Proposed Order

Summary

Doc 806-1, filed May 8, 2023 in the jointly administered Chapter 11 cases of Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951 (CTG), in the U.S. Bankruptcy Court for the District of Delaware, is Exhibit A, a proposed order approving the Second Stipulation to Extend the United States' Deadline to File a Complaint to Determine Dischargeability of Debt. The proposed order would extend the United States' deadline under 11 U.S.C. § 523(c) from May 9, 2023 to August 7, 2023. The attached stipulation between the debtors and the United States recites the October 3, 2022 petition date, the prior extension, and the March 15, 2023 confirmation order. It states that the United States continues to investigate potential violations of the False Claims Act by Kabbage, Inc. d/b/a KServicing, and is signed by counsel for both parties.

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Case 22-10951-CTG   Doc 806-1   Filed 05/08/23   Page 1 of 9




                      EXHIBIT A

                    Proposed Order
                  Case 22-10951-CTG           Doc 806-1        Filed 05/08/23        Page 2 of 9




                         IN THE UNITED STATES BANKRUPTCY COURT
                              FOR THE DISTRICT OF DELAWARE




    In re:
                                                             Chapter 11
    KABBAGE, INC. d/b/a KSERVICING, et
                                                             Case No. 22-10951 (CTG)
    al., 1
                                                             (Jointly Administered)
                     Debtors.



                    ORDER APPROVING SECOND STIPULATION
                   TO EXTEND THE UNITED STATES’ DEADLINE
        TO FILE A COMPLAINT TO DETERMINE DISCHARGEABILITY OF DEBT

             Upon consideration of the Second Stipulation to Extend the United States’ Deadline to File

a Complaint to Determine Dischargeability of Debt (the “Stipulation”) 2 by and between the

above-captioned debtors (collectively, the “Debtors”) and the United States of America (the

“United States” and together with the Debtors, the “Parties”), through their respective counsel, a

copy of which is attached hereto as Exhibit 1 and related certification of counsel; and after due

deliberation and sufficient cause appearing therefor, it is hereby ORDERED:

                    1.      The Stipulation is approved.

                    2.      The deadline for the United States to file a complaint to determine

dischargeability under 11 U.S.C. § 523(c) shall be extended from May 9, 2023, to August 7,



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) (the “Company”); 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.
2
 Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in the
Stipulation.
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2023, or such later date as may be ordered by the Court, without prejudice to the United States’

right to seek further extension of the Nondischargeability Deadline, and without prejudice to the

Debtors’ rights, objections, or defenses related thereto.

               3.      The Parties are authorized to take any and all actions reasonably necessary

to effectuate the terms of the Stipulation.

               4.      This Court shall retain jurisdiction with respect to all matters arising from

or related to the implementation or interpretation of this Order.

               5.      Notwithstanding any Federal Rule of Bankruptcy Procedure or Local Rule

of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of

Delaware that might otherwise delay the effectiveness of this Order, the terms and conditions of

this Order shall be immediately effective and enforceable upon its entry.




                                                  2
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                      EXHIBIT 1

                       Stipulation
               Case 22-10951-CTG              Doc 806-1        Filed 05/08/23        Page 5 of 9




                       IN THE UNITED STATES BANKRUPTCY COURT
                            FOR THE DISTRICT OF DELAWARE




 In re:
                                                             Chapter 11
 KABBAGE, INC. d/b/a KSERVICING, et
                                                             Case No. 22-10951 (CTG)
 al., 1
                                                             (Jointly Administered)
                   Debtors.



       SECOND STIPULATION TO EXTEND THE UNITED STATES’ DEADLINE
      TO FILE A COMPLAINT TO DETERMINE DISCHARGEABILITY OF DEBT

          The above-captioned debtors (collectively, the “Debtors”) and the United States of

America (the “United States” and together with the Debtors, the “Parties”) enter into this second

stipulation (this “Stipulation”) to extend the deadline to file a complaint to determine

dischargeability of debt under 11 U.S.C. § 523. The Parties stipulate as follows:

          A.     On October 3, 2022 (the “Petition Date”), the Debtors filed their voluntary

petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”).

          B.     On November 10, 2022, the meeting of creditors pursuant to 11 U.S.C. § 341 was

scheduled and conducted (the “341 Meeting”).

          C.     Pursuant to Rule 4007(c) of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”), a party in interest may file a complaint under 11 U.S.C. § 523(c) within

sixty days after the first date set for the 341 Meeting.




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) (the “Company”); 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). The Debtors’ mailing and service address is 925B
Peachtree Street NE, Suite 383, Atlanta, GA 30309.
             Case 22-10951-CTG          Doc 806-1      Filed 05/08/23    Page 6 of 9




        D.      Accordingly, the deadline by which to file a complaint under 11 U.S.C. § 523(c)

was January 9, 2023 (the “Nondischargeability Deadline”), or such later date as may be ordered

by the Court.

        E.      On January 6, 2023, the United States filed a Certification of Counsel Submitting

Proposed Order Approving Stipulation to Extend the United States’ Deadline to File a Complaint

to Determine Dischargeability of Debt [Docket No. 426]. The Court approved the order attached

thereto, which extended the Nondischargeability Deadline for the United States to May 9, 2023

[Docket No. 429]. The Nondischargeability Deadline as to the United States has not expired as of

the date of this Stipulation.

        F.      On March 15, 2023 the Court entered the Order Confirming Amended Joint

Chapter 11 Plan of Liquidation of Kabbage, Inc. (d/b/a KServicing) and Its Affiliated Debtors

[Docket No. 680] (the “Confirmation Order”), thereby confirming the Amended Joint Chapter

11 Plan of Liquidation of Kabbage, Inc. (d/b/a KServicing) and Its Affiliated Debtors [Docket No.

627] (the “Plan”).

        G.      The Plan and the Confirmation Order provide that “[n]othing in the Plan or

Confirmation Order shall . . . grant the Debtors a discharge pursuant to section 1141(d) of the

Bankruptcy Code.” See Confirmation Order ¶ 32; Plan § 10.3(f).

        H.      The effective date of the Plan (the “Effective Date”) has yet to occur. The Debtors

expect the Effective Date to occur in the near term.

        I.      The United States continues to investigate potential violations of the False Claims

Act, 31 U.S.C. §§ 3279-3733, by Kabbage, Inc. d/b/a KServicing, a lender and loan servicer that

participated in the Paycheck Protection Program.




                                                 2
               Case 22-10951-CTG           Doc 806-1      Filed 05/08/23     Page 7 of 9




          J.       To the extent that the filing of a dischargeability complaint may be necessary, the

United States seeks an extension of the Nondischargeability Deadline through and including

August 7, 2023.

          K.       Nothing in this Stipulation, or any order approving it, constitutes a determination

that section 523(c) of the Bankruptcy Code or Bankruptcy Rule 4007(c) apply, or that any deadline

exists to seek a determination of dischargeability under section 1141(d)(6) of the Bankruptcy

Code.

          L.       Nevertheless, out of an abundance of caution since the Effective Date is projected

to occur after the current Nondischargeability Deadline for the United States, the Parties have

entered into this Stipulation extending such deadline for the United States on the terms set forth

herein.

          NOW, THEREFORE, the Parties hereby agree as follows:

          1.       The Parties agree that the Nondischargeability Deadline for the United States to file

a complaint to determine the dischargeability of debt under 11 U.S.C. § 523(c) is extended through

and including August 7, 2023, or such later date as may be ordered by the Court.

          2.       The extension of the Nondischargeability Deadline is without prejudice to the

United States’ rights to seek additional extensions or the Debtors’ rights, objections, or defenses

related thereto.

          3.       This Stipulation may be executed in counterparts, each of which shall be deemed

an original and such counterparts shall together constitute a single agreement. Any signature,

including an electronic signature, transmitted by facsimile or electronic mail shall be deemed an

original signature to this Stipulation.


/s/ Zachary I. Shapiro
                                                     3
            Case 22-10951-CTG        Doc 806-1    Filed 05/08/23   Page 8 of 9




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 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
E-mail: defranceschi@rlf.com
steele@rlf.com
shapiro@rlf.com
milana@rlf.com

-and-

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
E-mail: ray.schrock@weil.com
candace.arthur@weil.com
natasha.hwangpo@weil.com
chase.bentley@weil.com

Attorneys for Debtors and
Debtors-In-Possession

Dated: May 8, 2023

BRIAN M. BOYNTON
Principle Deputy Assistant Attorney General

DAVID C. WEISS
United States Attorney

/s/ Alastair M. Gesmundo
RUTH A. HARVEY
RODNEY A. MORRIS
ALASTAIR M. GESMUNDO
STANTON McMANUS
Commercial Litigation Branch
                                              4
            Case 22-10951-CTG         Doc 806-1   Filed 05/08/23   Page 9 of 9




Civil Division
United States Department of Justice
P.O. Box 875
Ben Franklin Station
Washington, D.C. 20044
Tel. (202) 305-4659
Fax (202) 514-9163
Alastair.M.Gesmundo@usdoj.gov

Attorneys for the United States of America


Dated: May 8, 2023




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