Court filing
Order Authorizing Loan Transfer Agreement — In re KServicing
Summary
An order of the U.S. Bankruptcy Court for the District of Delaware in the jointly administered Chapter 11 cases of Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951 (CTG), entered April 11, 2023 as Doc 764 by Judge Craig T. Goldblatt. It grants the debtors' motion, overrules unresolved objections and, under section 363(b) of the Bankruptcy Code, approves the Loan Transfer Agreement among KServicing, Lendistry SBLC, LLC and the Federal Reserve Bank of San Francisco, attached as Exhibit 1. The order authorizes transfer of the Transferred Loans to Lendistry free and clear of liens, claims and interests other than the FRB-SF Interests and the Plan Reversion Interest. It finds Lendistry is not a successor to the debtors, acted in good faith under section 363(m), and enjoins actions against Lendistry over liens or successor liability. The order is five pages.
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No. 22-10951 · Doc. 764 · Docket on CourtListener
Full text
Case 22-10951-CTG Doc 764 Filed 04/11/23 Page 1 of 5
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
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In re : Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., : Case No. 22-10951 (CTG)
:
:
1
Debtors. : (Jointly Administered)
:
: Re: Docket Nos. 721 & 754
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ORDER (I) AUTHORIZING AND APPROVING THE LOAN TRANSFER
AGREEMENT BETWEEN KSERVICING, LENDISTRY SBLC, LLC, AND THE
FEDERAL RESERVE BANK OF SAN FRANCISCO; (II) AUTHORIZING DEBTORS
TO TAKE ALL ACTIONS TO FACILITATE TRANSFER OF CERTAIN SERVICING
RIGHTS AND OBLIGATIONS; AND (III) GRANTING RELATED RELIEF
Upon the motion (the “Motion”),2 of Kabbage, Inc. d/b/a KServicing (the “Company”)
and its debtor affiliates, as debtors and debtors in possession in the chapter 11 cases (collectively,
the “Debtors”), requesting entry of an order (this “Order”): (i) authorizing entry into and approval
of the Loan Transfer Agreement; (ii) authorizing the Debtors to take any actions reasonably
necessary to immediately begin to facilitate the Transaction in accordance with the Loan Transfer
Agreement; (iii) authorizing consummation of the Loan Transfer Agreement on a date mutually
agreed to by the Parties; and (iv) granting related relief, all as more fully set forth in the Motion;
and upon the Loan Transfer Agreement Declaration; and the Court having jurisdiction to consider
the Motion and the relief requested therein pursuant to 28 U.S.C. 157 and 1334; and the Amended
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 or Loan Transfer Agreement, as applicable.
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Case 22-10951-CTG Doc 764 Filed 04/11/23 Page 2 of 5
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 that the Court may enter a final order consistent
with Article III of the United States Constitution; 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 held a hearing to
consider the relief requested in the Motion (the “Hearing”), if necessary; and upon the Loan
Transfer Agreement Declaration and the record of the Hearing, if any; 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 in the best interests of the
Debtors, their estates, creditors, and all parties in interest; and upon all of the proceedings had
before the Court and after due deliberation and sufficient cause appearing therefor,
IT IS HEREBY FOUND, DETERMINED AND ORDERED THAT:
1. The Motion is granted as set forth herein.
2. All objections, if any, that have not been withdrawn, waived, or resolved
are hereby overruled.
3. Pursuant to section 363(b) of the Bankruptcy Code, the Loan Transfer
Agreement, in substantially the form attached to this Order as Exhibit 1, and all of the terms and
conditions thereof, is approved. The failure specifically to include any particular provision of the
Loan Transfer Agreement in this Order shall not diminish or impair the effectiveness of such
provision, it being the intent of the Court that the Loan Transfer Agreement be authorized and
approved in its entirety.
2
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4. The Company is authorized and directed to execute and deliver, and
empowered to perform under, consummate and implement, the Loan Transfer Agreement, together
with all additional instruments and documents that may be reasonably necessary or desirable to
implement the Loan Transfer Agreement and the Transaction, and to take all further actions as
may be reasonably required for the purpose of assigning, transferring, granting, conveying and
conferring the Transferred Loans to Lendistry, or as may be necessary or appropriate to the
performance of the obligations as contemplated by the Loan Transfer Agreement and the
Transaction.
5. Pursuant to Sections 105(a) and 363(f) of the Bankruptcy Code, the Transfer
of the Transferred Loans is authorized, and upon consummation of the Transfer of the Transferred
Loans will be, free and clear of all liens, claims and interests other than the FRB-SF Interests and
the Plan Reversion Interest. By consummating the Transfer pursuant to the Loan Transfer
Agreement, Lendistry is not a mere continuation of any of the Debtors or any Debtor’s estate, and
there is no continuity of enterprise or otherwise or common identity between Lendistry and any
Debtor. Lendistry is not holding itself out as a continuation of any Debtor. Lendistry is not a
successor to any Debtor or any Debtor’s estate by reason of any theory of law or equity, and the
Transfer does not amount to a consolidation, merger or de facto merger of Lendistry and the
Debtors or any of the Debtors’ estates. Lendistry shall not assume or in any way be responsible
for any obligation or liability of any Debtor or any Debtor’s estate, except as expressly provided
in the Loan Transfer Agreement. The Transfer of the Transferred Loans to Lendistry will not
subject Lendistry to any liability with respect to the operation of the Debtors’ businesses prior to
the Closing or by reason of such transfer.
3
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6. The Transfer shall constitute a legal, valid, and effective transfer of the
Transferred Loans and shall vest Lendistry with all right, title, and interest of the Debtors in and
to the Transferred Loans other than the FRB-SF Interests and the Plan Reversion Interest.
7. The transactions contemplated by the Loan Transfer Agreement are
undertaken by Lendistry in good faith, as that term is used in section 363(m) of the Bankruptcy
Code, and accordingly, the reversal or modification on appeal of the authorization provided herein
shall not affect the validity of the Transfer of the Transferred Loans to Lendistry, unless such
authorization is duly stayed pending such appeal. Lendistry has proceeded in good faith and
without collusion in all respects and is entitled to all of the protections afforded by section 363(m)
of the Bankruptcy Code. Neither the Transfer of the Transferred Loans nor the Loan Transfer
Agreement is subject to avoidance, and no party is entitled to any damages or other recovery in
connection therewith under section 363(n) of the Bankruptcy Code.
8. Effective upon the Closing Date, except for the FRB-SF and the Company
with respect to the FRB-Interests and the Plan Reversion Interest, respectively, all persons and
entities are forever prohibited and enjoined from commencing or continuing in any manner any
action or other proceeding, whether in law or equity, in any judicial, administrative, arbitral or
other proceeding against Lendistry, its assets (including the Transferred Loans), Affiliates, or its
successors or assigns, with respect to any (a) Liens on the Transferred Loans or (b) successor,
transferee, vicarious or other similar liability or theory of liability, including (i) commencing or
continuing any action or other proceeding pending or threatened, in any manner or place, that does
not comply with, or is inconsistent with, the provisions of this Order or other orders of the Court
or the agreements or actions contemplated or taken in respect hereof or thereof; (ii) enforcing,
attaching, collecting or recovering in any manner any judgment, award, decree or order;
4
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(iii) creating, perfecting or enforcing any Lien; (iv) asserting any setoff, right of subrogation or
recoupment of any kind; or (v) revoking, terminating or failing or refusing to renew any license,
permit or authorization to administer or service any of the Transferred Loans.
9. The terms and provisions of the Loan Transfer Agreement and this Order
will be binding in all respects upon, and will inure to the benefit of, the Debtors, their estates, the
Wind-Down Estates, the Wind-Down Officer, Lendistry, and their respective affiliates, successors
and assigns, and any affected third parties including, but not limited to, all persons asserting claims
in the Transferred Loans to be transferred to Lendistry pursuant to the Loan Transfer Agreement.
10. Notwithstanding any applicable Bankruptcy Rule or Local Rule to the
contrary, this Order is effective and enforceable immediately upon entry, and the Debtors may
complete the transactions contemplated hereby immediately.
11. To the extent any provisions of this Order conflict with the terms and
conditions set forth in the Motion or the Loan Transfer Agreement, this Order shall govern and
control.
12. The Court retains jurisdiction with respect to all matters arising from or
related to the implementation, interpretation, and enforcement of this Order.
Dated: April 11th, 2023 CRAIG T. GOLDBLATT
Wilmington, Delaware UNITED STATES BANKRUPTCY JUDGE
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