Final Order — Prepetition Employee Wages & Benefits — In re KServicing (Bankr. D. Del.)

Record facts

U.S. Bankruptcy Court for the District of Delaware · No. 22-10951 · Doc. 194 · 2022-11-02 · Docket on CourtListener

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RLF1 28186866v.1 
IN THE UNITED STATES BANKRUPTCY COURT 
FOR THE DISTRICT OF DELAWARE 
 
 
 
------------------------------------------------------------ x 
 
In re 
: 
Chapter 11 
 
: 
 
KABBAGE, INC. d/b/a KSERVICING, et al., : 
Case No. 22-10951 (CTG) 
 
: 
 
 
: 
 
 
 
Debtors.1 
:  
: 
: 
(Jointly Administered)  
 
Re: Docket Nos. 10, 75 
------------------------------------------------------------ X 
 
 
FINAL ORDER (I) AUTHORIZING DEBTORS TO 
(A) PAY PREPETITION WAGES, SALARIES, EMPLOYEE BENEFITS, AND  
OTHER COMPENSATION AND (B) MAINTAIN EMPLOYEE BENEFIT PROGRAMS 
AND PAY RELATED OBLIGATIONS AND (II) GRANTING RELATED RELIEF 
 
Upon the motion, dated October 3, 2022 (the “Original Motion”) 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”), and the supplement thereto, dated October 21, 2022 (the 
“Supplement” and collectively with the Original Motion, the “Motion”)2 for entry of an order 
pursuant to sections 105(a), 363(b), and 507(a) of the Bankruptcy Code and Bankruptcy Rules 
6003 and 6004, (i) authorizing the Debtors to (a) pay the Employee Obligations and (b) maintain, 
continue to honor, and pay amounts with respect to the Debtors’ business practices, programs, and 
policies for their employees as such were in effect as of the commencement of these Chapter 11 
Cases and as such may be modified during the pendency of these Chapter 11 Cases 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 meanings ascribed to such terms in the 
Motion. 
Case 22-10951-CTG    Doc 194    Filed 11/02/22    Page 1 of 5

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RLF1 28186866v.1 
(ii) granting related relief, all as more fully set forth in the Motion; and upon consideration of the 
Rieger-Paganis Declaration; and this Court having jurisdiction to consider the Motion, and the 
relief requested therein pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Standing Order 
of Reference entered by 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 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 reviewed the Motion; and this 
Court having entered an order granting the relief requested in the Motion on an interim basis; and 
this Court having held a hearing to consider the relief requested in the Motion; and all objections, 
if any, to the Motion having been withdrawn, resolved, or overruled; 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 upon all of the proceedings had before this Court and after due deliberation 
and sufficient cause appearing therefor, 
IT IS HEREBY ORDERED THAT 
1. 
The Motion is granted to the extent set forth herein. 
2. 
The Debtors are authorized, but not directed, pursuant to sections 105(a), 
363(b), and 507(a) of the Bankruptcy Code, to (i) pay the prepetition Employee Obligations in an 
aggregate amount not to exceed, absent further order of this Court, $1,070,800 and any related 
expenses, fees and costs incident to the foregoing, and (ii) maintain, honor, and continue the 
Employee Benefit Programs in the ordinary course of business, as summarized in further detail in 
the chart below: 
Case 22-10951-CTG    Doc 194    Filed 11/02/22    Page 2 of 5

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RLF1 28186866v.1 
Employee Obligations 
Final Amount 
Administration Fees 
$1,000 
Compensation 
$35,000 
Employee Bonus Program 
$0 
Employee Benefit Programs 
$22,000 
Employer Taxes 
$3,000 
Deferred 2020 Payroll Tax 
$600,000 
Reimbursement Programs  
$5,000 
Contractor Workforce Compensation 
$400,000 
Employee Leave Benefits 
$0 
Health and Welfare Benefits 
$2,800 
Retirement Benefits 
$2,000 
Total  
$1,070,800 
 
3. 
Notwithstanding any other provision of this Final Order nothing in this 
Final Order shall authorize the Debtors to make any payment to, or on behalf of, any Employee or 
Contractor on account of prepetition wages and other compensation obligations or other 
prepetition obligations in excess of the statutory caps set forth in sections 507(a)(4) and (5) of the 
Bankruptcy Code (the “Statutory Caps”); provided, however that the Debtors are authorized but 
not directed to pay prepetition obligations on account of one member of the Contractor Workforce 
in excess of the Statutory Caps (as applicable) as and to the extent set forth in the Supplement. 
4. 
Except as set forth in paragraph 7 of this Final Order, nothing in the Motion 
or this Final Order shall be deemed to (i) authorize the payment of any amounts in satisfaction of 
bonus or severance obligations, including but not limited to the KERP program or the Employee 
Case 22-10951-CTG    Doc 194    Filed 11/02/22    Page 3 of 5

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RLF1 28186866v.1 
Bonus Program, or which are subject to section 503(c) of the Bankruptcy Code, including, for the 
avoidance of doubt, payment of any obligations to or on behalf of any “insider” (as defined by 
section 101(31) of the Bankruptcy Code) of the Debtors or any non-Debtor affiliates or violate or 
permit a violation of section 503(c) of the Bankruptcy Code; or (ii) authorize the Debtors to cash 
out unpaid vacation or leave time except upon termination of an employee, if applicable state law 
requires such payment. 
5. 
The Banks are authorized to receive, process, honor, and pay any and all 
checks issued, or to be issued, and electronic funds transfers requested, or to be requested, by the 
Debtors relating to such obligations, to the extent that sufficient funds are on deposit and standing 
in the Debtors’ credit in the applicable bank accounts to cover such payments.  The Banks are 
authorized to 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 prior to, on, or subsequent to the Petition Date, without any duty to inquire 
otherwise. 
6. 
The Debtors are authorized, but not directed, to issue new post-petition 
checks, or effect new electronic funds transfers, 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 with respect to any prepetition amounts that are authorized to be 
paid pursuant to this Final Order. 
7. 
The Debtors are authorized, but not directed, to honor bonuses to one (1) 
eligible Employee pursuant to the Employee Bonus Program, in an amount not to exceed $20,000. 
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RLF1 28186866v.1 
8. 
The Debtors are authorized, but not directed, to continue to retain and pay 
the Contractor Workforce through the Employment Vendors in the ordinary course of business as 
provided for in the Motion.  For the avoidance of doubt, nothing in this Final Order authorizes the 
Debtors to retain and pay any professional, executive officer or director in violation of sections 
327, 328 or 363 of the Bankruptcy Code. 
9. 
Nothing contained in the Motion or this Final Order, nor any payment made 
pursuant to the authority granted by 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. 
10. 
Nothing in this Final Order shall implicitly or expressly approve or sanction 
any current or prospective incentive bonus, key employee incentive or retention program, or any 
payment having been made in relation to or pursuant thereto.  
11. 
Notice of the Motion is adequate under Bankruptcy Rule 6004(a). 
12. 
Notwithstanding the provisions of Bankruptcy Rule 6004(h), this Final 
Order shall be immediately effective and enforceable upon its entry. 
13. 
The Debtors are authorized to take all actions necessary or appropriate to 
effectuate the relief granted in this Final Order. 
14. 
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. 
 
 
 
 
 
Dated: November 2nd, 2022 
Wilmington, Delaware
CRAIG T. GOLDBLATT 
UNITED STATES BANKRUPTCY JUDGE
Case 22-10951-CTG    Doc 194    Filed 11/02/22    Page 5 of 5

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