to run the PPP business, and Amex Kabbage is obligated under the Transition Services Agreement, dated
- Date
- 2023-03-08
Summary
Exhibit 3, filed March 8, 2023 as Doc 623-3 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951, is a six-page letter dated January 13, 2023 from Theodore E. Tsekerides of Weil, counsel for the Debtors, to James L. Bromley of Sullivan & Cromwell LLP. The letter asks American Express Kabbage Inc. to provide loan servicing information it holds under the Transition Services Agreement dated as of October 16, 2020, confirming by January 19, 2023 and producing by February 17, 2023. It states that if Amex Kabbage opposes, the Debtors will move under Bankruptcy Rule 2004 and Rule 2004-1 of the local rules of the United States Bankruptcy Court for the District of Delaware. An attached schedule of KServicing 2004 requests lists items such as risk review and fraud flag documentation, database and platform access, PPP loan data fields, APIs and automated processes for transition.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 22-10951-CTG Doc 623-3 Filed 03/08/23 Page 1 of 6
EXHIBIT 3
Case 22-10951-CTG Doc 623-3 Filed 03/08/23 Page 2 of 6
VIA E-MAIL 767 Fifth Avenue
New York, NY 10153-0119
+1 212 310 8000 tel
+1 212 310 8007 fax
Theodore E. Tsekerides
+1 (212) 310-8218
January 13, 2023 theodore.tsekerides@weil.com
James L. Bromley, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
bromleyj@sullcrom.com
Re: In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951
Dear Jim:
Following up on our discussions regarding the need for the Debtors to obtain loan servicing information
in the possession of Amex Kabbage, attached is a schedule identifying particular information requested
by the Debtors, as well as general matters that will be necessary to transition loan servicing from Amex
Kabbage. Certain of the requested information is more immediately necessary and critical for the Debtors
to run the PPP business, and Amex Kabbage is obligated under the Transition Services Agreement, dated
as of October 16, 2020 and as amended on November 13, 2020 (“TSA”), by and between American
Express Kabbage Inc., (formerly Alpha Kabbage, Inc.) (“Amex Kabbage”) and Kabbage, Inc. (“Legacy
Kabbage”) to provide such information to the Debtors. Moreover, given that the TSA expressly
contemplated Amex Kabbage would ultimately transition its services under the TSA, it is appropriate to
undertake the steps necessary toward that transition. To that end, other items requested on the attached
schedule address that transition as well. Note, while we believe the particular information requested in
the schedule is comprehensive, we reserve the right to supplement should additional items be required.
In light of the importance of this information to the Debtors’ proper fulfillment of their loan servicing
obligations and the administration of the Debtors’ estates, the Debtors request that Amex Kabbage
voluntarily provide the information specified in the schedule as soon as possible, especially as relates to
the more specific requests.
We believe it is in all parties’ interests to work cooperatively in transitioning these materials to the Debtors
as quickly as possible. Accordingly, by January 19, 2023, please confirm that Amex Kabbage is willing
to provide the requested material, and that it will do so by February 17, 2023. As you are aware, the
Federal Reserve and certain of the Debtors’ partner banks are especially eager to have this information
made available to the Debtors so that the Debtors, or another entity, can better service the applicable loans.
The information is further required in connection with the Debtors’ ongoing administration and is
additionally necessary to respond to certain third-party regulatory requests. For these reasons, and given
WEIL:\98969274\7\55894.0003
Case 22-10951-CTG Doc 623-3 Filed 03/08/23 Page 3 of 6
January 13, 2023
Page 2
the importance of the materials to the Debtor’s estates, if Amex Kabbage opposes providing the requested
information, the Debtors will file a motion for entry of an order directing Amex Kabbage 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.
We hope you will work cooperatively to provide all the requested materials and information to avoid our
having to file a motion.
If Amex Kabbage is unwilling to provide the information or believes to be unable to do so before February
17, 2023, please let us know if you are available on Tuesday next week to meet and confer about the
requests.
Sincerely,
Theodore E. Tsekerides
Encl.
cc: Candace M. Arthur, candace.arthur@weil.com
Natasha Hwangpo, natasha.hwangpo@weil.com
WEIL:\98969274\7\55894.0003
Case 22-10951-CTG Doc 623-3 Filed 03/08/23 Page 4 of 6
SCHEDULE
KSERVICING 2004 REQUESTS
Specific Information Requests/Access
1. Documentation providing overview and business requirements to manage the risk
reviews of loans at origination: This includes all of the accompanying documentation,
including the following:
● Incident Reports (IRs) and narratives generated in connection with loan reviews
● Questionable Activity Reports (QARs)
● Fraud flag categories with definitions for each flag
● Documentation of business reason business requirements that explain placement of flag
● Documentation of process to clear or confirm each category of suspected fraud
● Results of any screening procedures, including but not limited to Threatmetrix,
Lexis/Nexis, Experian, GIAC and related third-party tools
● Any other KYC/KYB data and documents, including those described in the company’s
AML/BSA program documents
2. IT System Alerts
● Defined and documented system alerts to be sent to KServicing IT/Sr. Management
leads to alert teams of changes to the database environment that require investigation
and validation, to confirm reporting output from Amex-managed systems and delivered
to KServicing bank partners and internal teams to accurately reflect the status of the
portfolio
3. Data Environments & Technical Platforms
● Request for the IT department to provide read-only access to the Kabbage platform that
KServicing licenses to service the loans, allowing the KServicing team to reference the
code within the platform
● Access to databases used to support automated jobs that Amex maintains, that interact
directly with KServicing partner banks. KServicing data operations team requires the
code from Amex system environment to test and validate KServicing partner reporting
deliverables.
4. Access to all data fields associated with each PPP loan, comprising the history from
origination through disbursement, and all other aspects of the loan
● Currently the access that KServicing has is to a shared database environment, with
select fields that the KServicing team has been blocked from accessing and referencing
Case 22-10951-CTG Doc 623-3 Filed 03/08/23 Page 5 of 6
to service PPP loans. For example Kservicing currently does not have access to SSNs,
TINs, beneficial ownership and related SSNs/TINs and ownership percentages.
5. KAmex Database updates
● Designated Amex point of contact who provides support to database updates
○ Example: Amex point of contact to review and understand the need to change an
SBA Loan # to new Loan #, when adding a 2nd loan is required to manage a
reinstatement of the loan
● Ability to document and update the Kore/CoreCredit environment to support the
changing PPP loan servicing workflow
6. Audit/Governance Business Requirements
● Designated Amex point of contact who supports 3rd-party audit & governance
requirements and deliverables
○ Inclusion of Kore and all such related systems within the scope of AmEx’s annual
SOC audits to comply with partner bank contractual obligations made available
to AmEx during due diligence.
7. APIs for Kore, PPP Borrower Dashboard, and Salesforce
● Designated Amex point of contact for KServicing to coordinate/work with for API
management
● Documentation that outlines and explains all APIs ingested/connected to the Kore and
Customer Dashboard environments, and impact the customer’s dashboard and facilitate
the monetary activities on a customer’s account
8. Data Environments & Technical Platforms
● Provide Amex point of contact to KServicing Help Desk to provide provisioning and
troubleshooting support for Kore-related/Core Card system issues
Case 22-10951-CTG Doc 623-3 Filed 03/08/23 Page 6 of 6
General Matters for Transition
9. Tutorial of the full PPP data environment and support of KAmex Technical lead
10. Confirm, document and transition all automated processes managed within the Amex
infrastructure that support KServicing operations, including
● Number of automated processes that support the PPP loan servicing effort
● Name and description of each individual process
● Documentation of process detail for reference
● Code from each process
● Naming convention for file/directories that map to all automated processes
● Access rights/needs for automated reporting, including Amex point of contact to
manage access rights for automated reporting
● 3rd party vendors impacted by and supporting established automated processes that
support PPP loan servicing operations
● Kabbage Amex point of contact for follow up questions/implementation
Documentation of all automated processes include, but are not limited to:
● Daily all loan schedule delivered daily directly to CRB and CB via their SFTP
environments
● Data dictionary for loan schedule raw report
● Data Reporting Script that captures call recording links produced within the Five9
environment, for subpoena document production
● Instructions and deliverables that AMEX data environments are managing for all
SFTP automated file(s) delivered to KServicing vendors and partners
● Forgiveness data ingestion workflow
● Documentation for Direct Forgiveness API deliverables that Amex completed
● Documentation that outlines and explains automated SFTP updates into the
Blackline accounting environment
● Documentation that outlines and explains that management of the dialer file
generated to support collections efforts
● Documentation of workflows established to manage automated reporting for
collections agencies to reference, to deliver charge off accounts for collection
agency to work from
● Processes, and pending changes to processes, that impact and/or change data
reporting outputs automatically saved into the KS data environment
● Documentation of auto-generation of Salesforce tickets that are created by doc
requests made through Kore
File and source
- File
- gov.uscourts.deb.188293.623.3.pdf
- Size
- 803,974 bytes
- SHA-256
- e94176f12ffc0326d019b19bd81722aaaf7ae763e7c01f74bfa6bd74bbcabae3
- Original
- archive.org