Hearing Transcript (February 27, 2023) — In re KServicing

Record facts

U.S. Bankruptcy Court for the District of Delaware · No. 22-10951 · Doc. 598 · 2023-03-01 · Docket on CourtListener

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UNITED STATES BANKRUPTCY COURT 
DISTRICT OF DELAWARE 
 
 
IN RE: 
 
 
   .  Chapter 11 
 
 
 
 
   .  Case No. 22-10951 (CTG) 
KABBAGE, INC., d/b/a   
   .  (Jointly Administered) 
KSERVICING, et al.,      
. 
 
 
 
 
   .  Courtroom No. 7 
 
  
 
 
   .  824 Market Street 
 
 
 
Debtors.    .  Wilmington, Delaware 19801 
  
 
 
 
   . 
                            .  Monday, February 27, 2023 
. . . . . . . . . . . . . . .  10:02 a.m. 
 
 
TRANSCRIPT OF ZOOM HEARING 
BEFORE THE HONORABLE CRAIG T. GOLDBLATT 
UNITED STATES BANKRUPTCY JUDGE 
 
APPEARANCES: 
 
For the Debtors: 
Zachary I. Shapiro, Esquire 
 
 
 
 
RICHARDS, LAYTON & FINGER, PA 
 
 
 
 
One Rodney Square 
 
 
 
 
920 North King Street 
 
 
 
 
Wilmington, Delaware 19801 
 
 
 
 
 
-and- 
 
 
 
 
 
Chase A. Bentley, Esquire 
 
 
 
 
WEIL, GOTSHAL & MANGES, LLP 
 
 
 
 
767 Fifth Avenue 
 
 
 
 
New York, New York 10153 
 
 
 
  
Audio Operator:          Theresa Mistretta, ECRO 
 
Transcription Company:   Reliable 
 
                    The Nemours Building 
                         1007 N. Orange Street, Suite 110        
                         Wilmington, Delaware 19801 
                         Telephone: (302)654-8080  
                         Email:  gmatthews@reliable-co.com 
 
Proceedings recorded by electronic sound recording, 
transcript produced by transcription service. 
 
Case 22-10951-CTG    Doc 598    Filed 03/01/23    Page 1 of 9

                                       
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INDEX 
 
MOTIONS: 
 
 
 
 
 
 
   
 
  PAGE 
 
Agenda  
Item 3:  Motion of The Juneau Group, LLC for Allowance      3 
         of Administrative Expense Claim Pursuant to 11  
         U.S.C. 503(b)(9)  
         [Docket No. 345 – filed December 6, 2022] 
 
         Court's Ruling: 
 
 
DECLARATIONS: 
 
 
 
 
 
 
 
  PAGE 
 
1) Declaration of Thora Thoroddsen                          6 
 
Declaration of Transcriptionist 
 
 
 
 
 
9 
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(Proceedings commenced at 10:02 a.m.) 
THE COURT:  Good morning.  We are on the record 
in, In re Kabbage, which is Case Number 22-10951.   
Counsel can proceed.   
MR. SHAPIRO:  Good morning, Your Honor.  For the 
record, Zach Shapiro of Richards, Layton & Finger, on behalf 
of the debtors, with my colleagues at Weil, Chase Bentley, 
Natasha Hwangpo, and Richard Slack.   
We have one matter on the agenda today.  It was 
actually a motion that was not filed by us.  We did file an 
objection.  I don't believe the Movant -- the Movant is on?   
UNIDENTIFIED SPEAKER:  Yes.   
MR. SHAPIRO:  So, with that, we did file an 
objection, Your Honor, but we are not the Movant, so I will 
turn the podium over, the virtual podium over to the Movant 
to let them proceed.   
THE COURT:  Thank you very much, Mr. Shapiro.  I 
appreciate it.   
So, Mr. Juneau, are you on the line? 
 
(No verbal response) 
THE COURT:  Have we muted the phone,  
Ms. Barksdale?   
THE CLERK:  I can unmute this to see if this is 
him.  
THE COURT:  Okay.   
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(Pause)  
THE COURT:  Mr. Juneau, if you're on the line, if 
you could unmute your phone and enter your appearance, that 
would be very helpful.   
 
(Pause)  
THE COURT:  All right.  While it appears that at 
the Movant has not dialed in, I'm happy to hear from the 
debtor on how they'd propose to proceed under the 
circumstances.   
MR. BENTLEY:  Thank you, Your Honor.  For the 
record, Chase Bentley, Weil Gotshal, on behalf of the 
debtors.   
Your Honor, given that the Movant has not shown up 
on the proceeding today to present his motion, I think the 
debtors are comfortable resting on the papers unless Your 
Honor has any questions.   
THE COURT:  I do not.  I've reviewed the papers.   
Look, I'm satisfied on its face the claim does not 
assert a claim with respect to goods that would be subject to 
administrative priority, so I've got no trouble based on the 
papers concluding that it's not an allowed administrative 
claim.   
With respect to the -- so, the debtor objected to 
the administrative claim.  Did the debtor also move to 
disallow the claim in its entirety?   
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MR. BENTLEY:  Your Honor, we moved to reclassify 
the claim.   
THE COURT:  As a general unsecured claim?   
MR. BENTLEY:  As a general unsecured claim.   
THE COURT:  Okay.  So, I'm satisfied, without, 
obviously, without prejudice --  
MR. BENTLEY:  Thank you, Your Honor.   
THE COURT:  -- to your addressing its allowance.  
So, I'm happy, under the circumstances, I think it's 
appropriate, based on the pleadings and having given the 
Movant the opportunity to be heard to demonstrate the claim 
is entitled to administrative priority and the claim having 
failed to appear, I'm happy to issue a brief order that would 
provide for the claim to be reclassified as a general 
unsecured claim, without prejudice, to anyone's right to, you 
know, take further action with respect to allowance of the 
claim.   
MR. BENTLEY:  Thank you, Your Honor.  And just for 
the record, I think you should have seen that we filed a 
declaration attached to our objection.  If you think it's 
necessary, we're happy to enter that on the record as direct 
testimony.   
THE COURT:  I take it you're moving that 
declaration into evidence?   
MR. BENTLEY:  Only if necessary, Your Honor.  If 
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you're comfortable ruling without it, then I think that 
we're, likewise, okay not entering it.   
THE COURT:  I think for -- I'm not sure it's 
necessary, but I think for the completeness of the record, it 
would make sense for you to make that motion.   
MR. BENTLEY:  Absolutely.  Given that, Your Honor, 
we'd like to move to admit as the direct testimony of Thora 
Thoroddsen, the declaration filed at Docket 547-1.  
THE COURT:  Is there any objection to the 
admission of that declaration? 
 
(No verbal response) 
THE COURT:  Okay.  Seeing none, the declaration 
will be admitted.   
 
(Thoroddsen Declaration received in evidence)   
THE COURT:  Is there any party that seeks to 
cross-examine the declarant?   
 
(No verbal response) 
THE COURT:  Okay.  Seeing none, the declaration is 
admitted and we can take it from there.   
MR. BENTLEY:  Thank you, Your Honor.   
Nothing from the debtors at this point.   
THE COURT:  Okay.  Sorry to bring everyone here 
for what seems to be a rather anticlimactic hearing.   
Is there any further way in which the Court can be 
of assistance to the parties, either who are in person or on 
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the line?   
MR. BENTLEY:  I think Mr. Shapiro has one thing to 
add.   
THE COURT:  Okay.  Mr. Shapiro?   
MR. SHAPIRO:  I just wanted to clarify one thing.  
You're going to enter your own order?  Is that what the Court 
would propose?   
THE COURT:  Yeah, I'm going to.  Under the 
circumstances, I think it's appropriate for me --  
MR. SHAPIRO:  Okay.   
THE COURT:  -- to issue a brief order -- I expect 
to get it out today -- that sets forth the reasons in light 
of the record as it exists.   
MR. SHAPIRO:  Understood.  Just one point of 
clarification.  Mr. Juneau did file, I guess you call them 
identical claims.  One was this motion that was docketed as a 
motion.  Another was a claim 184, which was the same exact 
motion.  It was just docketed as a claim.   
That claim has been re-classed, and so I don't 
know that it's necessary to re-class this motion as well.  I 
think I --  
THE COURT:  Obviously, because you think we're 
then going to have duplicate claims.  You're going to run a 
process for dealing with duplicate claims, right?   
MR. SHAPIRO:  Right.  But I think as -- I mean, if 
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we were to submit an order, I'll just tell you what it would 
say.  It would just say the motion is denied.  I don't think 
it --  
THE COURT:  The motion for the allowance of the 
administrative claim?   
MR. SHAPIRO:  Yeah, I don't think it needs to 
address re-classification.  
THE COURT:  I think it is the -- so, you don't 
have a motion that is on today?  You don't have a motion to 
disallow?  You're just here as opposing a motion for the 
allowance of an administrative claim?   
MR. SHAPIRO:  Correct.   
THE COURT:  Okay.  I think you're right about 
that.   
MR. SHAPIRO:  Okay.   
THE COURT:  I think the order will just provide 
for the denial of a motion.   
MR. SHAPIRO:  Thank you, Your Honor.   
THE COURT:  Thank you.   
Any other way in which the Court can be of 
assistance to any of the parties?   
MR. SHAPIRO:  Nothing for today.   
THE COURT:  Well, with thanks to all of the 
parties for this, we're adjourned.  Thank you.   
 
(Proceedings concluded at 10:09 a.m.) 
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CERTIFICATION 
 
 
I certify that the foregoing is a correct 
transcript from the electronic sound recording of the 
proceedings in the above-entitled matter to the best of my 
knowledge and ability. 
 
/s/ William J. Garling                      February 28, 2023 
William J. Garling, CET-543 
Certified Court Transcriptionist 
For Reliable 
 
Case 22-10951-CTG    Doc 598    Filed 03/01/23    Page 9 of 9

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