Kabbage - COC re Order Approving Adequate Protection Stipulation w CRB
- Date
- 2023-01-17
Summary
Doc 444-1, Exhibit 1, a Stipulation Between the Debtors and Cross River Bank, filed January 17, 2023 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. The recitals describe agreements between Kabbage and Cross River on originating and servicing Paycheck Protection Program loans, including a Loan Program Agreement dated April 14, 2020 and a Sale and Servicing Agreement dated May 6, 2020. Under the stipulation, the Debtors agree to give Cross River online access to and monthly statements for the Subservicing Account, to hold borrower remittances on Cross River's PPP Loans in trust and disburse them within 14 days of each remittance batch, and to produce the Servicing Files. It sets conditions for remitting borrower overpayments and is dated January 11, 2023, signed by counsel for both sides.
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 444-1 Filed 01/17/23 Page 1 of 6
Exhibit 1
Stipulation
RLF1 28475287v.1
Case 22-10951-CTG Doc 444-1 Filed 01/17/23 Page 2 of 6
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re Chapter 11
KABBAGE, INC. d/b/a KSERVICING, et al., Case No. 22-10951 (CTG)
Debtors.1 (Jointly Administered)
STIPULATION BETWEEN THE DEBTORS AND CROSS RIVER BANK
WHEREAS, Kabbage and Cross River Bank (“Cross River”) entered into agreements
relating to the origination and servicing of Paycheck Protection Program loans (“PPP Loans”),
including that certain Loan Program Agreement dated April 14, 2020, as amended or may be
amended from time to time, and including any letter agreements or supplements related thereto
(the “LPA”) and that certain Sale and Servicing Agreement dated May 6, 2020, as amended or
may be amended from time to time, and including any letter agreements or supplements related
thereto (“SSA” and together with the LPA, the “Agreements”);
WHEREAS, Kabbage established and maintains the Synovus CRB Servicing Account
(as defined in the Debtors’ cash management motion, Docket No. 12) as a “Subservicing
Account” under the Agreements;
WHEREAS, on October 3, 2022, the Debtors filed voluntary petitions for relief under
chapter 11 of the United States Bankruptcy Code;
WHEREAS, on December 7, 2022, Customers Bank, an operating subsidiary of
Customers Bancorp. Inc. (“Customers Bank”) filed the Motion of Customers Bank for Entry of
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”); 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) (collectively, the “Debtors”).
RLF1 28474266v.1
Case 22-10951-CTG Doc 444-1 Filed 01/17/23 Page 3 of 6
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, in which it, among other things, requested various forms of adequate protection;
WHEREAS, Cross River has requested production of its “Servicing Files” as defined in
the Agreements;
NOW THEREFORE, the parties hereby stipulate and agree as follows:
1. The Debtors agree to give Cross River online access to the Subservicing Account
for full visibility of account transactions, but not authorization or the ability to move funds to or
from that account.
2. The Debtors agree to give Cross River monthly bank statements for the
Subservicing Account when available and upon Cross River’s request.
3. The Debtors confirm that the name of the Subservicing Account identifies it as
being for the benefit of Cross River.
4. The Debtors shall segregate and hold in trust any and all borrower remittances
pertaining to Cross River’s PPP Loans and deposit such amounts in the Subservicing Account.
Those funds shall be disbursed within 14 days after each agreed upon remittance batch to Cross
River or in accordance with Cross River’s instructions, and the Debtors shall not use those funds
for any purposes other than as authorized by Cross River; provided, however, that the Debtors may
remit any borrower overpayments2 directly to borrowers and/or the Small Business Administration
2
“Borrower Overpayments” shall mean amounts collected from a borrower on account of a Cross River PPP
Loan (i) already purchased by the SBA, thus resulting in such collected amounts being payable to the SBA, (ii) where
such amounts are in excess of the required minimum loan payments, including payments on forgiven loans, thus
resulting in such collected amounts being payable to the applicable borrower, or (iii) that is ultimately forgiven by the
SBA, thus resulting in such collected amounts being payable to the applicable borrower, or (iv) any other
overpayments received by KServicing from any source that must be returned or otherwise paid to a borrower or the
SBA.
2
RLF1 28474266v.1
Case 22-10951-CTG Doc 444-1 Filed 01/17/23 Page 4 of 6
(“SBA”) (as applicable), provided that: (a) on a weekly basis prior to making such payments, the
Debtors shall submit in writing via email to the Cross River PPP Operations team the loan details
to identify the loans to which the overpayments relate, including but not limited to the amount of
the overpayment, the basis for the overpayment, the date of receipt of the payment, a copy of any
borrower or SBA correspondence related thereto, and any other information reasonably requested
by Cross River; (b) prior to making such payments, Cross River shall within 2 business days
respond to the notice and approve the disbursement of such payment; (c) the Debtors will maintain
transaction events in the documentation that is relayed to Cross River that will show any such
payments to borrowers and/or the SBA; and (d) the Debtors will provide on a monthly basis a
reconciliation to Cross River of cash being paid by borrowers and cash being paid to borrowers
and/or the SBA no later than 30 days after each respective remittance batch.
5. The Debtors will produce to Cross River the Servicing Files (as defined in the
Agreements) as supplemented or otherwise modified by written agreement between the parties or
as set forth in the documents specified in the correspondence between counsel to the parties, dated
January 11, 2023. This is without prejudice to Cross River’s rights to seek additional documents,
including in connection with the transfer of servicing of Cross River’s PPP Loans, and nothing
herein shall be construed to modify or amend the Agreements.
3
RLF1 28474266v.1
Case 22-10951-CTG Doc 444-1 Filed 01/17/23 Page 5 of 6
Dated: January 11, 2023
Wilmington, Delaware
BENESCH, FRIEDLANDER, COPLAN &
ARONOFF LLP
/s/ Gregory W. Werkheiser
Gregory W. Werkheiser (No. 3553)
1313 N. Market Street, Suite 1201
Wilmington, Delaware 19801
Telephone: (302) 442-7010
Facsimile: (302) 442-7012
gwerkheiser@beneschlaw.com
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
Susheel Kirpalani
Isaac Nesser
51 Madison Avenue, 22nd Floor
New York, NY 10010
Telephone: (212) 849-7000
susheelkirpalani@quinnemanuel.com
isaacnesser@quinnemanuel.com
Erika Morabito
1300 I Street NW, Suite 900
Washington, D.C. 20005
Telephone: (202) 538-8000
erikamorabito@quinnemanuel.com
Matthew R. Scheck
300 West 6th Street, Suite 2010
Austin, TX 78701
Telephone: (737) 667-6100
matthewscheck@quinnemanuel.com
Counsel to Cross River Bank
4
RLF1 28474266v.1
Case 22-10951-CTG Doc 444-1 Filed 01/17/23 Page 6 of 6
Dated: January 11, 2023
Wilmington, Delaware
/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
5
RLF1 28474266v.1
File and source
- File
- gov.uscourts.deb.188293.444.1.pdf
- Size
- 223,677 bytes
- SHA-256
- 5c821b26b7526bcbe05c543edf04b46d9cd22d784eb685357f0194af64e638ed
- Original
- archive.org