Exhibit A — Exhibit A — KServicing Wind Down Corp. (22-10951) (Dkt. 89.1) (Dkt. 89.1)

Record facts

U.S. court record · No. 22-10951 · Doc. 89-1 · 2022-10-06 · Docket on CourtListener

Full text

RLF1 28049246v.1 
EXHIBIT A 
 
Motion
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RLF1 28018237V.1 
UNITED STATES BANKRUPTCY COURT 
DISTRICT OF DELAWARE 
------------------------------------------------------------ x 
 
In re 
: 
Chapter 11 
 
: 
 
KABBAGE, INC. D/B/A KSERVICING, et al., : 
Case No. 22-10951 (       ) 
 
: 
 
 
: 
 
 
 
Debtors.1 
: 
(Joint Administration Requested)  
------------------------------------------------------------ x 
 
 
 
 
MOTION OF DEBTORS FOR INTERIM AND FINAL 
ORDERS AUTHORIZING DEBTORS TO (I) CONTINUE SERVICING 
AND SUBSERVICING ACTIVITIES AND (II) PERFORM RELATED OBLIGATIONS 
 
Kabbage, Inc. d/b/a KServicing and its debtor affiliates, as debtors and debtors in 
possession in the above-captioned chapter 11 cases (collectively, the “Debtors” and, together with 
their non-Debtor affiliates, the “Company”), respectfully move and represent as follows in support 
of this motion (this “Motion”):2 
Preliminary Statement 
1. 
As COVID-19 spread across the country, state and local governments 
implemented public health measures that mandated businesses of all sizes to immediately close 
their doors or substantially curtail operations.  On March 27, 2020, in an emergency attempt to 
support small businesses with evaporating revenues and to avoid mass layoffs of the U.S. 
workforce, the federal government enacted the Coronavirus Aid, Relief, and Economic Security 
                                                 
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 
number, as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A); Kabbage 
Asset Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding 2019-A 
LLC (8973); and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used under license; 
Kabbage, Inc. d/b/a KServicing is not affiliated with American Express. The Debtors’ mailing and service address 
is 925B Peachtree Street NE, Suite 383, Atlanta, GA 30309.  
2 The facts and circumstances supporting the relief requested herein are set forth in the Declaration of Deborah 
Rieger-Paganis In Support of Debtors’ Chapter 11 Petitions and First Day Relief (the “Rieger-Paganis 
Declaration”) sworn to on the date hereof and filed contemporaneously herewith.  Capitalized terms used but not 
defined herein shall have the respective meanings ascribed to such terms in the Rieger-Paganis Declaration. 
Docket No. 11 
Date Filed: 10/3/22
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Act (the “CARES Act”).  Among other measures, the CARES Act authorized the provision of 
nearly $1 trillion in government aid to small businesses under the Paycheck Protection Program 
(the “PPP” and the loans provided thereunder, the “PPP Loans”).  The CARES Act directed the 
U.S. Small Business Administration (the “SBA”) to administer the PPP by partnering with private 
lenders and servicers to process loan applications and deliver funds to small businesses as quickly 
as possible.  Notably, PPP borrowers would be eligible for forgiveness of their loan if they used 
the PPP funds for “qualifying payroll costs” (“Loan Forgiveness”), and in the event a PPP Loan 
was not eligible for forgiveness pursuant to the SBA guidelines, the SBA nevertheless guaranteed 
its purchase of 100% of the PPP Loan from the originating lender (a “Guaranty Purchase”). 
2. 
Prior to the Petition Date (as defined herein), the Company partnered with 
the SBA to administer the PPP by, among other things, processing loan applications and delivering 
funds to small businesses.  In the ordinary course of business, the Company maintains and services 
a PPP Loan portfolio comprising approximately 99 percent of the Company’s loan servicing 
portfolio by outstanding principal amount as of September 30, 2022, with non-PPP Loans 
(the “Legacy Loans”) comprising the remainder.   
3. 
The Company services two primary types of PPP Loans:3 
(a) 
PPP Loans that the Company originated and pledged to the Federal Reserve 
Bank’s (the “Federal Reserve”) Paycheck Protection Program Liquidity 
Facility (the “PPPLF,” the portfolio of loans, the “PPPLF Portfolio,” and 
the loans thereunder, the “Pledged PPP Loans”); and 
 
(b) 
PPP Loans owned by Customers Bank (“CUBI”) and Cross River Bank 
(“CRB” and, together with CUBI, the “Partner Banks”), which the 
                                                 
3 In addition to the PPPLF Portfolio and Partner Bank Portfolio, the Company originated, funded, and services, as of 
September 30, 2022, approximately 80 PPP Loans with approximately $1.6 million in outstanding principal amount 
(the “KS PPP Portfolio,” and the loans thereunder, the “KS PPP Loans,” and the KS PPP Portfolio together with 
the PPPLF Portfolio and the Partner Bank Portfolio, the “PPP Portfolio”).  The KS PPP Portfolio comprises 
approximately 0.1 percent of the Company’s PPP by outstanding principal amount. 
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Company subservices for the Partner Banks (the “Partner Bank Portfolio” 
and the loans thereunder, the “Partner Bank Loans”).  
 
4. 
As part of its PPP Loan servicing activities, the Company, among other 
things: collects and accounts for borrower payments—including payments of principal and 
interest, assists borrowers in completing their Loan Forgiveness applications, completes Guaranty 
Purchase applications on account of Pledged PPPLF Loans and KS PPP Loans and assists the 
Partner Banks in completing their Guaranty Purchase applications and other reports, and provides 
a software platform to facilitate collections, Loan Forgiveness, and Guaranty Purchase activities, 
all as described more fully herein.   
5. 
In addition to PPP Loans, the Company subservices a small portfolio of 
Legacy Loans (the “Legacy Loan Portfolio”), all of which are owned by Celtic Bank (“Celtic”).  
The Company marketed these loans, performed diligence on applicants to ensure compliance with 
Celtic’s screening procedures, and currently services these loans, with Celtic as the lender of 
record.  Once the Company identified an eligible borrower, the Company established a loan 
account and Celtic made available all funds needed to extend credit to the borrower.  The Company 
purchased from Celtic participation interests in receivables on these loans, effectively retaining the 
rights to borrower principal and interest payments. 
6. 
As a company that was already in wind down prior to the filing of these 
chapter 11 cases, the Company is not generating significant cash on a go-forward basis; in fact, 
the Company collected all of its fees from the Partner Bank Portfolio at or near the time a loan was 
originated.4  Given that the PPP ended on May 31, 2021, the Company does not anticipate earning 
additional cash in connection with servicing newly-originated PPP Loans.  Likewise, the Company 
                                                 
4 With the exception of the CUBI Receivable, as explained herein and in paragraphs 51-53 of the Rieger-Paganis 
Declaration. 
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is not permitted to originate any new Legacy Loans due to non-compete covenants contained in 
documentation associated with the Company’s sale of its legacy online lending platform to 
affiliates of American Express (the “AmEx Transaction”), whereby the Company agreed not to 
engage in any business that provides products or services of the type offered by the Company prior 
to the AmEx Transaction.  This leaves the Company with two potential sources of cash flow on a 
go-forward basis: (a) interest earned on the PPPLF Portfolio, subject to an agreement with the 
Federal Reserve on the Debtors’ use of its cash collateral and/or an order by the Court approving 
such use, and KS PPP Portfolio, and (b) interest and principal earned on the Legacy Loan 
Portfolio.5  Exacerbating the Company’s already limited revenue streams is approximately 
$31 million of servicing fees that remain outstanding from CUBI as of September 30, 2022.6  
Given the significant time and costs required to continue servicing the PPP Portfolio, the limited 
incoming cash, and shrinking pot of resources, the Company may soon be forced to seek Court 
approval to change its servicing arrangements.  Until that time—however short (or long) it may 
be—the Debtors seek authority to continue their ordinary course loan servicing operations and 
provide approximately 48,000 PPP Loan borrowers with outstanding balances comfort that there 
                                                 
5 When a Legacy Loan payment becomes 180 days delinquent, the Company, in the ordinary course of business, 
requests certain collection agencies (the “Collection Agencies”) to collect borrower interest and principal payments 
on behalf of the Company.  If and when a Collection Agency is able to collect borrower payments, it remits such 
payments to the Company after deducting a collection fee (the “Collection Fee”). 
6 From April 2020 to May 2021, CUBI funded or originated over $2.5 billion in loans through its arrangements with 
the Debtors, generating tens of millions of dollars in fees payable to the Debtors under the CUBI Agreements, 
including approximately $65 million in servicing fees (the “CUBI Receivable”) that CUBI has withheld from the 
Company, purportedly based on the possibility that CUBI may have claims against the Company.  In response, as of 
September 30, 2022 the Debtors have withheld borrower payments due to CUBI in the amount of approximately 
$34 million (the “KServicing Withholding”) to offset the CUBI Receivable.  As of September 30, 2022, the CUBI 
Receivable exceeds the KServicing Withholding by approximately $31 million.  The Company and CUBI are 
currently in discussions regarding the terms of a potential settlement related to the Company’s collection of the 
CUBI Receivable. 
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will be no interruption in services on account of the chapter 11 filing, and provide the Federal 
Reserve and the Partner Banks with time to institute alternate servicing arrangements. 
7. 
The Company understands that there remains only a small population of 
existing PPP Loan servicers.  In light of the limited population of PPP Loan servicers, it may take 
a significant amount of time and resources to transfer servicing obligations for a PPP Loan 
portfolio of more than $1.3 billion in outstanding PPP Loan amounts.  It would be catastrophic for 
borrowers, the Federal Reserve, and the Partner Banks if the Company immediately stopped 
servicing loans with no alternative servicer (or at minimum, a plan for alternative servicing) in 
place. 
8. 
Therefore, the Debtors respectfully request out of an abundance of caution, 
that this Court authorize, but not direct, the Debtors to continue their servicing and Related 
Obligations (as defined herein) in the ordinary course of business in these Chapter 11 Cases (as 
defined herein) until such time that the Company seeks to transfer servicing. 
Relief Requested 
9. 
By this Motion, pursuant to sections 105(a), 362, 363(c), 1107(a), and 1108 
of title 11 of the United States Code (the “Bankruptcy Code”) and Rules 6003, and 6004 of the 
Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), the Debtors request authority, 
but not direction, to continue in the ordinary course of business and in the same manner as their 
prepetition practice: 
(a) 
servicing and subservicing PPP Loans, including, but not limited to, 
obligations related to collecting borrower payments, maintaining a 
borrower software platform, Loan Forgiveness, and Guaranty Purchase; 
(b) 
servicing and subservicing Legacy Loans, including, but not limited to, 
obligations related to collecting borrower payments and maintaining a 
borrower software platform; 
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(c) 
remitting certain borrower overpayments to borrowers or the SBA, as 
applicable, and any reconciliation activities related thereto; 
(d) 
paying prepetition amounts owed to the Critical Vendors (as defined herein) 
on the terms and conditions described herein; and 
(e) 
fulfilling compliance and regulatory obligations, as described herein. 
10. 
The Debtors further request that the Court (a) authorize all applicable 
financial institutions (collectively, the “Banks”) to receive, process, honor, and pay all checks 
presented for payment and electronic payment requests relating to the foregoing to the extent 
directed by the Debtors in accordance with any order granting the relief sought by this Motion and 
to the extent the Debtors have sufficient funds on deposit in their accounts with such Bank, whether 
such checks were presented or electronic requests were submitted before or after the date hereof, 
and (b) authorize all Banks to rely on the Debtors’ designation of any particular check or electronic 
payment request as appropriate pursuant to this Motion without any duty of further inquiry and 
without liability for following the Debtors’ instructions. 
11. 
A proposed form of order granting the relief requested herein on an interim 
basis is annexed hereto as Exhibit A (the “Proposed Interim Order”), and a proposed form of 
order granting the relief requested herein on a final basis is annexed hereto as Exhibit B 
(the “Proposed Final Order” and, together with the Proposed Interim Order, the “Proposed 
Orders”).7 
Jurisdiction and Venue 
12. 
The Court has jurisdiction to consider this matter pursuant to 
28 U.S.C. §§ 157 and 1334, and the Amended Standing Order of Reference from the United States 
                                                 
7 Nothing contained in this Motion or the Proposed Orders shall be construed as an approval, assumption, adoption, 
or rejection of any agreement, contract, lease, program, or policy between the Debtors and any third party under 
Section 365 of the Bankruptcy Code. 
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District Court for the District of Delaware, dated February 29, 2012.  This is a core proceeding 
pursuant to 28 U.S.C. § 157(b).  Pursuant to Rule 9013-1(f) of the Local Rules of Bankruptcy 
Practice and Procedure of the United States Bankruptcy Court for the District of Delaware 
(the “Local Rules”), the Debtors consent to the entry of a final order by the Court in connection 
with this Motion if it is later determined that the Court, absent consent of the parties, cannot enter 
final orders or judgments consistent with Article III of the United States Constitution.  Venue is 
proper before the Court pursuant to 28 U.S.C. §§ 1408 and 1409. 
Background 
13. 
On the date hereof (the “Petition Date”), the Debtors commenced with the 
Court voluntary cases under chapter 11 of title 11 of the Bankruptcy Code 
(the “Chapter 11 Cases”).  The Debtors are authorized to continue operating their business and 
managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the 
Bankruptcy Code.  No trustee, examiner, or statutory committee has been appointed in these 
Chapter 11 Cases. 
14. 
Contemporaneously herewith, the Debtors have filed a motion requesting 
joint administration of their Chapter 11 Cases pursuant to Rule 1015(b) of the Bankruptcy Rules 
and Rule 1015-1 of the Local Rules. 
15. 
Additional information regarding the Debtors’ business, capital structure, 
and the circumstances leading to the commencement of these Chapter 11 Cases is set forth in the 
Rieger-Paganis Declaration and is incorporated herein by reference. 
I. 
Enactment of the CARES Act and the Origin of PPP Loans 
16. 
Congress launched the PPP in the early weeks of an unprecedented global 
pandemic, during which vital public health measures forced businesses of all sizes in all sectors to 
shut down or substantially curtail operations virtually overnight.  The PPP was the primary 
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mechanism through which the federal government sought to ensure businesses and families could 
survive.  To ensure widespread participation, the CARES Act directed the SBA to provide Loan 
Forgiveness and Guaranty Purchase to eligible borrowers and lenders, respectively.  Pursuant to 
CARES Act direction, the SBA issued guidance in the form of interim final rules, FAQs, and 
procedural notices detailing the processes and standards for determining eligible borrowers 
(“Borrower Diligence”), Loan Forgiveness, and Guaranty Purchase, as detailed further herein. 
II. 
Debtors’ PPP Loan Business 
17. 
The Company is party to three types of PPP Loan servicing arrangements:  
(a) servicing Pledged PPPLF Loans; (b) subservicing Partner Bank Loans; and (c) servicing KS 
PPP Loans. 
A. 
PPPLF Portfolio 
18. 
On April 9, 2020, to support the effectiveness of the PPP, the Board of 
Governors of the Federal Reserve System, with the concurrence of the U.S. Treasury, authorized 
the establishment of the PPPLF, pursuant to which eligible lenders could enter into agreements 
with the Federal Reserve to obtain funding for PPP Loans.  To obtain PPPLF financing, the 
Company and the Federal Reserve entered into the Paycheck Protection Program Liquidity 
Facility Letters of Agreement (the “Letter Agreements”), dated May 12, 2020 and January 14, 
2021.  The Letter Agreements incorporate the Federal Reserve Banks Operating Circular No. 10, 
dated July 16, 2013 (the “Operating Circular,” and together with the Letter Agreements, the 
“PPPLF Documents”), which sets forth the universal terms and conditions for any party who 
obtained advances from, incurred liabilities to, or pledged collateral to, the Federal Reserve, and 
includes terms such as advance payment mechanics, requirements for collateral, and maintenance 
of lending documents. 
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19. 
Under the PPPLF Documents, the Company was authorized to request 
advances (the “PPPLF Advances”) from the Federal Reserve to fund PPP Loans originated by 
the Company.  The PPPLF Advances are fully secured by the underlying PPP Loans which the 
Company originated (the “PPPLF Collateral”), and mature on the respective maturity dates of 
the pledged PPP Loans.  Upon receipt of principal and interest payments from borrowers and 
payments from the SBA, including on account of Loan Forgiveness and Guaranty Purchase, the 
Company remits such amounts to the Federal Reserve on a weekly basis.8  These amounts are then 
used to set off obligations of the Company to the Federal Reserve.  In the event the Company fails 
to pay a PPPLF Advance on the maturity date, the Federal Reserve is required to first seek 
repayment from the PPPLF Collateral, including any proceeds received from the SBA.9 
20. 
Since the launch of the Company’s PPP Loan program, it has originated 
approximately 97,000 Pledged PPPLF Loans, representing nearly $1.6 billion in aggregate loan 
principal.  As of September 30, 2022, approximately 22,000 Pledged PPPLF Loans remain 
outstanding, representing approximately $541 million in principal amounts.  Pledged PPPLF 
Loans comprise approximately 41 percent of the Company’s PPP Loan servicing portfolio by 
outstanding principal amounts. 
                                                 
8 Prior to the filing of these Chapter 11 Cases, pursuant to the PPPLF Documents, the Federal Reserve and the 
Company directed the SBA to make payments directly to the Federal Reserve (the “SBA Direct Payment 
Processing”).  Although the Debtors and the Federal Reserve initiated the SBA Direct Payment Processing 
prepetition, the coordination process remains ongoing with the SBA and the parties are still in the process of 
documenting an agreement.  Once the SBA Direct Payment Processing is in place, the Federal Reserve will receive 
payments on account of the Pledged PPPLF Loans directly from the SBA, but the Company will still receive and 
remit borrower payments on account of the Pledged PPPLF Loans to the Federal Reserve 
9 Pursuant to the PPPLF Documents, the Federal Reserve may void the non-recourse provisions of the PPPLF 
Agreements and directly pursue payment from any of the Company’s assets if, (a) in its sole discretion it deems that 
the Company engaged in any fraud or misrepresentation in connection with any Advance or any request to obtain 
an Advance, or (b) the Company fails to meet any of the requirements of the Fed Agreements, including, but not 
limited to, breaches of any representations, warranties, or covenants.  On October 1, 2022, the Federal Reserve 
delivered a notice of default indicating that pursuant to the PPPLF Documents, the non-recourse provisions are void. 
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21. 
The Debtors’ activities with respect to servicing the Pledged PPPLF Loans 
in the ordinary course of business include, among other things: 
(a) 
collecting and accounting for payments received from borrowers, including 
payments of principal and interest (“Collections”); 
(b) 
maintaining a software platform for borrowers (“SaaS Services”);10 
(c) 
assisting borrowers in completing Loan Forgiveness applications 
(“Forgiveness Assistance”); 
(d) 
submitting Guaranty Purchase applications to the SBA;  
(e) 
subject to the completion of SBA Direct Payment Processing, depositing 
Loan Forgiveness and Guaranty Purchase amounts received from the SBA 
and Pledged PPPLF Loan payments received from borrowers into the 
correspondent bank account;11 and 
(f) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing (all of the foregoing, the “PPPLF Obligations”). 
22. 
Therefore, through this Motion, the Debtors seek authority, but not 
direction, to continue their PPPLF Obligations in the ordinary course of business. 
B. 
Partner Bank Portfolio 
23. 
Between April 2020 and February 2021, the Company entered into various 
PPP Loan-related agreements with the Partner Banks.  While there are nuanced differences in, 
among other things, how the underlying PPP Loans are originated (some were originated by the 
Company and sold to the Partner Banks, while others were originated by the Partner Banks), how 
servicing fees are calculated, and what the Company’s obligations are with respect to Loan 
                                                 
10 The main borrower software platform (the “AmEx Platform”) is under the control of affiliates of American Express 
(“AmEx”) in accordance with the terms of the AmEx Transaction.  The Company accesses the AmEx Platform 
pursuant to a Transition Services Agreement (the “AmEx TSA”) with AmEx.  The Company uses a separate third-
party platform, Biz2Credit, to process Loan Forgiveness applications. 
11 For the avoidance of doubt, once SBA Direct Payment Processing is established, the Company will only deposit 
borrower principal and interest payments into the correspondent bank account, and all SBA payments will be 
remitted directly to the Federal Reserve by the SBA. 
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Forgiveness and Guaranty Purchase, the ultimate relationship established between the Company 
and each of its Partner Banks is fundamentally the same.  Under the applicable CUBI Agreements12 
and CRB Agreements13 (together, the “Partner Bank Agreements”), generally, the Partner Banks 
funded the loans and the Company services the loans. 
24. 
Since the launch of the Company’s PPP Loan program, it has originated, in 
conjunction with the Partner Banks, approximately 221,000 Partner Bank Loans, representing 
approximately $5.6 billion in aggregate loan principal.  As of September 30, 2022, there are 
approximately 27,000 Partner Bank Loans with approximately $785 million in outstanding PPP 
Loan amounts remaining.  77 percent of the Partner Bank Loans by outstanding principal amount 
are owned by CRB (the “CRB Loans”) and 23 percent of the Partner Bank Loans by outstanding 
principal amount are owned by CUBI (the “CUBI Loans”).  Partner Bank Loans make up 
approximately 59 percent of the Company’s PPP Loan portfolio by outstanding principal amount. 
25. 
The Debtors’ activities with respect to servicing the Partner Bank Loans in 
the ordinary course of business include, among other things: 
(a) 
performing Collections; 
 
(b) 
providing SaaS Services; 
 
(c) 
performing Forgiveness Assistance;  
 
(d) 
assisting the Partner Banks in their submissions for Guaranty Purchase by 
(i) under the CRB LPA, establishing and maintaining a servicing file, which 
contains the documentation necessary to be submitted to the SBA in order 
                                                 
12 “CUBI Agreements” means (i) the CUBI Processing and Servicing Agreement, dated April 27, 2020, by and 
between Kabbage and CUBI (together with its amendments, the “CUBI PSA”); (ii) the CUBI Sale and Servicing 
Agreement, dated February 2, 2021, by and between Kabbage and CUBI (the “CUBI SAS”); and (iii) the CUBI 
SaaS Services Agreement, dated April 24, 2020, by and between Kabbage and CUBI (together with its amendments, 
the “CUBI SaaS”). 
 
13 “CRB Agreements” means (i) the CRB Loan Program Agreement, dated April 13, 2020, by and between Kabbage 
and CRB (together with its amendments, the “CRB LPA”); and (ii) the CRB Sale and Servicing Agreement, dated 
May 6, 2020, by and between Kabbage and CRB (the “CRB SAS”). 
 
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for the PPP Loan to be eligible for Guaranty Purchase; and (ii) under the 
CUBI PSA, filling in applicable fields on the Guaranty Purchase 
application; and 
 
(e) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing (all of the foregoing, the “Partner Bank Obligations”). 
 
26. 
As compensation for performing the Partner Bank Obligations, the 
Company received all of its fees at or near the time of origination of the underlying PPP Loan, 
with the exception of the approximately $65 million in fees due from CUBI.  Nevertheless, failing 
to perform the Partner Bank Loans Obligations—in particular without a process to transfer 
servicing to an alternative servicer—would be at the direct detriment to borrowers.  Therefore, 
through this Motion, the Debtors seek authority, but not direction, to continue its Partner Bank 
Obligations in the ordinary course of business. 
C. 
KS PPP Portfolio 
27. 
In addition to the PPPLF Portfolio and Partner Bank Portfolio, the Company 
originated, funded, and currently services approximately 80 KS PPP Loans with approximately $2 
million in outstanding loan amount.  The KS PPP Loans makes up approximately 0.1 percent of 
PPP Loans by outstanding principal amount. 
28. 
The Debtors’ activities with regards to the KS PPP Portfolio are similar to 
the PPPLF Obligations and include, among other things: 
(a) 
performing Collections; 
(b) 
providing SaaS Services; 
(c) 
performing Forgiveness Assistance; and 
(d) 
submitting Guaranty Purchase applications to the SBA; and 
(e) 
conducting loan reviews, responding to inquiries, and engaging in other 
activities in connection with the foregoing (all of the foregoing, the “KS 
PPP Obligations”). 
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29. 
Through this Motion, the Debtors seek authority, but not direction, to 
continue their KS PPP Obligations in the ordinary course of business. 
D. 
Summary 
30. 
The following table summarizes the outstanding PPP Loan portfolio of the 
Company as of September 30, 2022: 
 
Pledged PPPLF 
Loans 
CRB Loans 
CUBI Loans 
KS PPP Loans 
Number of Loans* 
22,000 
20,000 
7,000 
<1,000 
% of Total PPP Loans 
44.2% 
41.3% 
14.4% 
0.1% 
Amounts Outstanding** 
$541 million 
$604 million 
$181 million 
$2 million 
% of Total PPP Loans 
40.8% 
45.5% 
13.6% 
0.1% 
*Number of loans is rounded to the nearest thousand. 
**Amounts outstanding is rounded to the nearest million. 
 
E. 
Process for Issuing PPP Loans 
31. 
Applicants for PPP Loans (“Applicants”) had to first populate the Paycheck 
Protection Program Borrower Application Form (the “Loan Application”) and submit the Loan 
Application to an “SBA Participating Lender” (i.e., the Company and the Partner Banks).  In their 
Loan Applications, Applicants provided information such as purpose of the loan and average 
monthly payroll, and supporting documentation such as tax forms and bank statements.  Notably, 
the Loan Application required Applicants to provide certifications that the information provided 
was “true and accurate in all material respects” and that the Applicant was “eligible to receive a 
loan under the rules in effect at the time” the Loan Application was submitted.  As compensation 
for their participation in the PPP, the lenders received one (1) percent interest on the PPP Loan 
principal amount and a bank processing fee from the SBA, calculated as a percentage of the PPP 
Loan amount.  For all PPP Loans in the PPP Portfolio, the Company performed Borrower 
Diligence in accordance with SBA guidelines to determine borrower eligibility for PPP Loans.   
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F. 
Process for Loan Forgiveness 
32. 
Borrowers may apply for Loan Forgiveness once all PPP Loan proceeds 
have been used at any time up to the maturity date of their loan.  For PPP Loans issued in the first 
round of the PPP in 2020, maturities were either 24 months or 60 months (depending on the date 
of issuance) from the issue date.  For PPP Loans issued in the second round of the PPP in 2021, 
all maturities were 60 months from the issue date.  When a PPP Loan was disbursed to a borrower, 
the borrower elected a “Covered Period” between 8 and 24 weeks (depending on the date of 
disbursement and the election of the borrower) during which time only eligible expenses paid and 
certain eligible expenses incurred but not paid, were eligible for Loan Forgiveness.  Eligible 
expenses under the PPP include, but are not limited to: payroll expenses, rent, operations 
expenditures, mortgage interest, and utility payments.  To maximize potential for Loan 
Forgiveness, borrowers must adhere to the SBA’s requirements. 
33. 
As part of the PPP, the SBA offered participating lenders the ability to elect 
whether their borrowers would directly submit Loan Forgiveness applications to the SBA 
(“Direct Submission”) or submit them through the lenders.  With respect to the Pledged PPPLF 
Loans and the KS PPP Loans, the Company did not make the Direct Submission election.  With 
respect to most of the Partner Bank Loans within the Partner Bank Portfolio, the Partner Banks did 
not make the Direct Submission election.  Therefore, borrowers with loans in the PPPLF Portfolio 
and KS PPP Portfolio and most of the borrowers with loans in the Partner Bank Portfolio submit 
their Loan Forgiveness applications through the Company’s Loan Forgiveness platform, 
Biz2Credit.  For all PPP Loans, the Company reviews and provides comments to these 
applications, often requesting additional information from borrowers prior to submissions 
depending on Company review and SBA instruction.  Further, once the SBA receives a Loan 
Forgiveness application, it may request follow-up documentation that the Company assists 
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borrowers in providing.  Once the SBA relays its decision to the Company, the Company notifies 
the borrowers of the decision, informs them of their right to appeal, and provides additional support 
if they choose to appeal.  These are iterative processes that can take several months or longer. 
G. 
 Process for Guaranty Purchase 
34. 
PPP Loans are guaranteed by the SBA.  Following certain borrower 
delinquency events, PPP lenders are entitled to submit a request to the SBA for Guaranty Purchase.  
Applicable borrower delinquency events include, but are not limited to, (a) a 60-day borrower 
payment delinquency, (b) a borrower filing for chapter 7 bankruptcy (or chapter 11, 12, or 13 
bankruptcy, under certain circumstances); or (c) a borrower being indicted for or convicted of a 
felony related to the PPP Loan.  If a PPP lender does not apply for Guaranty Purchase within 180 
days following maturity of the underlying loan, the SBA is not legally obligated to honor the 
Guaranty Purchase. 
35. 
For each Pledged PPPLF Loan that meets Guaranty Purchase eligibility, the 
Company applies to the SBA for Guaranty Purchase.  If the application is approved (whether in 
full or in part), the Company receives a Guaranty Purchase payment directly from the SBA and 
deposits such amounts into a correspondent bank account in accordance with the terms of the 
PPPLF Documents.14  For the Partner Bank Loans, the Company’s obligations with respect to 
Guaranty Purchase differ in accordance with the terms of the agreement the specific Partner Bank 
Loan is governed by, as discussed in paragraph 25 above. 
                                                 
14 Prior to the filing of these chapter 11 cases, pursuant to the PPPLF Documents, the Federal Reserve and the 
Company directed the SBA to make payments directly to the Federal Reserve.  Although the Debtors and the Federal 
Reserve initiated the SBA Direct Payment Processing prepetition, the coordination process remains ongoing with 
the SBA and the parties are still in the process of documenting an agreement.  Once the SBA Direct Payment 
Processing is in place, the Federal Reserve will receive payments on account of the Pledged PPPLF Loans directly 
from the SBA, but the Company will still receive and remit borrower payments on account of the Pledged PPPLF 
Loans to the Federal Reserve 
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III.  
The Debtors’ Legacy Loan Business 
36. 
All Legacy Loans the Company services are owned by Celtic and governed 
by the Legacy Loan Agreement.15  As a non-Federal Deposit Insurance Corporation-insured 
financial institution, the Company partnered with Celtic in an arrangement whereby the Company 
processed borrower Legacy Loan applications and funded the Legacy Loans through the purchase 
of participation interests in loan receivables (the “Participation Interests”)16—effectively 
acquiring the rights to retain borrower principal and interest payments—with Celtic as the lender 
of record.  The Company services the Legacy Loans, provides an online platform for borrowers, 
performs loan reviews, responds to inquiries, and engage in other activities in connection with the 
foregoing (the “Celtic Obligations”). 
37. 
In addition, the Company marketed the Legacy Loans and performed 
diligence on loan applicants to ensure compliance with Celtic’s screening procedures.  Once the 
Company identified an eligible borrower, the Company established a loan account and Celtic made 
available all funds needed to extend credit to the borrower.  On account of the services rendered, 
the Company earned a fee calculated as a percentage of the principal amount of the underlying 
Legacy Loan upon origination (the “KS Legacy Fee”).  Instead of collecting the servicing fee 
upfront, the fees were set off against the Participation Interest fees (the “Celtic Legacy Fee”) that 
the Company paid to Celtic in connection with its purchase of Participation Interests.  On a 
monthly basis, if the KS Legacy Fees exceeded the Celtic Legacy Fees, Celtic would remit the net 
                                                 
15 “Legacy Loan Agreement” means the Celtic Program Management Agreement, dated March 20, 2014, by and 
between Kabbage and Celtic (as amended). 
16 Following the purchase of Participation Interests under the Legacy Loan Agreement, the Company’s records show 
that it sold some of the Participation Interests to HCG Business Credit III Trust and Stone Ridge Trust V. 
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amount to the Company.  If the Celtic Legacy Fees exceeded the KS Legacy Fees, the Company 
would remit the net amount to Celtic.17 
38. 
The Company continues to receive principal and interest payments on 
account of the Celtic Portfolio, including payments of Collection Fees from the Collection 
Agencies.  Therefore, the cessation of the Celtic Obligations would be costly to the Debtors, as the 
Debtors would be required to indemnify Celtic for its losses if the Debtors fail to perform its 
obligations.  Celtic currently holds $2 million in escrow as collateral security for potential claims 
Celtic may have under the Legacy Loan Agreement, the remaining amount of which Celtic is 
obligated to remit to the Company within five business days of the termination of the Legacy Loan 
Agreement. 
39. 
As of September 30, 2022, there are approximately 3,400 Legacy Loans 
with approximately $17 million in outstanding loan amounts.  Legacy Loans make up 
approximately 1 percent of the Company’s loan servicing portfolio by outstanding principal 
amount.  Through this Motion, the Debtors seek authority, but not direction, to continue the Celtic 
Obligations. 
IV.  
Other Matters Related to the Company’s Loan Servicing Business 
40. 
To facilitate their PPP Loan and Legacy Loan servicing activities, there are 
several related obligations that the Debtors request authority, but not direction, to continue in the 
ordinary course of business, including processing Borrower Overpayments (as defined herein), 
paying and honoring prepetition obligations owed to Critical Vendors (as defined herein), and 
                                                 
17 All KS Legacy Fees and Celtic Legacy Fees have been paid.  Therefore, these monthly remittances no longer 
occur. 
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activities related to compliance and regulatory obligations (all of the foregoing, the “Related 
Obligations”). 
A. Borrower Overpayments 
41. 
At times, borrowers make payments to the Company in the following 
scenarios: (a) in excess of the required minimum loan payments on account of both PPP Loans 
and Legacy Loans (“Regular Overpayments”), (b) on account of PPP Loans that are ultimately 
forgiven by the SBA (“Forgiveness Overpayments”), and (c) on account of PPP Loans that the 
SBA has already granted Guaranty Purchase (“Guaranty Overpayments,” and together with 
Regular Overpayments and Forgiveness Overpayments, the “Borrower Overpayments”).   
42. 
In the case of Forgiveness Overpayments and Guaranty Overpayments, the 
Company may at times remit the overpayment to the Federal Reserve or the Partner Banks, as 
applicable, as part of regularly scheduled remittances while the SBA is still considering whether 
to forgive or purchase the applicable PPP Loan or, in the case of a Guaranty Overpayment, the 
SBA has already purchased the applicable PPP Loan.  As part of its ordinary course servicing 
practices, the Company reconciles such remittances to the Federal Reserve and the Partner Banks 
with the Forgiveness Overpayments and the Guaranty Overpayments that need to be refunded to 
the applicable borrower or passed on to the SBA, and accounts for the appropriate discrepancy by 
either (a) offsetting future remittances to the Federal Reserve and the Partner Banks, as applicable, 
or (b) refunding to the applicable borrower or passing on to the SBA the amounts remitted by the 
Federal Reserve or the Partner Banks, as applicable, in furtherance of such overpayments 
(“Overpayment Reconciliation”).     
43. 
In the ordinary course of business, the Company (a) remits Regular 
Overpayments and Forgiveness Overpayments to borrowers, (b) may adjust regular remittances to 
the Federal Reserve and the Partner Banks or coordinate borrower refunds with the Federal 
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Reserve and the Partner Banks according to Overpayment Reconciliation, and (c) remits Guaranty 
Overpayments to the SBA (collectively, the “Overpayment Procedures”).  Consequently, the 
Debtors request that the Court authorize, but not direct, the Debtors to continue engaging in 
activities related to the Overpayment Procedures. 
B. Critical Vendors 
44. 
In connection with its general corporate, servicing and subservicing 
activities, the Debtors utilize the services of numerous third-party vendors, service providers, and 
other providers that are critical to its operations (collectively, the “Critical Vendors”).  The 
Critical Vendors perform a variety of necessary functions, including services such as critical 
software, information technology, security, and Internet systems and support tools to manage a 
pipeline of over 48,000 PPP Loans and 3,400 Legacy Loans.  
45. 
Expenses for the Critical Vendors (the “Critical Vendor Expenses”) are 
paid directly by the Company, and are generally part of the Company’s corporate overhead. 
46. 
Employing these specialized Critical Vendors is more cost-effective than 
performing such activities in-house; indeed, replacing certain of these Critical Vendors would not 
only be difficult and disruptive, but also cost-prohibitive.  The Debtors have developed long-
standing relationships with their Critical Vendors, which has enabled them to negotiate favorable 
pricing and terms.  Any failure to timely honor the Debtors’ obligations to the Critical Vendors 
could jeopardize these relationships, and any interruption of their services for even a short period 
of time would impair the Debtors’ operations and the value of the enterprise.   
47. 
In light of the above, through this Motion, the Debtors request authority, but 
not direction, to continue to employ and pay the prepetition obligations of the Critical Vendors in 
the Debtors’ sole discretion.  Furthermore, the Debtors estimate that as of the Petition Date, 
approximately $75,000 (the “Prepetition Vendor Amounts”) in aggregate prepetition payments 
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remain outstanding to the Critical Vendors.  Subject to Court approval, the Debtors seek to pay the 
Prepetition Vendor Amounts to Critical Vendors during the first thirty (30) days of the Chapter 11 
Cases.  Without the requested relief, the Critical Vendors may refuse to continue providing 
services to the Debtors on a post-petition basis or may impose unfavorable trade terms. 
48. 
The Debtors propose to condition payment of the prepetition claims of 
Critical Vendors on the agreement of individual Critical Vendors to continue providing services 
to the Debtors pursuant to the parties’ customary trade terms, practices, and programs (including 
credit limits, pricing, timing of payments, allowance, normal availability, and other applicable 
terms and programs) under which such Critical Vendors provided services to the Debtors prior to 
the Petition Date (such terms, the “Customary Trade Terms”), or pursuant to such other trade 
practices and programs that are acceptable to the Debtors.  The Debtors reserve the right to 
negotiate new trade terms with any Critical Vendor as a condition to payment of any prepetition 
claim.  If a Critical Vendor refuses to supply services to the Debtors on Customary Trade Terms 
(or such other terms as are agreed by the parties) following receipt of full or partial payment on its 
prepetition claim, then the Debtors’ rights to treat any payment made pursuant to this Interim Order 
as an unauthorized postpetition transfer and to exercise any and all appropriate remedies are 
expressly reserved. 
C. Compliance and Regulatory Obligations 
49. 
The Debtors and certain of their affiliates are subject to various federal and 
state regulatory requirements including certain lending, Bank Secrecy Act/Anti-Money 
Laundering, and Office of Foreign Assets Control regulations and requirements incorporated into 
the PPP.  The Debtors are also subject to various regulatory audits and reviews and are called to 
respond to duly-issued government subpoenas investigating potential borrower loan fraud, all of 
which may carry certain costs and expenses. Further, to the extent that the Debtors identify, 
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whether through internal or external audits, regulatory agencies, investors, client complaints, 
litigation, or other means, origination or servicing errors or lack of compliance with state or federal 
laws or regulations, the Debtors are obligated to remediate such errors or violations, as applicable.  
Such remedial measures may require the Debtors to (a) make payments to borrowers (e.g., in the 
form of reimbursements, refunds, and/or out-of-pocket expenses), (b) forgive past due amounts 
and/or assessed but unpaid fees or other charges, (c) pay fees, fines, and/or penalties, either directly 
to the applicable authority or through a Critical Vendor, (d) incur and pay certain expenses, (e) pay 
the costs and expenses of state and federal regulatory examinations, or (f) take such other measures 
as may be required by, or agreed to with, state and federal regulators. 
50. 
Through this Motion, the Debtors seek authority, but not direction, to 
continue in the ordinary course of business to (a) fulfill federal and state regulatory requirements 
and pay related obligations, (b) submit to, and comply with, any regulatory exams and audits and 
to pay related obligations, costs, and expenses, and (c) remediate errors and/or lack of compliance 
with laws or regulations. 
V. 
Applicable Authority 
 
A. The Court Should Authorize the Debtors to Continue Servicing and Subservicing 
Activities to PPP Loans and Legacy Loans and Perform the Related Obligations in 
the Ordinary Course 
51. 
As set forth above, through this Motion, the Debtors seek authority, but not 
direction, to continue their servicing and subservicing activities in the ordinary course of business, 
and to honor and pay the Prepetition Vendor Amounts.  The requested relief is both appropriate 
and necessary as it (a) falls squarely within sections 363(c)(1), 1107(a), and 1108 of the 
Bankruptcy Code, which, taken together, authorize a debtor in possession to use, sell, or lease 
property of the estate in the ordinary course of its business and (b) protects and conserves the value 
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of the Debtors’ estate, including by providing invaluable comfort to parties doing business with 
the Debtors. 
(i) The Debtors’ Activities Satisfy Ordinary Course of Business Standard 
52. 
Section 363 of the Bankruptcy Code provides for a debtor’s use, sale, or 
lease of property in the ordinary course of business, pursuant to section 363(c)(1).  In particular, 
section 363(c)(1) of the Bankruptcy Code provides that: 
If the business of the debtor is authorized to be operated under 
section 721, 1108, 1203, 1204 or 1304 of this title and unless the 
court orders otherwise, the trustee may enter into transactions, 
including the sale or lease of property of the estate, in the ordinary 
course of business, without notice or a hearing, and may use 
property of the estate in the ordinary course of business without 
notice or a hearing. 
 
11 U.S.C. § 363(c)(1).  The purpose of this section is to provide a debtor in possession with the 
flexibility to engage in the ordinary transactions required to operate its business without unneeded 
oversight by its creditors or the court.  See In re Roth American, Inc., 975 F.2d 949, 952 (3d Cir. 
1992) (“Section 363 is designed to strike [a] balance, allowing a business to continue its daily 
operations without excessive court or creditor oversight and protecting secured creditors and others 
from dissipation of the estate’s assets”) (internal quotations marks omitted); In re Vision Metals, 
Inc., 325 B.R. 138, 145 (Bankr. D. Del. 2005) (same). 
53. 
Included within the purview of section 363(c) of the Bankruptcy Code is a 
debtor’s ability to continue “routine transactions.”  See, e.g., In re Nellson Nutraceutical, Inc., 369 
B.R. 787, 796 (Bankr. D. Del. 2007) (noting that courts have shown a reluctance to interfere in a 
debtor’s making of routine, day-to-day business decisions); Vision Metals, 325 B.R. at 142 
(“[W]hen a chapter 11 debtor in possession continues to operate its business, as permitted by 
section 1108, no court authorization is necessary for the debtor to enter transactions that fall within 
the ordinary course of its business.”).  Here, continuing the Debtors’ servicing of PPP Loans and 
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Legacy Loans and performance of Related Obligations are the types of ordinary-course, routine 
transactions contemplated by section 363(c)(1) of the Bankruptcy Code. 
54. 
Further, similar relief has been granted in the chapter 11 cases of numerous 
other loan originators, lenders, and/or servicers.  See, e.g., In re Ditech Holding Corp., No. 19-
10412 (JLG) (Bankr. S.D.N.Y. Feb. 11, 2019) [Docket No. 224] (authorizing debtors to continue, 
among other things, (a) forward mortgage origination activities; (b) forward mortgage servicing 
activities; (c) honoring compliance and regulatory obligations; and (d) paying prepetition amounts 
due to critical vendors); In re Ditech Holding Corp., No. 19-10412 (JLG) (Bankr. S.D.N.Y. Feb. 
11, 2019) [Docket No. 229] (authorizing debtors to continue, among other things, (a) servicing 
reverse mortgages, (b) honoring compliance and regulatory obligations, and (c) paying prepetition 
amounts due to critical vendors); In re Residential Capital, LLC, No. 12-12020 (MG) (Bankr. 
S.D.N.Y. Jun. 15, 2012) [Docket No. 401] (authorizing debtors to continue, among other things, 
(a) servicing government sponsored loans, and (b) paying certain prepetition amounts due to 
critical servicing vendors); In re Residential Capital, LLC, No. 12-12020 (MG) (Bankr. S.D.N.Y. 
Jun. 15, 2012) [Docket No. 402] (authorizing debtors to continue, among other things, servicing 
private label mortgage loans); In re Capmark Fin. Grp. Inc., Case No. 09-13684 (CSS) (Bankr. D. 
Del. Nov. 24, 2009) [Docket No. 334] (authorizing debtors to continue, among other things, 
operating their servicing business in the ordinary course of business); In re Thornburg Mort., Inc., 
No. 09-17787 (DWK) (Bankr. D. Md. May 6, 2009) [Docket No. 49] (authorizing debtors to 
continue, among other things, mortgage loan servicing, auditing, and fulfillment services in the 
ordinary course of business); In re Aegis Mortg. Corp., No. 07-11119 (BLS) (Bankr. D. Del. Aug. 
15, 2007) [Docket No. 35] (authorizing debtors to, among other things, (a) continue performing 
under existing subservicing agreements, and (b) enter into new subservicing agreements); In re 
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Am. Home Mortg. Holdings, Inc., Case No. 07-11047 (CSS) (Bankr. D. Del. Aug. 7. 2007) [Docket 
No. 66] (authorizing debtors to, among other things, perform their securitization servicing 
functions); In re Mortg. Lenders Network USA, Inc., No. 07-10146 (PJW) (Bankr. D. Del. Mar. 
19, 2007) [Docket No. 304] (authorizing debtors to, among other things, pay amounts or honor 
liabilities accrued prepetition in the ordinary course of its loan servicing business). 
55. 
Accordingly, 363(c)(1) authorizes continuation of the Debtors’ servicing 
activities and related obligations thereto without this Court’s approval. 
(ii) Payment of Critical Vendor Claims is Warranted Under Sections 363(b)(1) and 105(a) of 
the Bankruptcy Code, and the Doctrine of Necessity 
56. 
A bankruptcy court may authorize a debtor to pay certain prepetition 
obligations pursuant to section 363(b) of the Bankruptcy Code. 11 U.S.C. § 363(b)(1).  Section 
363(b) provides, in pertinent part, that “[t]he trustee, after notice and a hearing, may use, sell, or 
lease, other than in the ordinary course of business, property of the estate.”  To approve the use of 
assets outside the ordinary course of business pursuant to section 363(b) of the Bankruptcy Code, 
courts require only that the debtor “show that a sound business purpose justifies such actions.”  In 
re Montgomery Ward Holding Corp., 242 B.R. 147, 153 (D. Del. 1999) (internal citations omitted); 
see also In re Phoenix Steel Corp., 82 B.R. 334, 335–36 (Bankr. D. Del. 1987).  
57. 
In addition, the Court has the authority, pursuant to its equitable powers 
under section 105(a) of the Bankruptcy Code, to authorize the relief requested herein because such 
relief is necessary for the Debtors to carry out their fiduciary duties under section 1107(a) of the 
Bankruptcy Code.  Section 105(a) of the Bankruptcy Code empowers bankruptcy courts to “issue 
any order, process, or judgment that is necessary or appropriate to carry out the provisions of this 
title.”  11 U.S.C. § 105(a).  Section 1107(a) of the Bankruptcy Code “contains an implied duty of 
the debtor-in-possession” to “protect and preserve the estate, including an operating business’ 
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going-concern value,” on behalf of a debtor’s creditors and other parties in interest.  In re CEI 
Roofing, Inc., 315 B.R. 50, 59 (Bankr. N.D. Tex. 2004) (citations omitted); see also Unofficial 
Comm. of Equity Holders v. McManigle (In re Penick Pharm., Inc.), 227 B.R. 229, 232–33 (Bankr. 
S.D.N.Y. 1998) (“[U]pon filing its petition, the Debtor became debtor in possession and, through 
its management . . . was burdened with the duties and responsibilities of a bankruptcy trustee.”). 
58. 
Furthermore, in a long line of well-established decisions, courts consistently 
have permitted payment of prepetition obligations that are necessary to preserve or enhance the 
value of a debtor’s estate.  In re Lehigh & New Eng. Ry. Co., 657 F.2d 570, 581 (3d Cir. 1981) 
(holding that “if payment of a claim which arose prior to reorganization is essential to the continued 
operation of the . . . [business] during reorganization, payment may be authorized even if it is made 
out of [the] corpus”); Dudley v. Mealey, 147 F.2d 268, 271 (2d Cir. 1945) (extending doctrine for 
payment of prepetition claims beyond railroad reorganization cases), cert. denied 325 U.S. 873 
(1945); Mich. Bureau of Workers’ Disability Comp. v. Chateaugay Corp. (In re Chateaugay 
Corp.), 80 B.R. 279, 285–86 (S.D.N.Y. 1987) (approving lower court order authorizing payment 
of prepetition wages, salaries, expenses, and benefits). 
59. 
In addition, the Court may rely on its equitable powers under section 105(a) 
of the Bankruptcy Code and the doctrine of necessity to authorize the payment of prepetition 
claims when such payment is essential to the continued operation of a debtor’s business.  See, e.g., 
Just for Feet, 242 B.R. 821, 824–25 (D. Del. 1999) (holding that section 105(a) of Bankruptcy 
Code provides statutory basis for payment of prepetition claims under the doctrine of necessity 
particularly when such payment is necessary for the debtor’s survival during chapter 11); In re 
Columbia Gas Sys., Inc., 171 B.R. 189, 191–92 (Bankr. D. Del. 1994) (confirming that the doctrine 
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of necessity is standard for enabling a court to authorize payment of prepetition claims before 
confirming a plan). 
60. 
The Critical Vendor relief requested by this Motion represents a sound 
exercise of the Debtors’ business judgment, is necessary to avoid immediate and irreparable harm 
to the Debtors’ estates, and is justified under sections 363(b) and 105(a) of the Bankruptcy Code.  
As set forth above, the Critical Vendors provide services that are vital to the day-to-day operations 
of the Debtors’ loan servicing business and cannot be transitioned without severe disruption to the 
Debtors’ operations.  The Debtors’ inability to pay the Critical Vendors on account of obligations 
incurred prior to the Petition Date may result in the Critical Vendors refusing to provide key 
services to the Debtors postpetition.  Any such refusal by the Critical Vendors would have 
immediate and severe repercussions, including, but not limited to, (a) the Debtors’ inability to 
service loans, jeopardizing their already limited cash flows; (b) the pursuit of contractual remedies 
by not only the Critical Vendors, but the Federal Reserve, the Partner Banks, and Celtic, for the 
Debtors’ inability to service their loans; and (c) the economic impact on borrowers, the Federal 
Reserve, the Partner Banks, and Celtic to find alternate solutions in facilitating loan repayments.  
Accordingly, authorizing the Debtors to pay the Critical Vendor Claims is in the best interests of 
the Debtors, their estates, and their economic stakeholders.  
B. Cause Exists to Authorize Debtors’ Financial Institutions to Honor Checks and 
Electronic Fund Transfers 
61. 
The Debtors anticipate having sufficient funds to pay the amounts described 
herein in the ordinary course of business using expected cash flows from ongoing business 
operations.  In addition, under the Debtors’ existing cash management system, the Debtors can 
readily identify whether checks or wire transfer requests are payments authorized by the relief 
requested in this Motion.  Accordingly, the Debtors believe that checks or wire transfer requests, 
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other than those relating to authorized payments, will not be honored inadvertently and that the 
Court should authorize the Banks, when requested by the Debtors, to receive, process, honor and 
pay any and all checks or wire transfer requests in respect of the relief requested herein, to the 
extent the Debtors have sufficient funds on deposit in their accounts with such Banks, and such 
Banks may rely on the representations of the Debtors without any duty of further inquiry and 
without liability for following the Debtors’ instructions. 
Scope of Motion 
62. 
This Motion does not cover all aspects of the Debtors’ business.  Whether 
or not a business activity is described in this Motion, and whether or not the Debtors seek an order 
with respect to the continuation of such activity, if the activity is of the nature of those that the 
Debtors conduct in the ordinary course of business, the Debtors intend to continue to conduct such 
activity after the Petition Date pursuant to the authority granted to them by section 363(c) of the 
Bankruptcy Code.  Absence of a description of a particular activity or request for a specific relief 
related to the Debtors’ servicing business shall not limit the rights of the Debtors to conduct their 
business and manage their assets in the ordinary course without prior Court approval. 
Reservation of Rights 
63. 
Nothing contained herein is intended or shall be construed as an approval, 
assumption, adoption, or rejection of any agreement, contract, lease, program, or policy between 
the Debtors and any third party under section 365 of the Bankruptcy Code.  Likewise, if the Court 
grants the relief sought herein, any payment made pursuant to the Court’s order is not intended to 
be and should not be construed as an admission to the validity of any claim or a waiver of the 
Debtors’ rights to dispute such claim subsequently.   
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Debtors Have Satisfied Bankruptcy Rule 6003(b) 
64. 
Bankruptcy Rule 6003(b) provides that, to the extent relief is necessary to 
avoid immediate and irreparable harm, a Bankruptcy Court may issue an order granting “a motion 
to use, sell, lease, or otherwise incur an obligation regarding property of the estate, including a 
motion to pay all or part of a claim that arose before the filing of the petition” before 21 days after 
filing of the petition.  Fed. R. Bankr. P. 6003(b).  As described above, and in the Rieger-Paganis 
Declaration, the Debtors would suffer immediate and irreparable harm if the relief sought herein 
is not promptly granted.  Accordingly, the Debtors believe that the relief requested herein is 
necessary to avoid immediate and irreparable harm, and, therefore, Bankruptcy Rule 6003 is 
satisfied. 
Bankruptcy Rules 6004(a) and (h) 
65. 
To implement the foregoing successfully, the Debtors request that the Court 
find that notice of this Motion is adequate under Bankruptcy Rule 6004(a) under the circumstances, 
and waive the 14-day stay of an order authorizing the use, sale, or lease of property under 
Bankruptcy Rule 6004(h).  As described above, and in the Rieger-Paganis Declaration, the relief 
requested herein is necessary to avoid immediate and irreparable harm to the Debtors.  
Accordingly, ample cause exists to justify finding that the notice requirements under Bankruptcy 
Rule 6004(a) have been satisfied and to grant a waiver of the 14-day stay imposed by Bankruptcy 
Rule 6004(h), to the extent such notice requirements and such stay apply. 
Notice  
66. 
Notice of this Motion will be provided to (a) the Office of the United States 
Trustee for the District of Delaware; (b) the holders of the 30 largest unsecured claims against the 
Debtors on a consolidated basis; (c) the Federal Reserve Bank; (d) Customers Bank; (e) Cross 
River Bank; (f) Celtic Bank; (g) HCG Business Credit III Trust; (h) Stone Ridge Trust V; (i) the 
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United States Department of Justice; (j) the Federal Trade Commission; (k) the Small Business 
Administration; (l) the Internal Revenue Service; (m) the Securities and Exchange Commission; 
(n) the United States Attorney’s Office for the District of Delaware; (o) the Banks; and (p) any 
party that is entitled to notice pursuant to Local Rule 9013-1(m) (collectively, the “Notice 
Parties”).  As this Motion is seeking “first-day” relief, the Debtors will serve copies of this Motion 
and any order entered in respect of this Motion as required by Local Rule 9013-1(m).  The Debtors 
believe that no further notice is required. 
No Prior Request 
67. 
No previous request for the relief sought herein has been made by the 
Debtors to this or any other court. 
 
[Remainder of page intentionally left blank] 
 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 30 of 46

 
 
RLF1 28018237V.1 
WHEREFORE the Debtors respectfully request entry of the Proposed Orders granting the 
relief requested herein and such other and further relief as the Court may deem just and appropriate. 
Dated: October 3, 2022 
 
Wilmington, Delaware 
 
/s/ Zachary I. Shapiro 
RICHARDS, LAYTON & FINGER, P.A. 
Daniel J. DeFranceschi (No. 2732) 
Amanda R. Steele (No. 5530) 
Zachary I. Shapiro (No. 5103) 
Matthew P. Milana (No. 6681) 
One Rodney Square 
920 North King Street 
Wilmington, Delaware 19801 
Telephone: (302) 651-7700 
E-mail: defranceschi@rlf.com 
             steele@rlf.com 
             shapiro@rlf.com 
             milana@rlf.com 
 
-and- 
 
WEIL, GOTSHAL & MANGES LLP 
Ray C. Schrock, P.C. (pro hac vice admission pending) 
Candace M. Arthur (pro hac vice admission pending) 
Natasha S. Hwangpo (pro hac vice admission pending) 
Chase A. Bentley (pro hac vice admission pending) 
767 Fifth Avenue 
New York, New York 10153 
Telephone:  
(212) 310-8000 
E-mail:  
ray.schrock@weil.com 
                        candace.arthur@weil.com 
 
 
natasha.hwangpo@weil.com 
                        chase.bentley@weil.com 
 
Proposed Attorneys for Debtors  
and Debtors in Possession 
 
 
 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 31 of 46

 
 
 
RLF1 28018237V.1 
Exhibit A 
 
Proposed Interim Order
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 32 of 46

 
RLF1 28018237V.1 
UNITED STATES BANKRUPTCY COURT 
DISTRICT OF DELAWARE 
------------------------------------------------------------ x 
 
In re 
: 
Chapter 11 
 
: 
 
KABBAGE, INC. D/B/A KSERVICING, et al., : 
Case No. 22-10951 (       ) 
 
: 
 
 
: 
 
 
 
Debtors.1 
: 
(Jointly Administered) 
------------------------------------------------------------ x 
 
 
 
 
INTERIM ORDER AUTHORIZING DEBTORS TO (I) CONTINUE SERVICING 
AND SUBSERVICING ACTIVITIES AND (II) PERFORM RELATED OBLIGATIONS 
Upon the motion (the “Motion”)2 of Kabbage, Inc. d/b/a KServicing and its debtor 
affiliates, as debtors and debtors in possession in the Chapter 11 Cases (collectively, 
the “Debtors”), for entry of orders authorizing the Debtors to continue in the ordinary course of 
business (a) servicing and subservicing PPP Loans; (b) servicing and subservicing Legacy Loans; 
(c) engaging in activities related to the Overpayment Procedures; (d) paying and honoring 
prepetition obligations to Critical Vendors; and (e) fulfilling compliance and regulatory 
obligations, all as more fully set forth in the Motion; and this Court having jurisdiction to consider 
the Motion and the relief requested therein pursuant to 28 U.S.C. §§ 157(a)–(b) and 1334(b), and 
the Amended Standing Order of Reference from the United States District Court for the District of 
Delaware, dated February 29, 2012; and consideration of the Motion and the requested relief being 
a core proceeding pursuant to 28 U.S.C. § 157(b); and venue being proper before this Court 
                                                 
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 
number, as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A); Kabbage 
Asset Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding 2019-A 
LLC (8973); and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used under license; 
Kabbage, Inc. d/b/a KServicing is not affiliated with American Express. The Debtors’ mailing and service address 
is 925B Peachtree Street NE, Suite 383, Atlanta, GA 30309.  
2 Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms 
in the Motion. 
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2 
RLF1 28018237V.1 
pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper notice of the Motion having been 
provided to the Notice Parties under the circumstances, and it appearing that no other or further 
notice need be provided; and this Court having held a hearing to consider the interim relief 
requested in the Motion (the “Hearing”); and upon the Rieger-Paganis Declaration and the record 
of the Hearing; and this Court having determined that the legal and factual bases set forth in the 
Motion establish just cause for the relief granted herein; and it appearing that the relief requested 
in the Motion is necessary to avoid immediate and irreparable harm to the Debtors and their estates 
as contemplated by Rule 6003 of the Federal Rules of Bankruptcy Procedure, and after due 
deliberation and sufficient cause appearing therefor, 
IT IS HEREBY ORDERED THAT 
1. 
The Motion is granted on an interim basis to the extent set forth herein. 
PPPLF Portfolio 
2. 
The Debtors are authorized, but not directed, to continue in the ordinary 
course of business, servicing and subservicing their loan portfolio. 
3. 
With regards to the PPPLF Portfolio, the Debtors are authorized, but not 
directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for Pledged PPPLF Loan payments received from 
borrowers, including payments of principal and interest; 
(b) 
maintaining a software platform for borrowers; 
(c) 
assisting borrowers in the completion of their Loan Forgiveness 
applications; 
(d) 
submitting Guaranty Purchase applications to the SBA; 
(e) 
subject to the completion of SBA Direct Payment Processing, depositing 
Loan Forgiveness and Guaranty Purchase amounts received from the SBA 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 34 of 46

 
3 
RLF1 28018237V.1 
and Pledged PPPLF Loan payments received from borrowers into the 
correspondent bank account;3 and 
(f) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing. 
Partner Bank Portfolio 
4. 
With regards to the Partner Bank Portfolio, the Debtors are authorized, but 
not directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for Partner Bank Loan payments received from 
borrowers, including payments of principal and interest; 
(b) 
maintaining a software platform for borrowers; 
(c) 
assisting borrowers in the completion of their Loan Forgiveness 
applications; 
(d) 
assisting the Partner Banks in their submissions for Guaranty Purchase and 
other reports; and 
(e) 
conducting loan reviews, reconciling collections and remittances 
responding to inquiries, and engaging in other activities in connection with 
the foregoing. 
KS PPP Portfolio 
5. 
With regards to the KS PPP Portfolio, the Debtors are authorized, but not 
directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for KS PPP Loan payments received from 
borrowers, including payments of principal and interest; 
(b) 
maintaining a software platform for borrowers; 
(c) 
assisting borrowers in the completion of their Loan Forgiveness 
applications; 
(d) 
submitting Guaranty Purchase applications to the SBA; and 
                                                 
3 For the avoidance of doubt, once SBA Direct Payment Processing is established, the Company will only deposit 
borrower principal and interest payments into the correspondent bank account, and all SBA payments will be 
remitted directly to the Federal Reserve by the SBA. 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 35 of 46

 
4 
RLF1 28018237V.1 
(e) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing. 
Legacy Loan Portfolio  
6. 
With regards to the Legacy Loan Portfolio, the Debtors are authorized, but 
not directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for Legacy Loan payments received from 
borrowers, including payments of principal and interest;  
(b) 
maintaining a software platform for borrowers; and 
(c) 
conducting loan reviews, responding to inquiries, and engaging in other 
activities in connection with the foregoing. 
Borrower Overpayments 
7. 
The Debtors are authorized, but not directed, to continue in the ordinary 
course of business: 
(a) 
remitting Regular Overpayments to borrowers; 
(b) 
remitting Forgiveness Overpayments to borrowers;  
(c) 
adjusting remittances to the Federal Reserve and Partner Banks pursuant to 
Overpayment Reconciliation; and 
(d) 
remitting Guaranty Overpayments to the SBA. 
Critical Vendors 
8. 
The Debtors are authorized, but not directed, in the reasonable exercise of 
their business judgment, to pay some or all of the prepetition claims of the Critical Vendors, upon 
such terms and in the manner provided in this Interim Order and the Motion; provided, that 
payments to Critical Vendors on account of prepetition claims shall not exceed $75,000 in the 
aggregate, absent further order of the Court. 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 36 of 46

 
5 
RLF1 28018237V.1 
9. 
If a Critical Vendor refuses to supply services to the Debtors on Customary 
Trade Terms (or such other terms as are agreed by the parties) following receipt of payment on its 
prepetition claim, the Debtors’ rights to treat any payment made pursuant to this Interim Order as 
an unauthorized postpetition transfer and to exercise any and all appropriate remedies are expressly 
reserved. 
10. 
Notwithstanding entry of this Interim Order, the Debtors’ rights to enforce 
the automatic stay provision of section 362 of the Bankruptcy Code with respect to any creditor 
who demands payments of its prepetition claims as a condition to doing business with the Debtors 
postpetition are preserved. 
Compliance and Regulatory Obligations 
11. 
The Debtors are authorized, but not directed, to continue in the ordinary 
course of business: 
(a) 
fulfilling state licensing requirements and to pay related obligations; 
(b) 
submitting to, and complying with, state regulatory exams and audits and to 
pay related obligations, costs, and expenses; and 
(c) 
remediating errors and/or lack of compliance with laws or regulations. 
Other Relief 
12. 
Each of the Banks at which the Debtors maintain their accounts relating to 
payments on account of obligations related to servicing and subservicing PPP Loans and Legacy 
Loans and the Related Obligations are authorized to  (a) receive, process, honor, and pay all checks 
presented for payment, and to honor all fund transfer requests made by the Debtors related thereto, 
to the extent that sufficient funds are on deposit in those accounts, and (b) accept and rely on all 
representations made by the Debtors with respect to which checks, drafts, wires, or automated 
clearing house transfers should be honored or dishonored in accordance with this or any other 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 37 of 46

 
6 
RLF1 28018237V.1 
order of this Court, whether such checks, drafts, wires, or transfers are dated before, on, or after 
the Petition Date, without any duty to inquire otherwise. 
13. 
The Debtors are authorized, but not directed, to issue new postpetition 
checks, or effect new electronic funds transfers, on account of obligations related to servicing and 
subservicing PPP Loans and Legacy Loans and the Related Obligations as set forth herein, and to 
replace any prepetition checks or electronic fund transfer requests that may be lost or dishonored 
or rejected as a result of the commencement of the Debtors’ Chapter 11 Cases. 
14. 
Nothing contained in the Motion or this Interim Order, nor any payment 
made pursuant to the authority granted by this Interim Order, is intended to be or shall be construed 
as an approval, assumption, adoption, or rejection of any agreement, contract, lease, program, or 
policy between the Debtors and any third party under section 365 of the Bankruptcy Code. 
15. 
Nothing contained in the Motion or this Interim Order relieves the Debtors 
from any federal, state, or local regulatory requirements, including, but not limited to, any 
requirements to report or disclose information. 
16. 
Notwithstanding entry of this Interim Order, nothing herein shall create, nor 
is intended to create, any rights in favor of or enhance the status of any claim held by any party. 
17. 
The requirements of Bankruptcy Rule 6003(b) have been satisfied. 
18. 
Under the circumstances of these Chapter 11 Cases, notice of the Motion is 
adequate under Bankruptcy Rule 6004(a). 
19. 
Notwithstanding Bankruptcy Rule 6004(h), this Interim Order shall be 
immediately effective and enforceable upon its entry. 
20. 
The Debtors are authorized to take all action necessary to effectuate the 
relief granted in this Interim Order. 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 38 of 46

 
7 
RLF1 28018237V.1 
21. 
This Court shall retain jurisdiction to hear and determine all matters arising 
from or related to the implementation, interpretation, or enforcement of this Interim Order. 
22. 
The final hearing to consider the relief requested in the Motion shall be held 
on   
, 2022 at ______ (Prevailing Eastern Time), and any objections or responses to the Motion 
shall be in writing, filed with the Court, and served on or prior to ____________, 2022 at 4:00 
p.m. (Prevailing Eastern Time). 
 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 39 of 46

 
 
 
 
RLF1 28018237V.1 
Exhibit B 
 
Proposed Final Order
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 40 of 46

 
 
 
 
RLF1 28018237V.1 
UNITED STATES BANKRUPTCY COURT 
DISTRICT OF DELAWARE 
------------------------------------------------------------ x 
 
In re 
: 
Chapter 11 
 
: 
 
KABBAGE, INC. D/B/A KSERVICING, et al., : 
Case No. 22-10951 (       ) 
 
: 
 
 
: 
 
 
 
Debtors.1 
: 
(Jointly Administered) 
------------------------------------------------------------ x 
 
 
 
 
FINAL ORDER AUTHORIZING DEBTORS TO (I) CONTINUE SERVICING 
AND SUBSERVICING ACTIVITIES AND (II) PERFORM RELATED OBLIGATIONS 
 
Upon the motion (the “Motion”)2 of Kabbage, Inc. d/b/a KServicing and its debtor 
affiliates, as debtors and debtors in possession in the Chapter 11 Cases (collectively, 
the “Debtors”), for entry of orders authorizing the Debtors to continue in the ordinary course of 
business (a) servicing and subservicing PPP Loans; (b) servicing and subservicing Legacy Loans; 
(c) engaging in activities related to the Overpayment Procedures; (d) paying and honoring 
prepetition obligations to Critical Vendors; and (e) fulfilling compliance and regulatory 
obligations, all as more fully set forth in the Motion; and this Court having jurisdiction to consider 
the Motion and the relief requested therein pursuant to 28 U.S.C. §§ 157(a)–(b) and 1334(b), and 
the Amended Standing Order of Reference from the United States District Court for the District of 
Delaware, dated February 29, 2012; and consideration of the Motion and the requested relief being 
a core proceeding pursuant to 28 U.S.C. § 157(b); and venue being proper before this Court 
                                                 
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 
number, as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A); Kabbage 
Asset Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding 2019-A 
LLC (8973); and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used under license; 
Kabbage, Inc. d/b/a KServicing is not affiliated with American Express. The Debtors’ mailing and service address 
is 925B Peachtree Street NE, Suite 383, Atlanta, GA 30309.  
2 Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms 
in the Motion. 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 41 of 46

 
 
2 
RLF1 28018237V.1 
pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper notice of the Motion having been 
provided to the Notice Parties under the circumstances, and it appearing that no other or further 
notice need be provided; and this Court having held hearing to consider the relief requested in the 
Motion on an interim basis, and, if necessary, a final basis (the “Hearings”); and upon the 
Rieger-Paganis Declaration and the record of the Hearings; and this Court having determined that 
the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; 
and after due deliberation and sufficient cause appearing therefor, 
IT IS HEREBY ORDERED THAT 
1. 
The Motion is granted on a final basis to the extent set forth herein. 
PPPLF Portfolio 
2. 
The Debtors are authorized, but not directed, to continue in the ordinary 
course of business, servicing and subservicing their loan portfolio. 
3. 
With regards to the PPPLF Portfolio, the Debtors are authorized, but not 
directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for Pledged PPPLF Loan payments received from 
borrowers, including payments of principal and interest; 
(b) 
maintaining a software platform for borrowers; 
(c) 
assisting borrowers in the completion of their Loan Forgiveness 
applications; 
(d) 
submitting Guaranty Purchase applications to the SBA;  
(e) 
subject to the completion of SBA Direct Payment Processing, depositing 
Loan Forgiveness and Guaranty Purchase amounts received from the SBA 
and Pledged PPPLF Loan payments received from borrowers into the 
correspondent bank account;3 and 
                                                 
3 For the avoidance of doubt, once SBA Direct Payment Processing is established, the Company will only deposit 
borrower principal and interest payments into the correspondent bank account, and all SBA payments will be 
remitted directly to the Federal Reserve by the SBA. 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 42 of 46

 
 
3 
RLF1 28018237V.1 
(f) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing. 
Partner Bank Portfolio 
4. 
With regards to the Partner Bank Portfolio, the Debtors are authorized, but 
not directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for Partner Bank Loan payments received from 
borrowers, including payments of principal and interest; 
(b) 
maintaining a software platform for borrowers; 
(c) 
assisting borrowers in the completion of their Loan Forgiveness 
applications; 
(d) 
assisting the Partner Banks in their submissions for Guaranty Purchase; and 
(e) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing. 
KS PPP Portfolio 
5. 
With regards to the KS PPP Portfolio, the Debtors are authorized, but not 
directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for KS PPP Loan payments received from 
borrowers, including payments of principal and interest; 
(b) 
maintaining a software platform for borrowers; 
(c) 
assisting borrowers in the completion of their Loan Forgiveness 
applications; 
(d) 
submitting Guaranty Purchase applications to the SBA; and 
(e) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing. 
 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 43 of 46

 
 
4 
RLF1 28018237V.1 
Legacy Portfolio 
6. 
With regards to the Legacy Portfolio, the Debtors are authorized, but not 
directed, to continue in the ordinary course of business: 
(a) 
collecting and accounting for Legacy Loan payments received from 
borrowers, including payments of principal and interest;  
(b) 
maintaining a software platform for borrowers; and 
(c) 
conducting loan reviews, reconciling collections and remittances, 
responding to inquiries, and engaging in other activities in connection with 
the foregoing. 
Borrower Overpayments 
7. 
The Debtors are authorized, but not directed, to continue in the ordinary 
course of business: 
(a) 
remitting Regular Overpayments to borrowers; 
(b) 
remitting Forgiveness Overpayments to borrowers;  
(c) 
adjusting remittances to the Federal Reserve and Partner Banks pursuant to 
Overpayment Reconciliation; and 
(d) 
remitting Guaranty Overpayments to the SBA. 
Critical Vendors 
8. 
The Debtors are authorized, but not directed, in the reasonable exercise of 
their business judgment, to pay some or all of the prepetition claims of the Critical Vendors, upon 
such terms and in the manner provided in this Final Order and the Motion; provided, that payments 
to Critical Vendors on account of prepetition claims shall not exceed $75,000 in the aggregate, 
during these Chapter 11 Cases absent further order of the Court. 
9. 
If a Critical Vendor refuses to supply services to the Debtors on Customary 
Trade Terms (or such other terms as are agreed by the parties) following receipt of payment on its 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 44 of 46

 
 
5 
RLF1 28018237V.1 
prepetition claim, the Debtors’ rights to treat any payment made pursuant to the relief granted in 
the Interim Order or this Final Order as an unauthorized postpetition transfer and to exercise any 
and all appropriate remedies are expressly reserved. 
10. 
Notwithstanding entry of this Final Order, the Debtors’ rights to enforce the 
automatic stay provision of section 362 of the Bankruptcy Code with respect to any creditor who 
demands payments of its prepetition claims as a condition to doing business with the Debtors 
postpetition are preserved. 
Compliance and Regulatory Obligations 
11. 
The Debtors are authorized, but not directed, to continue in the ordinary 
course of business: 
(a) 
fulfilling state licensing requirements and to pay related obligations; 
(b) 
submitting to, and complying with, state regulatory exams and audits and to 
pay related obligations, costs, and expenses; and 
(c) 
remediating errors and/or lack of compliance with laws or regulations. 
Other Relief 
12. 
Each of the Banks at which the Debtors maintain their accounts relating to 
payments on account of obligations related to servicing and subservicing PPP Loans and Legacy 
Loans and the Related Obligations are authorized to  (a) receive, process, honor, and pay all checks 
presented for payment, and to honor all fund transfer requests made by the Debtors related thereto, 
to the extent that sufficient funds are on deposit in those accounts, and (b) accept and rely on all 
representations made by the Debtors with respect to which checks, drafts, wires, or automated 
clearing house transfers should be honored or dishonored in accordance with this or any other 
order of this Court, whether such checks, drafts, wires, or transfers are dated before, on, or after 
the Petition Date, without any duty to inquire otherwise. 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 45 of 46

 
 
6 
RLF1 28018237V.1 
13. 
The Debtors are authorized, but not directed, to issue new postpetition 
checks, or effect new electronic funds transfers, on account of obligations related to servicing and 
subservicing PPP Loans and Legacy Loans and the Related Obligations as set forth herein, and to 
replace any prepetition checks or electronic fund transfer requests that may be lost or dishonored 
or rejected as a result of the commencement of the Debtors’ Chapter 11 Cases. 
14. 
Nothing contained in the Motion or this Final Order, nor any payment made 
pursuant to the authority granted by the Interim Order or this Final Order, is intended to be or shall 
be construed as an approval, assumption, adoption, or rejection of any agreement, contract, lease, 
program, or policy between the Debtors and any third party under section 365 of the Bankruptcy 
Code. 
15. 
Nothing contained in the Motion or this Final Order relieves the Debtors 
from any federal, state, or local regulatory requirements, including, but not limited to, any 
requirements to report or disclose information. 
16. 
Notwithstanding entry of this Final Order, nothing herein shall create, nor 
is intended to create, any rights in favor of or enhance the status of any claim held by, any party. 
17. 
Notice of the Motion is adequate under Bankruptcy Rule 6004(a). 
18. 
Notwithstanding Bankruptcy Rule 6004(h), this Final Order shall be 
immediately effective and enforceable upon its entry. 
19. 
The Debtors are authorized to take all action necessary to effectuate the 
relief granted in this Final Order. 
20. 
This Court shall retain jurisdiction to hear and determine all matters arising 
from or related to the implementation, interpretation, or enforcement of this Final Order. 
Case 22-10951-CTG    Doc 89-1    Filed 10/06/22    Page 46 of 46

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