only dispense with the calling of the calendar and we'll hear the first case stillwater the court david gore off for stillwater liquidity which i will call stillwater your honor is this court's precedent in colonial realty has three important holdings for this appeal first the court there underscored the vital importance of the automatic stay to an orderly bankruptcy noting that it is so central to an orderly bankruptcy process that actions taken in violation of the stay are void and without effect second the court held that for purposes of state section three sixty two  three fraudulent lee transferred property is not a property of the estate because until that time it is outside of the estate and finally this court held that irrespective of whether property is fraudulent be transferred the stay applies under section three sixty two a one as an action to recover a claim against the debtor and in colonial realty the court noted that a third party action to recover fraudulently transferred property is properly successor entities and was held at the time of the foreclosure by s f and by an entity called camden real estate opportunity fund which was the successor to the debtor had had no interest in any actual property well alina interest is an interest in property you cannot sell the underlying lived on it you can only you can only foreclose on it you can a lien interest is a cloud on title it's not part of an ownership has been recognized by this court in the fidelity case in one hundred seventy five and by number of other cases as being a kind of property for purposes of section five forty one of the code which defines property of the estate it is an interest in property which is all that the code requires the liens extinguishment result of because there was a problem there was a higher mean granted to the municipalities for the for the failure to make hillandale properties didn't pay the taxes or the property and the tax lien foreclosure occurred and two hundred twenty six thousand dollars was bid at the tax lien foreclosure you are there and you don't get it right what happens correct if you only and therefore what's the point well that's really are in the process your honor what happened was the tax liens vested property in a in an entity called f t the three but that has nothing to do with your over that's separate and independent all runs with the property because of the failure to make payment of taxes so that whole string of of liens and and the ultimate  crazy going on there because the properties fluctuating in value and everything else but i still don't understand how does this how do i mean well your your your complaint is with your own because because you had a closing you never got five drove a transfer either first of all let alone if i meant got a conversion claim are you claiming you think you have a conversion claim against your correct correct we've always made that claim your honor and how does that get you back your property your property lien when it first takes over because it succeeds to two things it's exceeds to the i'm sure funds piece in the entre fund has a piece it owns itself and has a forty percent piece it owns only in legal title as trustee the beneficial author of that is  to transfer that occurred at that point stillwater was not left with anything other than a claim against drew over from what i can see for a failure to pay the consideration it had promised i don't understand how any equitable interest or lean was sufficient to trigger the involvement of the payee or the automatic state provisions has any bearing on this there was a transfer to alleged at all times if you look at the joint appendix seven hundred thirty five paragraph four of the original complaint we say that these assets were converted leaving stillwater funds with no assets and no consideration yes and the can you claim that there was he there was a transfer that occurred in your now characterizing that as conversion but there was a transfer that occurred and consideration was promised and wasn't paid and now you're characterizing that as conversion your honor that that that is we are not now doing that we have at all times pleaded in the alternative and actually remember when you have an agent that breaches it's reduce your a duty that effect effectively is authorized to do one thing which is do a deal as papered for an immediate assumption of debts which never happens and the takeover of three hundred eighty five million dollars a first preferred stock which is never issued and then turning that into tradeable stock you six months late later which never happens and never of i mean this is this is a this is some form of participatory interest in a lien on a piece of property that you want to stop a tax lien foreclosure of a superior that's what you saw what you saw a closure was a two thousand and nine event and what ponce succeeded to was or was it a lien superior to yours i believe mechanic's lien would be superior ok so then i don't care what it was but it's doesn't disappear or to yours i don't see how you stop that because the automatic state doesn't ask if it's your then then any bank which went bankrupt and there were for closures of current because of more superior liens against properties on which that bank held secondary liens that bank would then be able in bankruptcy court to seek stays with regard to every single foreclosure and which it was in a junior position your honor there's multiple cases where for example pardon industries which we cite that's not true that's not a foreclosure of who these parties are the debtor is a cayman island fund that lends to the delaware fund which is an on shore fund and the arrangement between the two is to keep that fund the debtor secret all the rights and title in these liens are in the onshore fund and they only have this beneficial interest now the onshore fund decides to sell a but before that they had a foreclosure of their own wayne and they stopped it we don't know why they stopped it but the it's the entity the onshore fund which the debtor delegated all responsibility to manage this lien on sure didn't foreclose next thing we know is that there is this eighty five page agreement where there's an asset purchase these are sophisticated investors they decide to monetize their assets by agreeing to take convertible stock injure over six months hence they do this deal they would like this to be a conversion but at the time joe rova got lawful possession of these part of a scheme all along basically to defraud them of this valuable asset why why is why it's not a valuable or a legitimate way of pleading in the alternative here and  conversion you're out of that would not be a conversion because at the moment of transferring the possession of those intangible assets i e these loans and mortgages they will lawful it they would have a claim of fraudulent conveyance to recover them i would concede maybe that transfer is void a ball but until it is voided until it's determined that there was fraud in the inducement it's not void there is a valid transfer and i think he's saying that because there was an intent never there was intent never to pay any consideration that the fact that there was a paper transfer doesn't mean anything we should overlook that it's the same as a theft i disagree with that idea if and what he's saying is there was an intent at the time to breach an agreement to give stock six months hence that would be convertible and he would if the claim is that at the time you had that agreement they never intended intended to a beneficiary of this alleged trust that the delaware fund was the trustee if those assets were indeed transferred or converted he doesn't as the beneficiary and i don't believe he addresses  brief as the beneficiary of the truss he doesn't have legal title he doesn't have the right to come in and recover those assets the delaware fund which is the trustee who'd never filed bankruptcy and would not be have the benefits of a stay they would have that right so that either way whether it was transferred or converted as a beneficiary of a trust of these him office equitable interests if they were converted the delaware fund which by the way didn't seek to foreclose in two thousand and nine when they had the judgment against top flight they would have the right to recover these beneficial interests not the debtor consequently it was not a violation of the stack you have two minutes i have two minutes thank you your honor i'm sorry the district court maybe it was the bankruptcy courts it's a long and hundred pages but talks about the tax treatment with regard to yes and that actually that that they couldn't own the property yes they wouldn't be in a position because of the foreign investor if they held in an interest in the property it authorities i don't know and they delegated to the delaware fund all the responsibility to manage it the delaware fun chose not to foreclose it's lien it decided in two thousand and ten to enter into this transaction where they were going to monetize it that's not a conversion that's a transfer heat he started if you this long winded complaint initial complaint is all about fraudulent transfers and what happened here is they did a left turn and they said we can cut this off visa vs offend we can say it was a violation of the stay and we don't have to go into the merits of whether this was a transfer  and that's what they did lastly this is not a claim against the a state under colonial realty you have any entity in the cayman islands there is no way they were liable for these tax obligations on a property in georgia they were not in the chain of title they were not recorded anywhere in the chain a title lastly the entity in which the stillwater funds merged drover asset backed holdings they merged that int he had notice of this tax for closure they were served they didn't appear at the foreclosure impish my client was the only bitter and i know they make a lot of issue as to these appraisals of what the value was but at this property was worth so much i think that would have been more than one better selling for two hundred twenty six thousand i see my time is up iran as i thank you closure of the hillandale property did not implicate the bankruptcy stays eleven new a c three sixty two a one because a foreclosure proceeding was not an action against the debtor still want to offer alternatively the two thousand thirteen tax lien for closure proceeding did not implicate the bankruptcy stay at eleven you a c three sixty two eighty three because it did not involve the property of the debtor still what option this court has meticulously balanced the interest of creditors and debtors since one thousand nine hundred two when it handed down the bright line rule including all realty which says quite simply and provides definitive guidance for bankruptcy practitioners and real property transactions that property wrongfully conveyed from a debtor preposition cannot become part of a debtor state unless and until it is recovered this court laid out sink rationales for that pointing to the united states bankruptcy code in numerable provisions under five forty one for the recovery of properties by trustees who have now experienced proof that it or its property was rushing to convey similarly in the bankruptcy legal and beneficial interests judge wiles began to meticulously unwind the twenty four separate transactions involving the still want of funds and determined in two thousand and fifteen at the appellant was obligated to file a supplemental complaint judge wiles detailed what was to be filed in that supplemental complaint he wanted to see the exact interest being transferred he wanted to see the transfer or transfer ease he wanted to see the dates of the transfers because judge wiles was focused on the that participation interest was nothing more than a beneficial interest a pro rata share in mortgage proceeds to the extent they were collected by the system fund and placed in trust in two thousand and ten this court is being asked to do is impose a stay to interdict the transfer of real property arising out of a georgia foreclosure action conversion actions do not apply to real property conversion actions are limited to personal property secondly at the hub of every conversion action is that the owner has no notice that dominion and control is being hexa sized over its property in this case the still one of funds in their entirety knowingly participated in two sophisticated entities in the transfer and merge process a conversion action is a complete hindsight attempt by this appellant to circumvent the failures two to this day that his state is limited by its purpose a state is limited to the recovery of assets dissipated from in a state for the protection of the state's creditors if assets are not in the state the state has no purpose in being used and this court articulated that in one of its most recent pronouncements into court versus fairfield greenwich where in two thousand and fourteen is can this court say we will not employ stays against third parties were does honor at the very least this was a fraudulent transfer and under picard and colonial realty we then get to three sixty two a one because if the lien interest is part of the estate potentially part of the estate then an action which negates that lien is an action to recover a claim against the debt or the card supports the reversal here so it and that was something the court never grappled with that holding of colonial realty but again your honour's we have pleaded conversion is an alternative if you look at join appendix one seven three five you will see from paragraph four on we also have three counts in that complain conversion concept been conspiracy to convert into fraud count nine aiding and abetting conversion contests so it is not a laugh but later added fieri and the theory is borne out if you look at the facts if you look at the garner case we also cite lipitor and page under new york law if an agent doesn't trust you to do one thing which is to get you five hundred forty million in consideration through assumption of debt immediately which never happens and also gets you three hundred eighty five million in preferred stock which becomes convertible and that never happens and they instead do something very different that breach of fiduciary duty and exceeding of authority constitutes a conversion to new york law so we do believe the facts of conversion as i said when an agent exceeds his authority you have a the similarity in factual predicates to both fraudulent transfer and conversion the question but it doesn't matter for the automatic stay because the automatic say either applies under three sixty two a three or as in colonial realty which found a violation it applies under three sixty two a one and you're on to talk about the offshore aspect they couldn't own the property they don't they have a beneficial ownership interest it's held in trust section three point one of the participation agreement appendix to sixty seven states that the originator which is the  participant an undivided participation percentage in the payments and the collateral the collateral was the lien on the hillandale property that lien is transferred and all typically mr five senses why didn't title i under which and a trust for example if you if someone has millions of my dollars in trust as a trustee they they have the legal title to that but i'm the beneficial longer it exists for me and that interest is recognized as an equitable interest under section five forty one it's property of the estate thank you well here the next case document technologies versus discovery