paxton's one point nine million dollar first off offer to purchase to seat ins paxton units and in rejecting the noddings unconditional three point two million dollars cash offer let me ask you a question i couldn't find it in the briefs was there a in agreement that burke the shares the the fifteen percent of the enterprise was there an agreement that if the member sold the interest there was no evidence of any such agreement on the record and under what theory of law  group get first refusal well the judge the district court gave them that i know that but i'm looking for i'm looking for a a substantive rule that called for that we me and there was nothing fact well we took it for granted your honor thank you for pointing it out though because the district court would not have it would not have been asked to sorry for the district court to give whether at some point in the proceedings that the government told district judge you can't do that favoritism shown by this charge oh no i'm not talking about the favoritism i'm talking about giving them the right of first refusal act your honor that was an example of the favoritism that are a show to them there was no basis for that ok and paxson didn't present any bylaws or or or shareholder agreements that said that they had the right of a first reef refusal and that that was the reason that they should be allowed well purchased the shares that ok well everything was done on the books so the rescission would be done on the books and the shares would be the units would be restored to the receiver up for sale exactly damages because damages would be a guess work excuse me oh you couldn't do damages because damages would be guesswork you have nothing took to praise so  and do it right like we would like recession that the units restore to the receiver and the receiver be able to market the units as as previously now we did argue as an alternative then is there any reason you wouldn't get less than one point nine million well your honor we are taking that risk we'd like an open fair that being process that's what we requested all along we would like to have actually first or if you live  the case law including the tanzer case that we cited are a brief hold that the procedure is set forth in twenty eight u s c two thousand and one should be followed accept in extraordinary circumstance guess the court orders otherwise yes your honor the statute that applies to the sale of personal property does state that the two thousand and one procedures apply shall apply last the court orders otherwise but the case law holds that even though it says there is this exception in order for the exception not to swallow the rule the procedures under two thousand one should be followed except in extraordinary circumstances which we argue did not exist here why isn't this breakup the an extraordinary circumstance it's an if it's not a sincere bid the just the method of getting a fee in the event there's a higher bid the court didn't think it was a sincere bit so it knocked it out of my and then an exceptional circumstance the court did not make an express finding that it was not made being held on this if if the court was going to accept a bit that was over a million dollars last then the independent third party offer then our argument was the court should have held a hearing so then there could be a hearing on whether the bid was in good made in good faith but i will point out your honor that i received the receiver summited had tackle aeration that this breakup fee was not evening mediated numerous he had participated in numerous media transactions involving a break up fee and that amount and the district court found that that receiver was a highly rejected it because it would show other bettors who didn't want to pay a break of your honor it was at the highest bid the receiver that was able to peer procure within the ninety day period set by the district or and even if the break up fee had been paid from the proceeds of the sales the government would have earned much more and to satisfy the taxes than under the very low paxton offer my understanding though and tell me if i'm wrong the court can look at a totality of the circumstances and not make sure that the government gets the highest amount of money that it can get but it also i mean pac improper conduct of the sale unless the prices so low as to shot the conscious so in order to vacate on remand we'd have to find that the sale to the pacs and shocks the conscience no at that case we cited actually cited that case in our brief that the judicial sale of the stock may be rescinded and regardless of any subsequent disposition of the stock now we're looking not apply under rogers the court is supposed to ensure that the government receives the highest return possible on the sale of the of the property an order to maximize recovery of the taxes it's a completely separate category of foreclosures and private judgment creditor for hosiery so we would honor focusing solely on the statutes at issue here i don't know i want to know under what substantive rule of law about a procedure well whether in a great many amongst the members your honor this shareholder agreement and the by the by the by the units you're i was looking for what is the substance of rule ford the only rule i could imagine is that the members and cumbered one another's interests the new units such that if a member wanted to sell there were certain restrictions and therefore a buyer at an auction would no doesn't matter what i bid because paxson gets the last word understood i found nothing that is going to tell me where it is is that docket number twenty five and where is that provision that well that provision i cannot tell you exists in the agreement the agreement itself is attached does it does it exist any well you're one of the provisions that we cite in our briefs deal with the preservation of the selection and the importance that the people i know about all that that's in our in our kind i know about all that the agreement itself and the a minute agreements are attached to the as are anything that game packs if it's if it's there your honor it's in that shareholder and you can't tell me what you're talking i cannot tell economic present to you that is even though i believe it is i cannot represent you on the record that it is well then that ten days from today within ten days you'll write the court a letter and specify exactly where in the agreements amongst the parties the right a few first reviews like this i would do that your honor and the government has ten days after that to respond i would do that ok your honor with respect to the standard at issue the abuse of discretion the government must establish that there is an expense that if that if the court made a mistake about first refusal then it necessarily abused its  would have this court apply twenty eight u s c two thousand and one such doesn't one which in the provisions of the statute itself allows for it better to come in a private sale and bid out bid the private sale amount so in essence the statutes the government wants to apply include that overbid right that right of first refusal so the for them to are which is a gift that the court gives to one of the parties one of the better court case the supreme court took issue with the government's attempt to sell property and made explicit findings that interests of innocent third parties need to be protected the interests of pacs to media group were taken into account by the district court in fashioning a sale process a receiver of the government's own request was appointed and paxton media group in june of two thousand and fifteen had a board meeting agreed to pay one point nine eight five million dollars in a private sale the government didn't want to public sale in fact they explicitly told the district court that they didn't want to public sale because they knew they knew on the courthouse steps this sale is not going to net a dime because no one is going to pay for a minority interest in a closely held family corporation in a declining media company they knew that they knew that the only recourse they had was to squeeze packs to media for as much money as possible by putting forth non conforming bid expressions of interest which were contingent and trying to squeeze packs timea to outbid itself after it had ready received a conditionally approved private purchase one point nine five million dollar offer which packs to media has deposited in the court registry which is sitting there for the government's benefit and they are asking for their cake and they want to eat it too they want to put paxton media over a barrel for what is now twelve months since last june putting that money into the government's coffers they abuse they days the receiver night is to solicit that offer in about sixty five days the receiver sent a letter to the district judge throwing in the towel saying this is the best offer we have it was a contingent offer full of digital provisions contingencies made included a due diligence period that they could back out at any time and had all of these provisions in there which put our s lection at risk because of the identity of the purchaser and we objected to that original offer the issue was the district court's order required us to object within seven days and also to put our counter bit before the court within that seven day period the same seven days we had object so without knowing how the district judge would evaluate our objection we put a protective bid that was contingent on the district judge million seven hundred fifty thousand at three point seven yes and we also made objections to the three point two your honor and those objections the government tried to address by putting forth a revised netting bid which still had concerns over the identity of the purchaser still put our us election at risk and maintained this break that fee the government saw with the original offer of the netting offer to tack that breakup fee on to the bid so that paxton media was in a position to essentially bid against itself and also have to take into account this five hundred thousand again they're calling it a breakup fee it's really an enticement it was money that they were willing to take from the government coffers from taxpayers money to pay nothing to come forward and put this expression of interest before the court would that make if the bottom line would have been two point seven is more than one point nine if that three point two offer was a solid offer the break of three is irrelevant because you still come up with more money than one point nine well your honor there's their burden today is to show the district court abused its discretion they cannot do that the difference in the money does not take into account that they never submitted a conforming bid they essentially ignored the district court's order the district court gave them a sale process conditionally approved paxton media groups one point nine eight five million required pacs to me at the keep that money on its books knowing that it was accept it in the court rejected the letter of intent that exe gave had the government accepted their original nuttings bid it would have put paxton media groups a selection in jeopardy because of the non conforming nature of the proposed s on tax issues on how our us lex is terminated so the idea of having that reviewed later that's media jeopardy to pax to media group so over the twelve months that this case has been from the original order meeting at paxton to put the one point nine eight five million dollar offer in and getting at the already we've had that on the books our client and we've deposited that money with the court following the april order directing the trustee to sell the shares paxton media group extinguished the shares the shares no longer exist they went from two hundred sixty thousand units outstanding to two hundred twenty two thousand the government would like this court to believe that that those units are in treasury stock that is not accurate in their briefing the reference to the units being held in treasury stock the units had been extinguished this is not a case we're dealing with shares of stock this is arguing that the government this trick or by denying the state mooted the case your argument as i hear it the denial of the state on her happened no you have to present the status quo ante cannot be restored then it can't give the government any proof and of damages then the district court in effect abolished any chance of appeal to the government that the years are extinguished the courts say anything about a right of first refusal and it's and it's  er your honor in the original orders of temper two thousand and fifteen paxton media had the right within seven days of the presentation of an offer by the receiver a conforming offer to present a counter bi and that is exactly what passed and media did and was required to do under the sale we complied at every turn of the sale order whereas the government and the receiver ignored it at every turn the nuttings bid was not a conforming bit direct never unless you were spawn excuse me or this it was not conforming why did you respond we responded your honor to object to the bid and then because of the way the order was drafted giving us the same same  identical seven day window to object and to counter bid we did not want the run the risk your honor of having an objection pending without a counter bid and the court denying or striking our objection and then accepting that offer without a counter bid so we were we were in a position where we had to put a proposed contingent counter bid into the court which we did and it was never triggered because the court found that the nutting offer was non conforming and was not a qualified bid so your honor was telling from the record is that the court also in that same order in september gave the receiver the ability to submit expense reimbursement costs things of that nature after the court extended the sale period once again after we went through this initial round nutting offers and gave the government more time to submit a bid no bid surface the government was unable to have a bit pending there wasn't even a protective netting bid before the court when the second or extended sale period ended and the court district court noted that when it ruled that there was not an conforming offer pending nothing that was basically there to counter the conditionally approved one point nine eight five million bid from paxton that has been sitting before the court for several months at that point and your honor the cases that look into this issue make clear that the court is to find the best price under the circumstances the government wants this court to believe that rogers and section seventy four zero three of the internal revenue code has courts in the best highest recovery for the government tax cases that not correct what the supreme court said is certain and prompt tax collection is paramount district judge scriven made sure that there would be certain and prompt tax collection by escrow ing the one point nine eight five million requiring the trustee to issue the units to paxton paxson extinguishing them depositing those funds which still remain to satisfy the government's tax liability and which i'm  your honor the united states has never complied with the district judges sale process or sale order has never submitted conforming bed has always run roughshod over the parameters of the district judge set out at the government's request their  handpicked receiver didn't even submit a fee reimbursement that shows you how little work the receiver actually did it shows you how fruitless the idea of trying to market a closely held family company minority interest is because the receiver honor this is a media company and the record is clear affidavits from david paxton about the history of paxton media group a declining declining media market this is a newspaper company and the government is even aware of the declining nature of the value they don't dispute that the media company in the media she has gone down there's no dispute over that it's a decline attributable to the type of business press and media group as we understand  of thank you or i would like to quote rogers just to clear up exactly what roger says in rogers the supreme court stated that section seventy four zero three quote gives the federal government the opportunity to see the highest return possible on the forced sale of property interests liable for the payment of federal taxes and the district court clearly abused its discretion and not allowing the government the opportunity to do that in this case isn't we were the government were collecting the taxes and the state's been going on for these taxes have been delinquent for years decades and we don't feel that we feel it's appropriate to wait an extra few months or however long it takes to market and maximize what it would do district judges charged with doing comparing a certain counsel there was an initial offer that did have contingencies the offer the subsequent offer that was made it's in the record document sixty nine dash one at one and also exhibit one at one in two was the final offer by the not in it had it was a cash offer no due diligence no contingencies the only term in the offer other than zero and providing for protection of the  conforming is also somewhat misleading because the only way in which it did not conform with the court's requirements was the break up fee and that requirement had not in been imposed until the offer was submitted in other words the receiver secularization submitted at the end of the case specifically said that the restrictions imposed by the court did chill the bidding process and that there were other parties interested in submitting a but they felt it was futile because  have to be added to any offer so the not being student didn't have to pay it past and wouldn't have had to pay it would there have been any impact on the paxton shareholders the other pacs i'm sure holders who have an interest in the property they don't they don't have the other pass and shareholders to not have an interest in these units they have an interest in their own unit and in the company of the nothing offer would have been accepted it would have have had no impact whatsoever on independent third party dot under the rogers requirements which is what i believe