KServicing - Debtors First Omnibus Objection (Substantive) to Claims for Reclass Filing Version, Doc. 491-3 — In re KServicing Wind Down Corp., et al.
- Date
- 2023-01-27
Summary
Exhibit B to the debtors' objection, filed January 27, 2023 as Doc 491-3 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, is a declaration under 28 U.S.C. § 1746 by a Director at AlixPartners, LLP, the debtors' financial advisor. It supports the Debtors' First Omnibus Objection (Substantive) to Certain Misclassified Claims. The declarant states that claims asserting priority under section 507(a) of the Bankruptcy Code do not meet its prerequisites and should be reclassified as general unsecured claims. Claim by claim, it states that each claimant is a borrower of a PPP Loan or Legacy Loan the Debtors service. The closing schedule describes identical $11,000,000.00 secured claims filed against several Debtor entities by a PPP borrower whose loan it puts at $2,223. The document is 29 pages.
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
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Case 22-10951-CTG Doc 491-3 Filed 01/27/23 Page 1 of 29
Exhibit B
Declaration of Thora Thoroddsen
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
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:
In re : Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., : Case No. 22-10951 (CTG)
:
:
Debtors.1 : (Jointly Administered)
:
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DECLARATION OF THORA THORODDSEN
IN SUPPORT OF THE DEBTORS’ FIRST OMNIBUS
OBJECTION (SUBSTANTIVE) TO CERTAIN MISCLASSIFIED CLAIMS
I, Thora Thoroddsen, pursuant to 28 U.S.C. § 1746, hereby declare under penalty
of perjury that the following is true and correct to the best of my knowledge, information, and
belief:
1. I am a Director at AlixPartners, LLP (“AlixPartners”), who was retained
as financial advisor to Kabbage, Inc. d/b/a KServicing and its affiliated debtors in the above-
captioned chapter 11 cases (the “Chapter 11 Cases”), as debtors and debtors-in-possession
(collectively, the “Debtors”), by order of the Court entered on October 21, 2022, and have served
in such capacity since July, 2022.
2. I have been actively involved in the services provided by AlixPartners to
the Debtors. In particular, I was directly involved in preparing the Debtors’ requests for first-day
relief sought on the Petition Date and the Schedules and Statements. I have also led efforts to take
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.
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inventory of and analyze all proofs of claims filed against the Debtors. Through these efforts, I
have become generally knowledgeable and familiar with the Debtors’ day-to-day operations,
business and financial affairs, books and records, and the progression of these Chapter 11 Cases.
3. I have reviewed the Debtors’ First Omnibus Objection (Substantive) to
Certain Misclassified Claims (the “Objection”) filed by the Debtors contemporaneously herewith,
and I am authorized to submit this declaration (this “Declaration”) on behalf of the Debtors in
support of the Objection. Except as otherwise indicated herein, the facts set forth in this
Declaration are based upon my personal knowledge, my review of relevant documents, the
Debtors’ books and records, the Schedules and Statements, information provided to me by the
Debtors and the Debtors’ advisors, and my opinion based upon my experience, knowledge, and
information concerning the Debtors. If called upon to testify, I would testify competently to the
facts set forth in this Declaration.
Misclassified Priority Claims
4. Based upon a careful review and analysis in good faith of the Debtors’
books and records, the Schedules and Statements, and the Claims Register, utilizing due diligence
by appropriate personnel, I believe that the Misclassified Priority Claims, listed on Schedule 1 and
summarized below, fail to provide, and I am not otherwise aware of, any facts to support the
priority claim status as asserted.
5. The following claimants assert priority claims pursuant to one or more of
the following subsections of section 507(a) of the Bankruptcy Code: 507(a)(1)(A) or (a)(1)(B),
507(a)(4), 507(a)(5), 507(a)(7), 507(a)(8), and/or an unspecified subsection of 507(a). Based on
my review of the Debtors’ books and records, such claims do not satisfy the statutory prerequisites
for priority under any of the aforementioned subsections of section 507(a) of the Bankruptcy Code
and should be reclassified as general unsecured claims:
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Alicia Bryant – Claim No. 951-41: Alicia Bryant filed a $3,466 priority claim
pursuant to section 507(a)(4) of the Bankruptcy Code. No basis is asserted for the
claim. See proof of claim no. 951-41. Based on a review of the Debtors’ books
and records, the Debtors have determined Alicia Bryant is a borrower of a PPP
Loan that the Debtors service, and there are no amounts entitled to priority due and
owing to Alicia Bryant under section 507(a)(4) (the claim is not on account of
wages) of the Bankruptcy Code. Accordingly, Alicia Bryant’s priority claim should
be reclassified as a general unsecured claim.
AVDN Enterprise LLC – Claim No. 951-224: AVDN Enterprise LLC (“AVDN
Enterprise”) filed a $3,125 priority claim pursuant to an unspecified subsection of
507(a) of the Bankruptcy Code. The proof of claim asserts the “Paycheck
Protection Program” as the basis for the claim. See proof of claim no. 951-224.
Based on a review of the Debtors’ books and records, the Debtors have determined
AVDN Enterprise is a borrower of a PPP Loan that the Debtors service, and there
are no amounts entitled to priority due and owing to AVDN Enterprise under
section 507(a) of the Bankruptcy Code. Accordingly, AVDN Enterprise’s priority
claim should be reclassified as a general unsecured claim.
Charmaine Busch – Claim No. 951-27: Charmaine Busch filed a proof of claim
asserting a total claim of $30,000. The claimant asserts that $25,500 is entitled to
priority pursuant to sections 507(a)(1)(A) and (a)(1)(B), 507(a)(4), 507(a)(7), and
507(a)(8) of the Bankruptcy Code. The proof of claim asserts “money loaned . . .”
as the basis for the claim. See proof of claim no. 951-27. Based on a review of the
Debtors’ books and records, the Debtors have determined Charmaine Busch is a
borrower of a Legacy Loan that the Debtors service, and there are no amounts
entitled to priority due and owing to Charmaine Busch under sections 507(a)(1)(A)
(the claim is not on account of domestic support obligations) and (a)(1)(B) (the
claim is not on account of domestic support obligations), 507(a)(4) (the claim is not
on account of wages), 507(a)(7) (the claim is not on account of a deposit in
connection with the purchase, lease, or rental of property or purchase of services),
507(a)(8) (the claim is not on account of governmental units) of the Bankruptcy
Code. Accordingly, Charmaine Busch’s priority claim should be reclassified as a
general unsecured claim.
Corinthus Omari Pittman (Wellness Rehabilitation LLC) – Claim No. 951-
218: Corinthus Omari Pittman (Wellness Rehabilitation LLC) (“Wellness
Rehabilitation”) filed a $20,833 priority claim pursuant to an unspecified
subsection of 507(a) of the Bankruptcy Code. The proof of claim asserts the
“Paycheck Protection Program” as the basis for the claim. See proof of claim no.
951-218. Based on a review of the Debtors’ books and records, the Debtors have
determined Wellness Rehabilitation is a borrower of a PPP Loan that the Debtors
service, and there are no amounts entitled to priority due and owing to Wellness
Rehabilitation under section 507(a) of the Bankruptcy Code. Further, Wellness
Rehabilitation does not provide any documentation in support of the claim.
Accordingly, Wellness Rehabilitation’s priority claim should be reclassified as a
general unsecured claim.
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Deborah A. Mastrandrea – Claim No. 951-30: Deborah A. Mastrandrea filed a
$3,900 priority claim pursuant to section 507(a)(7) of the Bankruptcy Code. The
proof of claim asserts “money loaned” as the basis for the claim. See proof of claim
no. 951-30. Based on a review of the Debtors’ books and records, the Debtors have
determined Deborah A. Mastrandrea is a borrower of a PPP Loan that the Debtors
service, and there are no amounts entitled to priority due and owing to Deborah A.
Mastrandrea under section 507(a)(7) (the claim is not on account of a deposit in
connection with the purchase, lease, or rental of property or purchase of services)
of the Bankruptcy Code. Further, Deborah A. Mastrandrea does not provide any
documentation in support of the claim. Accordingly, Deborah A. Mastrandrea’s
priority claim should be reclassified as a general unsecured claim.
Kelvin Foster – Claim No. 951-231: Kelvin Foster filed a proof of claim asserting
a total claim of $3,000. The claimant asserts that $2,000 is entitled to priority
pursuant to section 507(a)(7) of the Bankruptcy Code. The proof of claim asserts
“goods sold” as the basis for the claim. See proof of claim no. 951-231. Based on
a review of the Debtors’ books and records, the Debtors have determined Kelvin
Foster is a borrower of a PPP Loan that the Debtors service, and there are no
amounts entitled to priority due and owing to Kelvin Foster under section 507(a)(7)
(the claim is not on account of a deposit in connection with the purchase, lease, or
rental of property or purchase of services) of the Bankruptcy Code. Further, Kelvin
Foster does not provide any documentation in support of the claim. Accordingly,
Kelvin Foster’s priority claim should be reclassified as a general unsecured claim.
Lakeysha James – Claim No. 951-229: Lakeysha James filed a $12,708 priority
claim pursuant to section 507(a)(4) of the Bankruptcy Code. The proof of claim
asserts “services performed” as the basis for the claim. See Proof of claim no. 951-
229. Based on a review of the Debtors’ books and records, the Debtors have
determined Lakeysha James is a borrower of a PPP Loan that the Debtors service,
and there are no amounts entitled to priority due and owing to Lakeysha James
under section 507(a)(4) (the claim is not on account of wages) of the Bankruptcy
Code. Accordingly, Lakeysha James’ priority claim should be reclassified as a
general unsecured claim.
Lakina Evans – Claim Nos. 951-3 and 951-4: Lakina Evans filed two proofs of
claim, each asserting a total claim of $3,216.00. Notwithstanding the asserted total
value of the claim, proof of claim no. 951-3 asserts a $3,350 priority claim pursuant
to section 507(a)(7) of the Bankruptcy Code, and proof of claim no. 951-4 asserts
a $3,250 priority claim pursuant to section 507(a)(7) of the Bankruptcy Code. No
basis is asserted for the claim. See proof of claim nos. 951-3 and 951-4. Based on
a review of the Debtors’ books and records, the Debtors have determined Lakina
Evans is a borrower of a PPP Loan that the Debtors service, and there are no
amounts entitled to priority due and owing to Lakina Evans under section 507(a)(7)
(the claims are not on account of a deposit in connection with the purchase, lease,
or rental of property or purchase of services) of the Bankruptcy Code. Further,
Lakina Evans does not provide any documentation in support of the claim.
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Lauren Garber – Claim No. 951-153: Lauren Garber filed a $17,700 priority
claim pursuant to sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code. The
proof of claim form asserts “Paycheck Protection Program loan approved by [the]
SBA” as the basis for the priority claim. See proof of claim form no. 951-153.
Based on a review of the Debtors’ books and records, the Debtors have determined
Lauren Garber is a borrower of a PPP Loan that the Debtors service, and there are
no amounts entitled to priority due and owing to Lauren Garber under sections
507(a)(4) (the claim is not on account of wages) and 507(a)(5) (the claim is not on
account of contributions to an employee benefit plan) of the Bankruptcy Code.
Accordingly, Lauren Garber’s priority claim should be reclassified as a general
unsecured claim.
Michael Hamlin – Claim No. 955-2: Michael Hamlin filed a $13,000 priority
claim pursuant to an unspecified subsection of section 507(a) of the Bankruptcy
Code. The proof of claim asserts a “foreclosure with court agreement” as the basis
for the claim. See proof of claim no. 955-2. Based on a review of the Debtors’
books and records, the Debtors have determined Michael Hamlin is a borrower of
a Legacy Loan that the Debtors service, and there are no amounts entitled to priority
due and owing to Michael Hamlin under section 507(a) of the Bankruptcy Code.
Further, Michael Hamlin does not provide any documentation in support of the
claim. Accordingly, Michael Hamlin’s priority claim should be reclassified as a
general unsecured claim.
Michael R. Hamlin – Claim No. 951-25: Michael R. Hamlin filed a $500,000
priority claim pursuant to an unspecified subsection of section 507(a) of the
Bankruptcy Code. The proof of claim asserts a “lien against property that Kabbage,
Inc must [have] purchased” as the basis for the claim. See proof of claim no. 951-
25. Based on a review of the Debtors’ books and records, the Debtors have
determined Michael R. Hamlin is a borrower of a Legacy Loan that the Debtors
service, and there are no amounts entitled to priority due and owing to Michael R.
Hamlin under section 507(a) of the Bankruptcy Code, and no record of the alleged
lien. Further, Michael R. Hamlin does not provide any documentation in support
of the claim. Accordingly, Michael R. Hamlin’s priority claim should be
reclassified as a general unsecured claim.
Nicolas E. Feliz – Claim No. 951-23: Nicolas E. Feliz filed an $866.49 priority
claim pursuant to section of 507(a)(4) of the Bankruptcy Code. The proof of claim
asserts “PPP loan paid by me to Kabbage on 08/2022 . . .” as the basis for the claim.
See proof of claim no. 951-23. Based on a review of the Debtors’ books and
records, the Debtors have determined Nicolas E. Feliz is a borrower of a PPP Loan
that the Debtors service, and there are no amounts entitled to priority due and owing
to Nicolas E. Feliz under section 507(a)(4) (the claim is not on account of wages)
of the Bankruptcy Code. Accordingly, Nicolas E. Feliz’s priority claim should be
reclassified as a general unsecured claim.
Quyen Nguyen – Claim No. 951-194: Quyen Nguyen filed a proof of claim
asserting a total claim of $3,349.27. The claimant asserts that $3,270 is entitled to
priority pursuant to section 507(a)(4) of the Bankruptcy Code. The proof of claim
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form asserts “services performed” as the basis for the claim. See proof of claim no.
951-194. Based on a review of the Debtors’ books and records, the Debtors have
determined Quyen Nguyen is a borrower of a PPP Loan that the Debtors service,
and there are no amounts entitled to priority due and owing to Quyen Nguyen under
section 507(a)(4) (the claim is not on account of wages) of the Bankruptcy Code.
Accordingly, Quyen Nguyen’s priority claim should be reclassified as a general
unsecured claim.
Rajesh Oza – Claim No. 951-24: Rajesh Oza filed a $2,800 priority claim pursuant
to section 507(a)(7) of the Bankruptcy Code. No basis is asserted for the claim.
See proof of claim no. 951-24. Based on a review of the Debtors’ books and
records, the Debtors have determined Rajesh Oza is a borrower of a PPP Loan that
the Debtors service, and there are no amounts entitled to priority due and owing to
Rajesh Oza under section 507(a)(7) (the claim is not on account of a deposit in
connection with the purchase, lease, or rental of property or purchase of services)
of the Bankruptcy Code. Further, Rajesh Oza does not provide any documentation
in support of the claim. Accordingly, Rajesh Oza’s priority claim should be
reclassified as a general unsecured claim.
Randolph Redley – Claim No. 951-136: Randolph Redley filed a $16,248 priority
claim pursuant to an unspecified subsection of 507(a) of the Bankruptcy Code. The
proof of claim asserts “PPP loan forgiveness” as the basis for the claim. See proof
of claim no. 951-136. Based on a review of the Debtors’ books and records, the
Debtors have determined Randolph Redley is a borrower of a PPP Loan that the
Debtors service, and there are no amounts entitled to priority due and owing to
Randolph Redley under section 507(a) of the Bankruptcy Code. Accordingly,
Randolph Redley’s priority claim should be reclassified as a general unsecured
claim.
Robert Clifton – Claim No. 951-173: Robert Clifton filed a $19,000 priority claim
pursuant to section 507(a)(4) of the Bankruptcy Code. The proof of claim form
asserts “bank account/my own money was fraudulently withdrawn” as the basis for
the priority claim. See proof of claim no. 951-173. Based on a review of the
Debtors’ books and records, the Debtors have determined Robert Clifton is a
borrower of a PPP Loan that the Debtors service, and there are no amounts entitled
to priority due and owing to Robert Clifton under section 507(a)(4) (the claim is
not on account of wages) of the Bankruptcy Code. Further, the claim is in excess
of the statutory limit under section 507(a)(4) of the Bankruptcy Code, and Robert
Clifton does not provide any documentation in support of the claim. Accordingly,
Robert Clifton’s priority claim should be reclassified as a general unsecured claim.
SS Peter and Paul Orthodox Church – Claim No. 951-195: SS Peter and Paul
Orthodox Church (the “Orthodox Church”) filed a $10,227 priority claim
pursuant to section 507(a)(4) of the Bankruptcy Code. The proof of claim asserts
the “Paycheck Protection Program” as the basis for the claim. See proof of claim
no. 951-195. Based on a review of the Debtors’ books and records, the Debtors
have determined the Orthodox Church is a borrower of a PPP Loan that the Debtors
service, and there are no amounts entitled to priority due and owing to the Orthodox
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Church under section 507(a)(4) (the claim is not on account of wages) of the
Bankruptcy Code. Accordingly, the Orthodox Church’s priority claim should be
reclassified as a general unsecured claim.
Stewart Williams – Claim No. 951-213: Stewart Williams filed a proof of claim
asserting a total claim of $20,000. Notwithstanding the asserted total value of the
claim, the claimant asserts that $30,000 is entitled to priority pursuant to sections
507(a)(1)(A) and (a)(1)(B), 507(a)(4), and 507(a)(7) of the Bankruptcy Code. The
proof of claim asserts “they sent money to the wrong account, got it back and held
it, after I got credits against the money they said time run out” as the basis for the
claim. See proof of claim no. 951-213. Based on a review of the Debtors’ books
and records, the Debtors have determined that there are no amounts entitled to
priority due and owing to Stewart Williams under sections 507(a)(1)(A) (the claim
is not on account of domestic support obligations) and (a)(1)(B) (the claim is not
on account of domestic support obligations), 507(a)(4) (the claim is not on account
of wages), and 507(a)(7) (the claim is not on account of a deposit in connection
with the purchase, lease, or rental of property or purchase of services) of the
Bankruptcy Code. Further, Stewart Williams does not provide any documentation
in support of the claim, and the claim is in excess of the statutory limit under section
507(a)(7) of the Bankruptcy Code. Accordingly, Stewart Williams’ priority claim
should be reclassified as a general unsecured claim.
Summer Stegall – Claim No. 951-49: Summer Stegall filed a proof of claim
asserting a total claim of $42,023.65. The claimant asserts that $30,523 is entitled
to priority pursuant to sections 507(a)(1)(A) and (a)(1)(B), 507(a)(4), 507(a)(7),
and 507(a)(8) of the Bankruptcy Code. The proof of claim asserts “money
loaned/personal injury” as the basis for the claim. See proof of claim no. 951-49.
Based on a review of the Debtors’ books and records, the Debtors have determined
Summer Stegall is a borrower of a PPP Loan that the Debtors service, and there are
no amounts entitled to priority due and owing to Summer Stegall under sections
507(a)(1)(A) (the claim is not on account of domestic support obligations) and
(a)(1)(B) (the claim is not on account of domestic support obligations), 507(a)(4)
(the claim is not on account of wages), 507(a)(7) (the claim is not on account of a
deposit in connection with the purchase, lease, or rental of property or purchase of
services), and 507(a)(8) (the claim is not on account of governmental units) of the
Bankruptcy Code. Further, the claim is in excess of the statutory limit under section
507(a)(7). Accordingly, Summer Stegall’s priority claim should be reclassified as
a general unsecured claim.
The Juneau Group, LLC – Claim Nos. 951-91, 955-4, 952-2, 953-2, 954-2, 956-
2: The Juneau Group, LLC (the “Juneau Group”) filed identical $11,000,000
priority claims against each of the Debtor entities pursuant to sections 507(a)(4),
507(a)(7), 507(a)(8), and an unspecified subsection of 507(a) of the Bankruptcy
Code. No basis is asserted for any of the claims. See proof of claim nos. 951-91,
955-4, 952-2, 953-2, 954-2, and 956-2. Based on a review of the Debtors’ books
and records, the Debtors have determined the Juneau Group is a borrower of PPP
Loan that the Debtors service, and there are no amounts entitled to priority due and
owing to the Juneau Group under sections 507(a)(4) (the claim is not on account of
7
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wages), 507(a)(7) (the claim is not on account of a deposit in connection with the
purchase, lease, or rental of property or purchase of services), and 507(a)(8) (the
claim is not on account of governmental units) of the Bankruptcy Code. Further,
the Juneau Group does not provide any documentation in support of the
$11,000,000 claims, and the total value of the Juneau Group’s PPP Loan is only
$2,223. Accordingly, the Juneau Group’s priority claims should be reclassified as
general unsecured claims.
Valeria Sanders – Claim No. 951-108: Valeria Sanders filed a $17,378 priority
claim pursuant to an unspecified subsection of section 507(a) of the Bankruptcy
Code. The proof of claim asserts “money loaned but never received” as the basis
for the priority claim. See proof of claim no. 951-108. Based on a review of the
Debtors’ books and records, the Debtors have determined Valeria Sanders is a
borrower of a PPP Loan that the Debtors service, and there are no amounts entitled
to priority due and owing to Valeria Sanders under section 507(a) of the Bankruptcy
Code. Further, Valeria Sanders does not provide any documentation in support of
the claim. Accordingly, Valeria Sanders’ priority claim should be reclassified as a
general unsecured claim.
Yanelys Gomez – Claim No. 951-205: Yanelys Gomez filed a $3,600 priority
claim pursuant to section 507(a)(4) of the Bankruptcy Code. The proof of claim
asserts “loaned” as the basis for the claim. See proof of claim no. 951-205. Based
on a review of the Debtors’ books and records, the Debtors have determined
Yanelys Gomez is a borrower of a PPP Loan that the Debtors service, and there are
no amounts entitled to priority due and owing to Yanelys Gomez under section
507(a)(4) (the claim is not on account of wages) of the Bankruptcy Code. Further,
Yanelys Gomez does not provide any documentation in support of the claim.
Accordingly, Yanelys Gomez’s priority claim should be reclassified as a general
unsecured claim.
6. Based on the foregoing, I believe that the Misclassified Priority Claims on
Schedule 1 should be reclassified as general unsecured claims because the claims are not entitled
to priority status under the Bankruptcy Code. Failure to reclassify the Misclassified Priority
Claims would lead to an inaccurate Claims Register and, based on my understanding, would
provide the claimants a recovery higher than what they should be afforded under the Bankruptcy
Code. As such, I believe the reclassification of the Misclassified Priority Claims on the terms set
forth in the Objection is appropriate.
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II. Administrative Expense Claims
7. Based on a thorough review of the Debtors’ books and records, the
Schedules and Statements, and the Claims Register, I believe that the claims listed on Schedule 2,
and summarized below, incorrectly assert administrative expense priority pursuant to section
503(b)(9) of the Bankruptcy Code:
Best Sister Friends Catering and Events LLC – Claim No. 951-58: Best Sister
Friends Catering and Events LLC (“Best Sister”) filed a $21,120.34 administrative
expense claim pursuant to section 503(b)(9) of the Bankruptcy Code. The proof of
claim asserts “money loaned” as the basis for the claim. See proof of claim no.
951-58. Based on a review of the Debtors’ books and records, the Debtors have
determined Best Sister is a borrower of a PPP Loan that the Debtors service, and
there is no evidence of the Debtors receiving goods from Best Sister within the
twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code. Accordingly, Best Sister’s administrative
expense claim should be reclassified as a general unsecured claim.
Carlos Aceves – Claim No. 951-215: Carlos Aceves filed a proof of claim
asserting a total claim of $63,490. The claimant asserts that $1,549 is an
administrative expense claim pursuant to section 503(b)(9) of the Bankruptcy
Code. The proof of claim asserts “loan was approved f[or] $63,490 after months a
deposit of $1,590” as the basis for the claim. See proof of claim no. 951-215. Based
on a review of the Debtors’ books and records, the Debtors have determined Carlos
Aceves is a borrower of a PPP Loan that the Debtors service, and there is no
evidence of the Debtors receiving goods from Carlos Aceves within the twenty days
prior to the Petition Date, in the ordinary course, as required by section 503(b)(9)
of the Bankruptcy Code. Accordingly, Carlos Aceves’ administrative expense
claim should be reclassified as a general unsecured claim.
Charmaine Busch – Claim No. 951-27: Charmaine Busch filed a $30,000
administrative expense claim pursuant to section 503(b)(9) of the Bankruptcy
Code. The proof of claim asserts “money loaned . . .” as the basis for the claim.
See proof of claim no. 951-27. Based on a review of the Debtors’ books and
records, the Debtors have determined Charmaine Busch is a borrower of a Legacy
Loan that the Debtors service, and there is no evidence of the Debtors receiving
goods from Charmaine Busch within the twenty days prior to the Petition Date, in
the ordinary course, as required by section 503(b)(9) of the Bankruptcy Code.
Accordingly, Charmaine Busch’s administrative expense claim should be
reclassified as a general unsecured claim.
Deborah A. Mastrandrea – Claim No. 951-30: Deborah A. Mastrandrea filed a
$3,900 administrative expense claim pursuant to section 503(b)(9) of the
Bankruptcy Code. The proof of claim asserts “money loaned” as the basis for the
claim. See proof of claim no. 951-30. Based on a review of the Debtors’ books
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and records, the Debtors have determined Deborah A. Mastrandrea is a borrower
of a PPP loan that the Debtors service, and there is no evidence of the Debtors
receiving goods from Deborah A. Mastrandrea within the twenty days prior to the
Petition Date, in the ordinary course, as required by section 503(b)(9) of the
Bankruptcy Code. Further, Deborah A. Mastrandrea does not attach any
documentation in support of the claim. Accordingly, Deborah A. Mastrandrea’s
administrative expense claim should be reclassified as a general unsecured claim.
George James Mallios, PC – Claim Nos. 951-196, 951-207, 951-216: George
James Mallios, PC (“George Mallios”) filed three proofs of claim, each asserting
a $209,816.08 administrative expense claim pursuant to section 503(b)(9) of the
Bankruptcy Code. The proofs of claim assert “failure to provide forgiveness” as
the basis for the claim. See proof of claim nos. 951-196, 951-207 and 951-216.
Based on a review of the Debtors’ books and records, the Debtors have determined
George Mallios is a borrower of a PPP Loan that the Debtors service, and there is
no evidence of the Debtors receiving goods from George Mallios within the twenty
days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code. Accordingly, George Mallios’ administrative
expense claim should be reclassified as a general unsecured claim.
Kelvin Foster – Claim No. 951-231: Kelvin Foster filed a proof of claim asserting
a total claim of $3,000. The claimant asserts that $2,000 is an administrative
expense claim pursuant to section 503(b)(9) of the Bankruptcy Code. The proof of
claim asserts “goods sold” as the basis for the claim. See proof of claim no. 951-
231. Based on a review of the Debtors’ books and records, the Debtors have
determined Kelvin Foster is a borrower of a PPP Loan that the Debtors service, and
there is no evidence of the Debtors receiving goods from Kelvin Foster within the
twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code. Accordingly, Kelvin Foster’s administrative
expense claim should be reclassified as a general unsecured claim.
Madel Carmen Hernandez d/b/a Todo Para Tu Pachang – Claim No. 951-15:
Madel Carmen Hernandez d/b/a Todo Para Tu Pachang (“Madel Hernandez”)
filed a $32,000 administrative expense claim pursuant to section 503(b)(9) of the
Bankruptcy Code. The proof of claim asserts “Loan” as the basis for the claim.
See proof of claim no. 951-15. Based on a review of the Debtors’ books and
records, the Debtors have determined Madel Hernandez is a borrower of a Legacy
Loan that the Debtors service, and there is no evidence of the Debtors receiving
goods from Madel Hernandez within the twenty days prior to the Petition Date, in
the ordinary course, as required by section 503(b)(9) of the Bankruptcy Code.
Accordingly, Madel Hernandez’s administrative expense claim should be
reclassified as a general unsecured claim.
Paula Roach – Claim Nos. 951-208, 951-210, 951-214: Paula Roach filed three
proofs of claim, each asserting a $112,770 administrative expense claim pursuant
to section 503(b)(9) of the Bankruptcy Code. The proofs of claim assert “failure to
provide forgiveness” as the basis for the claim. See proof of claim nos. 951-208,
951-210 and 951-214. Based on a review of the Debtors’ books and records, the
10
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Debtors have determined Paula Roach is a borrower of a PPP Loan that the Debtors
service, and there is no evidence of the Debtors receiving goods from Paula Roach
within the twenty days prior to the Petition Date, in the ordinary course, as required
by section 503(b)(9) of the Bankruptcy Code. Accordingly, Paula Roach’s
administrative expense claim should be reclassified as a general unsecured claim.
Randolph Redley – Claim No. 951-136: Randolph Redley filed a $16,248
administrative expense claim pursuant to section 503(b)(9) of the Bankruptcy
Code. The proof of claim asserts “SBA PPP loan forgiveness” as the basis for the
claim. See proof of claim no. 951-136. Based on a review of the Debtors’ books
and records, the Debtors have determined Randolph Redley is a borrower of a PPP
Loan that the Debtors service, and there is no evidence of the Debtors receiving
goods from Randolph Redley within the twenty days prior to the Petition Date, in
the ordinary course, as required by section 503(b)(9) of the Bankruptcy Code.
Accordingly, Randolph Redley’s administrative expense claim should be
reclassified as a general unsecured claim.
The Juneau Group, LLC – Claim No. 951-184: The Juneau Group filed an
administrative expense claim pursuant to section 503(b)(9) of the Bankruptcy
Code, in the amount of $20,833 per month for the duration of the Chapter 11 Cases
for an aggregate amount of $499,999.99. The proof of claim asserts “TIME” as the
basis for the claim. See proof claim no. 951-184. Based on a review of the Debtors’
books and records, the Debtors have determined the Juneau Group is a borrower of
a PPP Loan that the Debtors service, and there is no evidence of the Debtors
receiving goods from the Juneau Group within the twenty days prior to the Petition
Date, in the ordinary course, as required by section 503(b)(9) of the Bankruptcy
Code. Further, the Juneau Group does not attach any documentation in support of
the $499,999.99 claim, and the total value of the Juneau Group’s PPP Loan is only
$2,223. Accordingly, the Juneau Group’s administrative expense claim should be
reclassified as a general unsecured claim.
8. Based on the foregoing, I believe that the Misclassified Administrative
Expense Claims on Schedule 2 should be reclassified as general unsecured claims because the
claims are not entitled to administrative priority status pursuant to section 503(b)(9) of the
Bankruptcy Code. Failure to reclassify the Misclassified Administrative Expense Claims would
lead to an inaccurate Claims Register and, based on my understanding, would provide the
claimants a recovery higher than what they should be afforded under the Bankruptcy Code. As
such, I believe the reclassification of the Misclassified Administrative Expense Claims on the
terms set forth in the Objection is appropriate.
11
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III. Misclassified Secured Claims
9. The claimants listed on Schedule 3, and summarized below, assert secured
claims pursuant to section 506 of the Bankruptcy Code. After a careful review of the Debtors’
books and records, the Schedules and Statements, and the Claims Register, I believe that no records
exist supporting the asserted secured status of each of the Misclassified Secured Claims and,
therefore, each of the following claims should be reclassified as a general unsecured claim.
Anthony Dinish – Claim No. 951-185: Anthony Dinish filed a secured claim for
an unliquidated amount. The proof of claim asserts “chapter 11 bankruptcy” as the
basis for the claim. See proof of claim no. 951-185. Based on a review of the
Debtors’ books and records, the Debtors have determined Anthony Dinish is a
borrower of a PPP Loan that the Debtors service, and there is no basis for the
claim’s secured status under section 506 of the Bankruptcy Code. Accordingly,
Anthony Dinish’s secured claim should be reclassified as a general unsecured
claim.
Kadada, LLC – Claim No. 951-226: Kadada, LLC (“Kadada”) filed a $22,000
secured claim. The proof of claim asserts “money loaned” as the basis for the claim.
See proof of claim no. 951-226. Based on a review of the Debtors’ books and
records, the Debtors have determined Kadada is a borrower of a PPP Loan that the
Debtors service, and there is no basis for the claim’s secured status under section
506 of the Bankruptcy Code. Accordingly, Kadada’s secured claim should be
reclassified as a general unsecured claim.
Michael R. Hamlin – Claim No. 951-25: Michael R. Hamlin filed a $500,000
secured claim. The proof of claim asserts “a lien against property, that Kabbage
Inc, must [have] purchased” as the basis for the claim. The claimant further asserts
that the lien is against 13 River Street, Sanford, Maine, which is on file at the York
County Registry of Deeds. See proof of claim no. 951-25. Based on a review of
the Debtors’ books and records, the Debtors have determined Michael R. Hamlin
is a borrower of a Legacy Loan that the Debtors service, there is no evidence of the
alleged lien, and no basis for the claim’s secured status under section 506 of the
Bankruptcy Code.
Summer Stegall – Claim No. 951-49: Summer Stegall filed a filed a proof of claim
asserting a total claim of $42,023.65, including a $42,023 secured claim. The proof
of claim asserts “money loaned/personal injury” as the basis for the claim. See
proof of claim no. 951-49. Based on a review of the Debtors’ books and records,
the Debtors have determined Summer Stegall is a borrower of a PPP Loan that the
Debtors service, and there is no basis for the claim’s secured status under section
506 of the Bankruptcy Code. Accordingly, Summer Stegall’s secured claim should
be reclassified as a general unsecured claim.
12
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The Juneau Group, LLC – Claim Nos. 954-2, 956-2, 951-91, 955-4, 952-2, 953-
2: The Juneau Group filed identical $11,000,000 secured claims against each of the
Debtor entities. No basis for the claims is provided. See proof of claim nos. 954-
2, 956-2, 951-91, 955-4, 952-2, 953-2. Based on a review of the Debtors’ books
and records, the Debtors have determined the Juneau Group is a borrower of a PPP
Loan that the Debtors service, and there is no basis for the claims’ secured status
under section 506 of the Bankruptcy Code. Further, the Juneau Group provides no
documentation in support of the claims, and the total value of the Juneau Group’s
PPP Loan is only $2,223. Accordingly, the Juneau Group’s secured claims should
be reclassified as general unsecured claims.
10. Based on the foregoing, I believe that the Misclassified Secured Claims on
Schedule 3 should be reclassified as general unsecured claims because the claims are not entitled
to their asserted secured status under section 506 of the Bankruptcy Code. Failure to reclassify
the Misclassified Secured Claims would lead to an inaccurate Claims Register and, based on my
understanding, would provide the claimants a recovery higher than what they should be afforded
under the Bankruptcy Code. As such, I believe the reclassification of the Misclassified Secured
Claims on the terms set forth in the Objection is appropriate.
11. Based on the foregoing, my experience, and my review of the Objection, the
Debtors’ books and records, the Schedules and Statements, and the Claims Register, it is my
position that the information contained in the Objection and schedules attached thereto is true and
correct, and the relief requested by the Objection is in the best interests of the Debtors’ estates,
creditors, and economic stakeholders.
I declare under penalty of perjury that the foregoing is true and correct to the best of my
knowledge, information, and belief.
Date: January 27, 2023
New York, New York
/s/ Thora Thoroddsen
Thora Thoroddsen
Director
AlixPartners, LLP
13
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Schedule 1
Misclassified Priority Claims
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Case 22-10951-CTG Doc 491-3 Filed 01/27/23 Page 16 of 29
Misclassified Priority Claims1
(Claims are listed alphabetically)
Claimant Name Misclassified Modified
Date Claim Claim
# Debtor Name Priority Claim Classification Reason for Reclassification
Filed No.
Amount Status2
Alicia Bryant filed a $3,466 priority claim pursuant to section 507(a)(4) of the
$0.00 (A)
Bankruptcy Code. No basis is asserted for the claim. See proof of claim no. 951-41.
Alicia Bryant $0.00 (S)
Kabbage, Inc. Based on a review of the Debtors’ books and records, the Debtors have determined
1 11/18/2022 951-41 $3,466.00 (P) $0.00 (P)
d/b/a KServicing Alicia Bryant is a borrower of a PPP Loan that the Debtors service, and there are no
$3,466.00 (U)
amounts entitled to priority due and owing to Alicia Bryant under section 507(a)(4)
$3,466.00 (T)
(the claim is not on account of wages) of the Bankruptcy Code.
AVDN Enterprise filed a $3,125 priority claim pursuant to an unspecified subsection
$0.00 (A) of 507(a) of the Bankruptcy Code. The proof of claim asserts the “Paycheck
AVDN Enterprise LLC $0.00 (S) Protection Program” as the basis for the claim. See proof of claim no. 951-224. Based
Kabbage, Inc.
2 12/30/2022 951-224 $3,125.00 (P) $0.00 (P) on a review of the Debtors’ books and records, the Debtors have determined AVDN
d/b/a KServicing
$3,125.00 (U) Enterprise is a borrower of a PPP Loan that the Debtors service, and there are no
$3,125.00 (T) amounts entitled to priority due and owing to AVDN Enterprise under section 507(a)
of the Bankruptcy Code.
Charmaine Busch filed a proof of claim asserting a total claim of $30,000. The
claimant asserts that $25,500 is entitled to priority pursuant to sections 507(a)(1)(A)
and (a)(1)(B), 507(a)(4), 507(a)(7), and 507(a)(8) of the Bankruptcy Code. The proof
of claim asserts “money loaned . . .” as the basis for the claim. See proof of claim no.
$0.00 (A) 951-27. Based on a review of the Debtors’ books and records, the Debtors have
Charmaine Busch $0.00 (S) determined Charmaine Busch is a borrower of a Legacy Loan that the Debtors service,
Kabbage, Inc.
3 11/5/2022 951-27 $25,500.00 (P) $0.00 (P) and there are no amounts entitled to priority due and owing to Charmaine Busch under
d/b/a KServicing
$30,000.00 (U) sections 507(a)(1)(A) (the claim is not on account of domestic support obligations)
$30,000.00 (T) and (a)(1)(B) (the claim is not on account of domestic support obligations), 507(a)(4)
(the claim is not on account of wages), 507(a)(7) (the claim is not on account of a
deposit in connection with the purchase, lease, or rental of property or purchase of
services), 507(a)(8) (the claim is not on account of governmental units) of the
Bankruptcy Code.
Wellness Rehabilitation filed a $20,833 priority claim pursuant to an unspecified
subsection of 507(a) of the Bankruptcy Code. The proof of claim asserts the “Paycheck
$0.00 (A)
Corinthus Omari Pittman (Wellness Protection Program” as the basis for the claim. See proof of claim no. 951-218. Based
$0.00 (S)
Rehabilitation LLC) Kabbage, Inc. on a review of the Debtors’ books and records, the Debtors have determined Wellness
4 12/19/2022 951-218 $20,833.00 (P) $0.00 (P)
d/b/a KServicing Rehabilitation is a borrower of a PPP Loan that the Debtors service, and there are no
$20,833.00 (U)
amounts entitled to priority due and owing to Wellness Rehabilitation under section
$20,833.00 (T)
507(a) of the Bankruptcy Code. Further, Wellness Rehabilitation does not provide any
documentation in support of the claim.
Deborah A Mastrandrea Kabbage, Inc. $0.00 (A) Deborah A. Mastrandrea filed a $3,900 priority claim pursuant to section 507(a)(7) of
5 11/15/2022 951-30 $3,900.00 (P)
d/b/a KServicing $0.00 (S) the Bankruptcy Code. The proof of claim asserts “money loaned” as the basis for the
1
Certain of the Misclassified Priority Claims assert more than one incorrect classification status. This schedule lists only the misclassified priority amounts.
2
(A) - Administrative, including 503(b)(9); (S) - Secured; (P) - Priority; (U) - Unsecured; (T) – Total.
RLF1 28536648V.1
Case 22-10951-CTG Doc 491-3 Filed 01/27/23 Page 17 of 29
Claimant Name Misclassified Modified
Date Claim Claim
# Debtor Name Priority Claim Classification Reason for Reclassification
Filed No.
Amount Status2
$0.00 (P) claim. See proof of claim no. 951-30. Based on a review of the Debtors’ books and
$3,900.00 (U) records, the Debtors have determined Deborah A. Mastrandrea is a borrower of a PPP
$3,900.00 (T) Loan that the Debtors service, and there are no amounts entitled to priority due and
owing to Deborah A. Mastrandrea under section 507(a)(7) (the claim is not on account
of a deposit in connection with the purchase, lease, or rental of property or purchase of
services) of the Bankruptcy Code. Further, Deborah A. Mastrandrea does not provide
any documentation in support of the claim.
Kelvin Foster filed a proof of claim asserting a total claim of $3,000. The claimant
asserts that $2,000 is entitled to priority pursuant to section 507(a)(7) of the
Bankruptcy Code. The proof of claim asserts “goods sold” as the basis for the claim.
$0.00 (A)
See proof of claim no. 951-231. Based on a review of the Debtors’ books and records,
Kelvin Foster $0.00 (S)
Kabbage, Inc. the Debtors have determined Kelvin Foster is a borrower of a PPP Loan that the
6 01/23/2023 951-231 $2,000.00 (P) $0.00 (P)
d/b/a KServicing Debtors service, and there are no amounts entitled to priority due and owing to Kelvin
$3,000.00 (U)
Foster under section 507(a)(7) (the claim is not on account of a deposit in connection
$3,000.00 (T)
with the purchase, lease, or rental of property or purchase of services) of the
Bankruptcy Code. Further, Kelvin Foster does not provide any documentation in
support of the claim.
Lakeysha James filed a $12,708 priority claim pursuant to section 507(a)(4) of the
$0.00 (A) Bankruptcy Code. The proof of claim asserts “services performed” as the basis for the
Lakeysha James $0.00 (S) claim. See Proof of claim no. 951-229. Based on a review of the Debtors’ books and
Kabbage, Inc.
7 01/17/2023 951-229 $12,708.00 (P) $0.00 (P) records, the Debtors have determined Lakeysha James is a borrower of a PPP Loan that
d/b/a KServicing
$12,708.00 (U) the Debtors service, and there are no amounts entitled to priority due and owing to
$12,708.00 (T) Lakeysha James under section 507(a)(4) (the claim is not on account of wages) of the
Bankruptcy Code.
Lakina Evans filed two proofs of claim, each asserting a total claim of $3,216.00.
Notwithstanding the asserted total value of the claim, proof of claim no. 951-3 asserts a
$3,350 priority claim pursuant to section 507(a)(7) of the Bankruptcy Code. No basis
$0.00 (A)
is asserted for the claim. See proof of claim no. 951-3. Based on a review of the
Lakina Evans $0.00 (S)
Kabbage, Inc. Debtors’ books and records, the Debtors have determined Lakina Evans is a borrower
8 10/29/2022 951-3 $3,350.00 (P) $0.00 (P)
d/b/a KServicing of a PPP Loan that the Debtors service, and there are no amounts entitled to priority
$3,216.00 (U)
due and owing to Lakina Evans under section 507(a)(7) (the claim is not on account of
$3,216.00 (T)
a deposit in connection with the purchase, lease, or rental of property or purchase of
services) of the Bankruptcy Code. Further, Lakina Evans does not provide any
documentation in support of the claim.
Lakina Evans filed two proofs of claim, each asserting a total claim of $3,216.00.
Notwithstanding the asserted total value of the claim, proof of claim no. 951-4 asserts a
$3,250 priority claim pursuant to section 507(a)(7) of the Bankruptcy Code. No basis
$0.00 (A)
is asserted for the claim. See proof of claim no. 951-4. Based on a review of the
Lakina Evans $0.00 (S)
Kabbage, Inc. Debtors’ books and records, the Debtors have determined Lakina Evans is a borrower
9 10/29/2022 951-4 $3,250.00 (P) $0.00 (P)
d/b/a KServicing of a PPP Loan that the Debtors service, and there are no amounts entitled to priority
$3,216.00 (U)
due and owing to Lakina Evans under section 507(a)(7) (the claim is not on account of
$3,216.00 (T)
a deposit in connection with the purchase, lease, or rental of property or purchase of
services) of the Bankruptcy Code. Further, Lakina Evans does not provide any
documentation in support of the claim.
2
RLF1 28536648V.1
Case 22-10951-CTG Doc 491-3 Filed 01/27/23 Page 18 of 29
Claimant Name Misclassified Modified
Date Claim Claim
# Debtor Name Priority Claim Classification Reason for Reclassification
Filed No.
Amount Status2
Lauren Garber filed a $17,700 priority claim pursuant to sections 507(a)(4) and
507(a)(5) of the Bankruptcy Code. The proof of claim form asserts “Paycheck
$0.00 (A) Protection Program loan approved by [the] SBA” as the basis for the priority claim.
Lauren Garber $0.00 (S) See proof of claim form no. 951-153. Based on a review of the Debtors’ books and
Kabbage, Inc.
10 11/30/2022 951-153 $17,700.00 (P) $0.00 (P) records, the Debtors have determined Lauren Garber is a borrower of a PPP Loan that
d/b/a KServicing
$17,700.00 (U) the Debtors service, and there are no amounts entitled to priority due and owing to
$17,700.00 (T) Lauren Garber under sections 507(a)(4) (the claim is not on account of wages) and
507(a)(5) (the claim is not on account of contributions to an employee benefit plan) of
the Bankruptcy Code.
Michael Hamlin filed a $13,000 priority claim pursuant to an unspecified subsection of
section 507(a) of the Bankruptcy Code. The proof of claim asserts a “foreclosure with
$0.00 (A)
court agreement” as the basis for the claim. See proof of claim no. 955-2. Based on a
Michael Hamlin Kabbage Asset $0.00 (S)
review of the Debtors’ books and records, the Debtors have determined Michael
11 11/12/2022 955-2 Funding 2019-A, $13,000.00 (P) $0.00 (P)
Hamlin is a borrower of a Legacy Loan that the Debtors service, and there are no
LLC $13,000.00 (U)
amounts entitled to priority due and owing to Michael Hamlin under section 507(a) of
$13,000.00 (T)
the Bankruptcy Code. Further, Michael Hamlin does not provide any documentation in
support of the claim.
Michael R. Hamlin filed a $500,000 priority claim pursuant to an unspecified
subsection of section 507(a) of the Bankruptcy Code. The proof of claim asserts a “lien
$0.00 (A) against property that Kabbage, Inc must [have] purchased” as the basis for the claim.
Michael R. Hamlin $0.00 (S) See proof of claim no. 951-25. Based on a review of the Debtors’ books and records,
Kabbage, Inc.
12 11/12/2022 951-25 $500,000.00 (P) $0.00 (P) the Debtors have determined Michael R. Hamlin is a borrower of a Legacy Loan that
d/b/a KServicing
$500,000.00 (U) the Debtors service, and there are no amounts entitled to priority due and owing to
$500,000.00 (T) Michael R. Hamlin under section 507(a) of the Bankruptcy Code, and no record of the
alleged lien. Further, Michael R. Hamlin does not provide any documentation in
support of the claim.
Nicolas E. Feliz filed an $866.49 priority claim pursuant to section of 507(a)(4) of the
$0.00 (A) Bankruptcy Code. The proof of claim asserts “PPP loan paid by me to Kabbage on
Nicolas E. Feliz $0.00 (S) 08/2022 . . .” as the basis for the claim. See proof of claim no. 951-23. Based on a
Kabbage, Inc.
13 11/8/2022 951-23 $886.49 (P) $0.00 (P) review of the Debtors’ books and records, the Debtors have determined Nicolas E.
d/b/a KServicing
$886.49 (U) Feliz is a borrower of a PPP Loan that the Debtors service, and there are no amounts
$886.49 (T) entitled to priority due and owing to Nicolas E. Feliz under section 507(a)(4) (the claim
is not on account of wages) of the Bankruptcy Code.
Quyen Nguyen filed a proof of claim asserting a total claim of $3,349.27. The
claimant asserts that $3,270 is entitled to priority pursuant to section 507(a)(4) of the
$0.00 (A)
Bankruptcy Code. The proof of claim form asserts “services performed” as the basis
Quyen Nguyen $0.00 (S)
Kabbage, Inc. for the claim. See proof of claim no. 951-194. Based on a review of the Debtors’
14 12/2/2022 951-194 $3,270.00 (P) $0.00 (P)
d/b/a KServicing books and records, the Debtors have determined Quyen Nguyen is a borrower of a PPP
$3,349.27 (U)
Loan that the Debtors service, and there are no amounts entitled to priority due and
$3,349.27 (T)
owing to Quyen Nguyen under section 507(a)(4) (the claim is not on account of wages)
of the Bankruptcy Code.
$0.00 (A) Rajesh Oza filed a $2,800 priority claim pursuant to section 507(a)(7) of the
Rajesh Oza Kabbage, Inc. $0.00 (S) Bankruptcy Code. No basis is asserted for the claim. See proof of claim no. 951-24.
15 11/15/2022 951-24 $2,800.00 (P)
d/b/a KServicing $0.00 (P) Based on a review of the Debtors’ books and records, the Debtors have determined
$2,800.00 (U) Rajesh Oza is a borrower of a PPP Loan that the Debtors service, and there are no
3
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Claimant Name Misclassified Modified
Date Claim Claim
# Debtor Name Priority Claim Classification Reason for Reclassification
Filed No.
Amount Status2
$2,800.00 (T) amounts entitled to priority due and owing to Rajesh Oza under section 507(a)(7) (the
claim is not on account of a deposit in connection with the purchase, lease, or rental of
property or purchase of services) of the Bankruptcy Code. Further, Rajesh Oza does
not provide any documentation in support of the claim.
Randolph Redley filed a $16,248 priority claim pursuant to an unspecified subsection
$0.00 (A) of 507(a) of the Bankruptcy Code. The proof of claim asserts “PPP loan forgiveness”
Randolph Redley $0.00 (S) as the basis for the claim. See proof of claim no. 951-136. Based on a review of the
Kabbage, Inc.
16 11/30/2022 951-136 $16,248.00 (P) $0.00 (P) Debtors’ books and records, the Debtors have determined Randolph Redley is a
d/b/a KServicing
$16,248.00 (U) borrower of a PPP Loan that the Debtors service, and there are no amounts entitled to
$16,248.00 (T) priority due and owing to Randolph Redley under section 507(a) of the Bankruptcy
Code.
Robert Clifton filed a $19,000 priority claim pursuant to section 507(a)(4) of the
Bankruptcy Code. The proof of claim form asserts “bank account / my own money was
$0.00 (A) fraudulently withdrawn” as the basis for the priority claim. See proof of claim no. 951-
Robert Clifton $0.00 (S) 173. Based on a review of the Debtors’ books and records, the Debtors have
Kabbage, Inc.
17 11/30/2022 951-173 $19,000.00 (P) $0.00 (P) determined Robert Clifton is a borrower of a PPP Loan that the Debtors service, and
d/b/a KServicing
$19,000.00 (U) there are no amounts entitled to priority due and owing to Robert Clifton under section
$19,000.00 (T) 507(a)(4) (the claim is not on account of wages) of the Bankruptcy Code. Further, the
claim is in excess of the statutory limit under section 507(a)(4) of the Bankruptcy
Code, and Robert Clifton does not provide any documentation in support of the claim.
The Orthodox Church filed a $10,227 priority claim pursuant to section 507(a)(4) of
$0.00 (A) the Bankruptcy Code. The proof of claim asserts the “Paycheck Protection Program” as
SS Peter and Paul Orthodox Church $0.00 (S) the basis for the claim. See proof of claim no. 951-195. Based on a review of the
EIN 06-6087116 Kabbage, Inc.
18 12/3/2022 951-195 $10,227.00 (P) $0.00 (P) Debtors’ books and records, the Debtors have determined the Orthodox Church is a
d/b/a KServicing
$10,227.00 (U) borrower of a PPP Loan that the Debtors service, and there are no amounts entitled to
$10,227.00 (T) priority due and owing to the Orthodox Church under section 507(a)(4) (the claim is
not on account of wages) of the Bankruptcy Code.
Stewart Williams filed a proof of claim asserting a total claim of $20,000.
Notwithstanding the asserted total value of the claim, the claimant asserts that $30,000
is entitled to priority pursuant to sections 507(a)(1)(A) and (a)(1)(B), 507(a)(4), and
507(a)(7) of the Bankruptcy Code. The proof of claim asserts “they sent money to the
wrong account, got it back and held it, after I got credits against the money they said
$0.00 (A) time run out” as the basis for the claim. See proof of claim no. 951-213. Based on a
Stewart Williams $0.00 (S) review of the Debtors’ books and records, the Debtors have determined that there are
Kabbage, Inc.
19 12/8/2022 951-213 $30,000.00 (P) $0.00 (P) no amounts entitled to priority due and owing to Stewart Williams under sections
d/b/a KServicing
$20,000.00 (U) 507(a)(1)(A) (the claim is not on account of domestic support obligations) and
$20,000.00 (T) (a)(1)(B) (the claim is not on account of domestic support obligations), 507(a)(4) (the
claim is not on account of wages), and 507(a)(7) (the claim is not on account of a
deposit in connection with the purchase, lease, or rental of property or purchase of
services) of the Bankruptcy Code. Further, Stewart Williams does not provide any
documentation in support of the claim, and the claim is in excess of the statutory limit
under section 507(a)(7) of the Bankruptcy Code.
Summer Stegall $0.00 (A) Summer Stegall filed a proof of claim asserting a total claim of $42,023.65. The
Kabbage, Inc.
20 11/24/2022 951-49 $30,523.00 (P) $0.00 (S) claimant asserts that $30,523 is entitled to priority pursuant to sections 507(a)(1)(A)
d/b/a KServicing
$0.00 (P) and (a)(1)(B), 507(a)(4), 507(a)(7), and 507(a)(8) of the Bankruptcy Code. The proof
4
RLF1 28536648V.1
Case 22-10951-CTG Doc 491-3 Filed 01/27/23 Page 20 of 29
Claimant Name Misclassified Modified
Date Claim Claim
# Debtor Name Priority Claim Classification Reason for Reclassification
Filed No.
Amount Status2
$42,023.65 (U) of claim asserts “money loaned/personal injury” as the basis for the claim. See proof
$42,023.65 (T) of claim no. 951-49. Based on a review of the Debtors’ books and records, the Debtors
have determined Summer Stegall is a borrower of a PPP Loan that the Debtors service,
and there are no amounts entitled to priority due and owing to Summer Stegall under
sections 507(a)(1)(A) (the claim is not on account of domestic support obligations) and
(a)(1)(B) (the claim is not on account of domestic support obligations), 507(a)(4) (the
claim is not on account of wages), 507(a)(7) (the claim is not on account of a deposit in
connection with the purchase, lease, or rental of property or purchase of services), and
507(a)(8) (the claim is not on account of governmental units) of the Bankruptcy Code.
Further, the claim is in excess of the statutory limit under section 507(a)(7).
The Juneau Group filed identical $11,000,000 priority claims against each of the
Debtor entities pursuant to sections 507(a)(4), 507(a)(7), 507(a)(8), and an unspecified
subsection of 507(a) of the Bankruptcy Code. No basis is asserted for any of the
claims. See proof of claim no. 951-91. Based on a review of the Debtors’ books and
$0.00 (A)
records, the Debtors have determined the Juneau Group is a borrower of a PPP Loan
The Juneau Group, LLC $0.00 (S)
Kabbage, Inc. that the Debtors service, and there are no amounts entitled to priority due and owing to
21 11/28/2022 951-91 $11,000,000.00 (P) $0.00 (P)
d/b/a KServicing the Juneau Group under sections 507(a)(4) (the claim is not on account of wages),
$11,000,000.00 (U)
507(a)(7) (the claim is not on account of a deposit in connection with the purchase,
$11,000,000.00 (T)
lease, or rental of property or purchase of services), and 507(a)(8) (the claim is not on
account of governmental units) of the Bankruptcy Code. Further, the Juneau Group
does not provide any documentation in support of the $11,000,000 claims, and the
total value of the Juneau Group’s PPP Loan is only $2,223.
The Juneau Group filed identical $11,000,000 priority claims against each of the
Debtor entities pursuant to sections 507(a)(4), 507(a)(7), 507(a)(8), and an unspecified
subsection of 507(a) of the Bankruptcy Code. No basis is asserted for any of the
claims. See proof of claim no. 955-4. Based on a review of the Debtors’ books and
$0.00 (A)
records, the Debtors have determined the Juneau Group is a borrower of a PPP Loan
The Juneau Group, LLC Kabbage Asset $0.00 (S)
that the Debtors service, and there are no amounts entitled to priority due and owing to
22 11/28/2022 955-4 Funding 2019-A, $11,000,000.00 (P) $0.00 (P)
the Juneau Group under sections 507(a)(4) (the claim is not on account of wages),
LLC $11,000,000.00 (U)
507(a)(7) (the claim is not on account of a deposit in connection with the purchase,
$11,000,000.00 (T)
lease, or rental of property or purchase of services), and 507(a)(8) (the claim is not on
account of governmental units) of the Bankruptcy Code. Further, the Juneau Group
does not provide any documentation in support of the $11,000,000 claims, and the total
value of the Juneau Group’s PPP Loan is only $2,223.
The Juneau Group filed identical $11,000,000 priority claims against each of the
Debtor entities pursuant to sections 507(a)(4), 507(a)(7), 507(a)(8), and an unspecified
subsection of 507(a) of the Bankruptcy Code. No basis is asserted for any of the
$0.00 (A)
claims. See proof of claim no. 952-2. Based on a review of the Debtors’ books and
The Juneau Group, LLC $0.00 (S)
Kabbage Canada records, the Debtors have determined the Juneau Group is a borrower of a PPP Loan
23 11/28/2022 952-2 $11,000,000.00 (P) $0.00 (P)
Holdings, LLC that the Debtors service, and there are no amounts entitled to priority due and owing to
$11,000,000.00 (U)
the Juneau Group under sections 507(a)(4) (the claim is not on account of wages),
$11,000,000.00 (T)
507(a)(7) (the claim is not on account of a deposit in connection with the purchase,
lease, or rental of property or purchase of services), and 507(a)(8) (the claim is not on
account of governmental units) of the Bankruptcy Code. Further, the Juneau Group
5
RLF1 28536648V.1
Case 22-10951-CTG Doc 491-3 Filed 01/27/23 Page 21 of 29
Claimant Name Misclassified Modified
Date Claim Claim
# Debtor Name Priority Claim Classification Reason for Reclassification
Filed No.
Amount Status2
does not provide any documentation in support of the $11,000,000 claims, and the
total value of the Juneau Group’s PPP Loan is only $2,223.
The Juneau Group filed identical $11,000,000 priority claims against each of the
Debtor entities pursuant to sections 507(a)(4), 507(a)(7), 507(a)(8), and an unspecified
subsection of 507(a) of the Bankruptcy Code. No basis is asserted for any of the
claims. See proof of claim no. 953-2. Based on a review of the Debtors’ books and
$0.00 (A)
records, the Debtors have determined the Juneau Group is a borrower of a PPP Loan
The Juneau Group, LLC Kabbage Asset $0.00 (S)
that the Debtors service, and there are no amounts entitled to priority due and owing to
24 11/28/2022 953-2 Securitization, $11,000,000.00 (P) $0.00 (P)
the Juneau Group under sections 507(a)(4) (the claim is not on account of wages),
LLC $11,000,000.00 (U)
507(a)(7) (the claim is not on account of a deposit in connection with the purchase,
$11,000,000.00 (T)
lease, or rental of property or purchase of services), and 507(a)(8) (the claim is not on
account of governmental units) of the Bankruptcy Code. Further, the Juneau Group
does not provide any documentation in support of the $11,000,000 claims, and the
total value of the Juneau Group’s PPP Loan is only $2,223.
The Juneau Group filed identical $11,000,000 priority claims against each of the
Debtor entities pursuant to sections 507(a)(4), 507(a)(7), 507(a)(8), and an unspecified
subsection of 507(a) of the Bankruptcy Code. No basis is asserted for any of the
claims. See proof of claim no. 954-2. Based on a review of the Debtors’ books and
$0.00 (A)
records, the Debtors have determined the Juneau Group is a borrower of a PPP Loan
The Juneau Group LLC Kabbage Asset $0.00 (S)
that the Debtors service, and there are no amounts entitled to priority due and owing to
25 11/28/2022 954-2 Funding 2017-A, $11,000,000.00 (P) $0.00 (P)
the Juneau Group under sections 507(a)(4) (the claim is not on account of wages),
LLC $11,000,000.00 (U)
507(a)(7) (the claim is not on account of a deposit in connection with the purchase,
$11,000,000.00 (T)
lease, or rental of property or purchase of services), and 507(a)(8) (the claim is not on
account of governmental units) of the Bankruptcy Code. Further, the Juneau Group
does not provide any documentation in support of the $11,000,000 claims, and the total
value of the Juneau Group’s PPP Loan is only $2,223.
The Juneau Group filed identical $11,000,000 priority claims against each of the
Debtor entities pursuant to sections 507(a)(4), 507(a)(7), 507(a)(8), and an unspecified
subsection of 507(a) of the Bankruptcy Code. No basis is asserted for any of the
claims. See proof of claim no. 956-2. Based on a review of the Debtors’ books and
$0.00 (A)
records, the Debtors have determined the Juneau Group is a borrower of a PPP Loan
The Juneau Group LLC $0.00 (S)
Kabbage that the Debtors service, and there are no amounts entitled to priority due and owing to
26 11/28/2022 956-2 $11,000,000.00 (P) $0.00 (P)
Diameter, LLC the Juneau Group under sections 507(a)(4) (the claim is not on account of wages),
$11,000,000.00 (U)
507(a)(7) (the claim is not on account of a deposit in connection with the purchase,
$11,000,000.00 (T)
lease, or rental of property or purchase of services), and 507(a)(8) (the claim is not on
account of governmental units) of the Bankruptcy Code. Further, the Juneau Group
does not provide any documentation in support of the $11,000,000 claims, and the total
value of the Juneau Group’s PPP Loan is only $2,223.
Valeria Sanders filed a $17,378 priority claim pursuant to an unspecified subsection of
$0.00 (A)
section 507(a) of the Bankruptcy Code. The proof of claim asserts “money loaned but
Valeria Sanders $0.00 (S)
Kabbage, Inc. never received” as the basis for the priority claim. See proof of claim no. 951-108.
27 11/29/2022 951-108 $17,378.00 (P) $0.00 (P)
d/b/a KServicing Based on a review of the Debtors’ books and records, the Debtors have determined
$17,378.00 (U)
Valeria Sanders is a borrower of a PPP Loan that the Debtors service, and there are no
$17,378.00 (T)
amounts entitled to priority due and owing to Valeria Sanders under section 507(a) of
6
RLF1 28536648V.1
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Claimant Name Misclassified Modified
Date Claim Claim
# Debtor Name Priority Claim Classification Reason for Reclassification
Filed No.
Amount Status2
the Bankruptcy Code. Further, Valeria Sanders does not provide any documentation in
support of the claim.
Yanelys Gomez filed a $3,600 priority claim pursuant to section 507(a)(4) of the
$0.00 (A) Bankruptcy Code. The proof of claim asserts “loaned” as the basis for the claim. See
Yanelys Gomez $0.00 (S) proof of claim no. 951-205. Based on a review of the Debtors’ books and records, the
Kabbage, Inc.
28 12/6/2022 951-205 $3,600.00 (P) $0.00 (P) Debtors have determined Yanelys Gomez is a borrower of a PPP Loan that the Debtors
d/b/a KServicing
$3,600.00 (U) service, and there are no amounts entitled to priority due and owing to Yanelys Gomez
$3,600.00 (T) under section 507(a)(4) (the claim is not on account of wages) of the Bankruptcy Code.
Further, Yanelys Gomez does not provide any documentation in support of the claim.
7
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Schedule 2
Misclassified Administrative Expense Claims
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Misclassified Administrative Expense Claims1
(Claims are listed alphabetically)
Misclassified
Date Claim Claim Modified Classification
# Claimant Name Debtor Name Administrative Reason for Reclassification
Filed No. Status2
Claim Amount
Best Sister filed a $21,120.34 administrative expense claim pursuant to section
$0.00 (A) 503(b)(9) of the Bankruptcy Code. The proof of claim asserts “money loaned” as the
Best Sister Friends Catering and $0.00 (S) basis for the claim. See proof of claim no. 951-58. Based on a review of the Debtors’
Events LLC Kabbage, Inc.
1 11/25/2022 951-58 $21,120.34 (A) $0.00 (P) books and records, the Debtors have determined Best Sister is a borrower of a PPP
d/b/a KServicing
$21,120.34 (U) Loan that the Debtors service, and there is no evidence of the Debtors receiving goods
$21,120.34 (T) from Best Sister within the twenty days prior to the Petition Date, in the ordinary
course, as required by section 503(b)(9) of the Bankruptcy Code.
Carlos Aceves filed a proof of claim asserting a total claim of $63,490. The
claimant asserts that $1,549 is an administrative expense claim pursuant to section
$0.00 (A) 503(b)(9) of the Bankruptcy Code. The proof of claim asserts “loan was approved
Carlos Aceves $0.00 (S) f[or] $63,490 after months a deposit of $1,590” as the basis for the claim. See
Kabbage, Inc.
2 12/10/2022 951-215 $1,549.00 (A) $0.00 (P) proof of claim no. 951-215. Based on a review of the Debtors’ books and records,
d/b/a KServicing
$63,490.00 (U) the Debtors have determined Carlos Aceves is a borrower of a PPP Loan that the
$63,490.00 (T) Debtors service, and there is no evidence of the Debtors receiving goods from
Carlos Aceves within the twenty days prior to the Petition Date, in the ordinary
course, as required by section 503(b)(9) of the Bankruptcy Code.
Charmaine Busch filed a $30,000 administrative expense claim pursuant to section
503(b)(9) of the Bankruptcy Code. The proof of claim asserts “money loaned . . .”
$0.00 (A)
as the basis for the claim. See proof of claim no. 951-27. Based on a review of the
Charmaine Busch $0.00 (S)
Kabbage, Inc. Debtors’ books and records, the Debtors have determined Charmaine Busch is a
3 11/5/2022 951-27 $30,000.00 (A) $0.00 (P)
d/b/a KServicing borrower of a Legacy Loan that the Debtors service, and there is no evidence of the
$30,000.00 (U)
Debtors receiving goods from Charmaine Busch within the twenty days prior to the
$30,000.00 (T)
Petition Date, in the ordinary course, as required by section 503(b)(9) of the
Bankruptcy Code.
Deborah A. Mastrandrea filed a $3,900 administrative expense claim pursuant to
section 503(b)(9) of the Bankruptcy Code. The proof of claim asserts “money
$0.00 (A) loaned” as the basis for the claim. See proof of claim no. 951-30. Based on a
Deborah A Mastrandrea $0.00 (S) review of the Debtors’ books and records, the Debtors have determined Deborah A.
Kabbage, Inc.
4 11/15/2022 951-30 $3,900.00 (A) $0.00 (P) Mastrandrea is a borrower of a PPP loan that the Debtors service, and there is no
d/b/a KServicing
$3,900.00 (U) evidence of the Debtors receiving goods from Deborah A. Mastrandrea within the
$3,900.00 (T) twenty days prior to the Petition Date, in the ordinary course, as required by
section 503(b)(9) of the Bankruptcy Code. Further, Deborah A. Mastrandrea does
not attach any documentation in support of the claim.
1
Certain of the Misclassified Administrative Expense Claims assert more than one incorrect classification status. This schedule lists only the misclassified administrative expense amounts.
2
(A) - Administrative, including 503(b)(9); (S) - Secured; (P) - Priority; (U) - Unsecured; (T) – Total.
RLF1 28536648V.1
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Misclassified
Date Claim Claim Modified Classification
# Claimant Name Debtor Name Administrative Reason for Reclassification
Filed No. Status2
Claim Amount
George Mallios filed three proofs of claim, each asserting a $209,816.08 administrative
expense claim pursuant to section 503(b)(9) of the Bankruptcy Code. The proofs of
$0.00 (A)
claim assert “failure to provide forgiveness” as the basis for the claim. See proof of
George James Mallios, PC $0.00 (S)
Kabbage, Inc. claim no. 951-196. Based on a review of the Debtors’ books and records, the Debtors
5 12/5/2022 951-196 $209,816.08 (A) $0.00 (P)
d/b/a KServicing have determined George Mallios is a borrower of a PPP Loan that the Debtors service,
$209,816.08 (U)
and there is no evidence of the Debtors receiving goods from George Mallios within
$209,816.08 (T)
the twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code.
George Mallios filed three proofs of claim, each asserting a $209,816.08
administrative expense claim pursuant to section 503(b)(9) of the Bankruptcy Code.
$0.00 (A)
The proofs of claim assert “failure to provide forgiveness” as the basis for the claim.
George James Mallios, PC $0.00 (S)
Kabbage, Inc. See proof of claim no. 951-207. Based on a review of the Debtors’ books and records,
6 12/5/2022 951-207 $209,816.08 (A) $0.00 (P)
d/b/a KServicing the Debtors have determined George Mallios is a borrower of a PPP Loan that the
$209,816.08 (U)
Debtors service, and there is no evidence of the Debtors receiving goods from George
$209,816.08 (T)
Mallios within the twenty days prior to the Petition Date, in the ordinary course, as
required by section 503(b)(9) of the Bankruptcy Code.
George Mallios filed three proofs of claim, each asserting a $209,816.08 administrative
expense claim pursuant to section 503(b)(9) of the Bankruptcy Code. The proofs of
$0.00 (A)
claim assert “failure to provide forgiveness” as the basis for the claim. See proof of
George James Mallios, PC $0.00 (S)
Kabbage, Inc. claim no. 951-216. Based on a review of the Debtors’ books and records, the Debtors
7 12/10/2022 951-216 $209,816.08 (A) $0.00 (P)
d/b/a KServicing have determined George Mallios is a borrower of a PPP Loan that the Debtors service,
$209,816.08 (U)
and there is no evidence of the Debtors receiving goods from George Mallios within
$209,816.08 (T)
the twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code.
Kelvin Foster filed a proof of claim asserting a total claim of $3,000. The claimant
asserts that $2,000 is an administrative expense claim pursuant to section 503(b)(9) of
$0.00 (A)
the Bankruptcy Code. The proof of claim asserts “goods sold” as the basis for the
Kelvin Foster $0.00 (S)
Kabbage, Inc. claim. See proof of claim no. 951-231. Based on a review of the Debtors’ books and
8 01/23/2023 951-231 $2,000.00 (A) $0.00 (P)
d/b/a KServicing records, the Debtors have determined Kelvin Foster is a borrower of a PPP Loan that
$3,000.00 (U)
the Debtors service, and there is no evidence of the Debtors receiving goods from
$3,000.00 (T)
Kelvin Foster within the twenty days prior to the Petition Date, in the ordinary course,
as required by section 503(b)(9) of the Bankruptcy Code.
Madel Hernandez filed a $32,000 administrative expense claim pursuant to section
503(b)(9) of the Bankruptcy Code. The proof of claim asserts “Loan” as the basis
$0.00 (A)
Madel Carmen Hernandez dba for the claim. See proof of claim no. 951-15. Based on a review of the Debtors’
$0.00 (S)
TODO PARA TU PACHANG Kabbage, Inc. books and records, the Debtors have determined Madel Hernandez is a borrower of
9 11/3/2022 951-15 $32,000.00 (A) $0.00 (P)
d/b/a KServicing a Legacy Loan that the Debtors service, and there is no evidence of the Debtors
$32,000.00 (U)
receiving goods from Madel Hernandez within the twenty days prior to the Petition
$32,000.00 (T)
Date, in the ordinary course, as required by section 503(b)(9) of the Bankruptcy
Code.
2
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Misclassified
Date Claim Claim Modified Classification
# Claimant Name Debtor Name Administrative Reason for Reclassification
Filed No. Status2
Claim Amount
Paula Roach filed three proofs of claim, each asserting a $112,770 administrative
expense claim pursuant to section 503(b)(9) of the Bankruptcy Code. The proofs of
$0.00 (A)
claim assert “failure to provide forgiveness” as the basis for the claim. See proof of
Paula Roach $0.00 (S)
Kabbage, Inc. claim no. 951-208. Based on a review of the Debtors’ books and records, the Debtors
10 12/5/2022 951-208 $112,770.00 (A) $0.00 (P)
d/b/a KServicing have determined Paula Roach is a borrower of a PPP Loan that the Debtors service,
$112,770.00 (U)
and there is no evidence of the Debtors receiving goods from Paula Roach within the
$112,770.00 (T)
twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code.
Paula Roach filed three proofs of claim, each asserting a $112,770 administrative
expense claim pursuant to section 503(b)(9) of the Bankruptcy Code. The proofs of
$0.00 (A)
claim assert “failure to provide forgiveness” as the basis for the claim. See proof of
Paula Roach $0.00 (S)
Kabbage, Inc. claim no. 951-210. Based on a review of the Debtors’ books and records, the Debtors
11 12/5/2022 951-210 $112,770.00 (A) $0.00 (P)
d/b/a KServicing have determined Paula Roach is a borrower of a PPP Loan that the Debtors service,
$112,770.00 (U)
and there is no evidence of the Debtors receiving goods from Paula Roach within the
$112,770.00 (T)
twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code.
Paula Roach filed three proofs of claim, each asserting a $112,770 administrative
expense claim pursuant to section 503(b)(9) of the Bankruptcy Code. The proofs of
$0.00 (A)
claim assert “failure to provide forgiveness” as the basis for the claim. See proof of
Paula Roach $0.00 (S)
Kabbage, Inc. claim no. 951-214. Based on a review of the Debtors’ books and records, the Debtors
12 12/7/2022 951-214 $112,770.00 (A) $0.00 (P)
d/b/a KServicing have determined Paula Roach is a borrower of a PPP Loan that the Debtors service,
$112,770.00 (U)
and there is no evidence of the Debtors receiving goods from Paula Roach within the
$112,770.00 (T)
twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code.
Randolph Redley filed a $16,248 administrative expense claim pursuant to section
503(b)(9) of the Bankruptcy Code. The proof of claim asserts “SBA PPP loan
$0.00 (A)
forgiveness” as the basis for the claim. See proof of claim no. 951-136. Based on
Randolph Redley $0.00 (S)
Kabbage, Inc. a review of the Debtors’ books and records, the Debtors have determined
13 11/30/2022 951-136 $16,248.00 (A) $0.00 (P)
d/b/a KServicing Randolph Redley is a borrower of a PPP Loan that the Debtors service, and there is
$16,248.00 (U)
no evidence of the Debtors receiving goods from Randolph Redley within the
$16,248.00 (T)
twenty days prior to the Petition Date, in the ordinary course, as required by section
503(b)(9) of the Bankruptcy Code.
The Juneau Group filed an administrative expense claim pursuant to section 503(b)(9)
of the Bankruptcy Code, in the amount of $20,833 per month for the duration of the
Chapter 11 Cases for an aggregate amount of $499,999.99. The proof of claim asserts
$0.00 (A) “TIME” as the basis for the claim. See proof claim no. 951-184. Based on a review of
The Juneau Group, LLC $0.00 (S) the Debtors’ books and records, the Debtors have determined the Juneau Group is a
Kabbage, Inc.
14 11/28/2022 951-184 $499,999.99 (A) $0.00 (P) borrower of a PPP Loan that the Debtors service, and there is no evidence of the
d/b/a KServicing
$499,999.99 (U) Debtors receiving goods from the Juneau Group within the twenty days prior to the
$499,999.99 (T) Petition Date, in the ordinary course, as required by section 503(b)(9) of the
Bankruptcy Code. Further, the Juneau Group does not attach any documentation in
support of the $499,999.99 claim, and the total value of the Juneau Group’s PPP Loan
is only $2,223.
3
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Schedule 3
Misclassified Secured Claims
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Misclassified Secured Claims1
(Claims are listed alphabetically)
Misclassified
Date Claim Claim Modified
# Claimant Name Debtor Name Secured Claim Reason for Reclassification
Filed No. Classification Status2
Amount
$0.00 (A) Anthony Dinish filed a secured claim for an unliquidated amount. The proof of
claim asserts “chapter 11 bankruptcy” as the basis for the claim. See proof of claim
Anthony Dinish $0.00 (S)
Kabbage, Inc. no. 951-185. Based on a review of the Debtors’ books and records, the Debtors
1 11/28/2022 951-185 $0.00 (S) $0.00 (P)
d/b/a KServicing have determined Anthony Dinish is a borrower of a PPP Loan that the Debtors
$0.00 (U) service, and there is no basis for the claim’s secured status under section 506 of the
$0.00 (T) Bankruptcy Code.
$0.00 (A) Kadada filed a $22,000 secured claim. The proof of claim asserts “money loaned”
Kadada, LLC $0.00 (S) as the basis for the claim. See proof of claim no. 951-226. Based on a review of the
Kabbage, Inc.
2 1/5/2023 951-226 $22,000.00 (S) $0.00 (P) Debtors’ books and records, the Debtors have determined Kadada is a borrower of a
d/b/a KServicing
$22,000.00 (U) PPP Loan that the Debtors service, and there is no basis for the claim’s secured status
$22,000.00 (T) under section 506 of the Bankruptcy Code.
Michael R. Hamlin filed a $500,000 secured claim. The proof of claim asserts “a lien
$0.00 (A) against property, that Kabbage Inc, must [have] purchased” as the basis for the claim.
The claimant further asserts that the lien is against 13 River Street, Sanford, Maine,
Michael R. Hamlin $0.00 (S)
Kabbage, Inc. which is on file at the York County Registry of Deeds. See proof of claim no. 951-25.
3 11/12/2022 951-25 $500,000.00 (S) $0.00 (P)
d/b/a KServicing Based on a review of the Debtors’ books and records, the Debtors have determined
$500,000.00 (U) Michael R. Hamlin is a borrower of a Legacy Loan that the Debtors service, there is no
$500,000.00 (T) evidence of the alleged lien, and no basis for the claim’s secured status under section
506 of the Bankruptcy Code.
$0.00 (A) Summer Stegall filed a filed a proof of claim asserting a total claim of $42,023.65,
including a $42,023 secured claim. The proof of claim asserts “money loaned/personal
Summer Stegall $0.00 (S)
Kabbage, Inc. injury” as the basis for the claim. See proof of claim no. 951-49. Based on a review of
4 11/24/2022 951-49 $42,023.65 (S) $0.00 (P)
d/b/a KServicing the Debtors’ books and records, the Debtors have determined Summer Stegall is a
$42,023.65 (U) borrower of a PPP Loan that the Debtors service, and there is no basis for the claim’s
$42,023.65 (T) secured status under section 506 of the Bankruptcy Code.
The Juneau Group filed identical $11,000,000 secured claims against each of the
$0.00 (A) Debtor entities. No basis for the claims is provided. See proof of claim no. 954-2.
Based on a review of the Debtors’ books and records, the Debtors have determined the
The Juneau Group, LLC Kabbage Asset $0.00 (S)
Juneau Group is a borrower of a PPP Loan that the Debtors service, there is no
5 11/28/2022 954-2 Funding 2017-A, $11,000,000.00 (S) $0.00 (P) evidence of the Juneau Group’s claims, and no basis for the claims’ secured status
LLC $11,000,000.00 (U) under section 506 of the Bankruptcy Code. Further, the Juneau Group provides no
$11,000,000.00 (T) documentation in support of the claims, and the total value of the Juneau Group’s PPP
Loan is only $2,223.
1
Certain of the Misclassified Secured Claims assert more than one incorrect classification status. This schedule lists only the misclassified secured amounts.
2
(A) - Administrative, including 503(b)(9); (S) - Secured; (P) - Priority; (U) - Unsecured; (T) – Total.
RLF1 28536648V.1
Case 22-10951-CTG Doc 491-3 Filed 01/27/23 Page 29 of 29
Misclassified
Date Claim Claim Modified
# Claimant Name Debtor Name Secured Claim Reason for Reclassification
Filed No. Classification Status2
Amount
The Juneau Group filed identical $11,000,000 secured claims against each of the
$0.00 (A) Debtor entities. No basis for the claims is provided. See proof of claim no. 956-2.
Based on a review of the Debtors’ books and records, the Debtors have determined the
The Juneau Group LLC $0.00 (S)
Kabbage Juneau Group is a borrower of a PPP Loan that the Debtors service, there is no
6 11/28/2022 956-2 $11,000,000.00 (S) $0.00 (P)
Diameter, LLC evidence of the Juneau Group’s claims, and no basis for the claims’ secured status
$11,000,000.00 (U) under section 506 of the Bankruptcy Code. Further, the Juneau Group provides no
$11,000,000.00 (T) documentation in support of the claims, and the total value of the Juneau Group’s PPP
Loan is only $2,223.
The Juneau Group filed identical $11,000,000 secured claims against each of the
$0.00 (A) Debtor entities. No basis for the claims is provided. See proof of claim no. 951-91.
Based on a review of the Debtors’ books and records, the Debtors have determined the
The Juneau Group, LLC $0.00 (S)
Kabbage, Inc. Juneau Group is a borrower of a PPP Loan that the Debtors service, there is no
7 11/28/2022 951-91 $11,000,000.00 (S) $0.00 (P)
d/b/a KServicing evidence of the Juneau Group’s claims, and no basis for the claims’ secured status
$11,000,000.00 (U) under section 506 of the Bankruptcy Code. Further, the Juneau Group provides no
$11,000,000.00 (T) documentation in support of the claims, and the total value of the Juneau Group’s PPP
Loan is only $2,223.
The Juneau Group filed identical $11,000,000 secured claims against each of the
Debtor entities. No basis for the claims is provided. See proof of claim no. 955-4.
$0.00 (A) Based on a review of the Debtors’ books and records, the Debtors have determined the
The Juneau Group, LLC Kabbage Asset
$0.00 (S)$0.00 (P) Juneau Group is a borrower of a PPP Loan that the Debtors service, there is no
8 11/28/2022 955-4 Funding 2019-A, $11,000,000.00 (S)
$11,000,000.00 (U) evidence of the Juneau Group’s claims, and no basis for the claims’ secured status
LLC
$11,000,000.00 (T) under section 506 of the Bankruptcy Code. Further, the Juneau Group provides no
documentation in support of the claims, and the total value of the Juneau Group’s PPP
Loan is only $2,223.
The Juneau Group filed identical $11,000,000 secured claims against each of the
$0.00 (A) Debtor entities. No basis for the claims is provided. See proof of claim no. 952-2.
Based on a review of the Debtors’ books and records, the Debtors have determined the
The Juneau Group, LLC $0.00 (S)
Kabbage Canada Juneau Group is a borrower of a PPP Loan that the Debtors service, there is no
9 11/28/2022 952-2 $11,000,000.00 (S) $0.00 (P)
Holdings, LLC evidence of the Juneau Group’s claims, and no basis for the claims’ secured status
$11,000,000.00 (U) under section 506 of the Bankruptcy Code. Further, the Juneau Group provides no
$11,000,000.00 (T) documentation in support of the claims, and the total value of the Juneau Group’s PPP
Loan is only $2,223.
The Juneau Group filed identical $11,000,000 secured claims against each of the
$0.00 (A) Debtor entities. No basis for the claims is provided. See proof of claim no. 953-2.
Based on a review of the Debtors’ books and records, the Debtors have determined the
The Juneau Group, LLC Kabbage Asset $0.00 (S)
Juneau Group is a borrower of a PPP Loan that the Debtors service, there is no
10 11/28/2022 953-2 Securitization, $11,000,000.00 (S) $0.00 (P) evidence of the Juneau Group’s claims, and no basis for the claims’ secured status
LLC $11,000,000.00 (U) under section 506 of the Bankruptcy Code. Further, the Juneau Group provides no
$11,000,000.00 (T) documentation in support of the claims, and the total value of the Juneau Group’s PPP
Loan is only $2,223.
2
RLF1 28536648V.1
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