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EXHIBIT 1
Stipulation
Case 22-10951-CTG Doc 812-1 Filed 05/10/23 Page 1 of 6
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
KABBAGE, INC. d/b/a KSERVICING, et
al.,1
Debtors.
Chapter 11
Case No. 22-10951 (CTG)
(Jointly Administered)
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.
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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.
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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
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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
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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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