Order Denying Administrative Claim (Juneau Group) — In re KServicing

Record facts

U.S. Bankruptcy Court for the District of Delaware · No. 22-10951 · Doc. 583 · 2023-02-27 · Docket on CourtListener

Summary

An order dated February 27, 2023 denying a motion to allow an administrative claim, entered as Doc 583 in the jointly administered Chapter 11 cases of Kabbage, Inc. d/b/a KServicing, Case No. 22-10951 (CTG), in the U.S. Bankruptcy Court for the District of Delaware. The order recounts that The Juneau Group, LLC moved for allowance of an administrative expense claim under 11 U.S.C. § 503(b)(9), that the debtors objected, and that the movant did not appear at the February 27, 2023 hearing. It notes that the only evidence admitted was a declaration by a Director at AlixPartners, LLP, the debtors' financial advisor, indicating that the movant had provided no goods or services. The court states that the goods recited in the motion were time, that time is not a good giving rise to a claim under that section, and denies the motion. It is signed by the United States Bankruptcy Judge.

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IN THE UNITED STATES BANKRUPTCY COURT 
FOR THE DISTRICT OF DELAWARE 
In re: 
KABBAGE, INC. d/b/a KSERVICING,  
et al., 
Debtors. 
Chapter 11 
 
Case No. 22-10951 (CTG) 
 
(Jointly Administered) 
 
Related Docket Nos. 345, 547 
ORDER DENYING MOTION TO ALLOW ADMINISTRATIVE CLAIM 
The Juneau Group, LLC (the “Movant”) has moved for the allowance of an 
administrative expense claim under 11 U.S.C. § 503(b)(9).  [D.I. 345].  The debtors 
objected to the motion.  [D.I. 547].1  At the request of the Movant [D.I. 421], the motion 
was set for hearing on February 27, 2023 at 10:00 a.m. 
Movant did not appear at the hearing.  The debtors moved the admission into 
evidence of the declaration of Thora Thoroddsen [D.I. 547-1], a Director at 
AlixPartners, LLP, which is serving as financial advisor to the debtors.  The 
declaration was admitted into evidence without objection. 
Debtors point out that the Movant is a limited liability company that has filed 
its motion without counsel, and has instead appeared via its principal, Jacob Juneau.  
Debtors are correct that a corporate entity may not appear pro se, but only through 
licensed counsel.2  On the other hand, an unincorporated sole proprietorship without 
 
1 The debtors in these cases are Kabbage, Inc. d/b/a KServicing; Kabbage Canada Holdings, 
LLC; Kabbage Asset Securitization LLC; Kabbage Asset Funding 2017-A LLC; Kabbage 
Asset Funding 2019-A LLC; and Kabbage Diameter, LLC.  They are referred to collectively 
as the “debtors.”   
2 Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201-202 (1993). 
Case 22-10951-CTG    Doc 583    Filed 02/27/23    Page 1 of 3

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a “separate existence” from the individual proprietor may appear through the 
proprietor, pro se.3  In view of the Court’s disposition on the merits, however, the 
Court need not address this issue here. 
Section 503(b)(9) provides for an administrative claim for the “value of any 
goods received by the debtor within 20 days before the date of the commencement of 
a case under this title in which the goods have been sold to the debtor in the ordinary 
course of such debtor’s business.”  The motion recites that the goods it provided were 
“time.”  [D.I. 345 ¶ 4].  Under applicable law, “time” is not a “good” that may give rise 
to an administrative claim under § 503(b)(9).4 
In addition, the only evidence introduced at the hearing, the declaration of 
Thora Thoroddsen, indicates that the Juneau Group has not provided any goods or 
services to the debtors.  [D.I. 547-1].  The Juneau Group, which bears the burden of 
proof to establish its administrative claim, did not appear at the hearing and provided 
no evidence in support of its claim.5  It did not meet its burden at the hearing.  And 
perhaps more fundamentally, the motion on its face makes clear that it is not entitled 
to an administrative claim.6 
 
3 Shulman v. Facebook.com, 788 F. App’x 882, 885 (3d Cir. 2019). 
4 See, e.g., See In re NE Opco, Inc., 501 B.R. 233, 240-41 (Bankr. D. Del. 2013) (while natural 
gas is a “good,” electricity is a service that is not subject to a § 503(b)(9) claim); In re Goody’s 
Family Clothing, Inc., 401 B.R. 131, 133 (Bankr. D. Del. 2009) (adopting Uniform Commercial 
Code definition of the term “goods”). 
5 See Unidigital, Inc. 262 B.R. 283, 288 (Bankr. D. Del. 2001) (“Claimants who seek payment 
ahead of other unsecured claims bear the burden of establishing that their claim qualifies for 
priority status.”) 
6 Under Fed. R. Bankr. P. 9014, the Court may accordingly deem Fed. R. Bankr. P. 7012 
applicable to this contested matter and deny the motion on the ground that the motion itself 
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The Motion to allow an administrative claim is accordingly DENIED. 
 
 
Dated: February 27, 2023 
  
  
 
 CRAIG T. GOLDBLATT 
UNITED STATES BANKRUPTCY JUDGE 
 
 
 
fails to state a claim for the allowance of an administrative claim under the standard set 
forth in Fed. R. Civ. P. 12(b)(6). 
Case 22-10951-CTG    Doc 583    Filed 02/27/23    Page 3 of 3

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