KServicing is in post-confirmation wind-down, with the confirmed liquidation plan already effective and the estate’s current value path centered on claims administration and litigation recoveries rather than an operating restructuring. The debtor entered chapter 11 after the American Express transaction left the legacy Kabbage estate with the PPP servicing platform, a large PPP loan portfolio, regulatory exposure, partner-bank disputes, and limited unrestricted cash; the Rieger-Paganis first-day declarationDkt. 13 describes the retained portfolio as roughly $1.3 billion of PPP loans plus about $17 million of legacy small-business loans, alongside DOJ investigations, SBA and partner-bank issues, and only about $11 million of unrestricted cash.
The case moved quickly onto a liquidation track. Kabbage filed an amended joint chapter 11 liquidation planDkt. 453 in January 2023, and the court confirmed that plan on March 15, 2023 through the confirmation orderDkt. 680. By the first quarter of 2026, the post-confirmation estate reported that the plan had become effective on June 20, 2023, no final decree had been entered, and Jeremiah Foster was serving as wind-down officer; the post-confirmation report for quarter ended March 31, 2026Dkt. 1202 reported $694,576 of cash disbursements for the quarter, $16.4 million of cumulative transfers since the effective date, and no distributions yet on roughly $246.8 million of allowed general unsecured claims.
The active story is now litigation. In October 2025, the wind-down entity filed adversary complaints against American Express-related entities and against former officers, directors, and shareholders; the D&O and shareholder complaintDkt. 1 alleges fiduciary-duty and fraudulent-transfer claims tied to PPP compliance, the American Express merger structure, and merger consideration paid to insiders and shareholders. Recent docket activity is procedural around those adversary proceedings: defendants sought to seal merger and transition-services materials in the motion to file exhibits under sealDkt. 110, the related May 12, 2026 hearing was cancelled by the notice of agenda matters not going forwardDkt. 1203, and the main case’s latest filing is a counsel-withdrawal notice for the post-confirmation debtor’s team, with Morris James and Perkins Coie continuing as counsel through the wind-down.
