Proposed Order

Date: 2023-01-06

Summary

Doc 426-1 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951 (CTG), a jointly administered Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware, filed January 6, 2023. It is Exhibit A, a proposed order approving a stipulation between the debtors and the United States that would extend the United States' deadline to file a complaint to determine dischargeability under 11 U.S.C. § 523(c) from January 9, 2023 to May 9, 2023. The attached stipulation, Exhibit 1, recites the October 3, 2022 petition date and the November 10, 2022 meeting of creditors. It states that the United States continues to investigate potential violations of the False Claims Act by the lead debtor, a Paycheck Protection Program lender and loan servicer. The eight-page filing is signed by counsel for the debtors and for the United States Department of Justice.

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Case 22-10951-CTG Doc 426-1 Filed 01/06/23 Page 1 of 8

EXHIBIT A

Proposed Order
Case 22-10951-CTG Doc 426-1 Filed 01/06/23 Page 2 of 8

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

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

ORDER APPROVING STIPULATION
TO EXTEND THE UNITED STATES’ DEADLINE
TO FILE A COMPLAINT TO DETERMINE DISCHARGEABILITY OF DEBT

Upon consideration of the Stipulation to Extend the United States’ Deadline to File a

Complaint to Determine Dischargeability of Debt (the “Stipulation”) 2 by and between the above-

captioned debtors (collectively, the “Debtors”) and the United States of America (the “United

States” and together with the Debtors, the “Parties”), through their respective counsel, a copy of

which is attached hereto as Exhibit 1 and related certification of counsel; and after due deliberation

and sufficient cause appearing therefor, it is hereby ORDERED:

1. The Stipulation is approved.

2. The deadline for the United States to file a complaint to determine

dischargeability under 11 U.S.C. § 523(c) shall be extended from January 9, 2023, to May 9,

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) (the “Company”); 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 herein but not otherwise defined herein shall have the meanings ascribed to them in the
Stipulation.
Case 22-10951-CTG Doc 426-1 Filed 01/06/23 Page 3 of 8

2023, or such later date as may be ordered by the Court, without prejudice to the United States’

right to seek further extension of the Nondischargeability Deadline, and without prejudice to the

Debtors’ rights, objections, or defenses related thereto.

3. The Parties are authorized to take any and all actions reasonably necessary

to effectuate the terms of the Stipulation.

4. This Court shall retain jurisdiction with respect to all matters arising from

or related to the implementation or interpretation of this Order.

5. Notwithstanding any Federal Rule of Bankruptcy Procedure or Local Rule

of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of

Delaware that might otherwise delay the effectiveness of this Order, the terms and conditions of

this Order shall be immediately effective and enforceable upon its entry.

2
Case 22-10951-CTG Doc 426-1 Filed 01/06/23 Page 4 of 8

EXHIBIT 1

Stipulation
Case 22-10951-CTG Doc 426-1 Filed 01/06/23 Page 5 of 8

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

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

STIPULATION TO EXTEND THE UNITED STATES’ DEADLINE
TO FILE A COMPLAINT TO DETERMINE DISCHARGEABILITY OF DEBT

The above-captioned debtors (collectively, the “Debtors”) and the United States of

America (the “United States” and together with the Debtors, the “Parties”) enter into this

stipulation (this “Stipulation”) to extend the deadline to file a complaint to determine

dischargeability of debt under 11 U.S.C. § 523. The Parties stipulate as follows:

A. On October 3, 2022 (the “Petition Date”), the Debtors filed their voluntary

petitions for relief under chapter 11 of title 11 of the United State Code (the “Bankruptcy Code”).

B. On November 10, 2022, the meeting of creditors pursuant to 11 U.S.C. § 341 was

scheduled and conducted (the “341 Meeting”).

C. Pursuant to Rule 4007(c) of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”), a party in interest may file a complaint under 11 U.S.C. § 523(c) within

sixty days after the first date set for the 341 Meeting.

D. Accordingly, the deadline by which to file a complaint under 11 U.S.C. § 523(c) is

January 9, 2023 (the “Nondischargeability Deadline”), or such later date as may be ordered by

the Court. The Nondischargeability Deadline has not expired as of the date of this Stipulation.

E. The United States continues to investigate potential violations of the False Claims

Act, 31 U.S.C. §§ 3279-3733, by Kabbage, Inc. d/b/a KServicing, a lender and loan servicer that

participated in the Paycheck Protection Program.

F. To the extent that the filing of a dischargeability complaint may be necessary, the

United States seeks an extension of the Nondischargeability Deadline through and including

May 9, 2023.

G. Nothing in this Stipulation, or any order approving it, constitutes a determination

that section 523(c) of the Bankruptcy Code or Bankruptcy Rule 4007(c) apply, or that any deadline

exists to seek a determination of dischargeability under section 1141(d)(6) of the Bankruptcy

Code.

NOW, THEREFORE, the Parties hereby agree as follows:

1. The Parties agree that the Nondischargeability Deadline for the United States to file

a complaint to determine the dischargeability of debt under 11 U.S.C. § 523(c) is extended through

and including May 9, 2023, or such later date as may be ordered by the Court.

2. The extension of the Nondischargeability Deadline is without prejudice to the

United States’ rights to seek additional extensions or the Debtors’ rights, objections, or defenses

related thereto.

3. This Stipulation may be executed in counterparts, each of which shall be deemed

an original and such counterparts shall together constitute a single agreement. Any signature,

2
Case 22-10951-CTG Doc 426-1 Filed 01/06/23 Page 7 of 8

including an electronic signature, transmitted by facsimile or electronic mail shall be deemed an

original signature to this Stipulation.

/s/ Zachary I. Shapiro
RICHARDS, LAYTON & FINGER, P.A.
Daniel J. DeFranceschi (No. 2732)
Amanda R. Steele (No. 5530)
Zachary I. Shapiro (No. 5103)
Matthew P. Milana (No. 6681)
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
E-mail: defranceschi@rlf.com
steele@rlf.com
shapiro@rlf.com
milana@rlf.com

-and-

WEIL, GOTSHAL & MANGES LLP
Ray C. Schrock, P.C. (admitted pro hac vice)
Candace M. Arthur (admitted pro hac vice)
Natasha S. Hwangpo (admitted pro hac vice)
Chase A. Bentley (admitted pro hac vice)
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
E-mail: ray.schrock@weil.com
candace.arthur@weil.com
natasha.hwangpo@weil.com
chase.bentley@weil.com

Attorneys for Debtors and
Debtors-In-Possession

Dated: January 6, 2023

BRIAN M. BOYNTON
Principle Deputy Assistant Attorney General

DAVID C. WEISS
United States Attorney

3
Case 22-10951-CTG Doc 426-1 Filed 01/06/23 Page 8 of 8

/s/ Alastair M. Gesmundo
RUTH A. HARVEY
RODNEY A. MORRIS
ALASTAIR M. GESMUNDO
STANTON McMANUS
Commercial Litigation Branch
Civil Division
United States Department of Justice
P.O. Box 875
Ben Franklin Station
Washington, D.C. 20044
Tel. (202) 305-4659
Fax (202) 514-9163
Alastair.M.Gesmundo@usdoj.gov

Attorneys for the United States of America

Dated: January 6, 2023

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Proposed Order

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