Kabbage - COC re Further Revised Confirmation Order
- Date
- 2023-03-14
Summary
Exhibit 3, Change-Pages of Amended Plan, filed March 14, 2023 as Doc 674-3 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951 (CTG), in the United States Bankruptcy Court for the District of Delaware. The five-page exhibit reproduces the cover page of the Amended Joint Chapter 11 Plan of Liquidation, dated March 13, 2023, and filed by Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A. as attorneys for the debtors. The changed plan pages address the classification and treatment of Reserve Bank Claims tied to PPPLF Collateral, and the transfer of PPP loan servicing obligations to third-party servicers for the Reserve Bank, CRB, CB and the SBA. The final page sets out section 10.2, Term of Injunctions or Stays, and section 10.3, Injunction.
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Case 22-10951-CTG Doc 674-3 Filed 03/14/23 Page 1 of 5
Exhibit 3
Change-Pages of Amended Plan
RLF1 28730491v.1
Case 22-10951-CTG Doc 674-3 Filed 03/14/23 Page 2 of 5
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------------------ x
In re : Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING et al., : Case No. 22-10951 (CTG)
:
:
Debtors.1 : (Jointly Administered)
------------------------------------------------------------ x
AMENDED JOINT CHAPTER 11 PLAN OF LIQUIDATION OF
KABBAGE, INC. (d/b/a KSERVICING) AND ITS AFFILIATED DEBTORS
WEIL, GOTSHAL & MANGES LLP
Ray C. Schrock (admitted pro hac vice)
Candace M. Arthur (admitted pro hac vice)
Natasha S. Hwangpo (admitted pro hac vice)
Chase A. Bentley (admitted pro hac vice)
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
RICHARDS, LAYTON & FINGER, P.A.
Daniel J. DeFranceschi (No. 2732)
Amanda R. Steele (No. 5530)
Zachary I. Shapiro (No. 5103)
Matthew P. Milana (No. 6681)
One Rodney Square
920 N. King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
Attorneys for Debtors
and Debtors in Possession
Dated: March 13, 2023
Wilmington, Delaware
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.
WEIL 98778873V.26
98778873V.28
Case 22-10951-CTG Doc 674-3 Filed 03/14/23 Page 3 of 5
(ii) The portion of the Reserve Bank Claims paid from the proceeds
of the PPPLF Collateral and the Adequate Protection collateral
shall constitute the Reserve Bank Secured Clam.
(iii) If the proceeds described in the preceding clause (ii) are
insufficient to fully satisfy the Reserve Bank Claims, the
unsatisfied portion of the Reserve Bank Claims shall constitute
Reserve Bank Priority Claims.
(iv) Without limitation, the allowance of the Reserve Bank Claims
under section 4.3(b)(i) above, including the portions constituting
the Reserve Bank Secured Claims and the Reserve Bank Priority
Claims, shall be determined and Allowed as set forth in the Plan
and Program Agreements and following the Effective Date, and
shall not be subject to estimation for any purposes affecting the
Distributions on such Claims absent the consent of the Reserve
Bank to be granted or withheld in its sole and absolute
discretion, notwithstanding anything herein to the contrary.
Without limiting the foregoing, the Reserve Bank shall provide
documentation to the Wind Down Officer evidencing amounts
comprising the Reserve Bank Claims other than outstanding
PPPLF Advances.
(c) Treatment: Except to the extent that a holder of an Allowed Reserve
Bank Claim against the Debtors agrees to a less favorable treatment of
such Claim, each holder of an Allowed Reserve Bank Claim shall
receive the following treatment in respect of the Allowed Reserve Bank
Claims:
(i) The Reserve Bank Secured Claims will receive2 (x) the PPPLF
Collateral; provided that, to the extent the PPPLF Collateral is
transferred to the Reserve Bank or its designee, such transfer
shall only pertain to such Pledged PPPLF Loans that as of the
date of the transfer shall not have been fully forgiven or
guarantee repurchased by the SBA or fully repaid by the
borrower and/or (y) the cash proceeds of the PPPLF Collateral,
where in accordance with section 5.3 hereof (1) servicing of the
loans that constitute PPPLF Collateral shall be transferred to a
different servicer on or prior to the Effective Date, or (2) at the
Debtors’ sole discretion, the Debtors offer Post-Effective Date
PPP Servicing and the Reserve Bank consents to such post-
Effective Date PPP Servicing and pays the Reserve Bank
Servicing Costs.
(ii) Reserve Bank Priority Claims will receive GUC Pool Class A
Interests.
2
The Reserve Bank and the Debtors will agree prior to the confirmation hearing on whether title to the Pledged
PPPLF Loans will be transferred to the Reserve Bank or its designee or remain with the Wind Down Estates.
18
Case 22-10951-CTG Doc 674-3 Filed 03/14/23 Page 4 of 5
(c) PPP Transfer. Prior to the Effective Date, KServicing shall use
commercially reasonable efforts to assist:
(i) the Reserve Bank with transfer of the Debtors’ servicing
obligations with respect to the Pledged PPPLF Loans to a third-party loan servicer to be selected by the
Reserve Bank in its sole discretion by a date to be mutually agreed but no later than the Effective Date of
the Plan; provided that, for the avoidance of doubt, any fees, costs, and expenses associated with any
transfer of servicing obligations shall be borne upfront by the Reserve Bank, provided that any such fees,
as well as any additional fees, costs and expenses borne by or on behalf of the Reserve Bank related to
the servicing of the Pledged PPPLF Loans by a third-party servicer other than the Debtors shall constitute
a portion of and be included in the Reserve Bank Claims. For the avoidance of doubt, with respect to the
Reserve Bank, unless otherwise agreed by the Reserve Bank, such servicing transfer shall only pertain to
such Pledged PPPLF Loans that, as of the date of the transfer, shall not have been fully forgiven or
guarantee repurchased by the SBA or fully repaid by the borrower.
(ii) CRB with transfer of all the Debtors’ servicing obligations with
respect to the CRB PPP Loans to a third-party loan servicer to be selected by CRB in its sole discretion
by a date to be mutually agreed but no later than the Effective Date of the Plan; provided that, any such
fees, as well as any additional fees, costs and expenses borne by or on behalf of CRB related to the
servicing of the CRB Loans by a third-party servicer other than the Debtors shall be borne by CRB and
may constitute a portion of and be included in CRB’s Claims;
(iii) CB with transfer of all the Debtors’ servicing obligations with
respect to the CB PPP Loans to a third-party loan servicer to be selected with CB’s consent and direction
by a date to be mutually agreed but no later than the Effective Date of the Plan; provided that, for the
avoidance of doubt, any fees, costs, and expenses associated with the transfer of any servicing
obligations shall be borne by CB;
(iv) the SBA with the transfer of the Debtors’ servicing obligations
with respect to all fully forgiven or guaranty purchased Pledged PPPLF Loans to SBA or a third-party
loan servicer to be selected by the SBA in its sole discretion; provided that, any fees, costs, and expenses
associated with any transfer of servicing obligations shall be borne upfront by the SBA. After the
Effective Date, any trailing borrower loan payments or guaranty purchased Pledged PPPLF Loans will be
remitted to the SBA.
(v) On and after the Effective Date, subject to sections 5.3(e), (i)
and (j) hereof, the Debtors shall not retain any PPP Loan servicing-related obligations.
(d) In the event the Debtors (or, post-Effective Date, the Wind Down
Officer) and the Reserve Bank agree that the PPPLF Collateral will be transferred to the Reserve Bank or
its designee in furtherance of Section 4.3(c) hereof, the Debtors or the Wind Down Officer, as
applicable, shall enter into, execute and deliver any instruments, documents and agreements that may be
reasonably necessary or desirable in order to implement, or otherwise in connection with, the transferring
of title to the PPPLF Collateral, and take all actions as may be reasonably requested by the Reserve Bank
for the purpose of assigning, transferring, granting, conveying and conferring to the Reserve Bank or its
designee the PPPLF Collateral, including the Pledged PPPLF Loans, and as may be necessary or
appropriate to the servicing of the Pledged PPPLF Loans by an alternative servicer, in each case above,
any assignment, transfer, grant, conveyance or conferring shall be subject to the lien of the Reserve Bank
unless the Reserve Bank expressly agrees otherwise; provided that, for the avoidance of doubt, any fees,
costs, and expenses associated with any transfer of servicing obligations shall be borne by the Reserve
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Case 22-10951-CTG Doc 674-3 Filed 03/14/23 Page 5 of 5
10.2. Term of Injunctions or Stays.
Unless otherwise provided herein, the Confirmation Order, or in a Final Order of the
Bankruptcy Court, all injunctions or stays arising under or entered during the Chapter 11 Cases under
section 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date,
shall remain in full force and effect until the later of the Effective Date and the date indicated in the order
providing for such injunction or stay.
10.3. Injunction.
(a) Upon entry of the Confirmation Order, all holders of Claims and
Interests and other parties in interest, along with their respective present or former employees,
agents, officers, directors, principals, and affiliates, shall be enjoined from taking any actions to
interfere with the implementation or consummation of the Plan in relation to any Claim
extinguished, discharged, or released pursuant to the Plan.
(b) Except as expressly provided in the Plan, the Definitive Documents,
the Confirmation Order, or a separate order of the Bankruptcy Court or as agreed to by the
Debtors and a holder of a Claim against or Interest in the Debtors, all Entities who have held, hold,
or may hold Claims against or Interests in the Debtors (whether proof of such Claims or Interests
has been filed or not and whether or not such Entities vote in favor of, against or abstain from
voting on the Plan or are presumed to have accepted or deemed to have rejected the Plan) and
other parties in interest, along with their respective present or former employees, agents, officers,
directors, principals, and affiliates are permanently enjoined, on and after the Effective Date
through and until the date upon which all remaining property of the Debtors’ Estates vested in the
Wind Down Estates has been liquidated and distributed to creditors or otherwise in accordance
with the terms of the Plan and the Wind Down Agreement and the Plan has been fully
administered, subject to further extension or reduction by motion on notice, with all parties’ rights
with respect to such extension or reduction reserved, solely with respect to any Claims, Interests,
and Causes of Action that will be or are treated by the Plan from (i) commencing, conducting, or
continuing in any manner, directly or indirectly, any suit, action, or other proceeding of any kind
(including, without limitation, any proceeding in a judicial, arbitral, administrative or other
forum) against or affecting the Debtors, the Wind Down Estates, or the Wind Down Officer, as
applicable, or the property of any of the Debtors, the Wind Down Estates, or the Wind Down
Officer, as applicable; (ii) enforcing, levying, attaching (including, without limitation, any
prejudgment attachment), collecting, or otherwise recovering by any manner or means, whether
directly or indirectly, any judgment, award, decree, or order against the Debtors, the Wind Down
Estates, or the Wind Down Officer; or the property of any of the Debtors, or the Wind Down
Estates, as applicable; (iii) creating, perfecting, or otherwise enforcing in any manner, directly or
indirectly, any encumbrance of any kind against the Debtors, the Wind Down Estates, or the
property of any of the Debtors, the Wind Down Estates, or the Wind Down Officer, as applicable;
(iv) asserting any right of setoff, directly or indirectly, against any obligation due from the
Debtors, or the Wind Down Estates, as applicable, or against property or interests in property of
any of the Debtors, or the Wind Down Estates, except as contemplated or Allowed by the Plan; and
(v) acting or proceeding in any manner, in any place whatsoever, that does not conform to or
comply with the provisions of the Plan.
(c) By accepting distributions pursuant to the Plan, each holder of an
Allowed Claim or Interest extinguished, discharged, or released pursuant to the Plan will be
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