IN THE UNITED STATES BANKRUPTCY COURT FOR THE … · Judgment Creditors Tessa Knox, the 13 Opt-In plaintiffs and the class that the Court certified (“Class of Judgment Creditors”)

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x : In re : Chapter 11 : John Varvatos Enterprises, Inc. et al., : Case No. 20-11043 (MFW) : Debtors. : (Joint Administration) : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

MOTION OF THE CLASS OF JUDGMENT CREDITORS FOR AN ORDER PURSUANT TO RULE 2004 DIRECTING THE

PRODUCTION OF DOCUMENTS AND AN ORAL EXAMINATION

Judgment Creditors Tessa Knox, the 13 Opt-In plaintiffs and the class that the Court

certified (“Class of Judgment Creditors”) in the civil action entitled Tessa Knox v. John Varvatos

Enterprises, Inc., 17-cv-772-GWG (S.D.N.Y.) (“Sex Discrimination Class Action”) hereby move

for an order pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, and Rule

2004-1 of the Local Rules of this Court, for an order compelling debtor John Varvatos

Enterprises, Inc. (“Debtor”) to (i) produce the documents set forth in Exhibit A, and (ii) to appear

for examination that includes the topics that are set forth in Exhibit A.

JURISDICTION AND VENUE

1. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. §§ 157 and

1334.

2. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.

FACTUAL BACKGROUND

3. Tessa Knox (“Knox”) commenced the Sex Discrimination Class Action on

February 1, 2017, with the filing of a complaint alleging that the facially discriminatory Clothing

Allowance policy of defendant and now debtor John Varvatos Enterprises, Inc. (“Debtor”)

Case 20-11043-MFW Doc 77 Filed 05/12/20 Page 1 of 21

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violated the federal Equal Pay Act (“federal EPA”), the New York Equal Pay Act (“NY EPA”),

and the New York Human Rights Law (“NY HRL”). (17-cv-772, Dkt. 1) On August 29, 2017,

after receiving a right-to-sue letter from the Equal Employment Opportunity Commission, Knox

filed a second amended complaint, adding a claim that the Debtor’s Clothing Allowance policy

violated Title VII of the Civil Rights Act (“Title VII”). (17-cv-772, Dkt. 69)

4. On October 17, 2017, the Court conditionally certified Knox’s federal EPA claim

as a collective action under 29 U.S.C. § 216(b). (17-cv-772, Dkt. 84) Ultimately, 13 additional

women sales professionals joined the collective action as Opt-In plaintiffs: Alyssa Hickey (Dkt.

101), Joy Fusaro (17-cv-772, Dkt. 102), Christina Torres (17-cv-772, Dkt. 103), Hillary Crandle

(17-cv-772, Dkt. 104), Wijdan Shoubaki (17-cv-772, Dkt. 105), Ruby Romero (17-cv-772, Dkt.

110), Laurentina Chaparro (17-cv-772, Dkt. 111), Pamela Kassen (17-cv-772, Dkt. 119),

Michelle Ortiz (17-cv-772, Dkt. 122), Arissia Tossetti (17-cv-772, Dkt. 128), Jena Tobak (17-cv-

772, Dkt. 129), Margret Holcomb (17-cv-772, Dkt. 130), and Tripti Pandey. (17-cv-772, Dkt.

131)

5. On February 22, 2018, the Court certified a class pursuant to Fed. R. Civ. P. 23

consisting of female sales professionals with claims under the NY EPA, the NY HRL, and Title

VII, and certified Knox as the class representative. (17-cv-772, Dkt. 157) The class consisted of

69 present or former female sales professionals of the Debtor.

6. On May 24, 2018, the Class of Judgment Creditors and the Debtor both moved for

summary judgment. (Dkts. 177 and 185) On January 16, 2019, the Court denied these motions.

(17-cv-772, Dkt. 219) On April 25, 2019, the parties submitted a proposed joint pre-trial order.

(17-cv-772, Dkt. 254)


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7. The trial began on February 24, 2020. The first phase of the trial concluded with

a jury verdict on February 28, 2020, that (i) the Debtor violated the federal EPA, the NY EPA,

Title VII, and the NY HRL; (ii) women sales professionals should be compensated for $3,000

per “pull” at retail stores, and $1,500 per “pull” at outlet stores; (iii) the Debtor’s violation of the

federal EPA and the NY EPA was willful, and (iv) that the Debtor should pay punitive damages

under Title VII. (17-cv-772, Dkt. 334)

8. The second phase of the trial on March 2, 2020, concluded with a jury verdict that

the Class of Judgment Creditors should receive enhanced liquidated damages under the NY EPA

and punitive damages under Title VII of $2,500 per “pull” at retail stores, and $1,250 per “pull”

at outlet stores. (Dkt. 335) The Court then made a series of rulings to calculate an aggregate

amount of damages for the plaintiffs to recover. (17-cv-772, Dkts. 355, 359, and 361)

9. On March 24, 2020, the Clerk entered a final judgment in favor of the Class of

Judgment Creditors and against the Debtor for $3,516,051.23. (17-cv-772, Dkt. 362)

10. The Class of Judgment Creditors moved for costs and attorneys’ fees of an

additional $1,744,589.71(17-cv-772, Dkt. 367), which was sub judice at the time of the petition.

11. While the Debtor has insurance coverage for this judgment, the Debtor has failed

to provide the precise amount of remaining coverage available on its $5 million policy, or any

explanation for the Debtor’s failure to take any legal action against the insurer, which apparently

disputed the extent of coverage. The dealings between the Debtor and its insurance company

remain undisclosed.

12. On May 6, 2020, the day that the district court in the Sex Discrimination Class

Action required the Debtor to file papers in support of its motion for a continued stay of the

execution of judgment (17-cv-772 (GWG), Dkt. 382), the Debtor filed its petition in this Court.


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13. The Petition proposes no plan for reorganization. (Dkts. 1, 4) Based upon the

disclosures of the Debtor’s counsel to the Court on May 7, 2020, the Debtor does not intend, at

any time, to propose any plan of reorganization in this case. The basis for that decision, and the

persons who made it, remains undisclosed.

14. Although the Debtor contends that a liquidation under Chapter 7 would not result

in any value to the “stakeholders” (Dkt. 4 at 12/51, ¶ 30), the Debtor’s supporting analysis

ignores the fact that at the end of January 2020, the Debtor had inventory, at retail value, of

approximately $150,000,000. (17-cv-772 (GWG), Dkt. 348, Tr. 3/2/20 at 704:13-18 and 727:6-

15) The liquidation value of that inventory remains unknown.

15. Through its petition, the Debtors seeks to sell the business to an affiliate of the

private equity firm Lion Capital LLC (with its affiliates other than the Debtor, “Lion”), which

also owns the Debtor. The Debtor proposes that Lion finance the purchase with a credit bid

based upon purported perfected security interests. (Dkt. 4 at 12/51) The documents proving these

perfected security interests remain undisclosed.

16. The Debtor proposes a “stalking horse” bid, expressly stating that, when it

negotiated that “stalking horse” bid with itself, it took care to eliminate any conflict of interest,

stating “At all times, L/H Cayman has been represented by separate counsel.” (Dkt. 4 at 11/51,

n. 2) The details of these negotiations leading to the “stalking horse” bid remain undisclosed.

17. Also undisclosed is the role of Lion in the Debtor’s unlawfully discriminatory

Clothing Allowance policy. The jury in the Sex Discrimination Class Action found on February

28, 2020, that the Debtor intended to violate the rights of the Class of Judgment Creditors

through its discriminatory policy, and that the violation required an award of punitive damages

because the Debtor acted willfully and with malice and/or reckless indifference to the rights of


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the women. (17-cv-772 (GWG), Dkt. 334 at 4/4) The evidence may demonstrate that Lion, as

the owner and controlling person of the Debtor, was involved in, or caused, the Debtor’s

intentional violation of federal law, and therefore should be equitably subordinated to the Class

of Judgment Creditors.

THE RELIEF REQUESTED

18. To resolve the unknown facts in this case, the Class of Judgment Creditors request

that the Court order the Debtor to (i) produce the documents set forth in Exhibit A, and (ii)

appear for an examination that includes the topics set forth in Exhibit A.

THE LEGAL STANDARD FOR RULE 2004 RELIEF

19. An examination pursuant to Bankruptcy Rule 2004 “can be ordered ‘on motion of

any party in interest.’” In re Lifeco Inv. Group, Inc., 173 B.R. 478, 480 (Bankr. D. Del. 1994)

(quoting Fed. R. Bankr. P. 2004(a)). Rule 2004 further provides that the Court may order the

examination and the production of documentary evidence concerning any matter that relates “to

the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any

matter which may affect the administration of the debtor’s estate, or . . . any matter relevant to

the case or the formulation of a plan.” Fed. R. Bankr. P. 2004(b); see also Harrow v. Street (In

re Fruehauf Trailer Corp.), 369 B.R. 817, 827-28 (Bankr. D. Del. 2007) (noting the “extensive

document discovery” that occurred pursuant to a subpoena issued under Fed. R. Bankr. P. 2004).

Thus, “[t]hird parties having knowledge of the debtor’s affairs, as well as a debtor itself, are

subject to examination.” In re Valley Forge Plaza Assoc., 109 B.R. 669, 674 (Bankr. E.D. Pa.

1990).

20. The scope of a Rule 2004 examination is “unfettered and broad,” as the plain

language of the rule indicates. See 9 Collier on Bankruptcy ¶ 2004.02[1] at 2004-6 (15th ed.


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Rev. 1997) (quoting In re Table Talk, Inc., 51 B.R. 143, 145 (Bankr. D. Mass. 1985). Courts

have repeatedly recognized that the scope of Bankruptcy Rule 2004 examinations “as broad,

unfettered and in the nature of a ‘fishing expedition.’” In re Countrywide Home Loans, Inc., 384

B.R. 373, 400 (Bankr. W.D. Pa. 2008) (citing In re Lev, No. 05-35847, 2008 WL 207523, at *3

(Bankr. D.N.J. Jan. 23, 2008); In re Silverman, 36 B.R. 254 (Bankr. S.D.N.Y. 1984); In re

Vantage Petroleum Corp., 34 B.R. 650 (Bankr. E.D.N.Y. 1983)). Indeed, Bankruptcy Rule 2004

affords parties-in-interest an extremely broad right of discovery and “is even broader than that of

discovery permitted under [the Federal Rules of Civil Procedure], which themselves contemplate

broad, easy access to discovery.” In re Valley Forge Plaza Assocs., 109 B.R. 669, 674 (Bankr.

E.D. Pa. 1990) (citations omitted).

THE NEED FOR RULE 2004 RELIEF

21. While additional topics may arise, the Class of Judgment Creditors needs Rule

2004 discovery on at least the following topics.

A. The Debtor’s Insurer in the Sex Discrimination Class Action.

22. In the Sex Discrimination Class Action, the Debtor disclosed the existence of an

insurance policy (the Policy”) issued by Ironshore Indemnity Inc. (“Ironshore”). The policy

afforded coverage for acts of employment discrimination of the type that the Class of Judgment

Creditors alleged. (17-cv-772 (GWG) Dkt. 249 at 2-3/9) The initial policy limit was $5,000,000,

which included defense costs. (17-cv-772 (GWG) Dkt. 249 at 3/9)

23. After the filing of the Sex Discrimination Class Action, Ironshore by letter dated

March 17, 2017, advised the Debtor that it afforded coverage under the Policy. (17-cv-772

(GWG) Dkt. 266)


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24. More than a year later, by letter dated May 18, 2018, Ironshore purported to

disclaim certain coverage under the Policy. (17-cv-772 (GWG) Dkt. 266)

25. Almost a year later, the Debtor informed the Class of Judgment Creditors of

Ironshore’s position.

26. Ironshore nevertheless participated in Court sanctioned mediations in March 2019

and December 2019, and paid for at least some of Varvatos’ costs in defending the Sex

Discrimination Class Action. A representative of Ironshore attended most days, if not all days,

of the jury trial, from February 24, 2020 to March 2, 2020.

27. Since that time, the Class of Judgment Creditors have asked the Debtor repeatedly

to disclose the remaining limit on the Policy. The Debtor has declined to advise us of the

remaining limit, except orally in general of ranges.

28. More importantly, the communications between the Debtor and Ironshore

concerning the Policy and the Sex Discrimination Class Action will offer valuable evidence

concerning the strength of the planned direct action of the Class of Judgment Creditors against

Ironshore, pursuant to Section 3420 of the New York Insurance Law.

29. All of the information sought concerning the Policy will prove important to the

Class of Judgment Creditors in evaluating how to proceed in this case, and in the planned direct

action against Ironshore.

30. It is also important that the Class of Judgment Creditors obtain this information as

soon as possible. For example, if the evidence discloses that an amount close to the $5,000,000

policy limit remains and if Ironshore has made admissions that weaken its defense, the Class of

Judgment Creditors may decide to focus their resources in pursuing Ironshore.


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B. The Value of Debtor’s Current Inventory

31. The Debtor contended in the May 6, 2020 declaration of Mr. Zorda, CFO of the

Debtor, that “liquidation would destroy substantially all of the Debtor’s value for their

stakeholders.” (Dkt. 4 at 12/51)

32. The Debtor, however, has failed to provide the information that would allow the

Court or the parties in interest to assess the soundness of that argument.

33. For example, the most significant asset of the Debtor may be its inventory of

Varvatos brand clothing. Mr. Zorda writes “The Debtors have experienced better-than-expected

eCommerce sales, as the brand remains among the top contemporary menswear brands in the

United States.” (Dkt. 4 at 10/51)

34. At the trial of the Sex Discrimination Class Action on March 2, 2020, the Debtor

disclosed that, at its retail list price, the Debtor had approximately $150,000,000 of Varvatos

clothes in inventory. Mr. Zorda testified:

Q. Let me just recap the colloquy. It is your understanding that Varvatos has $30 million at cost of inventory?

A. Approximately at the end of January; correct.

Q. OK. So, if we take the $30 million or so of Varvatos inventory which is at Varvatos cost and we multiply it by five, we would get $150 million at retail costs, correct?

A. Using those numbers, correct.

Q. And those numbers are consistent with your prior testimony,

sir, right?

A. Correct.” (17-cv-772 (GWG), Dkt. 348, Tr. 3/2/20 at 724:8-10 and 727:9-15; Emphasis added.)

35. To make a rational assessment of the best means to maximize the value of the

estate in this case, one must assess the current value of that inventory.


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36. The Debtor, however, has not disclosed either its understanding of the current

value of its inventory, or the underlying evidence that would be necessary to assess the accuracy

of its understanding. This evidence would include the speed at which the Debtor is selling the

inventory at retail, the costs of making those sales, and the value of the inventory at wholesale.

37. Only with this information and evidence can a rational person assess the accuracy

of the Debtor’s contention that that “liquidation would destroy substantially all of the Debtor’s

value for their stakeholders.” (Dkt. 4 at 12/51)

C. The Reclassification Of Lion’s Promissory Notes As Equity.

38. The Debtor has made no disclosures concerning the amount or structure of its

equity.

39. Such disclosure is necessary to determine whether Lion’s claimed $94,779,483.29

in secured debt (Dkt. 4 at 50/51) should be reclassified as equity, or otherwise subordinated.

D. Any Preference Or Fraudulent Conveyance In Lion’s Claimed Security Interest.

40. The driving force of the Debtor’s plan to sell its business to itself, and leave

nothing for the unsecured creditors, rests on the premise that Lion has secured notes “restated” as

of February 6, 2020, in the amount of $94,779,483.29. (Dkt. 4 at 5-6/51)

41. At least part of the security interest in that amount may be a voidable preference

under 11 U.S.C. § 547, or a fraudulent conveyance under 11 U.S.C. § 548 or New York law.

42. Although Lion purports to have made the certain loans as of December 18, 2015,

March 30, 2016, and March 3, 2017, the Debtor has not disclosed any UCC-1s.

43. In addition, the Sex Discrimination Class Action was filed on February 1, 2017.

17-cv-772 (Dkt. 1), before the notes of March 3, 2017, and February 20, 2020. (Dkt. 4 5-6/51)


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44. Although it is the cornerstone of the credit bid that Lion hopes to make for

substantially all of the assets of the Debtor, the Debtor has disclosed no facts concerning either

how security interests in those amount arose, in favor of an insider, 91 days before the filing of

the petition.

E. The Conflicts In The Negotiation of the Stalking Horse Bid

45. The Debtor disclosed the procedures that the Debtor used to create the “stalking

horse” bid only in the most general of terms. (Dkt. 4 at 10-11/51)

46. The Debtor acknowledges the inherent conflicts of interest involved in selling

substantially all of the assets of its business to its present owner. (Dkt. 4 at 11-12/51) The

Debtor disclosed that a so-called “independent” committee made that decision to sell the assets

of its business to its present owner. (Dkt. 4 at 11-12/51) The Debtor also highlights its effort to

eliminate any conflict of interest by having different lawyers, both ultimately reporting to the

same client, negotiate with each other to ensure “fairness.” (Dkt. 4 at 11-12/51, n.2)

47. While certain provisions in the proposed “stalking horse” agreement provide a

substantial advantage to the “stalking horse” bidder (Dkt. 21-2), the Debtor has not offered any

assurance that it could not have negotiated better terms with an independent buyer, rather than

itself. (Dkt. 4 at 11-12/51, n.2)

48. More importantly, the Debtor has not disclosed who, if anyone, exercised

independent business judgment that substantially all of the assets of the Debtor should be sold in

one sale rather than in categories, such as Intellectual Property, Leases and Inventory, or the

basis upon which that judgment was exercised.


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49. The evidence that we uncover will provide the basis for an informed decision as

to whether the conflict of interest leading to the “stalking horse” bid should change the direction

in which this case should proceed.

F. The Equitable Subordination of Any Lion Claim Based Upon Its Conduct Which Led To The Judgment In The Sex Discrimination Class Action

50. The Class of Judgment Creditors seeks to explore Lion’s knowledge and actions

with respect to the facially discriminatory “Clothing Allowance” policy of the Debtor that led to

the finding of the jury in the Sex Discrimination Class Action that the Debtor intentionally,

willfully, and maliciously violated Federal law.

51. The jury found that the Debtor had intentionally violated the federal Equal Pay

Act and Title VII of the Civil Rights Act of 1964. The jury’s verdict sheet, from February 28,

2020, provided in part:

(17-cv-772 (GWG), Dkt. 334 at 4/4)


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52. We have evidence that since about March 2012, Lion owned and therefore

controlled the Debtor, that beginning in 2013 or 2014, Lion was fully aware of the Debtor’s

unlawful discriminatory policy, that the Debtor intentionally violated federal law to the extent

that a jury concluded that punitive damages were required, and that the Debtor (even when its

HR department urged it to do so) did not change the unlawfully discriminatory policy because

the Debtor did not want to incur the expense of complying with federal law.

53. While the circumstances suggest that Lion knew the unlawfully discriminatory

policy violated federal law, or was at least willfully blind to the fact that it did, the Class of

Judgment Creditors should be entitled to discover the direct evidence of Lion’s conduct. Indeed,

the evidence may show that Lion caused Varvatos to refuse to settle the Sex Discrimination

Class Action because Lion believed that, when it lost the case, it could expunge any judgment in

a bankruptcy.

54. If such evidence exists, that evidence would provide the basis for a claim of

equitable subordination of Lion’s debt to the Class of Judgment Creditors, or the unsecured

creditors as a whole. See In re Advance Nanotech, Inc., 2014 WL 1320145, at *8 (Bankr. D.

Del. Apr. 2, 2014); In re SHC, Inc., 329 B.R. 438 (Bankr. D. Del. 2005); In re OODC, LLC, 321

B.R. 128, 145 (Bankr. D. Del. 2005); In re Am. Bus. Fin. Servs., Inc., 362 B.R. 149 (Bankr. D.

Del. 2007).

CERTIFICATION OF COMPLIANCE WITH LOCAL RULE 2004-1

55. Attached hereto as Exhibit B is a certification of William Dunnegan, counsel to

the Class of Judgment Creditors, demonstrating compliance with Local Rule 2004-1. In essence,

William Dunnegan conferred with Derek Abbott, counsel for the Debtor, on May 7 and 8, 2020

in a good faith effort to resolve the present dispute, and was unable to do so.


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56. The Class of Judgment Creditors respectfully request that the Court grant their

motion for Rule 2004 Discovery.

57. A proposed order is attached as Exhibit C.

NOTICE AND NO PRIOR REQUEST

58. Notice of this Motion will be provided to: (i) the Office of the United States

Trustee; (ii) the Internal Revenue Service; (iii) the Securities and Exchange Commission; (iv) the

Delaware Secretary of State; (v) the Delaware Secretary of the Treasury; (vi) the Debtors’ thirty

(30) largest unsecured creditors; (vii) the Authorities: (viii) counsel to Wells Fargo Bank, N.A.;

(ix) counsel to Lion/Hendrix Cayman Limited; and (x) all parties requesting notice pursuant to

Bankruptcy Rule 2002. In light of the nature of the relief requested herein, the Debtors submit

that no other or further notice is necessary.

No prior request for the relief sought herein has been made.

Dated: May 12, 2020 /s/ Mark Billion

Mark Billion (DE Bar No. 5263) Billion Law 1073 S. Governors Ave. Dover, DE 19904 Telephone: (302) 428-9400 Email: [email protected] -and-

/s/ William Dunnegan William Dunnegan (NY Bar No. 1927763) (pro hac vice) Dunnegan & Scileppi LLC 350 Fifth Avenue, 76th Floor New York, New York 10118 Telephone: (212) 332-8300 Email : [email protected]


Exhibit A


Documents

1. All documents that constitute communications between the Debtor and Ironshore with respect to the Policy and/or the Sex Discrimination Class Action.

2. Documents sufficient to demonstrate the value of Debtor’s current inventory, including the items of inventory, the cost and retail value, the prices and volumes at which the inventory has been sold in 2020, and the cost of storing the inventory.

3. Documents sufficient to demonstrate the circumstances surrounding the equity or debt investments that Lion has made in the Debtor since January 1, 2012, and the circumstance concerning each such investment.

4. All documents that constitute, refer or relate to the circumstances under which Lion, or any affiliate, obtained and perfected any security interest in any property of the Debtors, including but not limited to the transactions involving the promissory notes referred to in paragraphs 12, 13, 14, 139, 140 and 141of the declaration of Joseph Zorda. (Dkt. 4)

5. All documents that constitute, refer or relate to the formation, work or work product of the Debtor, Lion, and/or “committee” referred to in paragraph 26 of the declaration of Joseph Zorda (Dkt. 4) and the negotiation of the proposed stalking horse bid set forth as Dkt. 21-2.

6. All documents that constitute, refer or relate to the knowledge or actions of Lion Capital or any of its affiliates, concerning the Clothing Allowance Policy of the Debtor since April 2013 and/or the Sex Discrimination Class Action since February 1, 2017.

Topics

1. The communications between the Debtor and Ironshore with respect to the Policy and/or the Class Action’s Insurer in the Sex Discrimination Class Action.

2. The value of Debtor’s current inventory, including the items of inventory, the cost and retail value of the inventory, the prices and volumes at which the inventory has been sold in 2020, and the cost of storing the inventory.

3. The circumstances surrounding the equity or debt investments that Lion, or any affiliates, has made in the Debtor, or any of its affiliates, since January 1, 2012, and the circumstance concerning the closing of each such investment.

4. The circumstances under which Lion, or any affiliate, obtained and perfected any security interest in any property of the Debtor, including but not limited to the transactions involving the promissory notes referred to in paragraphs 12, 13, 14, 139, 140 and 141 of the declaration of Joseph Zorda. (Dkt. 4)


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5. The formation, work or work product of the Debtor, Lion and/or “committee” referred to in paragraph 26 of the declaration of Joseph Zorda (Dkt. 4) and the negotiation of the proposed “stalking horse” bid set forth as Dkt. 21-2.

6. The knowledge and/or actions of Lion, concerning the Clothing Allowance Policy of the Debtor since April 2013 and/or the Sex Discrimination Class Action since February 1, 2017.


Exhibit B




CERTIFICATION OF COMPLIANCE WITH LOCAL RULE 2004-1

William Dunnegan hereby states under penalty of perjury that the following is true and

correct.

1. I am member of the Bar of the State of New York, and an attorney for the

certified class of plaintiffs in the action Tessa Knox v. John Varvatos Enterprises, Inc., 17-cv-

772 (GWG), in the Southern District of New York, and I have applied for admission pro hac vice

in this case.

2. On May 7, 2020, at about 9 p.m., I discussed with Derek Abbott, counsel for the

Debtor, our request for a Rule 2004 Examination in this case. We spoke on the telephone for

about 15 minutes in a good faith effort to resolve the issue of whether the Debtor would provide

a Rule 2004.

3. On May 8, 2020, at about 9:00 a.m., Derek Abbott and I continued our discussion.

We spoke on the telephone for about 5 minutes.

4. We were unable to resolve the dispute.

5. At the conclusion of our discussion, however, we agreed that issue was

appropriate for submission to this Court.


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I declare under penalty of perjury pursuant to 28 U.S.C. § 1746 that the foregoing is true

and correct.

Executed this 12 day of May 2020.

William Dunnegan


Exhibit C




ORDER GRANTING MOTION OF THE CLASS OF JUDGMENT CREDITORS FOR AN ORDER PURSUANT TO RULE 2004 DIRECTING

PRODUCTION OF DOCUMENTS AND AN ORAL EXAMINATION

Upon the motion of the Judgment Creditors Tessa Knox, the 13 Opt-In plaintiffs and the

class that the Court certified in Tessa Knox v. John Varvatos Enterprises, Inc., 17-cv-772-GWG

(S.D.N.Y.) (the “Sex Discrimination Class Action”), it is hereby ORDERED as follows.

1. The motion is granted as set forth herein.

2. Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the Debtor

shall produce the documents described in Exhibit A to the Motion and shall produce a

knowledgeable witness to testify, including on the subjects set forth on Exhibit A.

Dated: May __, 2020 Wilmington, Delaware _____________________________________ THE HONORABLE MARY F. WALGRATH UNITED STATES BANKRUPTCY JUDGE
