Declaration of Amanda Flug Davidoff in Support of Objection

Summary

Declaration of Amanda Flug Davidoff in Support of Objection of American Express to Joint Motion of Cross River Bank and Customers Bank for an Order Authorizing Rule 2004 Examination, filed March 15, 2023 as Doc 685 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951-CTG, U.S. Bankruptcy Court for the District of Delaware. The declaration states that the declarant is a partner of Sullivan & Cromwell LLP and one of the attorneys representing American Express. It describes communications between Sullivan & Cromwell and counsel for the Debtors at Weil, Gotshal and Manges LLP between January 4, 2023 and February 28, 2023 about transitioning loan servicing. It also describes requests that American Express received from Debtors' counsel on January 13, 2023.

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

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

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

RE: D.I.

DECLARATION OF AMANDA FLUG DAVIDOFF IN SUPPORT OF OBJECTION
OF AMERICAN EXPRESS TO JOINT MOTION OF CROSS RIVER BANK AND
CUSTOMERS BANK FOR AN ORDER AUTHORIZING RULE 2004 EXAMINATION

I, Amanda Flug Davidoff, hereby declare under penalty of perjury:

1.
I am a member in good standing of the Bar of the District of Columbia and
the Bars of the States of Connecticut and New York and have been admitted pro hac vice to
practice before this Court.  I am a partner of Sullivan & Cromwell LLP (“S&C”) and am one of
the attorneys representing American Express in the above-captioned proceedings.  I submit this
declaration in support of the Objection of American Express to Joint Motion of Cross River Bank
and Customers Bank for an Order Authorizing Rule 2004 Examination (the “Objection”), to
place before the Court certain documents and information referred to in the Objection.2
2.
On January 4, 2023, S&C reached out to Debtors’ counsel at Weil, Gotshal
and Manges LLP (“Weil”) to schedule a call to discuss Debtors’ “options for ongoing loan

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 not otherwise defined herein are defined in the Objection or Joint Motion.
683
Case 22-10951-CTG    Doc 685    Filed 03/15/23    Page 1 of 5

2

servicing following bankruptcy.”  Attached hereto as Exhibit 1 is a true and correct copy of an
email James Bromley of S&C sent to Theodore Tsekerides of Weil, copying Suniti Mehta of
S&C and me, dated January 4, 2023 at 10:33 a.m.
3.
On January 6, 2023, Mr. Bromley, Ms. Mehta and I participated in a call
with Weil during which Weil indicated that Debtors’ Partner Banks (including Movants) were
requesting information such as “know your customer” (“KYC”) and “know your business”
(“KYB”) records related to their PPP loans.  Weil agreed to provide S&C with a detailed list of
the information requested by the Partner Banks, as well as other information about the options
being considered to transition servicing.
4.
On January 11, 2023, Ms. Mehta and I participated in a call with Isaac
Nesser of Quinn Emanuel Urquhart & Sullivan (“Quinn”), during which Mr. Nesser informed us
that CRB had been unable to obtain information from Debtors that was needed to service CRB’s
loans.  We explained that Weil had recently made S&C aware of a request for KYC- and KYB-
related information, and S&C had asked Debtors’ counsel to provide a list of third-party
requests.  Mr. Nesser agreed that it would be most efficient for all requests for information from
American Express to be funneled through Weil, given that multiple parties were seeking similar
information.  Quinn and S&C did not discuss any specific CRB requests on this call or at any
time thereafter.
5.
Neither Customers Bank nor its counsel has ever communicated with S&C
about data requests to transition servicing.
6.
On January 13, 2023, American Express received from Debtors’ counsel a
letter attaching a set of requests (the “KServicing Requests”) for extensive information about
American Express’s system architecture for storing Debtors’ and the Partner Banks’ loan data
and records, documentation from Debtors’ own PPP program that American Express does not
Case 22-10951-CTG    Doc 685    Filed 03/15/23    Page 2 of 5

3

have, documentation and descriptions of American Express’s systems and processes that
American Express would need to create, and proprietary intellectual property such as all of the
“code from Amex system environment.”  The KServicing Requests also sought data for
thousands of individual loans and extensive human capital support.  Attached hereto as Exhibit 2
is a true and correct copy of an email chain, including an email Mr. Bromley, Ms. Mehta and I
received from Theodore Tsekerides of Weil, dated January 13, 2023, at 4:37 p.m.  Attached
hereto as Exhibits 3 and 4 are true and correct copies of (i) the KServicing Requests and (ii) the
cover letter accompanying the KServicing Requests.
7.
On January 19, 2023, S&C responded to the KServicing Requests.  S&C
notified Weil that “American Express is open to discussing its role in assisting KServicing with
its transition plans, including the [KServicing Requests],” and that American Express “agree[s]
that it is in the best interests of the parties to work cooperatively and that it would be helpful to
meet and confer on the request.”  S&C explained that “American Express requires more
information to understand what is being requested and the ultimate goal with respect to
transitioning servicing,” and “[s]ome of these requests may require weeks or months of
development or other work to accomplish and so should be discussed” in order to develop a
“more comprehensive transition plan[.]”  S&C noted that “[i]n light of the steps required to
scope and respond to the requests, at this time American Express cannot commit to providing all
of the documentation, access, and resources requested by February 17, 2023 but is willing to
discuss a realistic timeframe for assisting KServicing.”  Attached hereto as Exhibit 5 is a true and
correct copy of an email chain, including an email Ms. Mehta sent to Theodore Tsekerides and
Candace Arthur of Weil, copying Natasha Hwangpo, Chase Bentley and Jordan Ollestad of Weil
as well as Mr. Bromley and me, dated January 19, 2023, at 5:59 p.m.
8.
On January 27, 2023, Weil responded to S&C’s January 19, 2023 email and
Case 22-10951-CTG    Doc 685    Filed 03/15/23    Page 3 of 5

4

asked to schedule a call for February 2, 2023.  Attached hereto as Exhibit 6 is a true and correct
copy of an email chain, including an email Mr. Bromley, Ms. Mehta and I received from
Cameron Bonk of Weil, copying Theodore Tsekerides, Candace Arthur, Natasha Hwangpo,
Chase Bentley and Jordan Ollestad of Weil, dated January 27, 2023, at 5:00 p.m.
9.
On February 2, 2023, Ms. Mehta and I participated in a call with Weil.  On
this call, Weil informed us that Debtors had decided to transition servicing away from Debtors
completely, so that it would be run by Movants and other relevant parties, but Debtors did not
know whether American Express would continue to host Debtors’ PPP loan data or would need
to extract the data and send it to the new servicers.  Thus, even at this late date, there was no
clear understanding of what was needed from American Express.  Weil agreed to arrange a
comprehensive discussion among American Express, Movants, other relevant parties, and their
respective servicers about how to transition servicing away from Debtors.
10.
Weil still had not scheduled the requested transition calls after two weeks.
Weil instead sent an email on February 17, 2023 suggesting that American Express was
supposed to have been providing some data to Movant CRB.  S&C responded, reminding Weil
that they were supposed to be scheduling calls with Movants and other relevant parties to discuss
exactly what was needed from American Express.  At the same time, S&C provided Weil with
readily available PPP-related data that Debtors sought in the KServicing Requests, some of
which had been provided months earlier.  Attached hereto as Exhibit 7 is a true and correct copy
of an email chain, including an email Suniti Mehta of S&C sent to Candace Arthur of Weil,
copying Theodore Tsekerides, Natasha Hwangpo, Chase Bentley and Jordan Ollestad of Weil,
Julia Prezioso Fotos of S&C as well as Mr. Bromley and me, dated February 17, 2023, at 9:42
a.m.
11.
On February 28, 2023, Mr. Bromley, Ms. Mehta, and I again participated in
Case 22-10951-CTG    Doc 685    Filed 03/15/23    Page 4 of 5

5

a call with Weil.  On this call, Weil informed S&C for the first time how Debtors planned to
proceed with the servicing transition:  Debtors wanted American Express to extract and transfer
Debtors’ PPP loan data to Movants, other relevant parties and their servicers.  Those parties then
would not rely on American Express to continue to host such data, which Weil had said was still
a possible path forward when the firms spoke on February 2.  This was, at last, a clear request
that American Express could act upon.  At S&C’s request, Weil again agreed to arrange calls
with each of Movants, other relevant parties and their respective servicers to discuss the data and
information needed by each entity to transition servicing.
12.
On March 6, 2023, American Express proposed times to Weil for calls with
Movants and others to discuss transitioning servicing.  Weil coordinated calls with Movants and
others for March 10, 2023.  Additional calls have occurred and been scheduled since then, and
more will be set among American Express and Movants to discuss the data transfer.
I declare under penalty of perjury that the foregoing is true and correct to the best of
my knowledge.

Dated: March 15, 2023
/s/ Amanda Flug Davidoff

Amanda Flug Davidoff

Case 22-10951-CTG    Doc 685    Filed 03/15/23    Page 5 of 5

File and source

File

gov.uscourts.deb.188293.685.0.pdf

Size

204,285 bytes

SHA-256

addde5394f94ec5e57e2d77b0622c7ebef467221493556e0059baa051f414389

Our copy

gov.uscourts.deb.188293.685.0.pdf

Original

archive.org