Exhibit B-1 Blackline, Schedule of Causes of Action — KServicing Third Plan Supplement, Doc 630-2
Summary
Exhibit B-1 Blackline, Schedule of Causes of Action, Doc 630-2 in Case 22-10951-CTG, filed March 9, 2023. The non-exclusive schedule describes categories of Causes of Action that will be retained by the Debtors and vest in the Wind Down Estate on the Effective Date, as provided for in Section 10.1 of the Plan, and states that the Debtors reserve the right to alter, modify, amend, remove, augment, or supplement the schedule. Listed categories include causes of action related to insurance, contracts or torts, the American Express Transaction, Bankruptcy Court orders and the Chapter 11 Cases, taxes, fees and refunds, and Avoidance Actions. The final page is a document comparison summary report.
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- Date
- 2023-03-09
Cite this document
“Exhibit B-1 Blackline, Schedule of Causes of Action — KServicing Third Plan Supplement, Doc 630-2.”
Original at archive.org, dated 2023-03-09. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-03-09-kservicing-bankruptcy-eece41d6-1/
, SHA-256 eece41d63d635d45291842fd999f1874303488f724604bc17e786465020b9b77.Full text
Case 22-10951-CTG Doc 630-2 Filed 03/09/23 Page 1 of 6
EXHIBIT B-1
Blackline
Case 22-10951-CTG Doc 630-2 Filed 03/09/23 Page 2 of 6
Schedule of Causes of Action1
This non-exclusive schedule of retained Causes of Action (this “Schedule”) comprises
part of the Plan Supplement and describes the categories of Causes of Action that will be
retained by the Debtors and vest in the Wind Down Estate on the Effective Date, as provided for
in Section 10.1 of the Plan. This Schedule is a supplement to section 5.8 of the Plan and the Plan
generally, and does not limit or narrow the scope of the Causes of Action that will vest in the
Wind Down Estate on the Effective Date. This Schedule is intended to provide further
information and explanation to parties in interest of the Causes of Action that will vest in the
Wind Down Estate. To the extent there are any inconsistencies between this Schedule and the
Plan, the Plan will govern. The Debtors expressly reserve the right to alter, modify, amend,
remove, augment, or supplement this Schedule at any time in accordance with the terms of the
Plan and subject to the consent of the Reserve Bank, not to be unreasonably withheld. Any such
modification will be set forth in an amended Schedule.
No Person may rely on the absence of a specific reference in the Plan, the Plan
Supplement, or the Disclosure Statement to any Cause of Action against them as any
indication that the Debtors, the Wind Down Estate or the Wind Down Officer (on behalf of the
Wind Down Estate) will not pursue any and all available Causes of Action against them.
The Debtors or the Wind Down Estate and the Wind Down Officer, as applicable,
expressly reserve all rights to prosecute any and all Causes of Action against any Person
or Entity, except as otherwise provided in the Plan, including Causes of Action that
are not expressly identified in this Schedule. Unless any Causes of Action against a Person
or Entity are waived, relinquished, exculpated, released, compromised, or settled in the Plan
or by an order of the Bankruptcy Court, the Debtors or the Wind Down Estate and the Wind
Down Officer, as applicable, expressly reserve all Causes of Action for later adjudication and,
therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel,
issue preclusion, claim preclusion, estoppel ( judicial, equitable, or otherwise), or laches, will
apply to such Causes of Action upon, after, or as a consequence of the Confirmation Date or the
Effective Date. In addition, the Wind Down Estate and the Wind Down Officer (on behalf of
the Wind Down Estate) expressly reserve the right to pursue, take-over, or adopt any claims
alleged in any lawsuit in which any of the Debtors is a party, against any Person or Entity,
including, without limitation, the plaintiffs or co-defendants in such lawsuits.2
1
Capitalized terms used but not defined herein have the meanings assigned to them in the
Amended Joint Chapter 11 Plan of Liquidation of Kabbage, Inc. (d/b/a KServicing) and its
Affiliated Debtors [Docket No. 466] (as may be amended, modified and/or supplemented, the
“Plan”).
2
For the avoidance of doubt, the inclusion of any Cause of Action herein shall not indicate any
determination by the Debtors or the Wind Down Officer (on behalf of the Wind Down Estate),
as applicable, to initiate, file, prosecute, enforce, abandon, settle, compromise, release,
withdraw, or litigate to judgment any such Cause of Action, or to decline to do any of the
foregoing.
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In accordance with section 1123(b)(3) of the Bankruptcy Code, any Causes of Action
that any of the Debtors may hold against any Person or Entity that are not waived, relinquished,
exculpated, released, compromised, or settled in the Plan or by an order of the Bankruptcy
Court will vest in the Wind Down Estate on the Effective Date. Subject to the Plan and to the
various consent and consultation rights set forth in the Wind Down Agreement, the Wind
Down Officer (on behalf of the Wind Down Estate) will have the exclusive right, authority, and
discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise,
release, withdraw, or litigate to judgment any such Causes of Action, or to decline to do any of
the foregoing, without further notice to or action, order, or approval of the Bankruptcy Court.
In addition, all of the Debtors’ respective rights, titles and interests in any privileges or
immunities of the Debtors’ estates, including the attorney-client privilege and any privilege in
respect of any Claims or Causes of Action shall automatically vest, without waiver, in the
Wind Down Estate and the Wind Down Officer, as applicable, and the Wind Down Officer
shall have the sole power and authority to assert or waive such privileges for the joint benefit of
the Debtors and the Wind Down Estate.
The following is a non-exclusive list of the categories of Causes of Action that will be
retained by the Debtors and vest in the Wind Down Estate on the Effective Date pursuant to the
Plan:
I. Causes of Action Related to Insurance
Unless otherwise released in the Plan, the Debtors or the Wind Down Estate and Wind
Down Officer (on behalf of the Wind Down Estate), as applicable, expressly reserve any
and all Causes of Action based in whole or in part upon any and all insurance contracts
and insurance policies to which any of the Debtors or the Wind Down Estate, as
applicable, is or was a party, or pursuant to which any of the Debtors or the Wind Down
Estate, as applicable, has any rights whatsoever, including any Causes of Action against
current or former insurance carriers, insurance brokers, third party administrators,
underwriters, or occurrence carriers related to coverage, indemnity, contribution,
reimbursement, or any other matters.
II. Causes of Action Related to Contracts or Torts
Unless otherwise waived, relinquished, exculpated, released, compromised, or settled in
the Plan or by an order of the Bankruptcy Court, the Debtors or the Wind Down Estate
and Wind Down Officer (on behalf of the Wind Down Estate), as applicable, expressly
reserve any and all Causes of Action based in whole or in part upon any and all contracts,
leases, or other agreements to which any of the Debtors or the Wind Down Estate, as
applicable, is, at one time was, or may become a party or pursuant to which any of the
Debtors or the Wind Down Estate, as applicable, has any rights whatsoever (regardless of
whether such contracts, leases or other agreements are executory contracts or unexpired
leases), including but not limited to (i) overpayments, back charges, duplicate payments,
improper holdbacks, deductions owing or improper deductions taken, deposits,
warranties, guarantees, indemnities, recoupment, or setoff, (ii) breach of contract,
malpractice, setoff, recoupment, equitable subordination, contractual clawback, and
disallowance against or related to individuals that provided professional services to the
Debtors prior to the Petition Date, (iii) wrongful or improper termination, suspension of
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services or supply of goods, or failure to meet other contractual or regulatory obligations,
(vi) failure to fully perform or to condition performance on additional requirements under
contracts with any one or more of the Debtors before the assumption or rejection, if
applicable, of such contracts, (v) counterclaims and defenses related to any contractual
obligations, and (vi) unfair competition, interference with contract or potential business
advantage, breach of contract, infringement of intellectual property, or any business tort
claim.
III. Causes of Action Related to the American Express Transaction
Unless otherwise exculpated or released in the Plan, the Debtors or the Wind Down
Estate and Wind Down Officer (on behalf of the Wind Down Estate), as applicable,
expressly reserve any and all Causes of Action against any Person or Entity, including,
without limitation, any party to the American Express Transaction, Former Officers and
Directors and current and former shareholders of the Debtors and former outside
professional advisors to the Debtors in connection with the American Express
Transaction, and any current or former affiliate of any of the foregoing, related to, arising
from or in furtherance of the American Express Transaction or any agreements entered
into pursuant to the American Express Transaction. Such reserved Causes of Action,
includeing, without limitation, any and all claims for and/or rights to setoff or
recoupment for, relating to, or based on successor liability, breach of fiduciary duties,
breach of contract, malpractice, and fraud, and any and all claims and/or rights to setoff,
recoupmentturnover, preference, fraudulent transfer, fraudulent conveyance, and/or other
similar avoidance claims and recoveries that any of the Debtors or the Wind Down Estate
and the Wind Down Officer (on behalf of the Wind Down Estate), as applicable, could
assert under sections 502, 506(d), 510, 522, 541, 542, 543, 544, 545, 547, 548, 549, 550,
551, 552, 553 and/or 558 of the Bankruptcy Code, violations of the Delaware LLC Act,
violations of the Delaware General Corporation Law, violations of any applicable
organizational documents of any Debtor or any Affiliate, or any other similar rights under
state or federal statutes and common law. Furthermore, the Debtors or the Wind Down
Estate, as applicable, expressly reserve any and all defenses relating to any counterclaims
arising out of the foregoing.
IV. Causes of Action Related to the Chapter 11 Cases and Bankruptcy Court Orders
Unless otherwise waived, relinquished, exculpated, released, compromised, or settled in
the Plan or by an order of the Bankruptcy Court, the Debtors or the Wind Down Estate
and Wind Down Officer (on behalf of the Wind Down Estate), as applicable, expressly
reserve any and all Causes of Action and rights to pursue and respond to any claims that
any of the Debtors or the Wind Down Estate, as applicable, hold or may hold against any
Person or Entity that is, or may in the future become, party to litigation, arbitration or any
other type of adversarial proceeding or dispute resolution proceeding, whether formal or
informal, or judicial or non-judicial as a consequence of the Chapter 11 Cases. Further,
the Debtors and the Wind Down Estate, as applicable, reserve any and all Causes of
Action based in whole or in part upon, or arising under, any order of the Bankruptcy
Court, including without limitation (i) any Causes of Action related to payments made by
the Debtors or the Wind Down Estate, as applicable, to any Persons or Entities pursuant
to any order of the Bankruptcy Court; (ii) any and all claims and counterclaims against
PPP Loan or Legacy Loan borrowers or Partner Banks of the Debtors’ various loan
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portfolios; (iii) any claims brought by any Governmental Units, including any
Governmental Units not subject to the injunction in section 10.3 of the Plan; and (iv) any
and all claims arising from the settlement agreement with CB and related litigation.
V. Causes of Action or Claims Related to any Loans or Borrowers of such Loans
Unless otherwise released in the Plan, the Debtors or the Wind Down Estate and Wind
Down Officer (on behalf of the Wind Down Estate), as applicable, expressly reserve all
Causes of Action against or related to borrowers of a PPP Loan or Legacy Loan for which
the Debtors have any rights or interests in as of the Effective Date including, but not
limited to, (i) claims in borrower bankruptcy proceedings, (ii) collection of unpaid
balances, (iii) recoupment of overpayments relating to underlying loans, and (iv) any
security interests on collateral relating to the loans to the extent applicable. For the
avoidance of doubt, nothing in this Section V or elsewhere in this Schedule shall in any
way limit the Reserve Bank Claims as Allowed under the Plan and the Cash Collateral
Order, or the Reserve Bank’s security interest in the PPPLF Collateral or the Adequate
Protection liens granted to the Reserve Bank under the Cash Collateral Order.
VI. Causes of Action Related to Taxes, Fees, and Tax or Fee Refunds or Credits
Unless otherwise released in the Plan, the Debtors or the Wind Down Estate and Wind
Down Officer (on behalf of the Wind Down Estate), as applicable, expressly reserve all
Causes of Action against or related to all Persons and Entities that owe or that may in the
future owe money related to tax or fee refunds, credits, overpayments, recoupments, or
offsets that may be due and owing to the Debtors or Wind Down Estate, as applicable.
Furthermore, the Debtors or the Wind Down Estate and Wind Down Officer (on behalf of
the Wind Down Estate), as applicable, expressly reserve all Causes of Action against or
related to all Persons and Entities that assert or may assert that the Debtors or Wind
Down Estate, as applicable, owe taxes to them.
VII. Causes of Action to Related to Avoidance Actions
Unless otherwise exculpated or released in the Plan, the Debtors or the Wind Down
Estate and Wind Down Officer (on behalf of the Wind Down Estate), as applicable,
expressly reserve any and all Avoidance Actions and/or other related Causes of Action
that any of the Debtors could assert against any Person or Entity.
THE DEBTORS RESERVE ALL RIGHTS TO AMEND, REVISE, OR SUPPLEMENT
THIS SCHEDULE, AND ANY OF THE DOCUMENTS AND DESIGNATIONS
CONTAINED HEREIN, AT ANY TIME BEFORE THE EFFECTIVE DATE OF THE
PLAN, OR ANY SUCH OTHER DATE AS MAY BE PROVIDED FOR BY THE PLAN
OR BY ORDER OF THE BANKRUPTCY COURT.
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