Interim Order
- Date
- 2022-10-06
Summary
Doc 80-2, filed October 6, 2022 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951 (CTG), in the U.S. Bankruptcy Court for the District of Delaware, is Exhibit B, the Interim Order authorizing the debtors to pay prepetition wages, salaries, employee benefits and other compensation and to maintain employee benefit programs, signed by Bankruptcy Judge Craig T. Goldblatt on October 6th, 2022. The order grants the October 3, 2022 motion on an interim basis and authorizes payment of prepetition Employee Obligations not to exceed $1,050,800, with a chart that includes $600,000 in Deferred 2020 Payroll Tax and $400,000 in Contractor Workforce Compensation. It bars payments above the caps in sections 507(a)(4) and (5) and does not authorize bonus, severance or insider payments. It sets a final hearing for October 26, 2022 and an objection deadline of October 19, 2022.
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Case 22-10951-CTG Doc 80-2 Filed 10/06/22 Page 1 of 6
EXHIBIT B
Interim Order
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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In re : Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., : Case No. 22-10951 (CTG)
:
:
Debtors.1 : (Jointly Administered)
:
: Ref. Docket No. 10
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INTERIM 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 “Motion”)2 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”), 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 (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
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.
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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 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 upon the record of the hearing; 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 necessary to avoid immediate and irreparable
harm to the Debtors and their estates as contemplated by Bankruptcy Rule 6003; 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 on an interim basis 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, $1,050,800, (ii) pay any related
expenses, fees and costs incident to the foregoing, and (iii) maintain, honor, and continue the
Employee Benefit Programs in the ordinary course of business, as summarized in further detail in
the chart below:
2
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Employee Obligations Interim Amount
Administration Fees $1,000
Compensation $35,000
Employee Bonus Program $0
Employee Benefit Programs $2,000
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 $1,050,800
3. Notwithstanding any other provision of this Interim Order nothing in this
Interim 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.
4. Nothing in the Motion or this Interim 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 Bonus Program, or which are subject to section
503(c) of the Bankruptcy Code, including, for the avoidance of doubt, payment of any obligations
3
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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 Interim Order.
7. Nothing contained in the Motion or this Interim Order, nor any payment
made pursuant to the authority granted by this Interim 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.
4
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8. Nothing in this Interim 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.
9. The requirements of Bankruptcy Rule 6003(b) have been satisfied.
10. Notice of the Motion is adequate under Bankruptcy Rule 6004(a).
11. Notwithstanding the provisions of Bankruptcy Rule 6004(h), this Interim
Order shall be immediately effective and enforceable upon its entry.
12. The Debtors are authorized to take all actions necessary or appropriate to
effectuate the relief granted in this Interim Order.
13. This Court shall retain jurisdiction to hear and determine all matters arising
from or related to the implementation, interpretation, or enforcement of this Interim Order.
14. The final hearing to consider the relief requested in the Motion shall be held
on October 26, 2022 at 10:30 a.m. (Prevailing Eastern Time), and any objections or responses to
the Motion shall be in writing, filed with the Court, and served so as to be actually received on or
prior to October 19, 2022 at 4:00 p.m. (Prevailing Eastern Time).
Dated: October 6th, 2022 CRAIG T. GOLDBLATT
Wilmington, Delaware UNITED STATES BANKRUPTCY JUDGE
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