Insys Liquidation Trust v. Kapoor

Opinion

INTHEUNITEDSTATESBANKRUPTCYCOURT FORTHEDISTRICTOFDELAWARE Inre: ) Chapter11 ) INSYSTHERAPEUTICS,INC.,etal., ) CaseNo.19-11292(JTD) ) (JointlyAdministered) LiquidatingDebtors. ) __________________________________________) INSYSLIQUIDATION TRUST,byand ) throughWILLIAMH.HENRICH,as ) LiquidatingTrustee, ) ) Plaintiff, ) AdversaryNo.21-50557-JTD ) v. ) ) JOHNN.KAPOOR, ) ) Defendant. ) Re: D.I.Nos.35 &41 MEMORANDUMOPINION1 WilliamH.Henrich,inhisofficialcapacityasLiquidatingTrustee(the “Trustee”)of theInsysLiquidationTrust(the“Trust”), commencedthisadversaryproceedingseekinga judgmentorderingdefendantJohnN.Kapoor (“Kapoor”or“Defendant”) torepayadvances madetohimbyDebtors forhislegaldefenseina criminalactioninwhich hewasconvicted.2 TheTrustee filedamotionforpartialsummaryjudgmentonCountVIoftheAmended Complaint,3 whichwasfollowedbylimiteddiscovery,briefing, andoral argument.4 Forthe reasonssetforthbelow,I recommendthattheMotionbegranted. BACKGROUND KapooristheformerChairmanandCEOofdebtor InsysTherapeutics,Inc. (“Insys”). Insysbylawsrequiredthecompanytoadvance expensestoitsdirectorsor officersin anylegal 1Asdiscussedbelow,theCourtcannotenterafinaljudgmentontheMotion. ThisOpinion,therefore, constitutestheCourt’sproposedfindingsoffactandconclusionsoflawpursuanttoFederalRulesof BankruptcyProcedure7052and9033. proceedingtowhichthe directororofficerwas a partybyreasonofthefact thatthepersonis orwasadirectororofficerofInsys.5 Kapoor alsoexecuted anindemnityagreementwith Insys(the“IndemnityAgreement”).6 TheIndemnityAgreementprovides thatKapooris entitledtoindemnificationandadvancementfromInsystothefullest extentpermittedbythe DelawareGeneralCorporationLaw(the “DGCL”)foranylegalproceedingrelatedtohis positionatInsys. ConsistentwiththerequirementsoftheDGCL,theIndemnityAgreement

alsoprovidesthatKapoorisnotentitledtoindemnificationwithrespectto conductfoundina finaljudgmenttobe“inbadfaith,knowinglyfraudulentordeliberatelydishonestor[tohave] constitutedwillfulmisconduct(but only to theextent of such specific determination)[.]”7 The IndemnityAgreementfurtherstatesthatKapoor“acknowledgesthatthe executionand deliveryofthisagreementshallconstituteanundertakingprovidingthatIndemniteeshall,to thefullestextentrequiredbylaw,repaytheadvanceifandtothe extentthatitisultimately determinedbya courtof competentjurisdictioninafinaljudgment,notsubjecttoappeal,that [Kapoor]isnotentitledtobeindemnifiedbythe Company.”8 OnDecember10,2013,Insysreceived asubpoena fromtheUnitedStates Department ofHealthand HumanServices(the“HHSSubpoena”)requestingdocumentsrelatedtothe

saleandmarketingofSubsys,Insys’proprietaryopioidproduct.9 OnFebruary29,2016,KapoorretainedPaul,Weiss,Rifkind,Wharton&Garrison LLP(“PaulWeiss”)torepresenthiminconnectionwithaninvestigationlaunchedbythe DepartmentofJustice(the“DOJInvestigation”), whicharoseoutoftheHHSSubpoena.

5D.I.42(OpeningBrief),Ex.1,§45. 6D.I.42,Ex.2. 7D.I.42,Ex.2. 8D.I.42,Ex.2. 9AmendedComplaint,¶35. AsrequiredbytheIndemnityAgreement,onJune 17,2016,Insysbeganmaking advancements(the“Advancements”)toKapoor forhisattorneys’fees. TheAdvancements continueduntilSeptember7,2018.10 InDecemberof2016,severalInsysofficers andemployees,wereindicted inacriminal actionfiledbytheU.S. Attorney’sOfficeforthe DistrictofMassachusettscaptionedUnited Statesv.Babichetal.,No.1:16-cr-10343-ADB(D.Mass.)(the “CriminalAction”). Kapoor

wasnotinitiallynamedintheCriminal Action,butonOctober24,2017, Kapoorwasnamed inasupersedingindictment(the“FirstSupersedingIndictment”).11 InNovember2017, KapoorretainedRopes &GrayLLP(“Ropes & Gray”)torepresenthim aslocalcounsel in theCriminalAction. OnSeptember11,2018,agrandjuryreturnedasecondsuperseding indictment(the“SecondSupersedingIndictment”)modifyingthechargesfiledagainst Kapoorandothers.12 OnMay2,2019,Kapoor wasconvictedofviolating18U.S.C.1962(d)byengagingin aracketeeringconspiracy.13 OnJanuary23,2020, Kapoorwassentencedto 66monthsin prison,threeyearsofsupervisedrelease, andissuedafineand forfeiture.14 OnAugust25, 2021,theFirstCircuit affirmedtheconviction. TheSupremeCourt denied Kapoor’spetition

forawrit ofcertiorari.15 PursuanttoitsbylawsandtheIndemnityAgreement,Insysmademorethan$6million inAdvancementstoKapoor’scriminaldefense counselandtheirvendorsduringtheDOJ

10D.I.42at14andEx.7. 11UnitedStatesv.Babichetal.,No.1:16-cr-10343-ADB(D.Mass.),D.I.183. 12Id.,D.I.419. 13AmendedComplaint,¶60. 14D.I.42,Ex.4(KapoorJudgment). 15SeegenerallyUnitedStatesv.Simonetal.,12F.4th1(1stCir.2021),cert.deniedsubnom.Kapoor v.UnitedStates,142S.Ct.2811(2022),andcert.deniedsubnom.Leev.UnitedStates,142S.Ct. 2812(2022). InvestigationandtheCriminalAction.16 TheTrusteenowseekstorecovertheAdvancements pursuant totheprovisionsofboththeDGCL,Insys’bylaws,andtheIndemnityAgreement, thatprovidethatKapoor isnot entitledtoindemnificationbecauseofhisconviction.17 JURISDICTIONAND VENUE ThisCourthasstatutoryjurisdictionoverthisadversaryproceedingpursuantto28 U.S.C.§1334(b)and28 U.S.C.§157(b)(2)(H)and(O). Venueisproperpursuantto28

U.S.C.§1409(a). Becausethemotionbeforemeseeksjudgmentonaclaimthatarisessolely understate lawthisCourtdoesnothaveconstitutional jurisdictiontoenterafinaljudgmentunlessthe partiesconsent. Stern v. Marshall,564U.S.462,469,494-95(2011);Granfinancierav. Nordberg,492U.S.33,56(1989). Kapoordoesnotconsent. Accordingly,andasnoted above,thisOpinionisnotafinaljudgment butinsteadconstitutestheCourt’sproposed findingsoffactand conclusionsoflaw. ANALYSIS Summary judgment is proper if the movant shows “there is no genuine dispute asto anymaterialfactandthemovantisentitledtojudgmentasamatteroflaw.” Fed.R.Civ.P.56;

Fed.R.Bankr.P.7056;seealsoCelotexCorp.v.Catrett,477U.S.317(1986). Agenuine disputeof material fact exists only if a reasonable trier of fact could enter a verdict in favor of thenonmovingparty. Andersonv.LibertyLobby,Inc.,477U.S.242,252(1986). TheCourt’sroleisto “determine whether there is a genuine issue for trial.” Id. at 249. In

16D.I.42at10andEx.7(HousleyDeclaration). Kapoorhasmovedtostrikeparagraph13ofthe HousleyDeclaration,inwhichMs.HousleytestifiesthattheAdvancementsweremadeforservices renderedonbehalfofKapoorandnotonbehalfofInsys. D.I.66. AsIdonotrelyonparagraph13in resolvingtheMotion,IwilldenytheMotiontoStrikeasmoot. 17TheComplaintalsoassertsclaimsforavoidanceoftheAdvancementsundertheBankruptcyCode, buttheTrusteehasindicatedthatifitissuccessfulonthisMotion,whichseeksjudgmentonits commonlawclaims,itwilllikelydismisstheremainderoftheComplaint. deciding a motion forsummary judgment, the Court must construe the facts and inferences in a light most favorable tothe non-moving party. Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986).When a movant’s evidence demonstrates the lack of a genuine issue of material fact, the burdenshiftstotheopposingpartytodemonstratetheexistenceofa genuineissuefortrial. Celotex,477U.S.at327. Thescopeof Delawarestatutorylawregardingthe indemnificationofcorporate

officers anddirectorswasbestoutlinedbyViceChancellorGlasscockinHermelinv.K-V Pharm.Co.: Delawarestatutorylawis largelyenablingwithrespecttotheindemnification rightsofcorporateofficersanddirectors.The[DGCL]setstwoboundariesfor indemnification:Thestatuterequiresacorporationtoindemnifyaperson who wasmadeapartytoaproceedingbyreasonofhis servicetothe corporation andhasachievedsuccess onthemeritsorotherwiseinthatproceeding.Atthe otherendofthespectrum,thestatuteprohibitsacorporationfrom indemnifyingacorporate officialwhowasnotsuccessfulintheunderlying proceeding andhasacted,essentially,inbadfaith. 54A.3d1093,1094-95(Del.Ch.2012). TheTrustee arguesthat underDelawarelaw, Insys bylaws,andthe Indemnity Agreement,Kapoorisnotentitledtobeindemnifiedinconnectionwiththe DOJ Investigation ortheCriminalActionbecauseofhisfinal,non-appealable criminalconviction. Specifically, hearguesthatbothSection145(a)oftheDGCLandtheIndemnityAgreementprohibit indemnificationwheretheindemniteewasnotsuccessfulintheunderlying proceeding andhas actedinbadfaith.TheTrusteecontendsthatKapoor’sconvictionsatisfiestheserequirements, pointingtoboththefactthatKapoorwasfoundguiltyonallchargesattrial andthejury’s findingsthatKapoordeliberatelyviolatedthelaw, whichheassertsareincompatiblewiththe suggestionthatKapooractedingoodfaith.18 18D.I.42at12-13. Kapoormakesseveralargumentsinanattempttoestablishthattherearegenuineissues ofmaterialfactthatprecludetheentryofsummaryjudgmentintheTrustee’sfavor. First,he arguesthathisconvictiondoesnotconclusivelyprovethatheisnot entitledtoatleastpartial indemnificationbecause theindictmentonwhichhewasconvictedcontainedfewercharges thantheoriginalindictmentagainsthim. Inother words,Kapoor argueshewassuccessful withrespecttothechargescontainedintheFirst SupersedingIndictmentthatwerenot includedintheSecondSupersedingIndictment.19 I disagree.

Insupportofhisposition,KapoorreliesontheholdinginMerritt-Chapman&Scott Corp.v.Wolfson,321A.2d138,140-41(Del.Super.1974),wheretheCourtfoundthat claimantswere“successful”andentitledtopartial indemnificationwithrespecttofees incurredinconnectionwithchargesdismissedas partofapleadeal. InMerritt,thefour claimantswerecharged withparticipatinginaplantocausetheiremployertosecretly purchasehundredsofthousandsofsharesofitsowncommonstock.Id.at 140. The indictmentcontainedseveralcounts. Followingthefirsttrial,thejuryreturnedguiltyverdicts onallchargesagainstall claimants,buttheconvictionswerereversedonappeal. Id. Someof thechargeswereretried, withthejuryacquittingononecount,findingdefendantsguiltyon

another,and reachingno agreementontheremainingcounts. Thecharges were eventually settledbypleaagreement,withsomechargesdroppedinexchange.

19TheSupersedingIndictmentchargedKapoorwithmailfraudconspiracy,wirefraudconspiracy, conspiracytoviolatetheAnti-KickbackStatute,andracketeeringconspiracywithpredicatesincluding mailfraud,wirefraud,honestservicesmailandwirefraud,violationsoftheTravelAct,andviolations oftheControlledSubstancesAct.UnitedStatesv.Babichetal.,No.1:16-cr-10343-ADB(D.Mass.), D.I.183. TheSecondSupersedingIndictmentchargedKapoorwithasinglecountofracketeering conspiracy,whichincludedaspredicatesmailandwirefraud,honestservicesmailandwirefraud,and violationsoftheControlledSubstancesAct.UnitedStatesv.Babichetal.,No.1:16-cr-10343-ADB(D. Mass.),D.I.419. Inopposingclaimants’indemnification,thecompanyinMerrittarguedthat theDGCL “requiresindemnificationonlywheretherehasbeenvindicationbyafindingorconcessionof innocence[,]” andthatbecausethe chargesagainst claimantsweredropped forpractical reasons,notbecauseoftheirinnocence,andinlightoftheconspiracy chargedinthe indictment,“thejudgmentofacquittaloncountfouraloneisnotvindication.” Id.at141. The Court disagreed,stating:

In acriminalaction,any resultotherthanconvictionmustbeconsidered success.Goingbehindtheresult,asMCSattempts,isneitherauthorizedby subsection(c)norconsistent withthepresumptionofinnocence. Thestatute doesnotrequire completesuccess. Itprovidesfor indemnificationtotheextent ofsuccess"indefenseof anyclaim,issueormatter"inanaction.Claimantsare thereforeentitledtopartialindemnificationifsuccessfulonacountof an indictment,whichisanindependentcriminalcharge,evenifunsuccessfulon another,relatedcount. Id.at141(emphasisadded). Thiscaseisdistinguishablefortworeasons. First,unliketheclaimantsinMerritt, Kapoorwasconvictedon theentiretyofthe chargesintheindictmentonwhichhewastried. Therewereno countson whichhewas foundnotguiltyorenteredaplea. Second,inrelying ontheoriginalindictmenttodemonstratehispurported“success,”Kapoor asksmetolook beyondtheresult ofthe CriminalActionintothecircumstancesofhowitcametobe. Butthis isexactlythetypeofinquirythattheMerrittCourtcautionedagainst. Thisprohibitiononlookingbehindtheresultoftheunderlyingactionwasreiteratedin thesecondcaseKapoorrelieson,Waltuchv.ConticommodityServs.,Inc.88 F.3d 87, 96 (2d Cir. 1996). KapoorcitestoWaltuchforthepropositionthat“‘success’under§145(c),does notmeanmoralexoneration. Escapefromanadversejudgmentorotherdetriment,for whatever reason,isdeterminative.” Id. WhileKapooriscorrectonthispoint,itdoesnotlead totheconclusionthathe shouldbeindemnifiedhere.The claimantinWaltuchappealedthe districtcourt’sdenialof hisrequestforindemnificationonthegroundsthathewasnot “‘successful onthemeritsorotherwise,’because[thecompany’s]settlementpaymentstothe plaintiffswerepartiallyonWaltuch'sbehalf.” Id. at89. Applyingthestandardsetforthin Merrittandrefusingto“gobehindtheresult,”the SecondCircuitreversed andheldthatthe dismissalofthesuitwithoutpaymentbyWaltuch constitutedthe“success” contemplatedby Section145. Indoingso,theCourtexpandedontheMerrittCourt’sobservationsregarding

whatconstitutes“success”forpurposesofSection 145: TheagentsinMerritt renderedconsideration--theirguiltypleaononecount--to achievethedismissaloftheothercounts.The courtconsideredthesedismissals both"success"and(therefore)"vindication,"and refusedto"go[]behindthe result"ortoappraisethe reasonforthesuccess. In equating"success"with "vindication,"thecourtthusrejectedthemoreexpansiveviewofvindication urgedbythecorporation. UnderMerritt'sholding,then,vindication,when used asasynonymfor"success"under§145(c),doesnotmeanmoralexoneration. Escapefromanadversejudgmentorotherdetriment,forwhateverreason,is determinative.AccordingtoMerritt,theonlyquestionacourtmayaskis whattheresultwas,not whyitwas. Id.at96(emphasisadded). WhiletheclaimantinWaltuchbenefitedfromthisresults-centeredapproachto determiningwhatconstitutes“success,”theapproachappliesevenwhendoingsois detrimentaltotheclaimant. Here,the resultofboththeDOJ InvestigationandtheCriminal ActionwasthatKapoor wasconvictedby ajury onallchargesintheindictmentonwhichhe wastried. Hedidnotescapefrom anadversejudgmentbutwassentencedtoprisonandfined. Thatisnot asuccess. Howthatresultcametobeisirrelevant. Kapoorcitestonothinginsupportofhispositionthatasupersedingindictmentisthe legalequivalentof anacquittalorformaldismissalofchargesagainstacriminaldefendant, insteadrelyingonlyonthecorporatedisputeinMayv.Bigmar,Inc.,838A.2d285,290(Del. Ch.2003),aff'd,854A.2d1158(Del.2004) forhisassertionthat heshouldbeconsidered partiallysuccessful. There,inalitigationinvolvingtheproprietyofcertain corporateactions undertheDGCL,the courtintheunderlyingactionheldintheclaimant’sfavorononeissue (holdingthattheboardmeetingwasvalidlyconvened)butagainstheronthesecond(holding thatthewrittenconsentestablishinghervotingpowerwasnot legallyeffective). Whilethe impactofthelitigationwasthatclaimantlostcontrolofthecompany(anundesiredand thereforeunsuccessfuloutcomefromherperspective),claimantwasneverthelessentitledto

partialindemnificationbecauseshewassuccessfulononeoftheclaimsassertedinthesuit. Thesamecannotbesaid here. KapoornextarguesthattheTrusteeisnotentitled tosummaryjudgmentbecausehe hasfailedtosubmitsufficientevidencethatallthe feesincurredbyKapoor were forwork performedin connection withtheCriminalAction. Specifically,Kapoorarguesthatthe Trustee’sassertionsthattheAdvancementswerenotindemnifiablearebasedsolelyonthefact thatpaymentsweremade tothelawfirmsandvendorsinvolvedindefendingtheCriminal Actionwithoutanyanalysisoftheactualworkperformed,whichhecontendsisaninsufficient basisforsummaryjudgment. Iamnotpersuaded. Theengagementlettersthat Kapoorexecuted withPaulWeissandRopes &Grayeach

providethatthefirmswereretainedtorepresentonlyKapoorandhiscompanyEJFinancial Enterprises,Inc.,inconnectionwithonlytheCriminalAction.20 Theseletters,alongwiththe firms’invoices,21 aresufficientevidencetoestablishthatthefeesincurred werefor work performedin connection withKapoor’sdefenseintheDOJInvestigationandtheCriminal Action. TheburdenthereforeshiftstoKapoorto establishtheexistenceof agenuineissueof materialfactthatwouldprecludesummaryjudgment. Giulianov.WorldFuelServs.(Inre

20D.I.81,Exs.AandB. 21SeeD.I.64,65,and70. Evergreen Int'lAviation, Inc.),2018Bankr. LEXIS2540,at*6-7(Bankr. D.Del.Aug.22, 2018)(“Onceamovantpresentssufficientproofinsupportofthemotion,theburdenshiftsto thenonmovingpartytoshowthatgenuineissues ofmaterialfactstillexistandthatsummary judgmentisnotappropriate.”) (internalquotationsomitted). Hehasnotdoneso. WhileKapoor arguesthat entriesonthelawfirms’invoicesdemonstratethathis counselwasworkingonmattersotherthantheCriminalAction,includingsomethathe

contendswerefor Insys’ benefit,22 IdisagreethattheseentrieshavethesignificanceKapoor assignstothem. Thefact thatKapoor’sdefenseattorneysreviewedfilingsinthecivilcasesor consultedwithcompany counseldoesnothingtodemonstratethatthework wasnotfor Kapoor’sbenefit. Itisnotatallunusualinsubstantialmattersinvolvinglargecorporations andmultiplesimultaneouslawsuitsforcounselin onemattertocommunicatewithoreven strategizewithcounselworkingonrelatedmatters (whether representingthesameclientas wellorotherco-defendantsoreventhecompany) forpurposesofinforminghowtobest representtheirclient. Unlessthelawfirmhasbeenengagedtorepresenttheclientinmultiple matters,suchworkisproperlyconsideredpart and parcelofasinglematter. Theinvoice entriesthatKapoorhashighlightedarenotenoughtoestablishthatthiswasnotthecasehere.

22Seee.g., Knights Aff.,D.I.63,Ex. 8 (Paul Weiss invoices containing narratives such as “Review of letter to NJ Division ofConsumer Affairs”; “Order to show cause regarding NJ matter”; “Finding public documents forIllinoisAGsuit”;and“Callswith...FrancDelFosse...re:lawsuitbyIllinois OfficeoftheAttorneyGeneral”);Id.,Ex.4(Ropes&Grayinvoicescontainingnarrativessuchas“edit memodiscussing...inN.J.civilcase”;and“obtainselecteddocuments...inNJAGmatterfor review”);id,Ex.3(emailbetweenPaulWeissattorneys,Insys’s outside counsel, and Franc del Fosse, Insys’s in-house counsel, in which Paul WeissattorneysflagdocumentsforInsysattorneys toreviewpriortomeetingwithDOJ); id.,Ex. 10 (email with Insys in-house counsel inviting Paul Weiss attorneys to join call regardingInsys’s business strategy);id., Ex. 11 (email with Insys in- house counsel asking PaulWeissattorneystoreviewInsys’ssubmissionofawhitepapertotheFDA); id.,Ex.12(emailfromPaulWeissattorneytoInsysin-housecounselprovidingestimatedcostforlegal workand stating that work primarily involved “participating in strategy discussions about how to achieve a settlement for the company with the U.S. Attorney’s Office, providing advice about corporate changes, and providing advice about media tactics and strategies”) (emphasis added). Giuliano v. World Fuel Servs. (In re Evergreen Int'l Aviation, Inc.), 2018 Bankr. LEXIS 2540, at *6-7 (To establish a genuine issue of material fact “[t]here must be sufficient evidence upon which a reasonable trier of fact could return a verdict in favor of the nonmoving party.”). Similarly, Kapoor submitted no evidence in support of his argument that the Trustee cannot recoup fees incurred prior to the Second Superseding Indictment. Kapoor contends that work performed before the charges were altered cannot be related to the charge on which he was convicted but relies only on the dates of the indictments in doing so. This is not enough. The modifications made to the charges against Kapoor were not of such a nature that work performed prior to the Second Superseding Indictment would have had no value to Kapoor’s ultimate defense.”? For these reasons, it is recommended that the Motion be granted and summary judgment on Count VI of the Amended Complaint be entered in the amount of $5,973,078.96.74

Dated: August 17, 2023 Cc ~f f , JOHN T. DORSEY, U.S.B.J.

For the same reason, I reject Kapoor’s argument that in relying only on the conviction the Trustee has not established that Kapoor had a non-indemnifiable state of mind with respect to all the Advancements the Trustee seeks to recoup. Kapoor simply contends that “Kapoor’s attorneys performed work ona whole host of issues and on a variety of matters” and that “his criminal conviction provides no evidence of a non-indemnifiable state of mind with respect to that work,” but he offers nothing in support of that contention. This amount reflects the $6,005,886.91 initially identified by the Trustee less $32,807.95 inadvertently included in that initial amount. See D.I. 42 at 17-18 and D.I. 70 at n.10. 11

District/Off: 0311−1 User: admin Date Created: 8/17/2023 Case: 21−50557−JTD Form ID: pdfgen Total: 9 Recipients of Notice of Electronic Filing: aty Mark T. Knights mknights@nixonpeabody.com aty Matthew O Talmo mtalmo@mnat.com aty Michael William McDermott mmcdermott@bergerharris.com aty Peter C McGivney pmcgivney@bergerharris.com TOTAL: 4 Recipients submitted to the BNC (Bankruptcy Noticing Center): dft John N. Kapoor Register Number: 82262−408 FPC Duluth Federal Prison Camp P.O. Box 1000 Duluth, MN 55814 aty Brian T Kelly Nixon Peabody LLP Exchange Place 53 State Street Boston, MA 02109 aty Richard C. Pedone Nixon Peabody LLP Exchange Place 53 State Street Boston, MA 02109−2835 ust U.S. Trustee Office of the United States Trustee J. Caleb Boggs Federal Building 844 King Street, Suite 2207 Lockbox 35 Wilmington, DE 19801 ust U.S. Trustee Office of United States Trustee J. Caleb Boggs Federal Building 844 King Street, Suite 2207 Lockbox 35 Wilmington, DE 19899−0035 TOTAL: 5 District of Delaware In Re: Bankruptcy Case No.: 19−11292−JTD Insys Therapeutics, Inc. Debtor Bankruptcy Chapter: 11 __________________________________________ Insys Liquidation Trust Plaintiff Adv. Proc. No.: 21−50557−JTD vs. John N. Kapoor Defendant NOTICE OF PROPOSED FINDINGS AND CONCLUSIONS Please take notice that the Honorable John T. Dorsey , U.S. Bankruptcy Judge, has filed the enclosed proposed findings of fact and conclusions of law in this matter. Rule 9033(b) of the Federal Rules of Bankruptcy Procedure provides: Within 14 days after being served with a copy of the proposed findings of fact and conclusions of law a party may serve and file with the clerk written objections which identify the specific proposed findings or conclusions objected to and state the grounds for such objection. A party may respond to another party's objections within 14 days after being served with a copy thereof. A party objecting to the bankruptcy judge's proposed findings or conclusions shall arrange promptly for the transcription of the record, or such portions of it as all parties may agree upon or the bankruptcy judge deems sufficient, unless the district judge otherwise directs. Following the objection period and the filing of the transcript if one is required, the clerk will transmit the proposed findings and conclusions together with any timely filed objections and transcripts to the district court. Objections should be electronically filed using "Objection to Proposed Findings of Fact/Conclusions of Law" event in the "Other" menu option under "Adversary" or "Bankruptcy", whichever is appropriate. Una O'Boyle CLERK OF COURT Date: 8/17/23 (VAN−488) District/Off: 0311−1 User: admin Date Created: 8/17/2023 Case: 21−50557−JTD Form ID: van488 Total: 9 Recipients of Notice of Electronic Filing: aty Mark T. Knights mknights@nixonpeabody.com aty Matthew O Talmo mtalmo@mnat.com aty Michael William McDermott mmcdermott@bergerharris.com aty Peter C McGivney pmcgivney@bergerharris.com TOTAL: 4 Recipients submitted to the BNC (Bankruptcy Noticing Center): dft John N. Kapoor Register Number: 82262−408 FPC Duluth Federal Prison Camp P.O. Box 1000 Duluth, MN 55814 aty Brian T Kelly Nixon Peabody LLP Exchange Place 53 State Street Boston, MA 02109 aty Richard C. Pedone Nixon Peabody LLP Exchange Place 53 State Street Boston, MA 02109−2835 ust U.S. Trustee Office of the United States Trustee J. Caleb Boggs Federal Building 844 King Street, Suite 2207 Lockbox 35 Wilmington, DE 19801 ust U.S. Trustee Office of United States Trustee J. Caleb Boggs Federal Building 844 King Street, Suite 2207 Lockbox 35 Wilmington, DE 19899−0035 TOTAL: 5