Court filing

Motion to Continue Insurance Policies and Pay Related Obligations — In re KServicing

Record facts

Court	U.S. Bankruptcy Court for the District of Delaware
Filed	2022-10-03

U.S. Bankruptcy Court for the District of Delaware · No. 22-10951 · Doc. 7 · 2022-10-03 · Docket on CourtListener

Summary

A motion filed October 3, 2022 as Doc. 7 by Kabbage, Inc. d/b/a KServicing and its debtor affiliates in Chapter 11 Case No. 22-10951, in the U.S. Bankruptcy Court for the District of Delaware. The motion asks for interim and final orders authorizing the debtors to continue their Insurance Policies and pay related obligations, citing sections 105(a), 362(d), and 363(b) of the Bankruptcy Code. It reports premiums of approximately $12,347.00 for liability and property policies, $1,308,332.00 for the Directors' and Officers' Liability Program, $73,994.24 for cyber security policies and $3,343.00 for an attorney liability policy. The debtors state they are not aware of outstanding prepetition premiums and ask to keep using brokers CAC Specialty and Marsh LLC. The 23-page filing closes with a proposed Final Order and Exhibit C, a list of insurance policies with carriers and policy terms.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

RLF1 28018207v.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 ENTRY OF INTERIM
AND FINAL ORDERS (I) AUTHORIZING (A) DEBTORS TO
CONTINUE INSURANCE POLICIES, AND (B) PAY ALL OBLIGATIONS
WITH RESPECT THERETO, AND (II) GRANTING RELATED RELIEF
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
Relief Requested
1.
By this Motion the Debtors request, pursuant to sections 105(a), 362(d), and
363(b) of title 11 of the United States Code (the “Bankruptcy Code”) and Rules 4001, 6003, and
6004 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), that the
Court (i) authorize the Debtors to (a) continue the Insurance Policies (as defined below) in
accordance with their terms as provided for in the underlying agreements and to perform with

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 and (8973); 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 First Day Declaration (as
defined below) filed contemporaneously herewith. Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the First Day Declaration (as defined below).
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respect thereto in the ordinary course of business, and (b) pay any prepetition obligations arising
under the Insurance Policies, and (ii) grant related relief.
2.
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 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.
3.
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”).
Jurisdiction and Venue
4.
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
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
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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
5.
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.
6.
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.
7.
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
Declaration of Deborah Rieger-Paganis in Support of Debtors’ Chapter 11 Petitions and First
Day Relief (the “First Day Declaration”), filed contemporaneously herewith.
Debtors’ Insurance Policies
8.
In the ordinary course of their loan servicing business, the Debtors maintain
and participate in various insurance policies (collectively, the “Insurance Policies”) through
several insurance carriers (each, an “Insurance Carrier”). Specifically, the Insurance Policies
include various liability, property, professional, and other coverage that provide the Debtors with
insurance related to, among other things, general liability, directors’ and officers’ liability, attorney
liability, property liability, automobile liability, cyber security liability, and excess liability
coverage. A list of the Insurance Policies, including information related to their respective
coverage periods, is annexed hereto as Exhibit C. Pursuant to the Insurance Policies, the Debtors
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pay premiums based on fixed rates established by each Insurance Carrier, which are paid through
either CAC Specialty or Marsh LLC (together, the “Insurance Brokers”), as well as certain other
obligations related thereto, including any broker or advisor fees, taxes, or other fees (collectively,
the “Insurance Obligations”).
9.
As of the Petition Date, the Debtors do not believe that they owe any
amounts with respect to prepetition Insurance Obligations. Accordingly, the Debtors seek
authority to continue performing under their Insurance Policies in the ordinary course of business
and to honor any obligations with respect thereto.
A.
Liability and Property Insurance Policies
10.
Through certain Insurance Carriers, the Debtors maintain various liability
and property insurance policies, which provide the Debtors with insurance coverage for liabilities
relating to, among other things, general liability, commercial property liability, and automobile
liability (collectively, the “Liability and Property Insurance Policies”). The Debtors maintain
the Liability and Property Insurance Policies to help manage the various risks associated with their
business operations. Additionally, some of the Liability and Property Insurance Policies are
required by applicable regulations, laws, and contracts that govern the Debtors’ commercial
activities and business.
11.
Pursuant to the Liability and Property Insurance Policies, the Debtors are
required to pay premiums based upon fixed rates, established by each Insurance Carrier, in addition
to applicable deductibles, paid through the respective Insurance Brokers. Specifically, the
Liability and Property Insurance Policies each have an annual premium that is paid prospectively
in full. For the current coverage periods (which are set forth on Exhibit C), premiums for the
Liability and Property Insurance Policies totaled approximately $12,347.00 in the aggregate.
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12.
The premiums for the Liability and Property Insurance Policies were paid
in full in advance of the current coverage periods. Therefore, as of the Petition Date, the Debtors
are not aware of any outstanding premiums or other prepetition amounts owed to the various
Insurance Carriers for the Liability and Property Insurance Policies.
B.
Directors’ and Officers’ Liability Program
13.
In addition to the Liability and Property Insurance Policies, the Debtors
participate in five insurance policies that provide the Debtors with insurance coverage for director
and officer liability (the “Directors’ and Officers’ Liability Program”). The Debtors incur
premiums under the Directors’ and Officers’ Liability Program based upon fixed rates, in addition
to applicable deductibles, established by the applicable Insurance Carriers and paid through the
respective Insurance Broker. For the current coverage periods (which are set forth on Exhibit C),
the premiums for the Directors’ and Officers’ Liability Programs totaled approximately
$1,308,332.00 in the aggregate.3 The premiums were paid by the Debtors in full in advance for
the current coverage periods. Therefore, as of the Petition Date, the Debtors are not aware of any
outstanding premiums or other prepetition amounts owed to the various Insurance Carriers for the
Directors’ and Officers’ Liability Programs.
C.
Cyber Security Insurance Policies
14.
In addition to the Liability and Property Insurance Policies and the
Directors’ and Officers’ Liability Programs, the Debtors participate in two insurance policies that
provide the Debtors with insurance coverage for cyber liability (the “Cyber Security Insurance
Policies”). Given that the Debtors’ Cyber Security Insurance Policies are set to expire on October
16, 2022, the Debtors intend to renew these policies in the interim period. The Debtors incur

3 Prior to the Petition Date, the Debtors also funded the premiums for tail coverage under the Directors’ and Officers’
Liability Programs in the amount of $175,000, which is included in the $1,308,332.00.
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premiums under the Cyber Security Insurance Policies based upon fixed rates, in addition to
various deductibles, established by the applicable Insurance Carriers and paid through the
respective Insurance Broker. For the current coverage periods, (which are set forth in Exhibit C),
the premiums for the Cyber Security Insurance Policies totaled approximately $73,994.24 in the
aggregate. The premiums were paid by the Debtors in full in advance for the current coverage
periods. Therefore, as of the Petition Date, the Debtors are not aware of any outstanding premiums
or other prepetition amounts owed to the various Insurance Carriers for the Cyber Security
Insurance Policies.
D.
Attorney Liability Policy
15.
The Debtors also participate in one insurance policy that provides the
Debtors insurance coverage for attorney liability arising through malpractice (the “Attorney
Liability Policy”). The Debtors incur premiums under the Attorney Liability Policy based upon
fixed rates, in addition to applicable deductibles, established by the applicable Insurance Carriers
and paid through the respective Insurance Broker. For the current coverage periods (which are set
forth on Exhibit C), the premiums for the Attorney Liability Policy totaled approximately
$3,343.00 in the aggregate. The premiums were paid by the Debtors in full in advance for the
current coverage periods. Therefore, as of the Petition Date, the Debtors are not aware of any
outstanding premiums or other prepetition amounts owed to the Insurance Carrier for the Attorney
Liability Policy.
E.
Insurance Brokers
16.
The Debtors utilize Marsh LLC to assist with the procurement and
negotiation of attorney liability, cyber liability, and Liability and Property Insurance Policies, and
CAC Specialty to assist with director and officer Insurance Policies. Both Insurance Brokers remit
premium payments to the Insurance Carriers on behalf of the Debtors for the current policy periods.
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Additionally, the Insurance Brokers assist the Debtors with identifying and reviewing claims
before they are reported to the Insurance Carriers.
17.
In exchange for their services, the Debtors pay the Insurance Brokers certain
fees (collectively, the “Brokers’ Fees”) on a commission basis, which are earned by the Insurance
Brokers upon inception of the applicable policy term. As of the Petition Date, the Debtors are not
aware of any outstanding prepetition amounts owed to the Insurance Brokers on account of the
Brokers’ Fees. However, because of the Insurance Brokers’ familiarity with the Insurance
Policies, the Debtors request authority to continue utilizing their services and pay any subsequent
Brokers’ Fees that may become due and payable in the ordinary course of the Debtors’ business.
Relief Requested Should be Granted
A.
Maintenance of Insurance Policies and Payment of Obligations Related Thereto
is Warranted Under Sections 363(b)(1) and 105(a) of Bankruptcy Code, and
Doctrine of Necessity
18.
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).
19.
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
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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’
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.”).
20.
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).
21.
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
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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
of necessity is standard for enabling a court to authorize payment of prepetition claims before
confirming a plan).
22.
The Debtors’ use of estate funds to pay the Insurance Obligations is justified
because such obligations are necessary costs of preserving the Debtors’ estates. The Debtors are
contractually and legally obligated to maintain certain Insurance Policies, and the Debtors must
maintain certain of the Insurance Policies in order to comply with the operating guidelines of the
Office of the United States Trustee for Region 3, which includes the District of Delaware.
Additionally, section 1112(b)(4)(C) of the Bankruptcy Code provides that “failure to maintain
appropriate insurance that poses a risk to the estate or to the public” is “cause” for mandatory
conversion or dismissal of a chapter 11 case. 11 U.S.C. § 1112(b)(4)(C). Based on the Debtors’
current circumstances, it is not likely that the Debtors will be able to renew or replace their existing
Insurance Policies on more favorable terms. The process of establishing new programs would also
be burdensome and costly to the Debtors. In this regard, the Insurance Policies are essential to the
Debtors’ operations, as the Debtors would be exposed to significant liability if the Insurance
Policies were allowed to lapse or terminate. Such exposure could detrimentally impact the
Debtors’ ability to reorganize successfully.
23.
The 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. Authorizing the
Debtors to use estate funds to pay the Insurance Obligations is in the best interests of the Debtors,
their estates, and their economic stakeholders.
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24.
The Court should also authorize the Debtors to continue paying the Brokers’
Fees in the ordinary course of business. The Insurance Brokers are intimately familiar with the
Insurance Policies and Insurance Obligations. The Debtors believe that any loss or interruption to
the services provided by the Insurance Brokers could result in a costly disruption to the Debtors’
administration of their estates.
B.
Cause Exists to Authorize Debtors’ Financial Institutions to Honor Checks and
Electronic Fund Transfers
25.
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
identify readily 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,
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.
Reservation of Rights
26.
Nothing contained herein is intended or shall be construed as (a) an
admission as to the validity of any claim against the Debtors; (b) a waiver of the Debtors’ or any
appropriate party in interest’s rights to dispute the amount of, basis for, or validity of any claim
against the Debtors; (c) a waiver of any claim or cause of action which may exist against any
creditor or interest holder; or (d) an approval, assumption, adoption, or rejection of any agreement,
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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.
Debtors Have Satisfied Bankruptcy Rule 6003(b)
27.
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 First Day
Declaration, authorizing the Debtors to use estate funds to pay Insurance Obligations and
continuing to pay the Insurances Brokers in the ordinary course of business is in the best interests
of the Debtors and their estates. 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)
28.
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 First Day 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.
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Notice
29.
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) the United States Department of Justice; (g) the Federal Trade Commission; (h)
the Small Business Administration; (i) the Internal Revenue Service; (j) the Securities and
Exchange Commission; (k) the United States Attorney’s Office for the District of Delaware; (l)
the Banks; (m) the Insurance Carriers, (n) the Insurance Brokers; and (o) 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
30.
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]

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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

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Exhibit A
Proposed Interim Order
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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
(I) AUTHORIZING DEBTORS TO (A) CONTINUE
INSURANCE POLICIES, AND (B) PAY ALL OBLIGATIONS
WITH RESPECT THERETO, AND (II) GRANTING RELATED RELIEF
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 an order pursuant to sections 105(a), 362(d), and 363(b) of the
Bankruptcy Code and Bankruptcy Rules 4001, 6003, and 6004 (i) authorizing the Debtors (a)
to continue all Insurance Policies, and (b) to pay any prepetition obligations arising under the
Insurance Policies, and (ii) granting related relief, 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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pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper notice of the Motion having been
provided; and such notice having been adequate and appropriate 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 First Day
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.
2.
The Debtors are authorized, but not directed, pursuant to sections 105(a),
362(d), and 363(b) of the Bankruptcy Code, to continue the Insurance Policies and to perform their
obligations with respect thereto.
3.
The Debtors are further authorized, but not directed, to revise, extend,
renew, rollover, replace, or obtain new Insurance Policies, and to take all appropriate actions in
connection therewith, in the ordinary course of business.
4.
Notwithstanding anything to the contrary in this Interim Order, payments
on account of prepetition Insurance Obligations shall not exceed $25,000.00 in the aggregate
without further order of this Court.
5.
The Debtors are authorized, but not directed, to issue new postpetition
checks, or effect new electronic funds transfers, on account of Insurance Obligations and Brokers’
Fees as set forth herein, and to replace any prepetition checks or electronic fund transfer requests
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that may be lost or dishonored or rejected as a result of the commencement of the Debtors’ Chapter
11 Cases.
6.
Each of the Banks at which the Debtors maintain their accounts relating to
the payment of the obligations described in the Motion 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.
7.
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.
8.
The requirements of Bankruptcy Rule 6003(b) have been satisfied.
9.
Under the circumstances of these Chapter 11 Cases, notice of the Motion is
adequate under Bankruptcy Rule 6004(a).
10.
Notwithstanding Bankruptcy Rule 6004(h), this Interim Order shall be
immediately effective and enforceable upon its entry.
11.
The Debtors are authorized to take all action necessary to effectuate the
relief granted in this Interim Order.
12.
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.
13.
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
Case 22-10951-CTG Doc 7 Filed 10/03/22 Page 17 of 23

RLF1 28018207V.1
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 7 Filed 10/03/22 Page 18 of 23

RLF1 28018207v.1
Exhibit B
Proposed Final Order
Case 22-10951-CTG Doc 7 Filed 10/03/22 Page 19 of 23

RLF1 28018207v.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
(I) AUTHORIZING DEBTORS TO (A) CONTINUE
INSURANCE POLICIES, AND (B) PAY ALL OBLIGATIONS
WITH RESPECT THERETO AND (II) GRANTING RELATED RELIEF
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 an order pursuant to sections 105(a), 362(d), 363(b), and 503(b) of the
Bankruptcy Code and Bankruptcy Rules 4001, 6003, and 6004 (i) authorizing the Debtors (a) to
continue all Insurance Policies, and (b) to pay any prepetition obligations arising under the
Insurance Policies, and (ii) granting related relief, 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

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 7 Filed 10/03/22 Page 20 of 23

RLF1 28018207V.1
venue being proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper
notice of the Motion having been provided; and such notice having been adequate and appropriate
under the circumstances; and it appearing that no other or further notice need be provided; and this
Court having held hearings to consider the relief requested in the Motion on an interim and, if
necessary, final basis (the “Hearings”); and upon the First Day Declaration and the record of the
Hearings, and all of the proceedings had before this Court; 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 as set forth herein.
2.
The Debtors are authorized, but not directed, pursuant to sections 105(a),
362(d), and 363(b) of the Bankruptcy Code, to continue the Insurance Policies and to perform their
obligations with respect thereto.
3.
The Debtors are further authorized, but not directed, to pay any prepetition
Insurance Obligations.
4.
The Debtors are further authorized, but not directed, to revise, extend,
renew, rollover, replace, or obtain new Insurance Policies, and to take all appropriate actions in
connection therewith, in the ordinary course of business.
5.
Each of the Banks at which the Debtors maintain their accounts relating to
the payment of the Insurance 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
Case 22-10951-CTG Doc 7 Filed 10/03/22 Page 21 of 23

RLF1 28018207V.1
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.
6.
The Debtors are authorized, but not directed, to issue new postpetition
checks, or effect new electronic funds transfers, on account of Insurance Obligations and Brokers’
Fees 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 Chapter 11
Cases.
7.
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.
8.
Notice of the Motion is adequate under Bankruptcy Rule 6004(a).
9.
Notwithstanding Bankruptcy Rule 6004(h), this Final Order shall be
immediately effective and enforceable upon its entry.
10.
The Debtors are authorized to take all action necessary to effectuate the
relief granted in this Final Order.
11.
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 7 Filed 10/03/22 Page 22 of 23

RLF1 28018207v.1
Exhibit C
List of Insurance Policies
TYPE OF COVERAGE
INSURANCE
CARRIER
POLICY #
POLICY TERM
A.
Liability and Property Insurance Policies

Commercial Property,
General Liability,
Automobile Policy, and Lead
Umbrella Policy

Atlantic Specialty
Insurance Company
712-00-86-50-0009
5/1/2022 – 5/1/2023
B.
Cyber Security Insurance Policies
Cyber Liability
AIG Specialty Insurance
Company
01-772-15-46
10/16/2021 –
10/16/2022
Excess Cyber Liability
Endurance American
Insurance Company
PVX30004806801
10/16/2021 –
10/16/2022
C.
Directors’ and Officers’ Liability Program
Directors & Officers – 1st
Layer
XL Specialty Insurance
Company
ELU170896-20
10/16/2020 – 10/16/2023
Policy converts to 6 year
runoff effective 10/16/2023 –
10/16/2029
Directors & Officers – 2nd
Layer

AIG –
National Union Fire
Insurance Company of
Pittsburgh, Pa.
02-778-00-05
1/29/2022 – 10/16/2023
Policy converts to runoff
effective 10/16/2023 –
10/16/2029
First Side A DIC Directors &
Officers Liability Policy
Berkshire Hathaway
Specialty Insurance
Company
47-EPF-323700-01
8/10/2022 – 10/16/2023
Policy converts to runoff
effective 10/16/2023 –
10/16/2029
Excess Side A – Directors &
Officers
Everest Insurance
AS5EX00271-221
8/10/2022 – 10/16/2023
Policy converts to runoff
effective 10/16/2023 –
10/16/2029
Excess Side A – Directors &
Officers
QBE Insurance
Corporation
130003257
8/10/2022-10/16/2023
Policy converts to runoff
effective 10/16/2023 –
10/16/2029
D.
Attorney Liability Policy
Attorney Liability
AIG – National Union
Fire Insurance Company
of Pittsburgh, Pa.
02-778-00-04
1/21/2022 – 1/21/2023

Case 22-10951-CTG Doc 7 Filed 10/03/22 Page 23 of 23

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Motion to Continue Insurance Policies and Pay Related Obligations — In re KServicing

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