transaction that was the subject of that certain Agreement and Plan of Merger dated August 16, 2020
- Date
- 2023-02-24
Summary
Exhibit 2, filed February 24, 2023 as Doc 577-2 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951, a Chapter 11 case in the United States Bankruptcy Court for the District of Delaware. The exhibit contains a December 15, 2022 letter from Theodore E. Tsekerides of Weil, Gotshal & Manges LLP, counsel to the Debtors, to Financial Technology Partners LP and FTP Securities LLC. The letter requests seven categories of documents about the Agreement and Plan of Merger dated August 16, 2020, including discussion materials, communications, work papers and engagement letters, by January 9, 2023, and states the Debtors will otherwise seek an order under Bankruptcy Rule 2004. The exhibit also includes minutes of a June 23, 2020 special meeting of the Kabbage, Inc. Board of Directors referring to Project Green and FT Partners as the company's financial advisor.
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Case 22-10951-CTG Doc 577-2 Filed 02/24/23 Page 1 of 6
EXHIBIT 2
Case 22-10951-CTG Doc 577-2 Filed 02/24/23 Page 2 of 6
Weil, Gotshal & Manges LLP
VIA E-MAIL 767 Fifth Avenue
New York, NY 10153-0119
+1212310 8000 tel
+1 212 310 8007 fax
Theodore E. Tsekerides
+1 (212) 310-8218
December 15, 2022 theodore.tsekerides@weil.com
Steve McLaughlin, Managing Partner
-and-
Amar Mehta, Managing Director
Financial Technology Partners LP
FTP Securities LLC
1 Front St., 31st Floor
San Francisco, CA 94111
Steve.McLaughlin@ftpartners.com
Amar.Mehta@ftpartners.com
Re: In re Kabbage, Inc. dlb/a KServicing, et al. [Case No. 22-10951]
Dear Messrs. McLaughlin and Mehta:
As you may know, Kabbage, Inc. d/b/a KServicing and its affiliated debtors (the "Company" or,
collectively, the "Debtors") filed a petition for relief under Chapter 11 of the Bankruptcy Code on
October 3, 2022 (the "Petition Date") in the United States Bankruptcy Court, District of Delaware. We
are counsel to the Debtors in that proceeding.
In connection with the chapter 11 filing, the Debtors are undertaking an examination of all possible claims
of the estate and require information necessary to complete that examination. Examinations under
Bankruptcy Rule 2004-which courts uniformly recognize as "broad" and "unfettered"-allow parties in
interest to obtain information concerning any matter that may affect the administration of a debtor's estate.
Rule 2004 allows "the examination of any entity" including investigation of"any matter which may affect
the administration of the debtor's estate." Fed. R. Bankr. P. 2004(a)-(b); see also In re GHR Energy
Corp., 33 B.R. 451,453 (Bankr. D. Mass. 1983) ("[T]he scope of [a Rule 2004] examination is virtually
unlimited."). "The scope of Bankruptcy Rule 2004 is 'unfettered and broad."' In re Wash. Mut., 408 B.R.
45, 49-50 (Bankr. D. Del. 2009) (quoting In re Bennett Funding Grp., Inc., 203 B.R. 24, 28 (Bankr.
N.D.N.Y. 1996)). "Legitimate goals of Rule 2004 examinations include discovering assets, examining
transactions, and determining whether wrongdoing has occurred." In re Millennium ab Holdings II, LLC,
562 B.R. 614, 625-27 (Bankr. D. Del. 2016) (citation omitted). Non-debtors are subject to examination
under Bankruptcy Rule 2004. In re Bennett, 203 B.R. at 28.
WEIL:\98938390\2155894.0003
Case 22-10951-CTG Doc 577-2 Filed 02/24/23 Page 3 of 6
December 15, 2022 Wall, Gotahal & Mangaa LLP
Page 2
Based on information available to the Debtors, we understand that Financial Technology Partners LP
and/or FTP Securities LLC (collectively, "FT Partners") has information that is necessary to examine the
transaction that was the subject of that certain Agreement and Plan of Merger dated August 16, 2020
(which agreement became effective on October 16, 2020) (the "Transaction") for which it appears FT
Partners performed certain services as financial advisors to the Company. See attached board minutes
reflecting work by FT Partners. To that end we request that FT Partners provide the following documents
to the Debtors by January 9, 2023:
1. All drafts and the final version(s) of any discussion materials prepared for, presented to or
distributed to the Company and/or its Board or management, including but not limited to, any
appraisals, solvency analysis, valuations, modeling, PowerPoints, presentations, fully functional
Microsoft Excel models and related support, or other materials relating thereto, that FT Partners
prepared relating to any proposed strategic alternatives for the Company, including the Transaction
and/or Project Green;
2. All documents that FT Partners reviewed in connection with any of its proposed or discussed
strategic alternatives for the Company, including the Transaction and/or Project Green;
3. All communications between FT Partners and the Company, its Board or management, relating to
any proposed strategic alternatives for the Company, including the Transaction and/or Project
Green;
4. All communications between FT Partners and any entity or individual other than the Company,
including American Express Travel Related Services Company, Inc., any equity or security holders
of the Company and/or its predecessor(s), debt holders of the Company and/or its predecessor(s),
Fortis Advisors, LLC, including any employees, representatives or agents thereof and/or any
financial advisors or representatives of any entity, relating to any proposed strategic alternatives
for the Company, including the Transaction and/or Project Green;
5. All internal communications between and/or among FT Partners' representatives, employees,
managing directors, and/or agents relating to any proposed strategic alternatives for the Company,
including the Transaction and/or Project Green;
6. All FT Partners work papers, analysis or other materials reflecting its work relating to any proposed
strategic alternatives for the Company, including the Transaction and/or Project Green; and
7. All engagement letters between the Company and FT Partners.
Given the importance of this information to the Debtors' estates, and to their creditors, please let us know
no later than the close of business on December 21, 2022 if FT Partners will agree to provide the requested
WEIL:19893839012155894.0003
Case 22-10951-CTG Doc 577-2 Filed 02/24/23 Page 4 of 6
December 15, 2022 Weil, Gotshal & Manges LLP
Page 3
information voluntarily. While it is our hope and expectation that FT Partners will agree to do so, in the
absence of such an agreement, the Debtors will seek entry of an order directing FT Partners to produce
the requested information pursuant to Bankruptcy Rule 2004 and Rule 2004-1 of the Local Rules of
Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware.
Further, and to that end, please advise if you (or any counsel you may retain) are available for a meet and
confer pursuant to Local Rule 2004-1 on December 22, 2022 if FT Partners will not provide the requested
materials voluntarily.
The Debtors expressly reserve their right to seek additional documents from and/or examinations of FT
Partners pursuant to Bankruptcy Rule 2004 and Local Rule 2004-1 in connection with these chapter 11
proceedings.
Sincerely,
Theodore E. Tsekerides
Encl.
cc: Candace M. Arthur, Candace.Arthur@weil.com
Natasha Hwangpo, Natasha.Hwangpo@weil.com
WEIL:\9893839012\55894.0003
Case 22-10951-CTG Doc 577-2 Filed 02/24/23 Page 5 of 6
DocuSign Envelope ID: 0CF65153-BF7D-45B9-9E7B-4E0048AC7DEE
MINUTES OF A SPECIAL MEETING
OF THE BOARD OF DIRECTORS OF
KABBAGE, INC.
June 23, 2020
A special meeting ("Meeting") of the Board of Directors (the "Board") of Kabbage, Inc. (the
"Company") was held on June 23, 2020 at approximately 2:45 p.m., Eastern Time via conference. Notice
of the Meeting was duly given with Board members Rob Frohwein, Chairman and CEO, Don Butler,
Jonathan Ebinger, Alex Chulack, Laurie Hodrick, Bryan Stolle and Ioannis (Yanni) Pipilis, constituting a
quorum. Also, in attendance at the invitation of the Board were: Kathryn Petralia, President; and L. Scott
Askins, General Counsel and Secretary.
This Meeting followed weekly Board update calls (as supplemented from time to time with
materials distributed via email to the Board) held on the following dates in which all members of the Board
participated: (i) April 29, 2020 from 12:30 p.m. - 2:00 p.m., Eastern Time; (ii) May 22, 2020 from 11 :00
a.m. - 12:50 p.m., Eastern Time; (iii) May 29, 2020 from 12:00 p.m. - 1:00 p.m., Eastern Time; and (iv)
June 9, 2020 from 11 :00 a.m. - 12:05 p.m., Eastern Time. The Board update calls continued to focus
primarily on the Company's crisis response to the COVID-19 pandemic and included participation by
various members of management, who provided presentations and updates to the following general agenda
items (with questions and discussions ensuing throughout): (i) employee matters, including safety
measures, work-from-home, furlough and reduction in force matters; (ii) operating expense initiatives,
including Kabbage Funding portfolio actions (such as customer relief and account management),
marketing, vendor management and other cost reduction initiatives; (iii) payroll protection program ("PPP")
initiatives, including regulatory matters, bank and referral partners, SBA non-depository direct lending
authorization and PPP liquidity facility access; (iv) credit facilities, including the Company's asset-backed
securitization ("ABS"), warehouse and corporate debt facilities; (v) the Company's insurance renewals;
(vi) Company financial and liquidity forecasts and plans to restart Kabbage Funding; and (vii) Company
strategic alternatives, including Project Green (with participation in certain calls by Steve McLaughlin and
Amar Mehta of Financial Technology Partners LP ("FT Partners"), the Company's financial advisor).
Mr. Frohwein called the Meeting to order and welcomed everyone. Mr. Frohwein first provided
the Board an update on Project Green. Ms. Askins then provided an update on the discounted buyout
proposal in connection with the continued negotiations on the Company's corporate debt facility under
forbearance agreement. Questions and discussion ensued.
oriz with
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Next, the Board acknowledged their support of an approval of an amendment to the Company's
certificate of incorporation, which would include a liquidation preference waiver by certain holders of
Series E Preferred Stock and Series F Preferred Stock, in order to help facilitate, and conditioned upon the
consummation of, the proposed acquisition of the Company by Amex.
Kabbage Board 6-23-20
Case 22-10951-CTG Doc 577-2
DocuSign Envelope ID: 0CF65153-BF7D-4589-9E7B-4E0048AC7DEE
Filed 02/24/23 Page 6 of 6
There being no further business to come before the Committee, the Meeting was adjourned at
approximately 3 :00 p.m., Eastern Time.
Respectfully submitted,
L. Scott Askins, Secretary
2
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