then we would ask for your argument done so here because there are some issues that trouble was they would like to discuss with you in the context of doing so at least give you an idea of what is going through our minds rather than have some ford or entered at some point with no explanation and you're sitting there scratching your head as to why so with that let us begin this morning with  are you are likely to succeed whether there is a workable injury to you absent the stag and whether the other parties if you stay is given would be injured and what is the public interest and in large measure you want to see is focusing on steps one and four it seems and maybe you or your opposing counsel can correct us if i got this incorrect it seems in terms of there's a few steps that normally you go through without even necessarily reaching the issue of beginner player three sixty three f three sixty three d and three sixty five h first up is obviously circa one you did have a proposed sale free and clear of lanes are common source so somebody has to propose that step two is there an interest in the property to be sold that isn't titled the three sixty five h protection so is there an interest remember there the burden would be on you the party asserting the interest under three sixty five p to show the priority the validity and the extent of bad interest so you're still questions on that if you meet step two step three seems to be the debtor must show that there's a bona fide dispute with respect to the lease because they're claiming that they're entitled to some pretty clear there are three sixty three f adequate protection as is required is a condition under the statute for it to be triggered where is that record but i'd have to double check but i believe when we responded on the sunday before the hearing in january which i guess would have been the fourth of a theft we as as the record indicates who seemed to be better just on the bus reply late in the evening on the friday following january first of week that's a little bit slower in any event at by ten for two in the evening that's come up a couple times we provide the e s a did for our papers by that sunday night and i believe that in that document we at least i isn't under the statute and that's why the question's been asked in the context of the sale was it requested and it's not clear that it was as of the sixty million dollars my question is a sixty million dollars figure comes from the fact situation where we didn't have the opportunity to address a lot of these issues we heard on a friday after the holidays a couple of weeks that they were going to raise the sixty three for the first time well actually that in your case they raised at we kind of put that off for the time being but they never raised and yes for sure what's critical about that is that judge birds didn't fight anything with regard to ideate about a bona fide biscuit she found things about the energy company she found before the filing that is from your ass from me that or that says we were there just so you know we don't think it was a lease this is a management agreement we tapped at the complaint why is it fair for the district court to look at the complaint it's three sixty three  and i would take issue with that i think the prayer for relief in a declaratory judgment count is exactly what one would expect for a party seeking a declaratory judgment here but the problem is when you have a receipt here and you you look at page fifty six of the lease this is nothing contained in this we shall be deemed a construed as creating the relationship partnership a joint venture between the parties for two it being understood and agreed that neither the method of computing red shall be deemed to create any relationship between the parties other than that of landlord yes sure and that may be a relevant provision as to the resolution of the bona fide dispute as to whether this was a real lease remember the question before the bankruptcy court which the district court then reviewed was not question is good because it goes right to the heart of that and that is section twenty one twelve says expressly that those things were not they've been done to change the relationship do would suggest that that is not sufficient to eliminate the possibility of a bona fide dispute here where again the creditor judgment action by the appellants constitutionally concerned they would have made a discount one rather than count six during it let me beg i don't think there seem to be in their minds a whole lot of dispute as to your concern as to whether this was a lease it was called a lease agreement  district courts for abuse of discretion who is then in turn reviewing the bankruptcy court for abuse of discretion so did a district court abused its discretion by not finding that it was likely that the bankruptcy court abused its discretion so we're dealing with a very the existence of this credit where judgment action i gave some objective basis to the bankruptcy court decision so that that leaves us reviewing whether as it seems you now are given to us  f we were applying as well as adequate protection on the merits you have the burden yes as should the resolution of whether we prevail on that dispute and again that is a separate question than what judge amanda was looking for the objective indicator of which is is this a real dispute this was not a trumped up dispute that was created in the context of this motion to try and give us a basis to selfing clear this is a real dispute that preexisted independent of that and was her ruling she was trying to find out from mr schechter and some others you know what evidence there was of a lease and she said you've given me something that eighty percent of it's redacted cetera but she comes back and it sounds like based on that aspect going on even as soon as the last hour i've gone back and forth this is during her recess so she's really concerned about this my question really was in my mind whether there is a sure enough to convince me that there was a bona fide dispute  i appreciate what she was under but my first question i guess is was time really the essence of jen wait wait and we still haven't closed on february sixth well if you're on when ever the sale order was to be honest about it was ready to close the next minute the debt would have been happy to have done so because we would like when i went through this in your position i can remember one time we closed you had to prove friday night at five o'clock and we closed by two o'clock in the morning on saturday morning correct we didn't have  first that we the buyer has that thirty day window that is their contractual right and we had to get the clocks ticking how about if i could back up just and i want to address all the courts questions but one thing to put this in context as it does go to the time sensitivity on this case was filed favor chapter seven trustee having to i guess pull the tv's off the wall and start selling them on the lawn and you know the ability when the willingness of that lender to continue to lead months and months and months longer than originally anticipate his her how do you address the fact that if the sale proceeds there will be assets collected but that there is not a strong likelihood they'll be any assets to a agreement i believe between the committee and defender as to which ones the lenders will or will not waive their deficiencies claims in but the employees actions the bankruptcy avoidance actions i believe will be available up front your creditors but in court said in the southern district of new york which is look if you can't really give them much of anything and it's hard to value their interest in any event here's the simple answer that the data protection is t reconcile ability of three sixty three f and three sixty five age group that more articulate way of saying what i what i was trying to say so we have to look i think in the context here and i think property if they qualify they certainly have an interest in the property and if there's not adequate protection provided monetary only i threw that three sixty three f and and e right and possession is is what's required right here your honor if we look at their interest in the property is a right to possess a shuttered closed building that is not operating that has potentially no power if you look at the scenario this goes to the bouncer arms which i would submit the balancing of the hans is something that the district court has the discretion to do and that's also reviewed for abuse of discretion if there is no sale it balancing his harms i think i would have counted had they done it at that court that they had filed a motion for temporary restraining order seeking to retain possession of the property making all these allegations back in september right after the property closed and from then until today none of those regulatory approvals really the things they said they were going to do have been secured but that was not presented sinister of course he was not given the opportunity to waive that and exercising his discretion as the balance in which  date that's kind of us exercise that you pick a date you value it and you say ok this is what their interest was here where you're trying to determine what it is that you're going to protect i think that adequate protection has to be judged in that context and i understand it's different than in other countries but at the time that we're actually dealing with making that determination so when they asked brad to protect adequate protection i think in this data petition date of sale when court date of form of this possession or whatever you might call i think as we're trying to figure out when what the date is objection whatever yet is sure and i guess my answer would be in this unique factual circumstance when you're dealing with possession and not say value no money when you're dealing with possession i think it has to be as of the date that you're judging that adequate assurance because you have to give them the dibble equivalent of what they have at that point unlike a number on a doing is trying to give them the into little quibbling over right of possession and that quite a position i think is can't be meaningfully valued as a past state of affairs that's no longer exists now obviously if there were a factual side which i would suggest this certainly is not where the deadest took some action with a specific intent some malevolent intent to target a particular creditor that may be something that they courts equable power could address here really is the economic that drove this closing let's go back to disregard the factors for the moment you've got a bankruptcy judge you said just before coming on the bench i'm going back and forth close decision yes or very close  same judge noone use the same language he says but it can't necessarily be fifty percent in the reno case because if you've got a show that you're going to win just to get a chance to show that you're going to win it doesn't make any sense basically paraphrase what the supreme court had said you need a strong showing of the likelihood of success yes this is from coarse language and that's what we we adopted and josh others opinion but why not take the next step and showing of of a possible probability we're likely to success you get to the next step you get the prove your point if you get beyond the other three reasons they don't in the state factor analysis and i think that's five three zero nine f third ninety five and he talks about this on pages one hundred she one hundred two and it basically ends up on page one or two of the likelihood of more than fifty percent this first factor tilts in their favor that's my my view now but the thing that really helps you it would seem is the brass factor the public interest and basically we're talking if this place reopens sounds like we're talking about a significant downsizing based on what i've seen it is obviously not within our control and so we would be speculating it's certainly going to be far more than there are now i could not promise t are being shuttered so any amount of activity that is brought back that is going to help this issue will be bigger than all of this yes or any you know i think the buyers council at the state hearing before judge middle made a point that public interest standard is so often thought of his i guess a throwaway that just kind of gets thrown out to be end in this case the public interest requirement is really implicated here is extremely important and it does also i would submit tie into the balancing of the arms the second prong that there is a reparable harm to them if we don't stay pending for the determination of this tension this people think exist between three sixty five and three sixty three but if we look at how judge sim mandel analyze that i think there is raised in in his approach which is if we look at what they get if they win it and if the sale does not go forward that i just i think you're right they they might not get anything the consequences of that but that the actual a p a the the agreement that both the buyer and seller who were willing to enter into did not provide for a you touch on a very important issue which is the scope of the state the state as it exists today as entered by this court actually would give the buyer a very strong argument that revel had failed to meet its condition precedent to close because the state as it exists today push its sell and if we are not in a position to consummate the sale by monday and if that is the fault of reading because we failed to secure the necessary approval because we have a s the reality that we face or selves it is if the stain of this language diff this provision is important to the buyer they would have the option of walking away and leaving behind a ten million dollars posit if the state were the more narrow as they say is that we're not in breach of the contract they would have to give up their ten million died of that if they walked away at that point so you're saying that whether it's a full say and you your client would not have to meet its condition precedent or didn't a partial stay where you have reason to important group the stars you were concerned as far as the buy was concerned sound to me like they were mr separate corners i do know that the buyer is very concerned about these parties as well is very important they have the ability to control who's in his property because he sees it and i'm going beyond what he said it the writer but i'm just trying to answer your question he sees it as interfering with his ability to how he wants to bring the property you know as a way to deal with that you it was probably what a couple years ago was but you know what two point five billion years or in fact i heard council talk about the sixty million dollar cost if there's one thing revel has taught us is that what it costs bears no relationship to what it's worth this building was opportunity for this to return to a functioning and productive asset and our fear is having all these efforts to try and sell this property over all of these months if we don't succeed this time and yet just as i am speculating astute certainty  yes and we tried hard to get them to not walk and now think about how to sell when two parties have walked away from it the court would modify the stay and they would walk away from it because two parties have chosen rock away from this property just think the lack of funding and the difficulty of the sale having tried for so long meets us with a very real risk which is not just a risk to the debtors not just to reassure creditor constituencies but also to see the lake city the state of new jersey that this huge potentially valuable asset just becomes and guess the point is that it was valuable it was perceived as valuable you put three billion at it one point was worth about two point five billion at this point and once it other than for a song and someone satisfied and we then need to look at the question of adequate protection what has been laid out for us suggests that without possession i that there are no meaningful dollars that would be available to satisfy three sixty three need to provide adequate protection were for this lease holder then aren't we left with a sale that on its face would be unlawful under the bankruptcy code because it doesn't satisfy three sixty three after that i would respectfully suggest trying to in the scenario that you laid out if we assume those things to be true you would be in a scenario where one other factor which the likelihood of success on the merits waiting favor of a stay and the question before this court would be to look at the district court's decision and adequate protection point adequate protection isn't even mentions much less any findings need at the bankruptcy court level and then when that goes before the district court that the district court recognizes that that by making a finding as to three sixty three after the bankruptcy court must've been considering three sixty three a although it's not mentioned when that's all we had before us and we're reviewing for abuse of discretion how could we say that that was not an abuse of discretion in which required as far as findings under the bankruptcy code i think there are two things if i could your recitation of the bankruptcy courts finding well i certainly appreciate several things you said i think there there were she did say a bit more and i will acknowledge she did not specifically reference this particular appellant when she did say to her remember that time she was dealing with not the parties she did come back and she did make findings based on the pleadings filed by the many tenants she did make findings based on statements that are certain her experience in other related  bona fide nature of the dispute if there is sufficient evidence in the record that something for the court to judge by to support a finding that there was a bona fide dispute to apply under three see i'm sure i'm not suggesting should i was just trying to answer judge ambush question about whether she did give any thought to any of this issue more just for the context of judge burgess decision making process i do acknowledge that the specific examples she of what needs to be required down under three sixty three f for court must make a determination not that it exists that such interest isn't bona fide to dispute your honor i would offer an alternative dispute she doesn't need to determine that the debtors are correct in this lease really is a joint venture management agreement she just needs to determine whether the dispute exists now she was speaking more generally with regard to all parties not just this one party but that's how i minute for at least the other part it's not so much necessarily ideate as it was brought up last fall but with respect to the other parties that on friday night late friday night january to you now say that you've got a three sixty five f work and that works like a tactic your honor i think the fact that the disputes existed months earlier and was embodied in a pleading filed by them not by me shows that it is not a tactic the reason that issue came up late is that is that that's the only thing the judge so we have over relied on the right but i think that that is an excellent objective indicator of the existence of a bona fide dispute to hold that that alone would be factors that satisfy the statute if you go to court and you follow declaratory judgment seeking judicial resolution of an issue you are i did submit affirmatively alleging subject to rule eleven that there is a dispute as to that issue that is an element of aside and still allow the allow the other factors to the answer is that it i would submit it was it would be within the district court's discretion to balance those factors and if you had one factor weighing in favor or strongly in favor of a stay the the the  district court has to weigh those factors and determine whether true impose a state or not and if we assume that one out of four factors favors a stay and two or three of the factors was against the st in granting that order under your hypothetical scenario and then we look at three sixty three m which speaks about what the consequences are of a cell closing on the basis of a order that was an error and congress made the decision in adopting the statute that you know in balance in its own competing interests that the finality of the sale would trump the fact that mistakes might be may well and we get into just issues at that point yes for that and if we're really looking at a sale that is going to take place and address the merits under those circumstances if you had a situation where the sale order was plainly and in error in the terms of the bankruptcy code because you're out of the standard the district court is required to apply i believe that at least the overwhelming majority of the law on this issue in the circuit speaks to how the multi pronged nature of the analysis assume that the other three factors there's nothing i thought that that was the deciding factor as this is as they are hurt the record label if they don't get a chance to deal with the merits of an issue but for the purposes of this assumption they're likely to win and back around and what do we do moving from from that hypothetical to what we have here with or no simply didn't indeed at either level that particular dispute as to whether or not it the debtors would be likely to prevail and on that issue with regard to adequate assurance i think with the court the district court did is it looked at the alleged possess against this judge we are asking for adequate protection i think i can speak as to what they may have included in their papers i did was that so hearing my recollection is adequate protection was not mentioned by any of the parties at the sa misrepresent you can refer us to the provision of the a p a that you were talking about previously that shows that you get your ten million if there is a certain type of limits but not if there is  submit that to predict there should be no state however yes the language that would as for our position that if the buyer chose to walk we could retain the ten million dollar deposit i would have to be clear that the sale could proceed and didn't talk about the only part that would be accept that not surprisingly was the buyer truly ended up back in court on thursday the judge was sort of face which iraq a hard place because the buyer wouldn't remove that lot more certainty here to know what's going to happen with this property never got it and i think he made the judgment that notwithstanding that this was you know this is all we had to go forward with and so we're going to go forward with it but i don't think there was any record was allowed to reopen and we could reopen the people by the way that they would have every interest to do it as quickly as possible to catch the upcoming summer season so the reality is that if that's a public the reason we had to move was because we had rights on a three sixty five and for example immediately when be better shut down the rotation in early september we root for the quarter under actually district court to conclude that there's a bonafide tissue that puts us into looking at adequate protection and i don't see the transcript of the january fifth hearing among the exhibits and that we've receive understand that that hearing of the theft was not procedurally very well set up in terms of what was going to be considered the it was a sale a motion not have to file a request for adequate protection if there is rejection and you can file a three sixty three he at any time but at some point the concept of latches were not not takes over so you could probably at the rejection property would have been so supposedly on one date the night pursuant to a sale border and what was a cell border say with regard to adequate protection rights of  for all these these tenants you're going to wipe out you know the pool of a bunch of creditors are going to increase it by you know tens of millions of dollars and that's going to affect us so that issue was raised but essentially the court seems to suggest well secure interested in what the state court in some way to get that related and i know was temporary beginning i don't know what happened with the ultimate case but but both as a physical matter and also as a legal matter it was possible to do that at all asking for work is to have comfort that this is the right way to go and he didn't get that in fact  but for what it's worth we've been contacted by you know different people heard different kind of rumors now nothing's come forward i understand that but there's no certainty that this whole thing is going to class it wouldn't be a better deal to to allow the buyer to close or not to close our route our rights to be exiled so we can protect those rights and to allow us to even go into the possession of the premises and whoever comes in you know either can can use us complimentary with them or  and that proceeding did you ask for a declaration that there is a lease and title to three sixty five rights i believe the first trip we didn't meet the main complaint did not i i  did watch leases listed there and so again i don't want to detract from the fact that we believe any state would work and irreparable harm or out trouble but at least with regard to our claim to the ten million dollar deposit a modification  much appreciate it it's always good to have good counsel before you we will kind of make a decision and have it communicated to you by five pm today i would ask counsel would get together with the clerk's office and arrange for a you're very welcome thank you