Order Denying Motion To Allow Administrative Claim
Summary
Order Denying Motion to Allow Administrative Claim, dated February 27, 2023 and filed March 1, 2023 as Doc 599 in In re Kabbage, Inc. d/b/a KServicing, et al., Case No. 22-10951 (CTG), in the U.S. Bankruptcy Court for the District of Delaware. The Juneau Group, LLC had moved for an administrative expense claim under 11 U.S.C. § 503(b)(9), and the debtors objected. The order states that the movant did not appear at the hearing, that the goods it cited were "time," and that time is not a good under § 503(b)(9). It finds the movant did not meet its burden of proof and denies the motion. The order is signed by United States Bankruptcy Judge Craig T. Goldblatt and is followed by a certificate of notice and a CM/ECF service list.
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Case 22-10951-CTG Doc 599 Filed 03/01/23 Page 1 of 6
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
Chapter 11
In re:
Case No. 22-10951 (CTG)
KABBAGE, INC. d/b/a KSERVICING,
et al., (Jointly Administered)
Debtors. Related Docket Nos. 345, 547
ORDER DENYING MOTION TO ALLOW ADMINISTRATIVE CLAIM
The Juneau Group, LLC (the “Movant”) has moved for the allowance of an
administrative expense claim under 11 U.S.C. § 503(b)(9). [D.I. 345]. The debtors
objected to the motion. [D.I. 547].1 At the request of the Movant [D.I. 421], the motion
was set for hearing on February 27, 2023 at 10:00 a.m.
Movant did not appear at the hearing. The debtors moved the admission into
evidence of the declaration of Thora Thoroddsen [D.I. 547-1], a Director at
AlixPartners, LLP, which is serving as financial advisor to the debtors. The
declaration was admitted into evidence without objection.
Debtors point out that the Movant is a limited liability company that has filed
its motion without counsel, and has instead appeared via its principal, Jacob Juneau.
Debtors are correct that a corporate entity may not appear pro se, but only through
licensed counsel.2 On the other hand, an unincorporated sole proprietorship without
1 The debtors in these cases are Kabbage, Inc. d/b/a KServicing; Kabbage Canada Holdings,
LLC; Kabbage Asset Securitization LLC; Kabbage Asset Funding 2017-A LLC; Kabbage
Asset Funding 2019-A LLC; and Kabbage Diameter, LLC. They are referred to collectively
as the “debtors.”
2 Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201-202 (1993).
Case 22-10951-CTG Doc 599 Filed 03/01/23 Page 2 of 6
a “separate existence” from the individual proprietor may appear through the
proprietor, pro se.3 In view of the Court’s disposition on the merits, however, the
Court need not address this issue here.
Section 503(b)(9) provides for an administrative claim for the “value of any
goods received by the debtor within 20 days before the date of the commencement of
a case under this title in which the goods have been sold to the debtor in the ordinary
course of such debtor’s business.” The motion recites that the goods it provided were
“time.” [D.I. 345 ¶ 4]. Under applicable law, “time” is not a “good” that may give rise
to an administrative claim under § 503(b)(9).4
In addition, the only evidence introduced at the hearing, the declaration of
Thora Thoroddsen, indicates that the Juneau Group has not provided any goods or
services to the debtors. [D.I. 547-1]. The Juneau Group, which bears the burden of
proof to establish its administrative claim, did not appear at the hearing and provided
no evidence in support of its claim.5 It did not meet its burden at the hearing. And
perhaps more fundamentally, the motion on its face makes clear that it is not entitled
to an administrative claim.6
3 Shulman v. Facebook.com, 788 F. App’x 882, 885 (3d Cir. 2019).
4See, e.g., See In re NE Opco, Inc., 501 B.R. 233, 240-41 (Bankr. D. Del. 2013) (while natural
gas is a “good,” electricity is a service that is not subject to a § 503(b)(9) claim); In re Goody’s
Family Clothing, Inc., 401 B.R. 131, 133 (Bankr. D. Del. 2009) (adopting Uniform Commercial
Code definition of the term “goods”).
5 See Unidigital, Inc. 262 B.R. 283, 288 (Bankr. D. Del. 2001) (“Claimants who seek payment
ahead of other unsecured claims bear the burden of establishing that their claim qualifies for
priority status.”)
6 Under Fed. R. Bankr. P. 9014, the Court may accordingly deem Fed. R. Bankr. P. 7012
applicable to this contested matter and deny the motion on the ground that the motion itself
2
Case 22-10951-CTG Doc 599 Filed 03/01/23 Page 3 of 6
The Motion to allow an administrative claim is accordingly DENIED.
Dated: February 27, 2023
CRAIG T. GOLDBLATT
UNITED STATES BANKRUPTCY JUDGE
fails to state a claim for the allowance of an administrative claim under the standard set
forth in Fed. R. Civ. P. 12(b)(6).
3
Case 22-10951-CTG Doc 599 Filed 03/01/23 Page 4 of 6
United States Bankruptcy Court
District of Delaware
In re: Case No. 22-10951-CTG
Kabbage, Inc. Chapter 11
Debtor
CERTIFICATE OF NOTICE
District/off: 0311-1 User: admin Page 1 of 3
Date Rcvd: Feb 27, 2023 Form ID: pdfgen Total Noticed: 1
Notice by first class mail was sent to the following persons/entities by the Bankruptcy Noticing Center on Mar 01, 2023:
Recip ID Recipient Name and Address
17821900 The Juneau Group, LLC, Attn: Jacob Juneau, 2386A Rice Blvd, Unit 232, Houston, TX 77005
TOTAL: 1
Notice by electronic transmission was sent to the following persons/entities by the Bankruptcy Noticing Center.
Electronic transmission includes sending notices via email (Email/text and Email/PDF), and electronic data interchange (EDI).
NONE
BYPASSED RECIPIENTS
The following addresses were not sent this bankruptcy notice due to an undeliverable address, *duplicate of an address listed above, *P duplicate of a
preferred address, or ## out of date forwarding orders with USPS.
NONE
NOTICE CERTIFICATION
I, Gustava Winters, declare under the penalty of perjury that I have sent the attached document to the above listed entities
in the manner shown, and prepared the Certificate of Notice and that it is true and correct to the best of my information and
belief.
Meeting of Creditor Notices only (Official Form 309): Pursuant to Fed .R. Bank. P.2002(a)(1), a notice containing the
complete Social Security Number (SSN) of the debtor(s) was furnished to all parties listed. This official court copy contains
the redacted SSN as required by the bankruptcy rules and the Judiciary's privacy policies.
Date: Mar 01, 2023 Signature: /s/Gustava Winters
CM/ECF NOTICE OF ELECTRONIC FILING
The following persons/entities were sent notice through the court's CM/ECF electronic mail (Email) system on February 27, 2023 at the address(es) listed
below:
Name Email Address
Alastair Gesmundo
on behalf of Interested Party United States of America Alastair.M.Gesmundo@usdoj.gov
Amanda R. Steele
on behalf of Debtor Kabbage Asset Funding 2017-A LLC steele@rlf.com
rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Amanda R. Steele
on behalf of Debtor Kabbage Canada Holdings LLC steele@rlf.com, rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Amanda R. Steele
on behalf of Debtor Kabbage Diameter LLC steele@rlf.com, rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Amanda R. Steele
on behalf of Debtor Kabbage Asset Funding 2019-A LLC steele@rlf.com
rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Amanda R. Steele
on behalf of Attorney Richards Layton & Finger, P.A. steele@rlf.com, rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Amanda R. Steele
on behalf of Debtor Kabbage Asset Securitization LLC steele@rlf.com
rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Case 22-10951-CTG Doc 599 Filed 03/01/23 Page 5 of 6
District/off: 0311-1 User: admin Page 2 of 3
Date Rcvd: Feb 27, 2023 Form ID: pdfgen Total Noticed: 1
Amanda R. Steele
on behalf of Debtor Kabbage Inc. steele@rlf.com, rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Anthony W. Clark
on behalf of Interested Party Board of Directors of Kabbage Inc. Anthony.Clark@gtlaw.com, zerber@gtlaw.com
Daniel J. DeFranceschi
on behalf of Debtor Kabbage Asset Securitization LLC defranceschi@rlf.com
RBGroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Daniel J. DeFranceschi
on behalf of Debtor Kabbage Canada Holdings LLC defranceschi@rlf.com,
RBGroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Daniel J. DeFranceschi
on behalf of Debtor Kabbage Asset Funding 2017-A LLC defranceschi@rlf.com
RBGroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Daniel J. DeFranceschi
on behalf of Debtor Kabbage Inc. defranceschi@rlf.com, RBGroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Daniel J. DeFranceschi
on behalf of Debtor Kabbage Diameter LLC defranceschi@rlf.com, RBGroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Daniel J. DeFranceschi
on behalf of Debtor Kabbage Asset Funding 2019-A LLC defranceschi@rlf.com
RBGroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
David Bruce Kurzweil
on behalf of Interested Party Board of Directors of Kabbage Inc. kurzweild@gtlaw.com,
brattons@gtlaw.com;thompsonmich@gtlaw.com;wagnerje@gtlaw.com
Dennis A. Meloro
on behalf of Interested Party Board of Directors of Kabbage Inc. melorod@gtlaw.com,
bankruptcydel@gtlaw.com;melorod@gtlaw.com;dennis-meloro-3182@ecf.pacerpro.com
Derek C. Abbott
on behalf of Interested Party AMERICAN EXPRESS dabbott@morrisnichols.com
derek-abbott-1155@ecf.pacerpro.com;brendan-cornely-7012@ecf.pacerpro.com;rweidman@morrisnichols.com;jlawrence@morri
snichols.com;john-lawrence-0804@ecf.pacerpro.com
Erika Morabito
on behalf of Creditor Cross River Bank emorabito@foley.com
Gregory W. Werkheiser
on behalf of Creditor Cross River Bank gwerkheiser@beneschlaw.com docket2@beneschlaw.com;lmolinaro@beneschlaw.com
Huiqi Liu
on behalf of Debtor Kabbage Inc. liu@rlf.com, ann-jerominski-2390@ecf.pacerpro.com;rbgroup@rlf.com
Isaac Nesser
on behalf of Creditor Cross River Bank isaacnesser@quinnemanuel.com
John J. Monaghan
on behalf of Creditor Customers Bank bos-bankruptcy@hklaw.com
Jonathan Michael Weyand
on behalf of Interested Party AMERICAN EXPRESS jweyand@morrisnichols.com
rweidman@morrisnichols.com;jlawrence@morrisnichols.com;john-lawrence-0804@ecf.pacerpro.com
Kate R. Buck
on behalf of Creditor CoreCard Software Inc. kbuck@mccarter.com
Kathleen G. Furr
on behalf of Creditor CoreCard Software Inc. kfurr@bakerdonelson.com,
smeadows@bakerdonelson.com;ali.lowe@bakerdonelson.com
Lisa M. Schweitzer
on behalf of Interested Party Federal Reserve Bank of San Francisco lschweitzer@cgsh.com maofiling@cgsh.com
Matthew A Petrie
on behalf of Interested Party Board of Directors of Kabbage Inc. petriem@gtlaw.com
Matthew P. Milana
on behalf of Debtor Kabbage Inc. milana@rlf.com
Pauline K. Morgan
on behalf of Interested Party Federal Reserve Bank of San Francisco pmorgan@ycst.com
Reliable Companies
gmatthews@reliable-co.com
Richard L. Schepacarter
Case 22-10951-CTG Doc 599 Filed 03/01/23 Page 6 of 6
District/off: 0311-1 User: admin Page 3 of 3
Date Rcvd: Feb 27, 2023 Form ID: pdfgen Total Noticed: 1
on behalf of U.S. Trustee U.S. Trustee richard.schepacarter@usdoj.gov
Robert J. Dehney
on behalf of Interested Party Paul Pietschner rdehney@mnat.com
robert-dehney-4464@ecf.pacerpro.com;brendan-cornely-7012@ecf.pacerpro.com;rweidman@morrisnichols.com;jlawrence@mor
risnichols.com;john-lawrence-0804@ecf.pacerpro.com
Rochelle Gumapac
on behalf of Creditor Lead Plaintiffs and Putative Class Members gumapacr@whiteandwilliams.com
Rosa Sierra-Fox
on behalf of U.S. Trustee U.S. Trustee rosa.sierra@usdoj.gov rosa.sierra-fox@usdoj.gov
Ryan M. Bartley
on behalf of Interested Party Federal Reserve Bank of San Francisco bankfilings@ycst.com
Scott D Jones
on behalf of Creditor Insperity Inc. scott.jones@cousins-law.com, kmccloskey@bayardlaw.com
Scott D. Cousins
on behalf of Creditor Insperity Inc. scott.cousins@cousins-law.com
Sean T. Greecher
on behalf of Interested Party Federal Reserve Bank of San Francisco sgreecher@ycst.com
U.S. Trustee
USTPRegion03.WL.ECF@USDOJ.GOV
William A. Hazeltine
on behalf of Creditor Customers Bank Bankruptcy001@sha-llc.com
Zachary I Shapiro
on behalf of Debtor Kabbage Inc. shapiro@rlf.com, rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Zachary I Shapiro
on behalf of Debtor Kabbage Canada Holdings LLC shapiro@rlf.com, rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Zachary I Shapiro
on behalf of Debtor Kabbage Asset Funding 2017-A LLC shapiro@rlf.com
rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Zachary I Shapiro
on behalf of Debtor Kabbage Asset Securitization LLC shapiro@rlf.com
rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Zachary I Shapiro
on behalf of Debtor Kabbage Asset Funding 2019-A LLC shapiro@rlf.com
rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
Zachary I Shapiro
on behalf of Debtor Kabbage Diameter LLC shapiro@rlf.com, rbgroup@rlf.com;ann-jerominski-2390@ecf.pacerpro.com
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