Beruflich Dokumente
Kultur Dokumente
Doc 259
Desc Main
UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF VIRGINIA IN RE: . . COMMONWEALTH . BIOTECHNOLOGIES, INC., . . Debtor. . . . . . . . . . . . . . .. . COMMONWEALTH . BIOTECHNOLOGIES, INC. . . Plaintiff, . . v. . . FORNOVA PHARMWORLD, INC. . . Defendant. . . . . . . . . . . . . . .. Case No. 11-30381 (KRH)
701 East Broad Street Richmond, VA 23219 June 14, 2012 10:08 a.m.
TRANSCRIPT OF MOTION HEARING BEFORE HONORABLE KEVIN R. HUENNEKENS UNITED STATES BANKRUPTCY COURT JUDGE APPEARANCES: For the Debtor: Tavenner & Beran, PLC By: LYNN L. TAVENNER, ESQ. 20 North Eighth Street, Second Floor Richmond, VA 23219 Phillips & Fleckenstein By: KEITH L. PHILLIPS, ESQ. 311 South Boulevard Richmond, VA 23220 Office of the U.S. Trustee By: ROBERT B. VAN ARSDALE, ESQ. 701 East Broad Street, Suite 4304 Richmond, VA 23219
Proceedings recorded by electronic sound recording, transcript produced by transcription service ______________________________________________________________ J&J COURT TRANSCRIBERS, INC. 268 Evergreen Avenue Hamilton, New Jersey 08619 E-mail: jjcourt@jjcourt.com (609) 586-2311 Fax No. (609) 587-3599
Case 11-30381-KRH
Doc 259
Desc Main
2 APPEARANCES (Contd): For Fornova Pharmworld: ANDREW CHIEN, Pro Se 665 Ellsworth Avenue New Haven, CT 06511 ---
WWW.JJCOURT.COM
Case 11-30381-KRH
Doc 259
Desc Main
2 Biotechnologies, Inc. appearing on matters as set out on 3 todays docket. 4 5 6 MS. TAVENNER: THE COURT: Good morning, Your Honor.
Good morning, Ms. Tavenner. For the record Lynn Tavenner of the
MS. TAVENNER:
7 law firm of Tavenner & Beran appearing on behalf of the debtor 8 Commonwealth Biotechnologies, Inc. With me today, Your Honor,
9 is Dr. Richard Freer at counsel table who is the debtors 10 designee, representative, and the CEO of the company. 11 Also, Your Honor, in the courtroom with -- attendance
12 with Dr. Freer is Mr. James Causey as well as Mr. Samuel Sears 13 who are other members of the executive committee with respect 14 to Commonwealth Biotech. They had already arranged to be down
15 here today for trial and came down to meet the Court and to 16 work on other business with Dr. Freer. 17 introduce them. 18 19 20 motions. THE COURT: Very good. Welcome to the court. So I did want to
MS. TAVENNER:
21 result I would like to provide just a little factual backdrop 22 before we get into the substance of the pleadings themselves. 23 24 THE COURT: You may. Your Honor, Commonwealth Biotech or
MS. TAVENNER:
WWW.JJCOURT.COM
Case 11-30381-KRH
Doc 259
Desc Main
4 1 20th of 2011. Prior to that filing CBI was extremely cash poor In fact its liquidity issues had become
3 such a problem that traditional financing had gone away long 4 before the Chapter 11 was filed. 5 CBI, a public company, had resorted to increased
6 infusions in various forms from certain investors or 7 shareholders. Two issues related to that were in existence on
8 the filing date. 9 The first was a lawsuit that was filed here in the
10 Eastern District of Virginia in the United States District 11 Court before Judge Payne by an entity called Fornova 12 Pharmaworld US, Inc. 13 Number 3:10CV840. 14 In that motion the plaintiff, Fornova Pharmaworld US, That case is still pending, its Case
15 was seeking a money judgment in the amount of $500,000 related 16 to a convertible instrument that had been executed prior to the 17 bankruptcy filing. 18 Once that action was instituted CBI hired counsel,
19 the law firm of Kaufman & Canoles, and was preparing to address 20 the litigation. Ultimately the lawsuit was transferred to
21 Judge Gibney but it is still pending on the Courts docket. 22 Once the bankruptcy was filed the debtors counsel,
23 the litigation counsel Kaufman & Canoles, and the then 24 plaintiffs counsel Morrison Foerster, filed a pleading with 25 Judge Gibney saying, Your Honor, in essence a bankruptcy has
WWW.JJCOURT.COM
Case 11-30381-KRH
Doc 259
Desc Main
5 1 been filed, attached is a notice of the case, we believe that 2 the automatic stay of Section 362 is in effect. And then Judge
3 Gibney responded by saying please continue to provide me status 4 reports. That has continued to date from the defendant
7 counsel Morrison Foerster filed a motion with the District 8 Court requesting approval to withdraw as counsel in that case. 9 In its motion the attorneys told Judge Gibney, Your Honor, we 10 have just lost all contact with our client, we have attempted 11 to comply with the Courts rules with regard to motion to 12 withdraw, we have advised them through the channels that we 13 know of to speak with them, to contact them, that were filing 14 this motion, but thats all we can do. As a result Judge
15 Gibney set the motion for hearing, called a hearing, allowed 16 Morrison Foerster to withdraw as counsel. So since September
17 of 2011 that matter has remained on the Courts docket without 18 counsel of record for the plaintiff Fornova Pharmaworld US, 19 Inc. 20 I tell you that information because I believe it does
21 relate to issues that we will discuss later in this matter this 22 morning. That was one issue that had taken place prior to the
23 bankruptcy filing. 24 The second issue was also related to liquidity issues
WWW.JJCOURT.COM
Case 11-30381-KRH
Doc 259
Desc Main
2 foreclosure in effect was with regard to the debtors major 3 asset which was the real property housing the medical 4 laboratory in Chesterfield, Virginia that the debtor at the 5 time of the filing was leasing out to a third party. 6 Despite the fact that the debtor already had the
7 property listed for sale and had identified several interested 8 buyers, the pipe investors knowing that they easily could 9 recognize the amount that they believe they were due, noticed 10 the foreclosure and refused to negotiate in any way. As a
11 result CBI at that point determined that the best alternative 12 was to file a Chapter 11 bankruptcy. 13 foreclosure sale was stopped. 14 As Your Honor knows the pipe investors were quickly That occurred and the
15 satisfied through the sale through this Court under a 363 sale 16 of the debtors ownership interest in a research facility in 17 Mimotopes, Australia. The real estate then was ultimately sold
18 as well to an entity related to its tenant Bosch Laboratories. 19 As a result of that then the debtors secured creditor was paid 20 in full. 21 So today, Your Honor, the debtor CBI stands before
22 you having realized substantial value for many of its assets 23 and with only one identified remaining asset, the value in its 24 corporate shell. The debtor also, Your Honor, now has a bank
WWW.JJCOURT.COM
Case 11-30381-KRH
Doc 259
Desc Main
2 Keith Phillips who is here today, are looking at potentially a 3 full recovery, something that rarely happens in a Chapter 11 4 these days. Understandably they would like to move this They
5 reorganization process along as quickly as possible. 6 would like to get paid sooner rather than later. 7 Honor, the debtor would like to oblige.
And, Your
8 would like nothing more than to complete this reorganization as 9 soon as possible. 10 Dr. Freer and the entire executive committee have
11 worked tirelessly on the debtors behalf, but they would like 12 some finality as well. 13 Now theres just this one little hurdle. There are
14 several parties in serious discussions with the debtor about 15 some type of transaction that would recognize the shells 16 value. 17 Unfortunately some of them have determined that the
18 pending litigation with the Fornova Pharmworld, Inc. and 19 related issues needs some additional finality before the 20 interested parties can move forward and then before a payout 21 could ultimately be made to creditors. 22 Now, Your Honor, throughout this case another
23 important fact is that the debtor and others have experienced 24 inquiries from someone known as Mr. Andrew Chien. He appeared
WWW.JJCOURT.COM
Case 11-30381-KRH
Doc 259
Desc Main
8 1 several entities. 2 BB&T. He sparred with Mr. Hauser the attorney for
He has appeared in connection with the Mimotopes sale on He has appeared in this
4 court, both in person and through numerous filings on behalf of 5 entities that I will loosely identify as Fornova. And I
6 loosely identify them because the defendant in the adversary 7 thats pending before you is Fornova Pharmworld while the 8 plaintiff that is in the United States District Court is 9 another entity known as Fornova Pharmaworld with some other 10 little differences in its name as well. Mr. Chien has appeared
11 on behalf of both of them and perhaps others because weve seen 12 different names throughout the day. I really dont know. All
Sometimes he doesnt
14 identify any affiliation with any type of entity and just 15 appears on his own behalf. 16 Now many of his pleadings have been procedurally
17 improper, even contained defamatory statements about many 18 people including Dr. Freer, my law firm, myself, my law 19 partner. In fact this Court has recently issued two orders
20 striking many of his pleadings from the records in this case 21 and related adversary proceeding. 22 In one of those orders Your Honor directed the Court
23 to serve a copy of that order on Fornova through the Hague 24 Convention. Now, Your Honor, we have begun that process. But there is a huge time We
WWW.JJCOURT.COM
Case 11-30381-KRH
Doc 259
Desc Main
9 1 factor involved with that and I can tell Your Honor that in 2 conjunction with another case that Im involved in before this 3 Court we have been involved in service through the Hague 4 Convention on a Chinese entity and we are ten months into it 5 and havent even heard back that there has been service made. 6 So were extremely concerned with regard to the time factor. 7 Now notwithstanding that Your Honor has entered
8 orders telling Mr. Chien that he cant file pleadings on behalf 9 of corporate entities, notwithstanding that the clerks office 10 has issued deficiencies and mandates to Mr. Chien telling him 11 not to do that, it appears that he is continuing undaunted 12 perhaps under the cloak of just filing things on behalf of 13 himself or as trustee. 14 I wouldnt venture to tell the Court what the But I do note for the record
16 that I did see that three more were docketed yesterday and I am 17 hopeful that the Court will advise and hopefully deal with 18 them, but those are not before Your Honor today with respect to 19 dealing with striking or anything like that. 20 you. 21 I just advise
I dont know if youve had an opportunity to see them. THE COURT: You can assume Ive read all of the
22 papers in this case. 23 MS. TAVENNER: Thank you, Your Honor. I can tell you
24 that much of the debtors time at this point is spent in 25 dealing with Mr. Chien, his various filings, and addressing
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
10 1 issues that he just pulls out of the air with respect to the 2 adversary proceeding and the finalization of the reorganization 3 itself. Its been very difficult. Its taking a lot of time.
4 The creditors committee really would like for us to do anything 5 that we can to speed it up. 6 that fact. 7 So, Your Honor, thats really the backdrop for We just wanted to apprise the Court of where We really want to help them in
8 todays hearings.
9 we were and how we got to where we are today and hopefully that 10 will help in the underlying substance of the motions. 11 The first motion, Your Honor, that I would like to
12 take up if Your Honor please is the debtors motion for order 13 directing manner of service of complaint, summons, and related 14 documents pursuant to Rule 4(f)(3) of the Federal Rules of 15 Civil Procedure. 16 17 THE COURT: You may proceed on that motion. Thank you, Your Honor. In conjunction
MS. TAVENNER:
18 with that motion, Your Honor, it is filed in the underlying 19 adversary proceeding 12-3038 which is Commonwealth 20 Biotechnologies, Inc. against Fornova Pharmworld, Inc. 21 Your Honor, in conjunction with that, the facts
22 leading up to this motion, notice to file proofs of claim was 23 provided to all requisite parties including an entity called 24 Fornova Pharmaworld US, the plaintiff upstairs, back when this 25 case was filed.
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
11 1 Notice was provided at the address listed in the This entity This entity,
2 convertible note to an address in Beijing, China. 3 was listed on Schedule F as a disputed creditor.
4 the plaintiff upstairs, did not file a proof of claim. 5 Instead a claim was filed by an entity called Fornova
6 Pharmworld, Inc., Claim Number 18-1, it was filed on May 16th, 7 2011. This entity, Your Honor, is included nowhere on the The claim is signed by Mr. Andrew
9 Chien who has represented that he is authorized to speak on 10 behalf of that claimant as trustee. Though to date, Your
11 Honor, no documentation has been provided to this Court or to 12 me or to the debtor to backup that fact. 13 word. 14 The debtor then after consultation with the committee All we have is his
15 initiated this adversary proceeding 12-3038 which first and 16 foremost objects to the claim of an entity that the debtor does 17 not believe it owes any money to. 18 In addition, Your Honor, its an entity that the
19 debtor has been able to locate no evidence even is in 20 existence, not in Virginia, not in the United States, not in 21 the British Virgin Islands, not in China, not anywhere that we 22 have looked. 23 Now we have heard that perhaps this entity is one and
24 the same with Fornova Pharmaworld US, the plaintiff in the 25 District Court action, but we have been able to find nothing to
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
2 the complaint in a manner that included every possible known 3 address that we could find. 4 And, Your Honor, I refer you to the motion itself, It sets out in detail every address to whom the It includes Bill Guo, the chief
5 Paragraph 4.
7 executive officer of another entity, Venture Pharm 8 Laboratories, Limited; it includes Mr. Andrew Chien, the 9 alleged trustee; it includes Fornova Pharmaworld US at various 10 addresses; it includes again Mr. Chien at a different address; 11 it also includes the person who we could find in the District 12 Court records upstairs as being affiliated with the purported 13 convertible note, we served her as well. Nowhere in those
14 pleadings in the District Court did we find any reference to 15 Mr. Chien. 16 And finally, Your Honor, it does also show that we
17 served Fornova Pharmaworld at a British Virgin Islands address 18 because the best that we could find is that there is a British 19 Virgin Islands entity that has a similar name but not the name 20 of the claimant. So, Your Honor, we did the best that we could
21 with regard to service and -22 23 right? 24 25 MS. TAVENNER: THE COURT: Yes, Your Honor. THE COURT: And that was Fornova Pharmaworld USA,
Thank you.
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
2 the beginning of filings in this adversary from Mr. Chien, 3 pleadings that ultimately have been struck by this Court. 4 in conjunction with those pleadings conversations we have 5 learned that he believes that the two entities are one and the 6 same, but still no documentation. 7 All of the addresses that we used were addresses that So at But
9 the time of the Courts initial pre-trial conference on March 10 20th of this year, the Court recognized we have an entity who 11 is attempting to be represented by someone other than an 12 attorney. Its not allowed. You had lengthy discussion with Its noted on the Courts
15 You told Mr. Chien you need to get counsel. 16 has appeared. 17
Instead Mr. Chien has been filing additional But upon the
19 debtors motion to strike the Court has entered an order 20 striking those pleadings. The Court also has struck a
21 subsequent pleading filed on April 24th. 22 But, Your Honor, notwithstanding the striking of the
23 pleadings, the deficiency mandate issued by the clerk, the 24 Courts specific instructions orally to Mr. Chien, the Courts 25 specific instructions by order, Mr. Chien continues to take
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
14 1 action on behalf of the entity. Mr. Chien continues to contact And just yesterday
2 Mr. Phillips, counsel for the committee. 3 hes been filing additional pleadings. 4
Now those pleadings talk about things related to the He now believes hes entitled to a vote
5 reorganization itself.
6 on the plan, sometimes hes asking for a conversion to 7, 7 sometimes hes asking for payment to be made directly to him. 8 Hes asking for a lot of things. 9 But, Your Honor, that begs the issue of you have
10 directed the debtor to serve process in conjunction with this 11 adversary case. You have directed that it now be done in You did that by order.
13 In addition to this you wanted us to serve that order as well. 14 And as I said, Your Honor, we have begun that
15 process, but we have grave concerns that that is really going 16 to hold up the process to such a degree that were not sure how 17 this case will ever be finalized because we have no 18 understanding that even if we go through that process that I 19 wont be standing here 18 months from now saying, Your Honor, 20 we did all that, it didnt work, can we please now try another 21 method. 22 So were trying to dispense with that if you will,
23 Your Honor, and based upon the Federal Rules of Civil Procedure 24 were asking you to authorize today an alternative method of 25 service. Because, Your Honor, it appears that the defendant or
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
15 1 Fornova PharmaWorld US, Inc., I dont know who it is, but 2 someone is attempting to abuse the judicial process. 3 We believe its inequitable at this point to make the
4 estate, which includes the unsecured creditors, to wait 5 numerous months for service to be attempted pursuant to the 6 Hague Convention. 7 several reasons. 8 One, Fornova Pharmaworld US, Inc., which Mr. Chien And we believe thats inequitable for
9 has asserted is one and the same with the defendant, has 10 already subjected itself to the jurisdiction of this Court 11 through the United States District Court when it filed its 12 lawsuit 3:10CV840 and then thereafter failed to maintain 13 contact with its lawyers. 14 In addition, Your Honor, its inequitable because
15 notice of the bankruptcy case and the need to file a claim was 16 served on all requisite parties at all known addresses and we 17 know that they got that notice because they filed in the 18 District Court action a joint status report saying a bankruptcy 19 has been filed. Its really of no mention that they chose not
20 to file a claim in this case. 21 Now because of the inequities that are in this case,
22 Your Honor, we are respectfully requesting today that the Court 23 grant pursuant to Rule 4(f)(3) that service of the complaint, 24 an alias summons which we would request to be issued, and a 25 pre-trial order as well as the Courts order entered on May 1,
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
2 address Fornova9@hotmail.com, to the address 3 Fornova9@gmail.com, and to the address Bill@venturepharm.net. 4 We also would request that we be authorized to serve
5 as well by first-class mail to those original service addresses 6 identified in Paragraph 4 of the motion, as well as by 7 first-class mail to Overseas Management Company Trust BVI 8 Limited which is the registered agent that we could locate for 9 the entity Fornova Pharmaworld US, Inc. 10 Your Honor, we suggest to the Court that Rule 4(f)
11 provides that this type of alternative service is certainly 12 appropriate in circumstances such as this. 4(f) sets forth
13 three different ways to serve entities that are located outside 14 of the United States and the third one says, by other means not 15 prohibited by international agreement as the Court orders. 16 And we would suggest that under that provision you
17 certainly have the authority and that that is at this point the 18 best option for serving the complaint package and the order 19 that I identify. 20 21 to this. Your Honor, I do -- I have read many cases relating There has been suggestion that well, you know, we do We want to make sure we dont go
25 sure that with respect to the defendant itself that the Hague
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
17 1 Convention even applies because the Hague Convention only 2 applies if you have a good service address. 3 that. 4 So I would submit that we dont even have to worry But even if, you know, Your Honor has already We dont have
5 about that.
6 suggested that we use that, even if that were an available 7 means if the Hague Convention did apply, Rule 4(f)(3) provides 8 that we still can use another alternative method and thats 9 what we are doing here today, Your Honor, requesting the same. 10 There is ample case authority to suggest that its I would suggest -- tell Your
12 Honor that e-mail service was first used or first authorized by 13 a bankruptcy court down in Atlanta, Georgia. 14 more and more prevalent. 15 The case that we cited from the Ninth Circuit, Rio It now has become
16 Properties, suggests that it is entirely appropriate in 17 circumstances such as this, that it is not a method of 18 extraordinary relief. 19 of mechanism. It doesnt have to be a last resort type
20 circumstances justify. 21 I also would suggest to the Court that the United
22 States District Court here in the Eastern District has 23 authorized alternative service under this section in the case 24 of FMAC Loan Receivables against Dagra. And, Your Honor, in
25 that instance the Court said the most appropriate focus for
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
18 1 alternative service is that the Court ensures that 2 constitutional notions of due process have been taken care of. 3 4 THE COURT: I am very familiar with that case. I know you are, Your Honor. And I
MS. TAVENNER:
5 thought it was the best case that we could put in here to show 6 that this is another instance where the defendant, there could 7 be no question the defendant knows that this matter is pending. 8 And just like in the Dagra case, the rules were
9 attempted to be used in a manner to have the case dismissed on 10 a procedural grounds even though the defendant certainly knew 11 that the case had been filed, he even had a lawyer that was 12 showing up and arguing the matter. 13 So, Your Honor, in this instance we would suggest
14 that alternative service is reasonably calculated to apprise 15 the requisite parties of the proceeding and a trial on the 16 same. 17 We also would suggest that the specific e-mails that
18 we have suggested are ones that Dr. Freer can attest to if you 19 would like for him to call him to the stand. I will represent
20 to you and proffer that he would testify that he has identified 21 these e-mails as e-mails where he has communicated with the 22 Fornova Pharmaworld US entity in the past. 23 ones that he can find. 24 Your Honor, and we would suggest again that the Those are the best
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
19 1 given that Fornova US is a plaintiff pending in this court and 2 the Hague Convention may not even be, even though its been 3 suggested, may not even be one that should be utilized in this 4 case, but weve tried. 5 For all these reasons, Your Honor, we would
6 respectfully request that you reconsider having us serve that 7 order through the Hague Convention as well as the other process 8 in this adversary proceeding and allow us to move forward to 9 use Rule 4(f)(3) to serve the defendant and the related Fornova 10 entity that you directed us to serve through the e-mail and 11 mail channels that we have outlined in the motion. 12 THE COURT: All right, Ms. Tavenner, before you cede
18 the three methods that you have suggested that the Court 19 approve as alternative service in this case, would that include 20 the address that was listed on the proof of claim that was 21 filed in this case for the entity Fornova? 22 23 24 25 MS. TAVENNER: THE COURT: Yes, Your Honor, it does. That was my question.
Thank you.
All right.
Id like to hear
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
20 1 from counsel for the unsecured creditors committee. 2 3 Phillips. 4 creditors. 5 case. MR. PHILLIPS: Good morning, Your Honor, Im Keith
Im here on behalf of the committee of unsecured Your Honor, we support the debtors motion in this
6 adversary proceeding may be resolved promptly. 7 We are very concerned about the delays and the If the Court has been reviewing the
8 associated expenses.
9 monthly operating reports it can see that funds are being 10 expended in administrative expenses which is diminishing the 11 pool of funds available to the unsecured creditors and were 12 very concerned that that may result in something less than the 13 hundred percent distribution which weve been hoping for 14 throughout this case. 15 16 concern. 17 MR. PHILLIPS: Thank you, Your Honor. The committee THE COURT: I can assure you the Court shares your
18 itself has not heard from any individual on behalf of a Fornova 19 entity other than Mr. Chien. The committee, at least one
20 member of the committee has some familiarity with the Hague 21 Convention and has expressed the same concerns that counsel is 22 expressing today and the delays that may result from attempting 23 to serve under that -- by that means. 24 As a result, Your Honor, the committee would support
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
21 1 including service as has been suggested by Ms. Tavenner or by 2 any other means which the Court deems appropriate. 3 THE COURT: All right. Thank you very much. Id
4 like to hear from the Office of the U.S. Trustee. 5 6 Trustee. MR. PHILLIPS: Robert Van Arsdale for the U.S.
7 objection to the relief thats being requested on behalf of the 8 debtor. 9 Ill also just tell the Court that we are concerned
10 with the activities of Mr. Chien during this and at some point 11 well have to consider what other actions may be necessary 12 because I think its gone way past what we would have expected 13 given the Courts earlier admonitions. 14 THE COURT: All right. Thank you. Does any other
15 party wish to be heard in connection with the debtors motion 16 for an order directing the manner and service of complaint and 17 summons and related documents pursuant to Rule 4(f)(3) of the 18 Federal Rules of Civil Procedure or wish to examine the 19 proffered witness? 20 All right, Ms. Tavenner, there being no objection. The Court finds that the The Court is well
23 aware of the Hague Convention and knows the problems and delays 24 that are involved in doing that and the Court -- the reference 25 in the Courts prior order was more directed at making sure
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
22 1 that we had constitutional due process addressed than it was 2 utilizing that specific procedure. 3 As you point out in the memorandum, Rule 4(f)(3) is a
4 perfectly fitting alternative that the Court can fashion the 5 relief. 6 case. Thats what Judge Hudson did in the FMAC (phonetic)
7 constitutional limits of due process and as long as there is 8 actual notice and were assured of that, that that is, you 9 know, the outward bound. 10 In this case the fact that counsel for the entity
11 that was suing the debtor in this case in the District Court 12 acknowledged the bankruptcy petition in this case and had 13 actual notice of the bankruptcy and then an entity filed or 14 purported to file a proof of claim on that exact same claim, 15 you know, tells the Court that theres already been notice in 16 this case. 17 But adhering to the belt and suspenders approach,
18 what the Court is going to do is authorize the service as 19 youve requested in your motion and that it be done in the 20 three manners, both by e-mail, first-class service to the 21 original addressees and then as well as to the Overseas 22 Management Company Trust BVI Limited as the registered agent 23 for Fornova entity in the British Virgin Islands. 24 And that being accomplished I think that there can be So the Court
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
23 1 will authorize that. The Court will vacate that portion of its
2 prior order that required you to go through the Hague 3 Convention and so that you know you dont have to do both of 4 those. 5 6 MS. TAVENNER: THE COURT: Thank you.
7 Court is authorizing and then you may dispense with concluding 8 those efforts unless you decide that you want to on your own, 9 of course you can do that, but youre not going to be required 10 by this Court to do it. 11 So that will be vacated.
12 testimony of Dr. Freer as you had put it on the record here 13 this morning as no party wish to cross-examine him on any of 14 those factual issues. 15 ruling? 16 MS. TAVENNER: Your Honor, I did want to state that Any questions regarding the Courts
17 we are taking action to ensure that we serve as much as we can. 18 With respect to the e-mail addresses, Dr. Freer reminded me 19 when I sat down and as consistent with the e-mails that are 20 attached to our pleading, that he actually only corresponded at 21 one e-mail address. The other addresses were suggested as
22 potentially appropriate or inappropriate, but were using them 23 all. 24 THE COURT: Very good. And that will be satisfactory The Court thinks its
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
24 1 disingenuous for an entity to file a claim in this court and 2 then suggest that they cannot be found in order to deal with 3 that proof of claim. That probably in and of itself is But
5 well go through the process and make sure that weve gotten 6 the matter sufficiently addressed. 7 MS. TAVENNER: Certainly, Your Honor. The next
8 motion that I would ask the Court to consider then is the 9 motion to continue the actual trial that was scheduled for 10 today. 11 THE COURT: The Court has already entered an order to
15 scheduled for today and it was my hope in getting that order 16 entered that the gentlemen that flew in today for the trial 17 might be able to avoid having to be inconvenienced in that 18 regard. 19 But in any event what I would like to do today on
20 that motion is to set a new trial date and entertain your 21 request for the entry of a new pre-trial order that can be 22 served along with an alias summons pursuant to the just 23 preceding motion. 24 MS. TAVENNER: And, Your Honor, we are hopeful that
25 when we serve that that we can actually say this is the trial
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
25 1 date as well. 2 THE COURT: Thats what I was anticipating so that we As I mentioned to Mr. Phillips the
4 Court is quite concerned about allowing administrative expenses 5 to continue to erode the estate in this case. I would like to
6 see the unsecured creditors receive as much as they can. 7 MS. TAVENNER: Absolutely, Your Honor. We would like
9 Honor, we have tried to look at a time frame that would ensure 10 that we have -- that we effect appropriate service or notice if 11 you will with regard to this matter and believe that that could 12 certainly be accomplished and the clerks office would have the 13 timing to issue a new alias summons with all of the requisite 14 information if we could have a trial date in September? 15 THE COURT: You may. Lets find a date in September
16 that works. 17
September 11?
MS. TAVENNER:
18 -- that day is now clear on your docket? 19 20 THE COURT: According to my calendar it is. Okay. I have another matter that was September 11th.
MS. TAVENNER:
I think it was your matter -Yes, and its removed. Thats why I
25 thought that --
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
26 1 2 3 right. 4 5 6 7 8 trial. 9 10 MS. TAVENNER: THE COURT: Thank you, Your Honor. MS. TAVENNER: THE COURT: What time? MS. TAVENNER: THE COURT: Yes, I am available. All
At 10:00. Perfect.
11 issue its normal pre-trial order or do we need to have anything 12 special because I had already entered a pre-trial order in this 13 case. Ill probably amend the original pre-trial order to
14 change the trial date and adjust some of the other dates 15 accordingly. 16 MS. TAVENNER: I dont think, Your Honor, from the We do
17 debtor/plaintiffs perspective we need anything special. 18 need to have the dates changed. We did make our initial
19 disclosures and send them the best way that we could, but we 20 have done nothing else not knowing who the adversary was. 21 THE COURT: All right. Well I will certainly
22 entertain other motions by the parties to expedite discovery as 23 such things need to be done if there is actually an answer by 24 an attorney on behalf of the defendant in this case that is 25 filed and so well make sure that no one is prejudiced with
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
27 1 regard to the trial date but the trial date will be firm. 2 MS. TAVENNER: Thank you. We appreciate that. From
3 the debtor/plaintiffs perspective we have volumes of documents 4 and were ready to go today, but obviously an answer may make 5 us need to rethink if we need some type of additional 6 discovery. 7 8 THE COURT: All right. So we appreciate that. The final
MS. TAVENNER:
9 matter thats on the docket today, Your Honor, is the debtors 10 motion for a 2004 examination. Your Honor, that is Docket
11 Number 184 filed in the main case, its a motion for 12 examination of Andrew Chien under Rule 2004 of the Federal 13 Rules of Bankruptcy Procedure. 14 Your Honor, I dont believe that I need to go back
15 and recite all of the various circumstances that have gotten us 16 here today. However, the debtor is certainly in need of a
17 mechanism to move forward with its reorganization plan and to 18 ensure that claims are paid to the appropriate creditors. 19 We need information at this point from Mr. Chien to
20 complete this case based upon representations that he has made 21 to this Court and to other parties. We are uncertain at this
22 point as to exactly who he represents, in what capacity he 23 might represent them, and what authority he has to act on their 24 behalf and to potentially ultimately receive any type of 25 distribution that he is now seeking on their behalf.
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
2 Bankruptcy Rules could not -- this is the perfect use for it. 3 This is not a fishing expedition. We know definitely what we
4 need and we know from whom we need it and its a pretty simple 5 process. We need him to answer under oath as to his ability to
6 actually file the claim thats now before the Court and to 7 participate in this bankruptcy case. 8 Your Honor said that you have already reviewed the Just a brief review of them
10 shows that he now is looking for even additional seat at the 11 table if you will with respect to this case. And the debtor in
12 exercise of its fiduciary duties in this case cannot go forward 13 without having additional information with regard to what his 14 real connection is to this debtor. 15 Because of that, Your Honor, we are seeking a motion
16 for a 2004 examination and we have identified the specific 17 categories of information that we are seeking from him. 18 all that were looking for, Your Honor. 19 THE COURT: All right. Thank you. Mr. Chien, this Thats
20 motion for examination is directed to you individually and so 21 the Court can hear you on that in your capacity there and I 22 will allow you to address the Court in that capacity. 23 24 6. MR. CHIEN: I already answered that for the Question I already
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
3 I cannot disclose my client information without authorization 4 from my client. 5 That is my answer. All right. And I reviewed the response The Court treats your
THE COURT:
7 answers of rejected as really meaning objected to and the Court 8 understand that. 9 The Court understands you are claiming some sort of a Of course the Rules of Privilege under the
10 rule of privilege.
11 Federal Rules of Evidence are very clear and they apply in very 12 limited situations, to a husband and wife, to an attorney and a 13 client, and to a minister and a penitent. There is no
14 attorney/client or any other kind of privilege that you in your 15 individual capacity would be able to assert. 16 Now what I do think if you wanted to is if youre
17 concerned about some confidential information being made public 18 you could file a motion for a protective order and I will ask 19 you today would you like me to issue a protective order to keep 20 information that you would be required to disclose 21 confidential? 22 23 24 MR. CHIEN: THE COURT: MR. CHIEN: No. No? Do you understand what I asked you? But before you
Yeah, I understand.
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
30 1 what kind of (indiscernible) I have. 2 3 THE COURT: MR. CHIEN: If I dont have a --
What kind of what you have, sir? I dont have any (indiscernible) why I
4 must handle all my client information. 5 THE COURT: Because you filed a document that You have
7 to be able to tell the debtor what your capacity is in order to 8 -- whether we could allow that. 9 proof of claim? 10 MR. CHIEN: No. But I already submitted Okay. Do you wish to withdraw the
11 supplementary information regarding Fornova and BVI. 12 You just not look for the name.
13 also missed the US (indiscernible), so the only variation is 14 the Pharm or Pharma. 15 Because, you know, English for the Chinese people is
16 a secondary language that Pharm had a or no a certainly is 17 the same Chinese translation. 18 an a is not a big deal. 19 mail in BVI. 20 21 to that. Therefore in the middle missing
Only one company have Fornovas name. Yes, but youre going to have to testify So that we actually have
THE COURT:
22 testimony and thats what Ms. Tavenner is asking is that you 23 submit to an examination under oath where you state those 24 things on the record so then she has that available to her. 25 And shes entitled to know not only what, you know, your
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
31 1 capacity is on behalf of this entity, what the entity is, why 2 its filing a claim in this case -3 4 MR. CHIEN: THE COURT: Okay. -- what is the claimants asserting.
5 Those are all things that have to come out if you want me to 6 entertain a claim or if Fornova wants me to entertain a claim. 7 8 order. 9 MR. CHIEN: Okay. You can issue the protective
I will do that. THE COURT: All right. Im going to treat then your Id
10 motion or your response as a motion for protective order. 11 now like to hear from Mr. Van Arsdale. 12 13 MR. CHIEN: Okay.
15 protective order so that I will have the same information that 16 the trustee -- or that Ms. Tavenner would have in this case as 17 we go forward. 18 19 THE COURT: You want to be included or excluded? I would like to be -- I would not
20 like to be barred from being in attendance at the 2004 -21 22 23 24 there. 25 MR. VAN ARSDALE: Yes, sir, I just -THE COURT: Well I would --- by the --
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
32 1 2 3 THE COURT: Okay. Very good. Thats it. So what Im going to do then
All right.
4 is Im going to grant the motion for the examination as youve 5 requested it with one caveat. 6 order in this case. I am going to want a protective
10 that makes it so that the documents would be kept confidential. 11 Anything thats provided to the Court would be under seal 12 unless I decide to unseal it because I dont think its 13 confidential. And you can always file a motion to that effect.
14 Mr. Chien can file a motion on his own behalf to that regard as 15 well. 16 But for the time being were going to preserve I want the
18 protective order to cover Mr. Van Arsdale, I want it to cover 19 Mr. Chien, I want it to cover you and your client, and Id like 20 it to cover the counsel for the unsecured creditors committee. 21 Is there anybody else that needs to have any participation? 22 23 24 25 MR. PHILLIPS: THE COURT: The rest of the executive committee. All right.
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
33 1 access to the information will be bound to keep it confidential 2 and cannot disclose it to anyone for any purpose other than 3 these bankruptcy proceedings. And the Court will certainly
4 keep it confidential as well and if the Court later decides to 5 unseal it or to disclose it, that will be subject to 6 everybodys right to be able to argue about it. 7 MS. TAVENNER: Certainly. We will prepare that
8 order, Your Honor, and tender it in conjunction with the 2004 9 order. 10 THE COURT: Thank you. Again, it should be a
11 separate order I would assume. 12 13 MS. TAVENNER: THE COURT: Yes. Now with
14 regard -- I also will ask you to submit the order on the first 15 motion that you argued -16 17 MS. TAVENNER: THE COURT: Yes, Your Honor.
19 enter its pre-trial order itself with regard to the second 20 motion. 21 today? 22 23 Honor. 24 MS. TAVENNER: Thank you. THE COURT: Okay. Very good. Mr. Chien, the Court I think that covers it for today, Your Is there anything else that we need to consider here
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
2 concerned that the filing of those pleadings violates the terms 3 of the Courts order of April 30 in this case. 4 The Court is going to be issuing a subsequent show
5 cause order for you to address the Courts concerns in those 6 regards. But I want you to know that I thought my order of the
7 20th was perfectly clear that you needed to have counsel in 8 this case to represent Fornova and that you could not file 9 pleadings on its behalf. 10 MR. CHIEN: Yeah, but let me ask a question that
11 (indiscernible) I cannot on behalf of Fornova to file any 12 pleading, I understand that. But my filing requires a
13 (indiscernible) vote, so that means unsecured creditor 14 committee (indiscernible) sent vote information to every 15 unsecured credits. We in total have 40 unsecured credits. We
16 never have a vote -17 THE COURT: You have not filed a proof of claim in
18 this case, sir, and the entity that has filed the claim is 19 Fornova, and thats what you filed this on behalf. Youll get
20 a chance to address the Courts concern once you receive the 21 order and well have another hearing on that. 22 time to do that. Today is not the
23 going to be coming, all right. 24 MS. TAVENNER: Your Honor, again for the record Lynn With respect to the 2004
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
35 1 order that you were just speaking of with Mr. Chien. We have
2 been using one address for him, 665 Ellsworth Avenue, New 3 Haven, Connecticut 06511. He obviously appeared here today, I
4 expect that he received it, but it would be helpful for him to 5 confirm that is the address to send the order to. 6 THE COURT: All right. Mr. Chien, is that the
7 address to which the order should be sent or is there a better 8 address for you, sir? 9 10 11 12 MR. CHIEN: THE COURT: MR. CHIEN: THE COURT: Yeah, that is the address. Thats a good address? Yes. Thank you, sir. Now you had also Do
14 we want to schedule a time right now while everybody is right 15 here? 16 17 MS. TAVENNER: THE COURT: That would be great, Your Honor. Mr. Chien, why dont you come to
Okay.
18 the podium with Ms. Tavenner and lets schedule a time when 19 this hearing can be conducted, the examination. 20 21 MR. CHIEN: THE COURT: July, I think late July is good. Okay. I was going to -- July weve
22 already got -- the hearing is going to be in -- the trial is 23 going to be in September. 24 want to do it in June. 25 MR. CHIEN: Im too busy. I have a lot of jobs to do July is going to be too late. I
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
36 1 in June, you know. Every time I come here I need two days
2 because if one day is the airplane (indiscernible) time to go 3 here. 4 THE COURT: If you cant give me a date in June Im I would suggest June 28th. Its a
7 Thursday, two weeks from today. 8 9 then. 10 THE COURT: All right. You understand if youre not MR. CHIEN: Okay. Ill try to do my best to come in
11 here then on that date after the Court issues an order that 12 youll be in contempt of Court. 13 here on the 28th. Okay. So I expect you to be
14 room at the end of the courthouse -15 16 17 18 19 be. MS. TAVENNER: THE COURT: Yes, Your Honor.
All right.
You know where the conference room is right outside the Thats where the examination
20 doors there to the courtroom. 21 will take place. 22 23 MS. TAVENNER: THE COURT:
24 open on the 28th so that you can get there. 25 MS. TAVENNER: Thank you.
WWW.JJCOURT.COM
Case 11-30381-KRH
Desc Main
37 1 2 Okay. 3 4 5 6 THE COURT: 10:00. MS. TAVENNER: THE COURT: That works for me, Your Honor. All right. Thank you both. All right. And that will be at 10:00.
All right.
Thank you.
7 take up in this case today? 8 9 10 11 12 13 MS. TAVENNER: THE COURT: No, Your Honor. Thank you all. Court is now adjourned.
All right.
COURTROOM DEPUTY:
All rise. * * * * *
14 certify that the foregoing is a correct transcript from the 15 official electronic sound recording of the proceedings in the 16 above-entitled matter, and to the best of my ability. 17 18 /s/ Janet D. Persons 19 JANET D. PERSONS 20 J&J COURT TRANSCRIBERS, INC. 21 22 23 24 25 DATE: October 2, 2012
WWW.JJCOURT.COM