DOJ False Claims Act Settlement Agreement — EDTX (USA v. Kabbage / Pietschner Qui Tam)

Record facts

Summary

A False Claims Act settlement agreement among the United States, acting through the Department of Justice for the U.S. Small Business Administration, K.Servicing Wind Down Corp. and the bankruptcy estates of Kabbage, Inc. d/b/a K.Servicing, and relator Paul Pietschner. The recitals describe Kabbage as a Paycheck Protection Program lender and processing agent that originated or facilitated over 310,000 PPP loan applications, and set out lender requirements from the Interim Final Rule at 85 Fed. Reg. 20811 and SBA Forms 2484 and 1502. They recount the relator's qui tam action, No. 4:21-cv-00110-SDJ, and the Chapter 11 case filed October 3, 2022, Case No. 22-10951 (CTG). They list SBA proof of claim No. 245 for $720,218,115.31 and proof of claim No. 247 for $346,157,724. Its terms address excluded liabilities, withdrawal of relator claims except Claim 174, and public disclosure.

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Full text

SETTLEMENT AGREEMENT 
This Settlement Agreement ("Agreement") is entered into among the United 
States ofAmerica, acting through the United States Department of Justice and on behalf 
of the U.S. Small Business Administration ("SBA") ( collectively the "United States"), 
K.Servicing Wind Down Corp. and the bankruptcy estates ofKabbage, Inc. d/b/a 
K.Servicing (the "Wind Down Estates") (through its Wind Down Officer Jeremiah Foster) 
the "Wind Down Officer")), and Paul Pietschner ("Relator") (hereinafter collectively 
referred to as "the Parties"), through their authorized representatives. 
RECITALS 
A. 
The Paycheck Protection Program ("PPP") was a federal program that 
provided emergency relief to small businesses affected by the COVID-19 pandemic. See 
15 U.S.C. § 636(a)(36). The SBA administered the PPP and guarantees loans that were 
made according to PPP rules. 
B. 
Prior to October 3, 2022, Kabbage, Inc. ("Kabbage") was a Delaware 
corporation headquartered in Atlanta, Georgia, and was a PPP lender and a processing 
agent for third-party banks making PPP loans. During Kabbage's participation in PPP, 
Kabbage originated or facilitated over 310,000 PPP loan applications and received over 
$-190 million in processing fees on these loans. 
C. 
On April 15, 2020, SBA issued an Interim Final Rule establishing lender 
requirements for PPP. 85 Fed. Reg. 20811, 20815 (Apr. 15, 2020). That regulation 
required that lenders: 

1. 
Confirm receipt ofborrower certifications contained in Paycheck 
Protection Program Application form issued by the 
Administration; 
11. 
Confirm receipt ofinformation demonstrating that a borrower had 
employees for whom the borrower paid salaries and payroll taxes 
on or around February 15, 2020; 
111. 
Confirm the dollar amount of average monthly payroll costs for the 
preceding calendar year by reviewing the payroll documentation 
submitted with the borrower's application; and 
1v. 
Follow applicable [Bank Secrecy Act] requirements .... 
Id. SBA guidance further required that lenders perform a "good faith review, in a 
reasonable time" of the borrower's application. SBA PPP FAQ #1 (Apr. 3, 2020). 
After the lender processed and approved a borrower's PPP loan application, but 
prior to the closing ofthe PPP loan, the PPP required a lender to submit SBA Form 2484, 
applying for a guarantee on the loan. SBA Form 2484 required a lender to certify that it 
had complied with paragraphs 3.b(i)-(iii) ofthe April 15 Interim Final Rule, as laid forth 
above. SBA Form 2484 required a further certification that "[t]he Lender has obtained 
and reviewed the required application (including documents demonstrating qualifying 
payroll amounts) ofthe Applicant and will retain copies ofsuch documents in the 
Applicant's loan file." 
To receive PPP processing fees, the PPP required lenders to submit SBA Form 
1502. 85 Fed. Reg. 26321 (May 4, 2020). Form 1502 requires the lender to confirm that 
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"all the information" in each Form 1502 was "true and correct." SBA Procedural Notice, 
No. 5000-20028 (May 11, 2020). 
D. 
On Februa1y 5, 2021, Relator filed a qui tam action in the United States 
District Court for the Eastern District of Texas captioned United States ex rel. Paul 
Pietschner v. Kabbage, Inc., et al., No. 4:21-cv-00110-SDJ, pursuant to the qui tam 
provisions of the False Claims Act, 31 U.S.C. § 3730(b) (the "Texas Civil Action"). 
Relator alleges Kabbage, in making PPP loans, knowingly submitted false certifications 
to the SBA when Kabbage knew it did not implement adequate fraud controls sufficient 
to comply with the PPP requirements, including Bank Secrecy Act/Anti-Money 
Laundering (BSA/AML) requirements, during its participation in the PPP, and knew 
and/or had reason to know that it was submitting fraudulent and ineligible PPP loan 
applications to the SBA. 
E. 
On or around June 15, 2021, Kabbage received a Civil Investigative 
Demand from the Department of Justice, Civil Division, Fraud Section, which indicated 
that the federal government was investigating whether Kabbage caused the submission of 
false claims to the SBA in connection with PPP loans. 
F. 
On October 3, 2022, Kabbage filed for Chapter 11 bankruptcy in the 
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), In re Kabbage, 
Inc. dlb/a KServicing, Inc., et al., Case No. 22-10951 (CTG) (hereinafter "Bankruptcy 
Case"). 
G. 
On March 15, 2023, the Bankrnptcy Court entered the confirmation order 
approving and confirming the Amended Joint Chapter 11 Plan of Liquidation (the "Plan") 
ofKabbage, Inc. (D/B/A KServicing) and Its Affiliated Debtors (collectively, the 
3 

"Debtors"). The Plan became effective on June 20, 2023, at which time the Wind Down 
Officer began serving and administering the Wind Down Estates. Under the Plan, the 
Wind Down Officer has authority to compromise claims against the Wind Down Estates, 
subject to certain consent and consultation rights held by third parties. 
H. 
On March 31, 2023, SBA filed proof ofclaim No. 245 (the "SBA Claim") 
asserting certain administrative claims as a claim in the amount of$720,218,115.31, and 
secured to the extent ofany setoffright, 11 U.S.C. §§ 506(a) & 553, in the Bankruptcy 
Case. 
I. 
On April 3, 2023, the United States filed proof ofclaim No. 247 ("POC 
No. 247") as a claim in the amount of$346,157,724, and secured to the extent of any 
setoff right, 11 U.S.C. §§ 506(a) & 553, in the Bankruptcy Case. 
J. 
On November 30, 2022, as reflected in the table below, Relator filed 
multiple proofs ofclaim in the bankruptcy cases. As set forth in the table below, Relator 
subsequently withdrew certain of the proofs ofclaims on January 30, 2023, leaving 
certain "Smviving Claims," each asserting an unliquidated, contingent general unsecured 
claim against the applicable Debtor. 
Claim 
Number 
Debtor Entity 
Withdrawn/ Surviving 
Claim 133 
Kabbage, Inc. d/b/a KServicing 
Withdrawn, See Doc 493 
Claim 174 
Kabbage, Inc. d/b/a KServicing 
Surviving Claim 
Claim 7 
Kabbage Canada Holdings, LLC 
Withdrawn, See Doc 495 
Claim 8 
Kabbage Canada Holdings, LLC 
Surviving Claim 
Claim 5 
Kabbage Asset Securitization, LLC 
Withdrawn, See Doc 497 
Claim 6 
Kabbage Asset Securitization, LLC 
Smviving Claim 
Claim 6 
Kabbage Asset Funding 2017-A, LLC 
Kabbage Asset Funding 2017-A, LLC 
Withdrawn, See Doc 500 
Surviving Claim 
Claim 7 
Claim 8 
Kabbage Asset Funding 2019-A, LLC 
Withdrawn, See Doc 501 
Claim 10 
Kabbage Asset Funding·2019-A, LLC 
Surviving Claim 
Claim 6 
Kabbage Diameter, LLC 
Withdrawn, See Doc 502 
Claim 7 
Kabbage Diameter, LLC 
Surviving Claim 
4 

Relator now agrees to further withdraw all Surviving Claims, with the exception 
of Claim 174 filed against Kabbage, Inc. d/b/a KServicing. As a result, Relator's 
currently asserted claim is Claim 174 against Kabbage ("POC 174") as an unsecured 
claim in the allowed amount of$250,000.00 based on attorneys' fees under 31 U.S.C. 
§ 3730(d), as more fully set forth in paragraph 3, below. 
K. 
After the bankrnptcy filing referenced in Paragraph F of the recitals above, 
the Wind Down Estates (through counsel and the Wind Down Officer) reviewed 
materials pertinent to the government's investigation, and met with government 
representatives multiple times to discuss the government's allegations. 
L. 
The United States contends that it has certain civil claims against the Wind 
Down Estates arising from false claims submitted by Kabbage to the SBA based on the 
following alleged conduct during the period from April 1, 2020 through May 31, 2021: 
(1) 
Kabbage knew that to participate in the PPP, it was required to comply 
with the PPP requirements, including BSA/ AML obligations; 
(2) 
Kabbage knowingly and systematically failed to conduct a timely good 
faith review to identify fraudulent bonowers and prevent disbursement offraudulent 
loans, in violation ofthe PPP requirement that lenders comply with applicable BSA/AML 
obligations, 85 Fed. Reg. 20811, 20815; 
(3) 
Kabbage knowingly and systematically submitted these fraudulent PPP 
loan applications and PPP loan applications that were highly suspicious offraud to the 
SBA for approval; 
(4) 
Kabbage falsely certified to the SBA its compliance with applicable rules 
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and regulations on SBA Forms 2484 and 1502 in connection with fraudulent loans 
approved by Kabbage, for which Kabbage and its partner banks received processing fees, 
and forgiveness payments or guaranty payments paid by the SBA; and 
(5) 
Kabbage knowingly set substandard fraud check thresholds, reduced its 
fraud review staff, instructed staff to submit to the SBA highly suspicious PPP loans 
despite Kabbage staff having identified those loans as fraudulent or highly suspicious of 
fraud, and encouraged employees to approve more PPP loans applications to increase 
revenue. 
Any claims that Kabbage submitted or caused to be submitted to the SBA related 
to fraudulent loans and loans highly suspicious for fraud, including with respect to any 
claims arising from or related to processing fees, guarantee purchase payments, or 
forgiveness payments, which SBA paid, as set out in subparagraphs (1) through (5) of 
Paragraph L, are referred to below as the "Covered Conduct." 
M. 
This Settlement Agreement is neither an admission of liability by the 
Wind Down Estates nor a concession by the United States that its claims are not well 
founded. 
N. 
Relator claims entitlement under 31 U.S.C. § 3730(d) to a share ofthe 
proceeds ofthis Agreement and to Relator's reasonable expenses, attorneys' fees, and 
costs. Relator is not entitled under 31 U.S.C. § 3730(d) to a share ofthe proceeds ofany 
recovery pursuant to the SBA Claim. 
0. 
SBA and the Wind Down Estates have been and continue to be engaged in 
separate discussions regarding a potential settlement or compromise of their respective 
claims, rights, and defenses, including as to the SBA Claim but not as to the claims 
6 

released in Paragraph 4 below. This Agreement is not intended to and does not resolve or 
impact any claims, rights, or defenses of the SBA or the Wind Down Estates against one 
another except as related to the claims released in Paragraph 4 below. 
In consideration of the mutual promises and obligations of this Agreement, the 
Parties agree and covenant as follows: 
TERMS AND CONDITIONS 
1. 
The Wind Down Estates agree that the United States has an Allowed 
General Unsecured Claim (as that term is defined in the Plan) that is not subject to 
subordination or reconsideration against Kabbage in the Bankruptcy Case for the 
Covered Conduct in the amount offifty-six million seven hundred five thousand seven 
hundred twenty-nine dollars and fifty-seven cents ($56,705,729.57) (the "Allowed 
Claim"), which includes twenty-eight million three hundred fifty-two thousand eight 
hundred sixty-four dollars and seventy-nine cents ($28,352,864.79) in restitution. The 
Parties agree that the Allowed Claim shall be tr·eated pari passu with all other allowed 
general unsecured claims against Kabbage under the Plan- except that the Parties agree 
that six million six hundred sixty-nine thousand five hundred sixteen dollars and fifty-six 
cents ($6,669,516.56) (the "Supplemental Amount") shall not be used to calculate the pro 
rata distribution paid to the United States until all other unsecured creditors' allowed 
claims against Kabbage have been paid in full. The Parties further agree that once, and 
only if, all other allowed general unsecured claims against Kabbage have been paid in 
full, the United States shall receive payment on account ofthe Supplemental Amount as 
an allowed general unsecured claim against Kabbage, paripassu with ProofofClaim No. 
246, also filed by the United States. 
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2. 
Upon the United States receiving payment ofany portion of the Allowed 
Claim from the Wind Down Estates and as soon as feasible after receipt, the United 
States shall pay an eighteen percent (18%) share of that portion of the Allowed Claim 
received by the United States ("Relator's Share") to Relator by electronic funds transfer 
pursuant to 31 U.S.C. § 3730(d). Relator agrees that the United States shall not be 
obligated to pay Relator more than eighteen percent (18%) ofthe total portion of the 
Allowed Claim that the United States receives from the Bankruptcy Case. 
3. 
The Wind Down Estates further agree that Relator shall have a single 
Allowed General Unsecured Claim (as that term is defined in the Plan) that is not subject 
to subordination or reconsideration against Kabbage in the Bankruptcy Case for Relator's 
claims on account offees and costs under 31 U.S.C. § 3730(d) in the amount of 
$250,000, which shall be associated with POC 174 (the "Allowed Fees Claim"). The 
Parties agree that the Allowed Fees Claim shall be Relator's only direct claim in the 
Bankruptcy Case and will be treated pari passu with all other allowed general unsecured 
claims against Kabbage under the Plan. The Allowed Fees Claim is intended to be a pro 
tan to settlement and is not evidence ofRelator's actual fees, expenses, and costs. Other 
than the Allowed Fees Claim, which is Relator's surviving claim against the Wind Down 
Estates, the Wind Down Estates are authorized to expunge any proof ofclaim filed by 
Relator from the official claims registry maintained in these chapter 11 cases (including 
those set fmth in Paragraph J, above) as necessary to reflect terms of this settlement. 
4. 
Subject to Paragraph 6 (concerning reserved claims), and upon the 
Effective Date ofthe Agreement, the United States releases the Wind Down Estates from 
any civil or administrative monetary claim the United States has for the Covered Conduct 
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under the False Claims Act, 31 U.S.C. §§ 3729-3733, the Program Fraud Civil Remedies 
Act, 31 U.S.C. §§ 3801-3812, or the common law theories of breach ofcontract, payment 
by mistake, unjust emichment, and fraud; or under the setoff provisions of 11 U.S.C. § 
553 with respect to the Allowed Claim. Ifany court or arbitrator finds that this Paragraph 
releases, hinders, or otherwise bars any claim pursued by the Wind Down Estates, 
including but not limited to claims brought pursuant to 11 U.S.C. § 544, this Paragraph 
shall be rescinded and void to the extent necessary to avoid any such foregoing effect. 
This Paragraph is likewise rescinded and void if the United States is compelled by court 
order to pay back to the Wind Down Estates, any other trustee appointed in the 
Bankruptcy Case, or any successor ofthe estate any portion of the Allowed Claim. 
5. 
Subject to Paragraph 6 (concerning reserved claims), and upon the 
Effective Date ofthe Agreement, Relator, for himself and for his heirs, successors, 
attorneys, agents, and assigns, releases the Wind Down Estates, their predecessors, their 
current and former corporate parents, divisions, subsidiaries, successors, and assigns from 
any civil monetary claim Relator has on behalf ofthe United States for the Covered 
Conduct under the False Claims Act, 31 U.S.C. §§ 3 729-3733. 
6. 
Notwithstanding the releases in Paragraphs 4 or 5 ofthis Agreement, or 
any other term ofthis Agreement, the following claims and rights of the United States are 
specifically reserved and are not released: 
a. 
Any liability arising under Title 26, U.S. Code (Internal Revenue 
Code); 
b. 
Any criminal liability; 
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c. 
Any claim that the United States may have to avoid any transfer of 
property ofthe Debtors or any obligation incurred by the Debtors; 
d. 
Except as explicitly stated in this Agreement, any administrative 
liability or enforcement right, or any administrative remedy, 
including the suspension and debarment rights ofany federal 
agency; 
e. 
Any liability to the United States ( or its agencies) for any conduct 
other than the Covered Conduct; 
f. 
Any liability based upon obligations created by this Agreement; 
g. 
Any liability ofindividuals; and 
h. 
Any liability for express or implied warranty claims or other 
claims for defective or deficient products or services, including 
quality ofgoods and services. 
7. 
Nothing in this Agreement affects, modifies, alters, impairs, or diminishes 
the exculpation provisions at Paragraph 10.7 ofthe Plan except as limited by Paragraph 
32 of the order confirming the Plan. 
8. 
Relator and his heirs, successors, attorneys, agents, and assigns shall not 
object to this Agreement and agree and confirm that this Agreement is fair, adequate, and 
reasonable under all the circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B). Upon the 
Effective Date of the Agreement, Relator and his/her heirs, successors, attorneys, agents, 
and assigns fully and finally release, waive, and forever discharge the United States, its 
agencies, officers, agents, employees, and servants, from any claims arising from the 

filing of the Texas Civil Action or under 31 U.S.C. § 3730, and from any claims to a 
share of the proceeds of this Agreement and/or the Texas Civil Action. 
9. 
Relator, for himself, and for his heirs, successors, attorneys, agents, and 
assigns, releases the Wind Down Estates, and their officers, agents, and employees, from 
any liability to Relator arising from the filing ofthe Texas Civil Action, or under 31 
U.S.C. § 3730(d) for expenses or attorneys' fees and costs. 
10. 
Relator further agrees to cooperate fully and truthfully with the Wind 
Down Estates' investigation into claims vested and retained by the Wind Down Estates 
under the Plan, whether or not such claims have been filed or otherwise initiated. Such 
cooperation includes, but is not limited to, producing relevant non-privileged documents, 
making himself reasonably available for interviews with counsel for the Wind Down 
Estates, and offering truthful testimony at both deposition and trial. 
11. 
The Wind Down Estates fully and finally release the United States, its 
agencies, officers, agents, employees, and servants, from any claims (including attorneys' 
fees, costs, and expenses of eve1y kind and however denominated) that Kabbage or the 
Wind Down Estates have asserted, could have asserted, or may assert in the future against 
the United States, its agencies, officers, agents, employees, and servants, related to the 
Covered Conduct or the United States' investigation or prosecution thereof. 
Notwithstanding the foregoing, this Agreement does not affect or limit the Wind Down 
Estates' claims, rights, or defenses with respect to the SBA except as related to the claims 
released in Paragraph 4. SBA and the Wind Down Estates have been and continue to be 
engaged in separate discussions regarding a potential settlement or compromise ofany 
claims, rights, and defenses other than the claims released in Paragraph 4. 
11 

12. 
The Wind Down Estates fully and finally releases Relator from any claims 
(including attorneys' fees, costs, and expenses ofevery kind and however denominated) 
that Kabbage or the Wind Down Estates has asserted, could have asserted, or may assert 
in the future against Relator, related to the Covered Conduct and Relator's investigation 
and prosecution thereof. 
13. 
a. 
Unallowable Costs Defined: All costs (as defined in the Federal 
Acquisition Regulation, 48 C.F.R. § 31.205-4 7) incurred by or on behalf of Kabbage and 
the Wind Down Estates, and their present or former officers, directors, employees, 
shareholders, and agents in connection with: 
i. 
the matters covered by this Agreement; 
11. 
the United States' audit(s) and civil investigation(s) ofthe 
matters covered by this Agreement; 
m. 
Kabbage's investigation, defense, and corrective actions 
undertaken in response to the United States' audit(s) and 
civil investigation(s) in connection with the matters 
covered by this Agreement (including attorneys' fees); 
1v. 
the negotiation and performance ofthis Agreement; 
v. 
the payment the Wind Down Estates makes to the United 
States pursuant to this Agreement and any payments that 
the Wind Down Estates may make to Relator, including 
costs and attorneys' fees, 
are unallowable costs for government contracting purposes (hereinafter referred to as 
Unallowable Costs). 
12 

b. 
Future Treatment of Unallowable Costs: Unallowable Costs will 
be separately determined and accounted for by the Wind Down Estates, and the Wind 
Down Estates shall not charge such Unallowable Costs directly or indirectly to any 
contract with the United States. 
c. 
Treatment ofUnallowable Costs Previously Submitted for 
Payment: Within 90 days of the Effective Date ofthis Agreement, the Wind Down 
Estates shall identify and repay by adjustment to future claims for payment or otherwise 
any Unallowable Costs included in payments previously sought by Kabbage or the Wind 
Down Estates or any of their subsidiaries or affiliates from the United States. The Wind 
Down Estates agree that the United States, at a minimum, shall be entitled to recoup from 
the Wind Down Estates any overpayment plus applicable interest and penalties as a result 
ofthe inclusion ofsuch Unallowable Costs on previously submitted requests for 
payment. The United States, including the Department ofJustice and/or the affected 
agencies, reserves its rights to audit, examine, or re-examine Kabbage's books and 
records and to disagree with any calculations submitted by Kabbage or the Wind Down 
Estates or any of their subsidiaries or affiliates regarding any Unallowable Costs 
included in payments previously sought by Kabbage or the Wind Down Estates, or the 
effect of any such Unallowable Costs on the amount of such payments. 
14. 
The Wind Down Estates agree to cooperate fully and trnthfully with the 
United States' investigation ofindividuals and entities not released in this Agreement. 
Upon reasonable notice, the Wind Down Estates shall encourage, and agrees not to 
impair, the cooperation oftheir directors, officers, and employees, and shall use their best 
efforts to make available, and encourage, the cooperation offormer directors, officers, 
13 

and employees for interviews and testimony, consistent with the rights and privileges of 
such individuals. The Wind Down Estates further agree to furnish to the United States, 
upon request, complete and unredacted copies ofall non-privileged documents, reports, 
memoranda of interviews, and records in their possession, custody, or control concerning 
any investigation ofthe Covered Conduct that they have undertaken, or that has been 
performed by another on their behalf. 
15. 
The Wind Down Estates waive and shall not assert any defenses Kabbage 
or the Wind Down Estates may have had or may have to any criminal prosecution or 
administrative action relating to the Covered Conduct that may be based in whole or in 
part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of 
the Constitution, or under the Excessive Fines Clause in the Eighth Amendment ofthe 
Constitution, this Agreement bars a remedy sought in such criminal prosecution or 
administrative action. 
16. 
The Wind Down Estates agree that any amended banhuptcy plan, 
confirmation order, or any material agreement or other order ofthe Bankruptcy Court 
shall not in any manner, by their terms, contain any provisions that amend, modify, 
supplement, supersede or conflict with, any ofthe provisions ofthis Agreement in any 
manner that is materially adverse to, or materially prejudicial to the United States or the 
Relator, in each case, with respect to their rights under this Agreement. Any amended 
plan or confirmation order shall be in form and substance reasonably acceptable to the 
United States. 
14 

17. 
The United States may, in its sole discretion, declare that the occurrence of 
any of the following events is a default ofthe Wind Down Estates' obligations under this 
Agreement (each "an Event ofDefault"): 
a. the Bankruptcy Case is converted to a case under Chapter 7 of 
the Bankruptcy Code or dismissed; 
b. the Bankruptcy Court enters an order that amends, modifies, 
supplements, supersedes, or conflicts with, any ofthe 
provisions of this Agreement; 
c. the Bankruptcy Court or any other court ofcompetent 
jurisdiction, issues any ruling, judgment or order enjoining the 
consummation of this Agreement or denying approval of this 
Agreement; 
d. the filing ofa pleading by the Wind Down Estates seeking to 
withdraw, amend or modify the Plan, the Confirmation Order, 
or any motion to assume or approve this Agreement, which 
withdrawal, amendment, modification or filing is not consistent 
with this Agreement in any material respect; or 
e. any court ofcompetent jurisdiction enters a judgment or order 
declaring this Agreement to be unenforceable. 
18. 
Upon the occurrence ofan Event ofDefault the United States shall have 
the rights and protections contemplated in Paragraphs 14 through 16. An Event of 
Default may be waived by the written consent ofthe United States. 
19. 
This Agreement is intended to be for the benefit ofthe Parties only. 
15 

20. 
Within a reasonable time after the Effective Date of this Agreement, the 
United States and Relator shall promptly sign and file in the Texas Civil Action a Notice 
ofDismissal ofthe Texas Civil Action pursuant to Rule 41(a)(l). 
21. 
Each Party shall bear its own legal and other costs incurred in connection 
with this matter, including the preparation and performance of this Agreement. 
22. 
Each Party and signatory to this Agreement represents that it freely and 
voluntarily enters into this Agreement without any degree of duress or compulsion. 
23. 
This Agreement is governed by the laws of the United States. The 
exclusive venue for any dispute relating to this Agreement is the United States District 
Court for the Eastern District ofTexas except to the extent that the Bankruptcy Court has 
exclusive statutory jurisdiction. For purposes ofconstruing this Agreement, this 
Agreement shall be deemed to have been drafted by all Parties to this Agreement and 
shall not, therefore, be construed against any Party for that reason in any subsequent 
dispute. 
24. 
This Agreement constitutes the complete agreement between the Parties. 
This Agreement may not be amended except by written consent ofthe Parties. 
Forbearance by the United States from pursuing any remedy or relief available to it under 
this Agreement shall not constitute a waiver ofrights under this Agreement. Nothing in 
this Agreement shall be construed as limiting the ability ofthe SBA to enter into a 
potential agreement with the Wind Down Estates, as contemplated in Paragraph O ofthe 
recitals herein. 
16 

25. 
The undersigned counsel represent and warrant that they are fully 
authorized to execute this Agreement on behalf of the persons and entities indicated 
below. 
26. 
This Agreement may be executed in counterparts, each ofwhich 
constitutes an original and all of which constitute one and the same Agreement. 
27. 
This Agreement is binding on the Wind Down Estates' successors, 
transferees, heirs, and assigns. 
28. 
This Agreement is binding on Relator's successors, transferees, heirs, and 
assigns. 
29. 
All Parties consent to the United States' disclosure of this Agreement, and 
information about this Agreement, to the public. 
30. 
This Agreement is effective on the date of signature of the last signatory to 
the Agreement (Effective Date of this Agreement). Facsimiles ofsignatures shall 
constitute acceptable, binding signatures for purposes ofthis Agreement. 
[SIGNATURE PAGES FOLLOW] 
17 


 
Digitally signed by 
BETTY YOUNG 
Date: 2024.05.07 
13:55:16 -05'00' 

DATED: 51J j 2o2,'-{ 
KSERVICING WIND D 
19 

PAUL PIETSCHNER - RELA TOR 
DATED: 5/g,/<- '/ 
M. ~~-=----::.:::>-===-::::::-------­
DATED:~f 
BY: 
William Meyers 
Counsel for Relater Paul Pietschner 
20

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