting was wrong. And we're going | | 18 | to have to have two interpreters because we're not just | | 19 | going to have Mr. Kwok's interpreter. | | 20 | MR. HENZY: We may need to have more than two | | 21 | interpreters. I don't know. But clearly interpretation is | | 22 | an issue in this case. | | 23 | MS. CLAIBORN: Your Honor, could I just complete | | 24 | my thought that I didn't finish earlier about the second 341 | | 25 | meeting? | | | |

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 34 of 71

Ho Wan Kwok - September 27, 2022 34 THE COURT: Sure. MS. CLAIBORN: That 341 meeting took place in person at the U.S. Trustee's Office in New Haven. Mr. Kwok was there. His same personal interpreter, Ms. Wilkinson, was there. And the U.S. Trustee had an in-person interpreter. And admittedly the transcript does reflect that there are disputes as to translations, but I would make the point that just as Ms. Wilkinson did when she participated in the hearing before Your Honor, she's quite capable of speaking up when she thinks the translation was inaccurate, mistaken, could be better. She spoke up an awful lot in both the first 341 meeting and the second 341 meeting. So to the extent that there's now a dispute over this particular section of the transcript, I don't know what it's based on because, as Your Honor noted, my question was simple, his answer was simple, and there is no dispute being raised by the lawyers within that particular subsection. MR. HENZY: I'm not sure I agree with that completely, Your Honor, but -- and I may be simplifying translation. The words came out of Mr. Kwok's mouth. And, again, I may just be wrong on this, okay, that there -- it seems to me there's an objective, those words are translated into these words in English. And either he answered one way

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 35 of 71

Ho Wan Kwok - September 27, 2022 35 or he answered another, I don't know. There's no way for me to know that. I can't listen to the audio and say I think this transcript is correct or I think it's in correct. I can't do that. THE COURT: But you already did. You just did. You said he disputes it. MR. HENZY: I have no way to do that independently. THE COURT: Okay. Well, then, you can say whatever you'd like him disputing it, but without any evidence, then I'm just hearing you say he disputes it. Right? I mean, because he's already testified that he owns it. He's testified under oath. He took an oath. MR. HENZY: And he disagrees that he testified that he owns it. THE COURT: Okay. Well, okay. MR. HENZY: Okay. And I understand -- THE COURT: So what next? So he -- so then Mr. Despins is going to file a motion -- MR. HENZY: Right. THE COURT: -- and your client is going to be held -- if that's the dispute, if he's going -- if he's going to say he disputes that testimony without disputing it at the time that he gave the testimony, that's going to, you know, may result in an order he doesn't like.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 36 of 71

| | Ho Wan Kwok - September 27, 2022 36 | |----|--------------------------------------------------------------| | 1 | MR. HENZY: It may, Your Honor. I think -- I | | 2 | guess what I would ask Your Honor is to withhold judgment | | 3 | until there's actually a record -- | | 4 | THE COURT: I said it may result in an order -- | | 5 | MR. HENZY: -- that's put before you. | | 6 | THE COURT: -- he might not like. That's what I | | 7 | said. | | 8 | MR. HENZY: Okay. Because, again, I don't think | | 9 | you want me today to go through all the places in this | | 10 | transcript that I marked where there was -- Mr. Baldiga laid | | 11 | down a continuing objection based on the interpretation. | | 12 | Okay? The parties went off the record and came back on. | | 13 | And on the record, Attorney Claiborn announced all | | 14 | objections to form are being reserved because I -- as I | | 15 | understand what happened is that the progress of the 341 was | | 16 | being so interrupted by the objections, by the interjections | | 17 | from the private interpreter, that to get it on track, there | | 18 | was this all objections are going to be reserved. I don't | | 19 | know how broad that reservation was intended to be, so I | | 20 | don't know. | | 21 | I know that the transcript is a mess. There are | | 22 | repeated interjections, even in the place where this is | | 23 | relevant, okay. And the trustee didn't include the next | | 24 | page, okay. | | 25 | At the bottom of page 61, which is attached to | | | |

Ho Wan Kwok - September 27, 2022 37 what the trustee filed, you can see: "Ms. Claiborn: I don't think that was" -- and the next page isn't there. "Let's start over because I don't think that was - - that was" -- the private interpreter says, "yeah. I thought that it was. Ms. Claiborn: That was the question because it didn't involve Dawn State. Private Interpreter: Yes. So I'm going to start over." And then there's -- then there's a series of questions. So I don't -- I don't think it's so clear cut. THE COURT: Okay. MR. HENZY: Okay. THE COURT: That's fair. In that series of questions -- MR. HENZY: And so I would ask Your Honor -- THE COURT: -- does he dispute owning it? MR. HENZY: Does he dispute owning it? THE COURT: When you're -- when you're talking about those additional questions that are starting to be asked after page 61, does he dispute when the questions are asked again? MR. HENZY: Then, actually, it moved on to another topic.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 37 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 38 of 71

| | Ho Wan Kwok - September 27, 2022 38 | |----|--------------------------------------------------------------| | 1 | THE COURT: But it was never asked again? | | 2 | MR. HENZY: It was never asked again. | | 3 | THE COURT: Okay. | | 4 | MR. HENZY: Okay. So I don't think it's so clear | | 5 | cut. And, again, I would -- before Your Honor is holding | | 6 | the debtor in contempt, I would ask that you at least -- | | 7 | THE COURT: I haven't done any such thing. | | 8 | MR. HENZY: -- allow there to be a record made. | | 9 | THE COURT: I haven't done any such thing. Okay? | | 10 | MR. HENZY: Okay. | | 11 | THE COURT: So I -- but I'm concerned. I mean, we | | 12 | did -- we've gone through a lot to get to the point of | | 13 | discovery. And hearing that there's all these problems, | | 14 | including Brown Rudnick, who came in here and said they | | 15 | agreed that the privilege had passed to the trustee and that | | 16 | everything isn't privileged, and now I'm hearing they're not | | 17 | going to turn everything -- anything over until your client | | 18 | gives them approval to do so. | | 19 | MR. HENZY: Mr. Romney is going to address that, | | 20 | but I think it's actually more complicated than that, Your | | 21 | Honor. | | 22 | THE COURT: Okay. | | 23 | MR. HENZY: Okay. | | 24 | MR. DESPINS: Your Honor, forget the 341. There's | | 25 | a complaint, a verified complaint, signed not only by Mr. | | | |

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 39 of 71

Ho Wan Kwok - September 27, 2022 39 Kwok, but by two other people, one on behalf of Dawn State and another on behalf of the other entity I forget, Ace Decade, that say that what's in the complaint is true. So those people also don't understand. So we've got three people who don't understand English, they're signing a verified complaint in the U.K. and then they say later, just, you know, sorry, but none of this is true? It just -- it boggles the mind. And the strategy, Your Honor, he has unlimited resources. He will make us spend money until the end of time. And this is just one example of it. But we'll bring a motion. MR. SARNOFF: Your Honor, this is Stuart Sarnoff. I don't mean to be glib or inflammatory, but the five years we were litigating with Mr. Kwok, and when we filed a state court complaint against Mr. Kwok, he filed all of his contracts that were relevant to PAX in his motion to dismiss from his own files and argued that these agreements were signed by him in Europe, in Asia, and, therefore, the matter should be (indiscernible) back to Hong Kong and the motion was granted. 22 And if it goes to an appeal that then he signed certificates and requests for admission that these documents were authentic (indiscernible) deposition because it didn't suit him, because he was losing his case, to testify that

Ho Wan Kwok - September 27, 2022 40 these are forgeries, that he'd never seen them before. So the fact that he might strategically change his testimony is -- this is not his debut at behavior like this and I think it's important to keep that in mind when you think about the credibility of the arguments that are being put forward now. MR. HENZY: And I assume we'll get to that when the trustee files a motion, Your Honor, and we'll all have an opportunity to make a record. THE COURT: Okay. Mr. Romney, you were going to be heard on some of these discovery disputes. Is that -- Mr. Henzy said you were going to address these? MR. ROMNEY: Yes. If Your Honor would like. I'll take up first the Brown Rudnick (indiscernible)/discovery issues. Can Your Honor hear me okay? I know there were -- you had some problems hearing me (indiscernible) -- THE COURT: It's a little better, but, yes. Anytime, if you don't mind, just kind of leaning in, that would be helpful. MR. ROMNEY: Yes. And please let me know if something doesn't come through. As far as the discovery is concerned, there's sort of -- there's a couple of issues there. The debtor (indiscernible) -- I do not agree with the trustee's Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 40 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 41 of 71

Ho Wan Kwok - September 27, 2022 41 characterization. I think we've got a number of instances where during our meet and confers we've had different perceptions of what was being said to the point that I suggested that we start recording these conversations. The trustee's counsel was not agreeable to that. As far as Brown Rudnick and the privilege order is concerned, the debtor's position is that the Court has entered an order, an order on the consent of the debtor and the trustee. The subpoenas have been served on a number of highly competent professionals, some of which represent the debtor and some of which represent related entities. It's our position that the professionals -- as I said in open Court as we were debating the entry of that order that these professionals are perfectly capable of looking at this order, looking at the documents in their possession, and making their own independent determination based upon their professional judgment whether a document should be withheld or not under the terms of that order or not. We have not told a single professional to withhold a document or to turn it over directly to us. What we have said is that the debtor doesn't raise whatever rights the debtor has under that order.

We have said to the professionals, who are aware of the terms of the order, that they have been served with a

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 42 of 71

Ho Wan Kwok - September 27, 2022 42 subpoena, they have an obligation to comply with it, and they have a professional obligation to their client, or former client, or whoever their clients are, to withhold privilege under that order if, and only if, there's a basis to do so. In addition, in an effort to be accommodating --

and this was an offer, it was not a demand, it was not a direction to counsel or former counsel, we offered, if there are particular documents that professionals are struggling should they be withheld under this or not, we will look at them and we will give the debtor's opinion as the debtor's current counsel whether the documents should be flagged.

We have not insisted that anyone do that. We have offered it solely in an effort to avoid burdening this court further with issues related to that order solely so that there isn't unnecessary delay caused by people who are uncomfortable with how they should be applying this order. That's what we've done.

And really it's -- this is with respect to documents that -- in almost all circumstances no longer represents debtor. As the trustee has been very adamant, the trustee controls the debtor's pre-petition and pre- appointment -- pre-trustee appointment causes of action, meaning assets of the estate, these professionals are no longer under the debtor's control.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 43 of 71

Ho Wan Kwok - September 27, 2022 43 All that the debtor and us as his professionals, with his permission, have offered to try and facilitate this process, speed it up, because as I have pointed out to the trustee's counsel, the debtor has no interest in delaying this proceeding. This is not a state court foreclosure where he's trying to get as much free rent as possible before the bank takes his house. This process is going to take its course. It's going to be complicated. And the debtor has directed us to cooperate and we are trying to cooperate. We he have not directed anyone to withhold documents under the terms of that order other than saying look at the order, apply it to the documents you're looking at and provide them or not. As far as what I was what I would refer to as the second part of the discovery issue, and what the debtor does have and doesn't have, the video or movie, whatever it is that the trustee is referring to, was from 2017. That was five years ago, Your Honor. The WhatsApp messages referred to, I don't have them in front of me, I believe those were things said in 2017 as well. Five years ago. I don't think it is an unreasonable conclusion or impossibility that somebody, particularly in the debtor's situation, who left Hong Kong years ago, filed an asylum application in 2017, and has been

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 44 of 71

Ho Wan Kwok - September 27, 2022 44 through years of litigation as a result of the hundreds of millions of dollars of judgments, including contempt, that his lifestyle might be different or what he has and doesn't have might be different today near the end of '22 as it did in 2017. Now, should people be required to answer questions that the trustee wants to ask them? Sure. They're legitimate questions. But it's not exactly smoking gun evidence that the debtor had a cell phone in 2017 that he can't locate here in 2022. It's just not, Your Honor. And the debtor is being unfairly characterized again and again based upon information that is five years old. As far as what the debtor does and doesn't have, I have had multiple discussions with the debtor through his interpreter where he has repeatedly said that he does not keep records related to any of the businesses that the trustee is asking about. Whatever there is is in the hands of his former professionals related to these entities. He does have two cell phones. My understanding is those cell phones were disclosed on his petition. They're not being hidden from anyone. And his position is not that the cell phones don't exist, but that the information on the cell phones doesn't concern these businesses. That's what he told us. That's what we told the trustee's counsel. The trustee's counsel's response, as I understand

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 45 of 71

Ho Wan Kwok - September 27, 2022 45 it, is effectively we don't believe him. And they don't have to believe him. It's their job arguably not to, Your Honor. But to come in there and say that he's lying because they think he is, that's not evidence and that's not the way our judicial system is intended to work. That's all I have on the discovery issues, Your Honor, unless the Court has any questions. THE COURT: The consent order that you entered into with regard to the privileges states that, and your client agreed to it, that the trustee holds all of the debtor's privileges on a post-petition basis through the point -- through the date of the appointment of a Chapter 11 Trustee and that all information with regard to assets of the estate are discoverable. That's what it says. That's what he agreed to in the very first paragraph. It's not limited to Rule 2004 Examination motions that have been filed or subpoenas that have been served. The privilege motion was establishing the trustee's rights to proceed with the investigation. Your client's declaration filed on March 20, 2022 in this case, when things were moving along in a manner in which he would -- he and Brown Rudnick had proposed, says that the assets of his estate include litigation pending in the United Kingdom, and he lists that on his statements of financial affairs as well, and a litigation in the District

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 46 of 71

Ho Wan Kwok - September 27, 2022 46 -- in the District Court of the District of Columbia, and that those are valuable assets of the estate. The plan that he filed and signed said that he was going to fund the estate with the proceeds from those litigations. That's what your client has said in this case. Those are admissions of your client in this case. So to find out now that I'm hearing that lawyers for Mr. Kwok aren't going to turn over documents until he gives them permission seems to me to be in violation of the consent order that you've signed onto, number one. Number two, with regard to the issues related to Ace and Delta in -- I think that's the other name -- Delta in London -- MR. DESPINS: Decade. THE COURT: Decade, excuse me, in London, then those two assets, those two entities, he says he owns. He's said he's owned. Mr. Henzy says he disputes that. Well, he'll have to come in and prove that when he -- that when he testified before his testimony was inaccurate. He'll have to come in and prove that. And right now Mr. Kwok has agreed that Mr. Despins succeeds to the rights of those two entities in London, that the -- that he has now the privileges -- any privileges with regard to the -- well, first of all, he doesn't even have to agree to that because the *Weintraub* case says that.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 47 of 71

Ho Wan Kwok - September 27, 2022 47 The United States Supreme Court case of *Weintraub* says that when it relates to the corporate entities, the trustee succeeds to the interest of that corporate entity and the -- and the privilege passes to that corporate entity. So I don't know what it is that is not -- you say he's cooperating. And he said in his -- in his declaration back on March 10 that -- I'll tell you exactly what he says -- we can go -- we can go to the page. He says that he wants to give everyone a fair opportunity to investigate his assets. So the trustee has been attempting to do so through the Federal Rules of Civil Procedure. You and he and others have worked hard on a consent order. That consent order says that the trustee possesses the privilege on a post-petition basis at the very least with regard to all of the debtor's assets. That's what it says. It doesn't say not with regard to the assets I listed in my petition. It says with regard to all the debtor's assets. So I don't know how there could be -- MR. ROMNEY: Your Honor, could you pull up document 856, please. THE COURT: Hold on a second. Hold on a second, Attorney Romney. Let me finish please. MR. ROMNEY: I apologize.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 48 of 71

| | Ho Wan Kwok - September 27, 2022 48 | |----|----------------------------------------------------------------| | 1 | THE COURT: So I don't know how there could be an | | 2 | argument made that anyone who's been served with a -- with a | | 3 | subpoena for post-petition information and/or assets related | | 4 | to the administration of the estate, because that's what the | | 5 | order says, can say that they don't have to turn over | | 6 | documents. I think that that's going to be a very | | 7 | interesting argument. And they do have -- it's their burden | | 8 | to prove that they should not have to turn over those | | 9 | documents. | | 10 | The Rule 2004 motions were granted. They then | | 11 | have to seek appropriate relief under the Federal Rules of | | 12 | Civil Procedure. | | 13 | And to hear that -- well, I don't know what's true | | 14 | at this point, but if the prior counsel is saying they're | | 15 | not going to turn over documents until Mr. Kwok approves | | 16 | that, if that's what they're saying, which I don't know if | | 17 | that is, but if that's what they're saying, then that's in | | 18 | violation of the consent order. | | 19 | MR. ROMNEY: Can I be heard now, Your Honor? | | 20 | THE COURT: Yes. | | 21 | MR. ROMNEY: The consent order that entered, | | 22 | document 856, in a number of locations specifically talks | | 23 | about the debtor's right to withhold documents subject to a | | 24 | balancing test, notwithstanding anything therein to the | | 25 | contrary. As Your Honor knows because -- |

Ho Wan Kwok - September 27, 2022 49 THE COURT: Tell me where it says that, Attorney Romney. MR. ROMNEY: The first line of paragraph 7, Your Honor. THE COURT: What's the document number again, 8? MR. ROMNEY: 856. THE COURT: 856x. Why don't we pull up 856 and we'll go through it again. (Pause) THE COURT: So what -- where do you want us to start? MR. ROMNEY: The particular language, that's most directly to what I was saying was found in a number of places, is the first line of paragraph 7, notwithstanding anything herein to the contrary. (Pause) THE COURT: He has to -- he has to make a statement that is going to result in personal harm to him if disclosed to the trustee. All of these assets that the trustee is investigating your client already disclosed as assets on the schedules filed in this case in March of this year. He isn't -- so where is the harm? He put those assets out there. He said that the claim in London is an asset of the estate that he was going Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 49 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 50 of 71

Ho Wan Kwok - September 27, 2022 50 to use to fund the plan in addition to the boat, which was going to be used to fund the plan. So where's the -- how could there be -- how could there be in good faith an allegation of personal harm with regard to the investigation of assets that your client put in play when he -- when he filed his -- filed this case and then filed his statements and schedules of affairs? MR. ROMNEY: Your Honor, the debtor, to my knowledge, has not directed anyone to withhold any particular document based upon this balancing test. THE COURT: I'm not talking about that. That's not my question, Mr. Romney. You just pointed me to paragraph 7, first line. That's what you said. You said look at the language in paragraph 7. So I'm looking at the language in paragraph 7, and it says notwithstanding anything herein to the contrary, to the extent the debtor believes in good faith that particular documents or information that are covered by a trustee privilege and that concern the investigation could result in personal harm to the debtor if disclosed to the trustee. Well, what the trustee is investigating are the claims in London and all of the other claims associated with assets either disclosed or not disclosed by Mr. Kwok. And my question to you about the London litigation is how can that be an issue? Your client put that out as an

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 51 of 71

Ho Wan Kwok - September 27, 2022 51 asset of the estate and said it was going to be available to fund a plan. So how could there be any information that he could have -- that someone could have that would somehow personally harm him, number one? Number two, with regard to the administration of the estate and what Brown Rudnick would have, what could your client possibly argue that he believes in good faith would result in personal harm if it was -- if that information was disclosed to the trustee? MR. ROMNEY: Okay. So let me take those two in turn. One, with respect to the U.K. matter, one, the U.K. matter was expressly carved out from docket number 856. THE COURT: It's only carved out to the extent that you believe -- your client believes he might have a privilege. That's all it is. It's only with regard to your client. It's not with regard to Brown Rudnick or anyone else that the trustee is seeking information. It says -- nine says, nothing herein shall be construed to impact one way or another the debtor or the debtor's counsel's rights, whatever they may be, to assert privileges the debtor may have under the laws of the United Kingdom. That has nothing to do with any of the information that the trustee's seeking from any other party other than the debtor.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 52 of 71

Ho Wan Kwok - September 27, 2022 52 MR. ROMNEY: As I said, the debtor has not directed anyone to withhold any information. What the debtor had said is that they would -- they're asserting their rights under this order to the extent that the debtor has any with respect to a particular document. We have said that it is -- we are not demanding that the debtor review individual documents. We have said that the debtor -- that the recipients of these subpoenas to look at this order. And it may be with respect to most, if not all of these professionals, that there is no document that should be withheld. I haven't seen them. Nobody in my office has seen them. They're in the hands of the people who were served with these subpoena. I don't know how to be any more clear that the debtor is not obstructing this investigation. 16 The debtor -- THE COURT: Okay. Well, then good. Then there won't be anything filed under paragraph 7 because he won't have a good faith basis to believe that he will be -- he will suffer any personal harm if any of these people turn the documents over to the trustee because he hasn't seen them. MR. ROMNEY: We have not seen the documents. THE COURT: So how can he make a good-faith -- MR. ROMNEY: The debtor hasn't seen them. I think

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 53 of 71

Ho Wan Kwok - September 27, 2022 53 that if they -- THE COURT: So how can he make a good faith claim that they shouldn't be turned over? MR. ROMNEY: He hasn't because he hasn't seen the documents. And I think the recipients of these subpoenas -- THE COURT: Well, he's not entitled to see the documents. They're not being subpoenaed to him. They're being subpoenaed to other people. MR. ROMNEY: Okay. And all that the debtor has said -- THE COURT: And the other people don't have a privilege to assert on behalf of the debtor because the trustee has that privilege. You consented to that. MR. ROMNEY: Yes, the debtor did. And, yes, I did as his counsel. And all that the debtor is saying to anyone who asks is that he reserves his right under this order whatever they may be. And the professionals who receive this subpoena can do what they will with that information, but he's not waiving anything that he has under this order. He's not required to waive anything that he has under this order. And professionals who are served with this subpoena should comply with these subpoenas in their professional judgment. That's what they should do and that's what we've said. I do not know what else the debtor can be required

Ho Wan Kwok - September 27, 2022 54 to do. As I said, if somebody is uncomfortable, somebody has a question, and they would like the debtor's current counsel, meaning me or one of my colleagues, to look at it and specifically say whether the debtor has a good-faith belief with respect to that particular document, we are willing to do that, but we're not demanding that we have a right to compel that. We're not. The debtor's not required to waive whatever rights the debtor has under this order and that's the only thing the debtor is saying he won't do. THE COURT: No one's asking him to. I haven't heard anybody ask him to so I don't even know why you're raising that issue. MR. ROMNEY: But that's all that the debtor is doing. The debtor is not obstructing anything. THE COURT: Okay. Well, I think we can -- we just need to move on. Mr. Despins, you're just going to have to file motions. It's the only way things are going to proceed in this case. With the issue on the litigation in London, you know, now that you have the privilege with regard to the two entities unless they can come in and prove otherwise that they don't own it. He's testified that he owns it. I'm

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 55 of 71

Ho Wan Kwok - September 27, 2022 55

told today that he disputes that.

Well, he'll have to -- just like they're going to make you file all those motions, they're going to have to file those motions and they're going to have to show that there is something inaccurate or he -- with regard to his prior testimony and with regard to the prior declaration he made in this case back in March of -- and with regard to his statements and schedules of affairs, which he signed under penalty of perjury in which he lists -- and with regard to the plan that he signed in which he said that he was going to use the funds from the UBS litigation to help fund the plan for the payment of creditors.

So I think that that, you know, we're not going to get any further and we're just going to have to file motions and I'll have to make rulings. That's unfortunate, but that's where we are.

It's a situation where -- and actually with regard to the London litigation, are you still pressing the need for that letter to the counsel? Now that you have the corporate entity privilege, why do you need the letter anymore? If you don't need the letter, then the appeal's moot.

MR. DESPINS: Let me come back to Your Honor on this. I mean, in the sense that I think I have the privilege, I agree with you. The problem is that they'll

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 56 of 71

| | Ho Wan Kwok - September 27, 2022 56 | |----|----------------------------------------------------------------| | 1 | say, no, you don't have the privilege. | | 2 | THE COURT: I understand what you're saying. | | 3 | MR. DESPINS: So we're going to be in that. But | | 4 | let me -- that's a fair question that you're raising, so let | | 5 | me -- let me come back to Your Honor on that. | | 6 | But I think at this point what would make sense, | | 7 | because we did file a motion, but it probably got lost in | | 8 | the shuffle there, there's a motion to expedite | | 9 | consideration of the prejudgment attachment. | | 10 | I made a proposal. Maybe Mr. Kindseth -- actually | | 11 | we made that proposal, not today, we made it yesterday, | | 12 | before they filed their objection, which is that if they | | 13 | agree that the status quo remains, then we don't need to | | 14 | schedule anything for October 7th, anything on the | | 15 | prejudgment attachment. So I think that that's probably the | | 16 | best thing we could do today because there isn't -- we filed | | 17 | a motion on that. | | 18 | THE COURT: When they filed an objection, you mean | | 19 | the debtor filed an objection to the PJR application? | | 20 | MR. DESPINS: No. To the schedule for the PJR -- | | 21 | THE COURT: Okay. | | 22 | MR. DESPINS: -- basically raising -- | | 23 | THE COURT: I don't think I -- I thought I saw the | | 24 | objection only related to the protective order. But I'm | | 25 | wrong, it related to both? | | | |

Ho Wan Kwok - September 27, 2022 57 MR. DESPINS: No. There were separate objections, Your Honor. THE COURT: Okay. I didn't see that. MR. DESPINS: It was filed yesterday afternoon. THE COURT: All right. I didn't see that. Hold on. MR. DESPINS: Sorry. That's the problem. It's in the adversary case, not in the main case. MR. HENZY: Yes, we did. We did file an objection to the motion to expedite. THE COURT: To the PJR? MR. HENZY: Yeah. THE COURT: In the adversary? MR. HENZY: Right. But Mr. Despins is correct, it's in the adversary, not the main case, yeah. MR. DESPINS: But it's on the scheduling, not on the merits of the -- MR. HENZY: That's correct, Your Honor. THE COURT: Okay. So let me look at that in the adversary, the debtor's objection to the scheduling of the hearing on the PJR, which the trustee was seeking a hearing on October 7th. Okay. Here it is. (Pause) THE COURT: Okay. So who's going to address the plaintiff's objection to the trustee's motion for an Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 57 of 71

Ho Wan Kwok - September 27, 2022 58 expedited hearing on the prejudgment remedy that the trustee's seeking for October 7th? MR. ROMNEY: I am, Your Honor. Aaron Romney for the record. THE COURT: Could you -- I'm sorry, Mr. Romney. Could you just lean again in a little bit? I can just hear you better when you lean in. Thank you. MR. ROMNEY: Is that better, Your Honor? THE COURT: Yes, it is. MR. ROMNEY: Thank you. THE COURT: So go right ahead. So you have objected to the hearing being held on October 7th saying you need more time, which, I mean, I understand that, but I understand also that the trustee is saying that they would agree to that if you would agree that there would be essentially a status quo order, a temporary restraining order, restraining everyone from doing anything until there's a hearing on the preliminary injunction on the PJR. MR. ROMNEY: Your Honor, in the first instance, as far as Ms. Guo is concerned, the trustee has not put forward any evidence that would entitle him to a temporary restraining order or an expedited hearing on the PJR. THE COURT: Well, he didn't say he put forth any evidence to entitle him to a temporary restraining order. He didn't say that, number one. I said that's essentially

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 58 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 59 of 71

| | Ho Wan Kwok - September 27, 2022 59 | |----|----------------------------------------------------------------| | 1 | what he's asking, right? And I didn't -- I don't agree -- I | | 2 | didn't -- I'm not suggesting he has put forth evidence. He | | 3 | said he made a -- he made a proposal. You either accept it | | 4 | or you don't. That's fine. That's the -- that's where we | | 5 | are. | | 6 | He's asking are you going to agree to maintain the | | 7 | status quo until there's actually a hearing on the | | 8 | preliminary -- on the -- I keep saying preliminary | | 9 | injunction, I'm sorry -- the prejudgment remedy. And if | | 10 | your answer is no, then your answer is now. That's fine. | | 11 | MR. ROMNEY: With regards to Ms. Guo, we're | | 12 | unaware of any basis that the trustee could possibly | | 13 | establish to restrain her individual assets. And, | | 14 | therefore, no, we will not. | | 15 | With respect to the -- what appears to be the | | 16 | primary focus, and only with an articulated exigent | | 17 | circumstance of the \$37 million escrow, the escrow was the | | 18 | subject of a heavily negotiated order between a number of | | 19 | parties, including the debtor, in whose shoes the trustee | | 20 | currently stands. | | 21 | The order specifically required HK International | | 22 | to bring the boat back and outlined a number of terms | | 23 | regarding what the escrow funds that were designed to secure | | 24 | that promise could and could not be used for. | | 25 | Paragraph 12 of that order, which is document 299 | | | |

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 60 of 71

Ho Wan Kwok - September 27, 2022 60 entered in this case, specifically precludes the parties, including the debtor, to whom the trustee is the successor in interest, from asserting any claims to that escrow fund, including to the enforcement of any judgment or service of any prejudgment remedy or other legal process other than with respect to securing the promise to return the boat or with regard to particularized repairs to the boat, which is what the subject of the repair reserve motion is.

To have HK and Ms. Guo, who personally guaranteed the loan of this \$37 million that HK then posted, to have them comply with their obligation under this court stipulated order, and then have the trustee say now that the boat is back I want the \$37 million too is not only unconscionable, but it is the source of promissory estoppel and collateral estoppel given that it is the subject of a court order.

And for that reason, under no circumstances should Ms. Guo or HK be required to defend an evidentiary hearing against a 65-page counterclaim that was briefed with a 40- page memorandum of law and that is supported with 3,000 pages of exhibits in two weeks, which two weeks include two Jewish holidays and two weekends, so that the trustee can try and attach funds that a court order expressly precludes the trustee from attaching is simply unconscionable and I don't believe lawful.

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 61 of 71

Ho Wan Kwok - September 27, 2022 61 And for that reason we will not agree to restrain the very funds that have already been agreed shall not be the subject of further restraint. THE COURT: Okay. That wasn't the only question though. It wasn't just with regard to the funds. So you've said no. The question was with regard to everything else, not just the funds. I understand your point. I understand he's seeking a PJR against the funds. I've seen that. I haven't read it. And everything else you've said you'll file in your opposition papers. You'll do whatever you need to do. MR. ROMNEY: Right. And HK, as well Ms. Guo, will need a reasonable time to defend against those allegations. The trustee has not established any cause for an expedited hearing -- THE COURT: Well, that's -- MR. ROMNEY: -- other than that it wants -- he wants to attach these funds that an order precludes him from attaching. MR. DESPINS: Your Honor, if I may be heard on this? THE COURT: Yes. MR. DESPINS: Okay. So we did establish cause. And yet I know you haven't seen the papers, but the point is that they want the 37 to leave the jurisdiction, go back to

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 62 of 71

Ho Wan Kwok - September 27, 2022 62 essentially Mr. Kwok, but that's a different story, as soon as possible. That's the issue here. That's why we're saying there should be a standstill on the \$37 million. And as you said, the argument that they just made that the debtor bound the trustee, which was not around at the time. And, by the way, at this time, there was a motion to appoint a trustee and a motion to dismiss the case and they made very particular provisions regarding what happens in the dismissal but nothing with respect to what happens when there's a trustee. This is kind of (indiscernible). In DIP financing orders you always put a provision saying if this is binding on a successor trustee, et cetera, et cetera, for the very reason that it's not binding. And, in fact, that's what they forgot to do here. There was a pending motion. And if they had asked you at that time, Your Honor, you understand there's a motion pending to appoint a trustee, this will bind the trustee through the reference here to Mr. Kwok, the debtor, you know, I doubt very much Your Honor would have intended to do that. And to be really clear about this, in the discovery disputes the Zeisler firm has taken the position that with respect to documents relating to this stipulation that there was a common interest between Mr. Kwok, the debtor, and HK International, that tells you everything you

Ho Wan Kwok - September 27, 2022 63 need to know. There was no -- this is not like when a debtor is at arm's length with another party. They were together on this stipulation trying to get the boat out of the jurisdiction as soon as possible. And the \$37 million out of the jurisdiction. But the point is you don't have to resolve this now. They can file their papers saying exactly what Mr. Romney just said and we will deal with it. The point though is if there's going to be race to, you know, release those funds, then we need a hearing sooner. If there's not going to be a race, then they can have all the time they want. But they can't have it both ways where they say, yes, indeed, he has no right to do that and, therefore, we will do everything we can to take the money out of the Court's jurisdiction, then we need a hearing before that happens. It's as simple as that. And if they're willing to agree, without any prejudice, but I want to be clear, we would not later argue that because they agreed to this standstill that somehow they're waiving their argument that they just made that the trustee cannot do what it's doing, not at all. This is what we call an administrative freeze to make sure that the Court has the time to review this and

Ho Wan Kwok - September 27, 2022 64 that they have the time. They think they want more time, sure, take more time. But there's no reason right now with -- the position they're taking is that we're going to jam the Court, meaning we're going to say, no, we're not agreeing to anything, including anything regarding the \$37 million, because we don't think he has no -- the trustee has a right to that relief. My point is it's totally within their control. It's a self inflicted ruling. I want to be clear, again, them agreeing today that they will not be -- that there will not be any actions taken with respect to \$37 million would not be used, could not be used in any way as an argument that somehow they have waived any of the arguments that Mr. Romney has made and any other arguments they want to raise. So it's really totally within their control. They cannot -- And the argument is simple. Is the 37 staying or not? If it's not staying, or some of it is not staying, we need to have a hearing as soon as the money is going to leave the -- before the money leaves the jurisdiction. It's as simple as that. And to be clear, again, no prejudice to them whatsoever because this is just a -- it's like we're on appeal, you know, we often have an administrative freeze to Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 64 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 65 of 71

Ho Wan Kwok - September 27, 2022 65 allow the Court to -- an administrative stay and it allows the Court to review the matter and take its time. And it's without prejudice to either side's position. That's all we're proposing. If they're not willing to agree to any of that, fine, then we need a hearing on an expedited basis because we can't let the money leave the jurisdiction. THE COURT: Okay. Thank you. MR. DESPINS: And because, Your Honor, this will be the last 37 million we'll ever see from the debtor very likely. THE COURT: Mr. Romney, did you want to respond? MR. ROMNEY: Yes, I did, Your Honor. Your Honor, the trustee sought two extensions to its filing to HK's complaint. The trustee was appointed I believe on July 15th. The motion was filed on September 24th around 10:00 p.m. If this was such exigent circumstances and not an attempt at sandbagging, for lack of a better word, this motion would have been filed months ago when we were scheduling the hearing on the reserve order. But the trustee needed multiple extensions of time to respond, one of which was on consent, one of them was over HK's objection, and they received it. Second, the trustee is the successor in interest,

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 66 of 71

Ho Wan Kwok - September 27, 2022 66 as we've been over in numerous contexts in this case, including today, in the context of the trustee's rights with respect to assets and certain privileges. The trustee is the successor to the debtor. And that works both ways, Your Honor. The trustee is the successor to the debtor in possession. The trustee is bound by the debtor's contracts whether the trustee likes that or not.

And this order that the Court entered specifically precludes attachments of the PJR funds. And there's a very simple reason for that. The funds wouldn't have been here if it wasn't for this order. This order is a negotiated order, an agreement, designed to facilitate the return of the Lady May and make sure it's in good working order.

The Lady May is back. There is a hearing scheduled for October 7th to reserve sufficient funds to make sure that it will be in good working order. But the trustee does not get both. The order says what it says.

And to say that unless we decide that we won't subject the funds to attachments, unless we agree to defend these allegations on 14-day's notice, it's just unconscionable and there's no basis in law for it.

If I may have one moment. Oh, and the trustee said there's no prejudice. The prejudice is, as we've said multiple times, and I believe has been before the Court before, the interest on this loan from a third party is \$1.3

Ho Wan Kwok - September 27, 2022 67 million per month. That's real money that has to be paid to a real third party while this money is sitting in an account. The incentive, yes, is to repay that loan and stop the interest that Ms. Guo has personally guaranteed and HK is incurring. It is to repay the money to a lender. It is not to steal the money. And to the extent that the trustee believes that there is cause to actually take this money, notwithstanding what the order says, perhaps the trustee should post a bond to secure the damages that HK and Ms. Guo will incur if these funds are tied up, and it incurs several million dollars of interest. MR. DESPINS: Your Honor, all these points will be heard. All these arguments can be heard at the time of the issue of the bonding will be addressed as well. So the point is, you know, the point they're making, because we're going to win, we're going to win, and, therefore, nothing needs to happen. No. We've made -- If Your Honor has not read the counterclaims, but -- and I'd -- it would be too much to expect you to have done that over the weekend, but it's very precise in terms of allegations regarding the providence of these funds, where these funds came in. This argument, you know, I hesitate to use that Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 67 of 71

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 68 of 71

| | Ho Wan Kwok - September 27, 2022 68 | |----|-----------------------------------------------------------------| | 1 | term, but we don't want to insult people's intelligence, the | | 2 | fact that a third party would have lent \$37 million to an | | 3 | unemployed, 28-year-old, really, who believes that? That's | | 4 | all Kwok's money. And I know they did. That's exactly the | | 5 | way they structure all these enterprises where he has | | 6 | nothing and it has to come from others. And in this case, | | 7 | it's his daughter. The daughter doesn't have the funds to | | 8 | pay 500,000. That will never happen. The reason that's | | 9 | created is to give the appearance that, in fact, she'll be | | 10 | prejudiced. | | 11 | And there's so many examples in the counterclaims. | | 12 | You'll see there are pages, page after page, of examples of | | 13 | using these shell companies or using family members to hide | | 14 | money from the creditors. And that's exactly what's | | 15 | happening here. And the Court, you know, needs to be | | | |

cognizant of that.

But, again, I'm not arguing the math now. I'm just saying a very simple thing, which is the hearing should be on October 7th or they can have it whenever they want. Again, I'm not asking you to rule on the merits, just a scheduling, or they can have it whenever they want if they agree that nothing happens with the \$37 million and the Lady May. That's all.

THE COURT: Okay. Thank you. Does anyone else wish to be heard?

Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 69 of 71

Ho Wan Kwok - September 27, 2022 69 (No response) THE COURT: All right. Is there any other matter we need to address this afternoon? MR. DESPINS: No, Your Honor. THE COURT: All right. I will look at -- I did not schedule a hearing and did not grant the motion for an expedited hearing because I wanted to hear what the parties' positions are. Now I've heard what the parties' positions are and I will rule accordingly. We also have, I believe, a scheduling order in place with the Lady May reserve, repair reserve, where documents need to be filed before the hearing next week, a list of witnesses and exhibits and things of that nature, correct? Do we have dates? MR. KINDSETH: That's correct, Your Honor. THE COURT: Okay. MR. KINDSETH: They're due to follow. THE COURT: So everyone's keeping to that schedule, correct? MR. KINDSETH: That's correct. And currently the evidentiary hearing scheduled for October 7th on the repair reserve which Your Honor scheduled I believe more than a month ago for the specific issue of having a hearing on the repair reserve. THE COURT: Well, because you had asked for an

Ho Wan Kwok - September 27, 2022 70 evidentiary hearing and we had a status conference on that issue. MR. KINDSETH: Correct. THE COURT: And that's why we needed to schedule it as we scheduled it because you needed an evidentiary hearing, which is fine. MR. KINDSETH: Correct. And that's scheduled for October 7th. THE COURT: Right. Okay. Then I will take a look at what has been filed over the last few days and I will issue an order with regard to the -- either granting or denying the motion for an expedited hearing. So is there anything further we need to address today? MR. DESPINS: Not from the trustee's point of view, Your Honor. Thank you. THE COURT: Anyone else? MR. ROMNEY: No, Your Honor. THE COURT: Okay. Then this is our last matter on the calendar today, so court is adjourned. (Proceedings concluded at 3:40 p.m.) Case 22-50073 Doc 936 Filed 10/11/22 Entered 10/11/22 09:53:48 Page 70 of 71

| | Ho Wan Kwok - September 27, 2022 | 71 | |----|------------------------------------------------------------|----| | 1 | | | | 2 | I, CHRISTINE FIORE, Certified Electronic Court | | | 3 | Reporter and Transcriber, certify that the foregoing is a | | | 4 | correct transcript from the official electronic sound | | | 5 | recording of the proceedings in the above-entitled matter. | | | 6 | | | | 7 | | | | 8 | October 9, 2022 | | | 9 | Christine Fiore, CERT | | | 10 | | | | 11 | | | | 12 | | | | 13 | | | | 14 | | | | 15 | | | | 16 | | | | 17 | | | | 18 | | | | 19 | | | | 20 | | | | 21 | | | | 22 | | | | 23 | | | | 24 | | | | 25 | | | | | | |