Further Revised Order
- Date
- 2022-11-01
Summary
Exhibit 1, Further Revised Order, filed November 1, 2022 as Doc 190-1 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. It sets out a proposed Final Order authorizing the Debtors to pay prepetition wages, salaries, employee benefits and other compensation and to maintain employee benefit programs. The order would authorize payment of prepetition Employee Obligations not to exceed $1,070,800, with a chart allocating amounts such as $600,000 for Deferred 2020 Payroll Tax and $400,000 for Contractor Workforce Compensation. It limits payments to the statutory caps of sections 507(a)(4) and (5), excludes bonus and severance obligations other than a bonus to one eligible employee not to exceed $20,000, and makes the order effective immediately.
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Case 22-10951-CTG Doc 190-1 Filed 11/01/22 Page 1 of 6
Exhibit 1
Further Revised Order
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
------------------------------------------------------------ x
In re : Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., : Case No. 22-10951 (CTG)
:
:
Debtors.1 : (Jointly Administered)
:
: Re: Docket Nos. 10, 75
------------------------------------------------------------ X
FINAL 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 “Original Motion”) 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”), and the supplement thereto, dated October 21, 2022 (the
“Supplement” and collectively with the Original Motion, the “Motion”)2 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
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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(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 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 entered an order granting the relief requested in the Motion on an interim basis; 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 this Court having
determined that the legal and factual bases set forth in the Motion establish just cause for the relief
granted herein; 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 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, $1,070,800 and any related
expenses, fees and costs incident to the foregoing, and (ii) 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 Final Amount
Administration Fees $1,000
Compensation $35,000
Employee Bonus Program $0
Employee Benefit Programs $22,000
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 $1,070,800
3. Notwithstanding any other provision of this Final Order nothing in this
Final 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 (the “Statutory Caps”); provided, however that the Debtors are authorized but
not directed to pay prepetition obligations on account of one member of the Contractor Workforce
in excess of the Statutory Caps (as applicable) as and to the extent set forth in the Supplement.
4. Except as set forth in paragraph 7 of this Final Order, nothing in the Motion
or this Final 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
3
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Bonus Program, or which are subject to section 503(c) of the Bankruptcy Code, including, for the
avoidance of doubt, payment of any obligations 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 Final Order.
7. The Debtors are authorized, but not directed, to honor bonuses to one (1)
eligible Employee pursuant to the Employee Bonus Program, in an amount not to exceed $20,000.
4
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8. The Debtors are authorized, but not directed, to continue to retain and pay
the Contractor Workforce through the Employment Vendors in the ordinary course of business as
provided for in the Motion. For the avoidance of doubt, nothing in this Final Order authorizes the
Debtors to retain and pay any professional, executive officer or director in violation of sections
327, 328 or 363 of the Bankruptcy Code.
9. Nothing contained in the Motion or this Final Order, nor any payment made
pursuant to the authority granted by this Final 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.
10. Nothing in this Final 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.
11. Notice of the Motion is adequate under Bankruptcy Rule 6004(a).
12. Notwithstanding the provisions of Bankruptcy Rule 6004(h), this Final
Order shall be immediately effective and enforceable upon its entry.
13. The Debtors are authorized to take all actions necessary or appropriate to
effectuate the relief granted in this Final Order.
14. 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.
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