Schedule of Misclassified Claims — In re Kabbage (KServicing)

Summary

Schedule 1, Misclassified Claims, filed April 5, 2023 as Doc 753-1 in In re Kabbage, Inc. d/b/a KServicing, case no. 22-10951-CTG. The three-page schedule lists five proofs of claim, nos. 951-232, 951-239, 951-235, 951-238 and 951-234, filed between January 30 and February 22, 2023, with the amount asserted, the proposed modified classification and the debtors' reason. For each, the debtors state that their books and records show the claimant is a borrower on a Paycheck Protection Program loan the debtors service. They state there are no amounts entitled to priority, administrative expense or secured status, and propose reclassifying each as a general unsecured claim. Asserted totals range from $7,000 to $42,023.65.

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Full text

RLF1 28816238V.1
Schedule 1

Misclassified Claims

Case 22-10951-CTG    Doc 753-1    Filed 04/05/23    Page 1 of 3

RLF1 28816238V.1
Misclassified Claims
(Claims are listed alphabetically)
#
Claimant Name
Date Claim
Filed
Claim
No.
Debtor Name
Misclassified
Claim
Amount
Modified
Classification
Status1
Reason for Reclassification
1
Ayesha Salahuddin
01/30/2023
951-232
Kabbage, Inc.
d/b/a KServicing
$114,350.00 (P)
$140,000.00 (A)
$14,000.00 (S)
$0.00 (U)

$0.00 (P)
$0.00 (A)
$0.00 (S)
$14,000.00 (U)2

Ayesha Salahuddin asserted a total claim of $14,000.  Notwithstanding the total
amount of the claim set forth on the proof of claim, the claimant asserts that: (i)
$114,350 is entitled to priority pursuant to sections 507(a)(7), 507(a)(8), and an
unspecified subsection of 507(a) of the Bankruptcy Code; (ii) $140,000 is entitled to
administrative expense status pursuant to section 503(b)(9) of the Bankruptcy Code;
and (iii) $14,000 is secured.  The proof of claim asserts “Money loaned, services
performed” as the basis for the claim.  See proof of claim no. 951-232.  Based on a
review of the Debtors’ books and records, the Debtors have determined Ayesha
Salahuddin is a borrower of a Paycheck Protection Program loan (“PPP Loan”) that
the Debtors service, and that there are no amounts entitled to priority due and owing to
Ayesha Salahuddin under sections 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), or any other section of
507(a) of the Bankruptcy Code.

In addition, the Debtors have determined there is no evidence of the Debtors receiving
goods from Ayesha Salahuddin within the twenty days prior to the Petition Date, in the
ordinary course, as required by section 503(b)(9) of the Bankruptcy Code, and that
there is no basis for the claim’s secured status under section 506 of the Bankruptcy
Code.  Accordingly, Ayesha Salahuddin’s claim should be reclassified as a general
unsecured claim.
2
Nella's Seafood Lounge & Co Inc
02/22/2023
951-239
Kabbage, Inc.
d/b/a KServicing
$20,833.00 (P)
$0.00 (U)

$0.00 (P)
$20,833.00 (U)

Nella's Seafood Lounge & Co Inc (“Nella’s Seafood”) filed a $20,833 claim asserting
that the entire amount is entitled to priority 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. 951-239.  Based on a review of the
Debtors’ books and records, the Debtors have determined Nella’s Seafood is a
borrower of a PPP Loan that the Debtors service, and there are no amounts entitled to
priority due and owing to Nella’s Seafood under section 507(a) of the Bankruptcy
Code.  Accordingly, Nella’s Seafood’s priority claim should be reclassified as a
general unsecured claim.

1 (A) - Administrative, including 503(b)(9); (S) - Secured; (P) - Priority; (U) - Unsecured; (T) – Total.
2 The amount reflected herein is the total claim amount asserted on the proof of claim notwithstanding any inconsistencies contained in such proof of claim.
Case 22-10951-CTG    Doc 753-1    Filed 04/05/23    Page 2 of 3

2
 RLF1 28816238V.1
#
Claimant Name
Date Claim
Filed
Claim
No.
Debtor Name
Misclassified
Claim
Amount
Modified
Classification
Status1
Reason for Reclassification
3
Quang Ho
02/13/2023
951-235
Kabbage, Inc.
d/b/a KServicing

Undetermined (P)
$2,500.00 (A)
Undetermined (U)

$0.00 (P)
$0.00 (S)
$7,000.00 (U)

Quang Ho filed a total claim of $7,000 asserting that: (i) an undetermined amount is
entitled to priority pursuant to sections 507(a)(4) and 507(a)(7) of the Bankruptcy
Code, and (ii) $2,500 is entitled to administrative expense status pursuant to section
503(b)(9) of the Bankruptcy Code.  The proof of claim asserts “Goods Sold, Lease” as
the basis for the claim.  See proof of claim no. 951-235.  Based on a review of the
Debtors’ books and records, the Debtors have determined Quang Ho is a borrower of a
PPP Loan that the Debtors service, and there are no amounts entitled to priority due
and owing to Quang Ho under sections 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,
or any record of the alleged lease.  The Debtors have also determined that there is no
evidence of the Debtors receiving goods from Quang Ho 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, Quang Ho’s claim should be reclassified as a general
unsecured claim.
4
Studio Forte Spa Salon
02/22/2023
951-238
Kabbage, Inc.
d/b/a KServicing
$20,833.00 (P)
$0.00 (U)

$0.00 (P)
$20,833.00 (U)

Studio Forte Spa Salon (“Studio Forte”) filed a $20,833 claim asserting that the entire
amount is entitled to priority pursuant to an unspecified subsection of 507(a) of the
Bankruptcy Code.  The proof of claim asserts “PPP Loan forgiveness that was applied
for” as the basis for the claim.  See proof of claim no. 951-238.  Based on a review of
the Debtors’ books and records, the Debtors have determined Studio Forte is a
borrower of a PPP Loan that the Debtors service, and there are no amounts entitled to
priority due and owing to Studio Forte under section 507(a) of the Bankruptcy Code.
Accordingly, Studio Forte’s claim should be reclassified as a general unsecured claim.
5
Summer Stegall
02/06/2023
951-234
Kabbage, Inc.
d/b/a KServicing
$12,023.63 (P)
$30,000.00 (S)
$0.00 (U)

$0.00 (P)
$0.00 (S)
$42,023.65 (U)

Summer Stegall filed a $42,023.65 claim asserting that: (i) $12,023.63 is entitled to
priority pursuant to section 507(a)(8) of the Bankruptcy Code and (ii) $30,000 is
secured.  The proof of claim asserts “Money loaned/personal injury/lose of business”
as the basis for the claim.  See proof of claim no. 951-234.  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 that there are no amounts entitled
to priority due and owing to Summer Stegall under section 507(a)(8) (the claim is not
on account of governmental units) of the Bankruptcy Code.  In addition, the Debtors
have determined that there is no basis for the claim’s secured status under section 506
of the Bankruptcy Code.  Accordingly, Summer Stegall’s claim should be reclassified
as a general unsecured claim

Case 22-10951-CTG    Doc 753-1    Filed 04/05/23    Page 3 of 3

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