Proposed Order on Motion to Enforce Settlement Agreement

Summary

Exhibit A to Doc 336 in In re: Kabbage, Inc., d/b/a KServicing, et al., Chapter 11 Case No. 22-10951 (CTG), in the U.S. Bankruptcy Court for the District of Delaware, filed 12/07/22 as Doc 336-2, is a proposed order on the motion of Customers Bank to compel compliance with a court-approved settlement agreement. The form of order would grant the motion and direct the debtor to pay Customers Bank, within five (5) business days, the Borrower Remittances it collected from October 3, 2022 through October 31, 2022 on PPP loans it services for the bank, with servicing reports. Going forward, the remittances would be reported and remitted without deduction or offset. As further adequate protection, the debtor would segregate the remittances in a Trust Account at Synovus Bank, give Customers Bank access and ownership rights, and make no other disbursements without the bank's written instruction.

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EXHIBIT A
ORDER

Case 22-10951-CTG    Doc 336-2    Filed 12/07/22    Page 1 of 4

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re:

KABBAGE, INC., d/b/a KSERVICING, et al.,1
Debtors.
Chapter 11
Case No. 22-10951 (CTG)
(Jointly Administered)

Re: Docket No. ___

ORDER (I) COMPELLING COMPLIANCE WITH COURT APPROVED
SETTLEMENT AGREEMENT AND ORDER; (II) REQUIRING ADDITIONAL
ADEQUATE PROTECTION IN FAVOR OF CUSTOMERS BANK;
AND (III) GRANTING RELATED RELIEF
Upon the Motion of Customers Bank for Entry of an Order (I) Compelling Compliance
with Court Approved Settlement Agreement and Order; (II) Requiring Additional Adequate
Protection in Favor of Customers Bank, and (III) Granting Related Relief (the “Motion”)2 of
Customers Bank pursuant to sections 105, 361 and 363(e) of title 11 of the Bankruptcy Code, and
Rules 4001 and 9013 of the Federal Rules of Bankruptcy Procedure, and Local Rules 4001-1 and
9013-1 for entry of an order (i) compelling the Debtor’s immediate and prospective compliance
with its obligations under the Court approved Settlement Agreement to segregate, account for, and
remit to Customers Bank the Borrower Remittances collected from counterparties to PPP loans
that the Debtor is servicing on behalf of Customers Bank starting as of October 3, 2022; (ii)
directing the Debtor to provide Customers Bank with additional forms of adequate protection of
its ownership interest in the Borrower Remittances; and (iii) granting Customers Bank such other

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  All capitalized terms not expressly defined herein shall have the same meaning as ascribed in the Motion.
Case 22-10951-CTG    Doc 336-2    Filed 12/07/22    Page 2 of 4

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related relief as is just and proper; and the Court having determined that there is good and sufficient
cause for the relief set forth in the Order; and the Court having jurisdiction to consider the Motion
and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334 and the Amended
Standing Order of Reference from the United States District Court for the District of Delaware
dated as of February 29, 2012 and the 9019 Order; and the Court having found that this is a core
proceeding pursuant to 28 U.S.C. § 157(b)(2); and the Debtor having consented to entry of a final
order under Article III of the United States Constitution; and the Court having found that venue of
this proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409;
and it appearing that proper and adequate notice of the Motion has been given and that no other or
further notice is necessary; and upon the record herein; and after due deliberation thereon;
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1.
The Motion is GRANTED, as set forth herein.
2.
The Debtor is ordered and directed to issue payment to Customers Bank within five
(5) business days of entry of this Order of the amount of Borrower Remittances received by the
Debtor on Customers Bank’s behalf from October 3, 2022 through October 31, 2022 (“October
Payment”), accompanied by all servicing and remittance reports detailing the calculation of the
October Payment prepared by the Debtor. The October Payment shall not be subject to reduction
or offset.
3.
Following entry of this Order, the procedure set forth in Paragraph 2 herein shall
apply prospectively such that the Borrower Remittances collected by the Debtor from
counterparties to PPP loans that the Debtor is servicing on behalf of Customers Bank shall be
timely reported, calculated, and remitted to Customers Bank without deduction, offset, or
reduction, unless expressly authorized and agreed to by Customers Bank.
Case 22-10951-CTG    Doc 336-2    Filed 12/07/22    Page 3 of 4

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4.
As further adequate protection of its ownership interest in the Borrower
Remittances collected by the Debtor from counterparties to loans that it is servicing on Customers
Bank's behalf, the Debtor is hereby ordered and directed to:
 timely and accurately prepare and distribute the Customers Bank Servicing Plan
Reports as set forth in Exhibit A to the Settlement Agreement;
 segregate into the Trust Account and retain all Borrower Remittances pertaining to
Customers Bank’s PPP Loans pending payment in accordance with Customers
Bank’s instructions;
 cause Synovus Bank to add Customers Bank as an authorized user of, and owner
of, the Trust Account;
 cause Synovus Bank to provide Customers Bank with unrestricted online access to
the Trust Account; and
 refrain from authorizing disbursements, withdrawals (debits) or transfers from the
Trust Account other than to Customers Bank without the express, written
instruction of Customers Bank’s authorized representatives.
5.
This Order shall be immediately effective and enforceable upon its entry.
6.
The 9019 Order and Settlement Order shall remain in full force and effect.
7.
The Court shall retain jurisdiction to hear and determine all matters arising from or
related to the implementation, interpretation, or enforcement of this Order.

Case 22-10951-CTG    Doc 336-2    Filed 12/07/22    Page 4 of 4

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