Final Order (I) Approving Debtors’ Proposed Form Of Adequate
- Date
- 2022-10-20
Summary
Doc 127-1, filed October 20, 2022 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951 (CTG), jointly administered Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware, is Exhibit A, a form of final order on the debtors' utilities motion (Docket Nos. 8 & 74). The order would approve the Adequate Assurance Deposit as adequate assurance of future payment under section 366 of the Bankruptcy Code and bar Utility Providers from altering, refusing or discontinuing service over prepetition charges. It sets Adequate Assurance Procedures under which a provider seeking more assurance must serve a written Additional Assurance Request, with a Determination Hearing if no resolution is reached within 20 days. It also lets the debtors amend the Utility Services List and adjust the deposit. The document is seven pages.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 22-10951-CTG Doc 127-1 Filed 10/20/22 Page 1 of 7
EXHIBIT A
RLF1 28121132v.1
Case 22-10951-CTG Doc 127-1 Filed 10/20/22 Page 2 of 7
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------------------ x
In re : Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., : Case No. 22-10951 (CTG)
:
: (Jointly Administered)
1
Debtors. :
------------------------------------------------------------ x Re: Docket Nos. 8 & 74
FINAL ORDER (I) APPROVING DEBTORS’ PROPOSED FORM OF ADEQUATE
ASSURANCE OF PAYMENT TO UTILITY PROVIDERS, (II) ESTABLISHING
PROCEDURES FOR RESOLVING OBJECTIONS BY UTILITY PROVIDERS,
(III) PROHIBITING UTILITY PROVIDERS FROM ALTERING, REFUSING, OR
DISCONTINUING SERVICE, AND (IV) GRANTING RELATED RELIEF
Upon the motion (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 orders (i) approving the Debtors’ proposed form of adequate assurance of
payment to the Utility Providers, (ii) establishing procedures for resolving objections by the Utility
Providers relating to the adequacy of the Adequate Assurance Deposit, (iii) prohibiting the Utility
Providers from altering, refusing, or discontinuing service to, or discriminating against, the
Debtors on account of the commencement of these Chapter 11 Cases or outstanding prepetition
invoices, and (iv) granting related relief, all as more fully set forth in the Motion; and this Court
having 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
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
Case 22-10951-CTG Doc 127-1 Filed 10/20/22 Page 3 of 7
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 held hearings to consider the relief requested in the Motion on an interim and, if necessary,
final basis (the “Hearings”); and upon the First Day Declaration and the record of the Hearings,
and all of the proceedings had before this Court; 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 after
due deliberation and sufficient cause appearing therefor,
IT IS HEREBY ORDERED THAT
1. The Motion is granted on a final basis to the extent set forth herein.
2. The Adequate Assurance Deposit shall constitute adequate assurance of
future payment as required by section 366 of the Bankruptcy Code.
3. Each of the Banks at which the Debtors maintain their accounts relating to
the payment of the Utility Services are authorized to (a) receive, process, honor, and pay all checks
presented for payment, and to honor all fund transfer requests made by the Debtors related thereto,
to the extent that sufficient funds are on deposit in those accounts, and (b) 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 before, on, or after
the Petition Date, without any duty to inquire otherwise.
2
Case 22-10951-CTG Doc 127-1 Filed 10/20/22 Page 4 of 7
4. Subject to the Adequate Assurance Procedures, all Utility Providers are
prohibited from altering, refusing, or discontinuing Utility Services, or otherwise discriminating
against the Debtors, on account of any unpaid prepetition charges or any perceived inadequacy of
the Debtors’ Adequate Assurance Deposit.
5. The following Adequate Assurance Procedures are hereby approved:
a. The Debtors shall serve a copy of the Motion and this Final Order
on the Utility Providers on the Utility Services List within two
business days after entry of this Final Order.
b. The portion of the Adequate Assurance Deposit attributable to each
Utility Provider shall be returned to the Debtors on the earlier of
(i) reconciliation and payment by Debtors of the Utility Provider’s
final invoice in accordance with applicable nonbankruptcy law
following the Debtors’ termination of Utility Services from such
Utility Provider and (ii) the effective date of any chapter 11 plan
confirmed in these Chapter 11 Cases.
c. Any Utility Provider desiring additional assurances of payment in
the form of deposits, prepayments, or otherwise must serve a request
for additional assurance (an “Additional Assurance Request”) on
the following parties: (i) proposed counsel to the Debtors, (a) Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY 10153
(Attn: Elizabeth Ruocco, Esq. (elizabeth.ruocco@weil.com) and
Chase A. Bentley, Esq. (chase.bentley@weil.com)) and
(b) Richards, Layton & Finger, P.A., One Rodney Square, 920 N.
King Street, Wilmington, DE, 19801 (Attn: Daniel J. DeFranceschi
Esq. (defranceschi@rlf.com) and Zachary I. Shapiro, Esq.
(shapiro@rlf.com)), (ii) the Office of the United States Trustee, 844
King Street, Suite 2207, Wilmington, DE 19801 (Attn: Richard
Schepacarter (richard.schepacarter@usdoj.gov)), and (iii) counsel
for any official committee of unsecured creditors appointed in these
Chapter 11 Cases (collectively, the “Utility Notice Parties”).
d. The Additional Assurance Request must (i) be made in writing,
(ii) set forth the location(s) for which Utility Services are provided,
the account number(s) for such location(s), and the outstanding
balance for each such account, (iii) explain why the Utility Provider
believes the Adequate Assurance Deposit is not adequate assurance
of payment, (iv) certify the amount that is equal to two weeks of the
Utility Services provided by the Utility Provider to the Debtors,
calculated as a historical average over the six (6) month period
preceding the Petition Date, and (v) certify that the Utility Provider
3
Case 22-10951-CTG Doc 127-1 Filed 10/20/22 Page 5 of 7
does not already hold a deposit equal to or greater than two weeks
of Utility Services provided by such Utility Provider.
e. Upon the Debtors’ receipt of an Additional Assurance Request, the
Debtors shall negotiate in good faith with such Utility Provider to
try to resolve such Utility Provider’s Additional Assurance Request.
f. The Debtors may, without further order from this Court, resolve an
Additional Assurance Request by mutual agreement with a Utility
Provider, and the Debtors may, in connection with any such
agreement, provide a Utility Provider with additional adequate
assurance of payment, including cash deposits, prepayments, or
other forms of security if the Debtors believe that such adequate
assurance is reasonable.
g. If the Debtors and the Utility Provider are not able to reach an
alternative resolution within 20 days of receipt of the Additional
Assurance Request, the Debtors shall request a hearing before this
Court at the next regularly scheduled omnibus hearing to determine
the adequacy of assurances of payment with respect to a particular
Utility Provider (the “Determination Hearing”) pursuant to
section 366(c)(3) of the Bankruptcy Code.
h. Pending resolution of Additional Assurance Requests or the
Determination Hearing, the Utility Provider filing such Additional
Assurance Request shall be prohibited from altering, refusing, or
discontinuing Utility Services to the Debtors on account of unpaid
charges for prepetition services or on account of any objections to
the Adequate Assurance Deposit.
6. The Utility Providers are prohibited from requiring additional adequate
assurance of payment other than pursuant to the Adequate Assurance Procedures.
7. The inclusion of any entity in, as well as any omission of any entity from,
the Utility Services List shall not be deemed an admission by the Debtors that such entity is, or is
not, a utility within the meaning of section 366 of the Bankruptcy Code, and the Debtors reserve
all rights and defenses with respect thereto.
8. The Debtors are authorized to amend the Utility Services List to remove
Utility Providers, including to the extent the Debtors terminate the services of any Utility Provider,
provided that the Debtors give at least three (3) business days' notice of the affected Utility
4
Case 22-10951-CTG Doc 127-1 Filed 10/20/22 Page 6 of 7
Provider. The Debtors are also authorized to amend the Utility Services List to add Utility
Providers to the extent the Debtors identify additional Utility Providers. This Final Order shall
apply to any such Utility Provider that is added to the Utility Services List and that receives service
of this Final Order. The Debtors shall serve a copy of this Final Order upon any Utility Provider
added to the Utility Services List.
9. The Debtors shall increase the amount of the Adequate Assurance Deposit
if an additional Utility Provider is added to the Utility Services List by an amount equal to two
weeks of Utility Services provided by such additional Utility Provider, calculated using the
historical average for such payments during the six (6) months prior to the Petition Date. The
Debtors may terminate the services of any Utility Provider and are immediately authorized to
reduce the Adequate Assurance Deposit by the amount held on account of such terminated Utility
Provider provided that the Debtors remove such Utility Provider from the Utility Services List in
accordance with paragraph 8 of this Final Order and there are no outstanding disputes related to
post-petition payments due.
10. The relief granted herein is for all Utility Providers providing Utility
Services to the Debtors and that receive service of this Final Order and is not limited to those
parties or entities listed on the Utility Services List. Any additional Utility Provider added to the
Utility Services List is not subject to the terms of this Final Order until the Adequate Assurance
Deposit is increased as set forth herein on account of such additional Utility Provider.
11. Notwithstanding entry of this Final Order, nothing herein shall create, nor
is intended to create, any rights in favor of or enhance the status of any claim held by, any party.
12. Notice of the Motion is adequate under Bankruptcy Rule 6004(a).
5
Case 22-10951-CTG Doc 127-1 Filed 10/20/22 Page 7 of 7
13. Notwithstanding Bankruptcy Rule 6004(h), this Final Order shall be
immediately effective and enforceable upon its entry.
14. The Debtors are authorized to take all actions necessary or appropriate to
carry out the relief granted in this Final Order.
15. This Court shall retain jurisdiction to hear and determine all matters arising
from or related to the implementation, interpretation, or enforcement of this Final Order.
6
File and source
- File
- gov.uscourts.deb.188293.127.1.pdf
- Size
- 244,895 bytes
- SHA-256
- 22e85f3687362018b6ed5cc46f6ba62d215837233d0c6d0779c82f29e999d43b
- Original
- archive.org