and we'll call our second case of this morning in re coastal broadcasting system number thirteen dash thirty three fifty four mr gary moore has is that correct and have a great many questions for your your opposing counsel when we give you the full fifteen minutes now and we ask her any questions if you think there should be rebuttal to the issues that we bring up with her if any and we'll go from  if we really have any significant questions of her that you think you need to rebut icing so you have fifteen minutes very well at issue in this case is whether multiple multiple provisions of the bankruptcy code that says upon or in connection with any we were going to zation that of coastal any payment shelby exists to be paid or delivered just thirty that's the back then three point two it's as if you have anything that comes up in three point one if any proceeding described in three point one which includes a reorganization commenced study is a revocable the authorized in its own name or the names of in this case rosenfeld and or otherwise to skip down take any such other actions print including without limitation voting the subordinated debt as it may deem necessary advisable it can it doesn't get any clearer than that your honor i would take the court back earlier earlier portion of the greenman and to examine little further more holistic of the structure of the subordination agreement yeah but that this is specific right well it means that there's a predicate predicate is section two point two of the agreement says that notwithstanding anything in this agreement to the contrary then i'll paraphrase to say unless the debtor was in default they get the payments roosevelt correct and then the beginning of section three were the sections were drawn or quoted from are contained it begins with the title in furtherance of subordination we would suggest to the court that until there is an event default which i think on sturdy gets the money and gets the vote because in effect what's happened is there's been a transfer of the interest of rosenfeld and huff to sturdy right that's what this whole thing is but i would say your honor that until there's a d those provisions don't come into play but i would i would i would say that the the predicate to those sections having efficacy is first there has to be a default on the loan and that connection with the concept of subordination swerd nation is not elimination it's the secured lender gets paid firms and what i'm saying to you is doesn't matter if there's a default it matters if the specific item is noted and the item is if there is a among other things a reorganization you can do x and y and one of those things is both my interest and by the way you don't get any further payments they come to me or if you get them the next action says you've got to turn him over to me and i understand that you're only trying to draft that how would you drafted any differently in order to  you're representing thirty back how would you draft any different the reading that is in did the interpretation by the bankruptcy court would essentially it might be grim might as well say in the event of a with security secured lenders do everything they can to protect themselves but that's not the trouble in the case that's what they're there for now with and i agree what's troublesome is that that that result having are been  pained the court and the debtor were able to utilize this agreement to instead of protect certain which was the purpose of the of the subordination agreement it was instead uses a vehicle in order to avoid the implications of the absolute priority ru creditors my clients were completely cut out of money they were the only party concision in case who received nothing and indeed they were the largest single constituency in the case and that fundamentally violates principles of a bankruptcy code of the bankruptcy code you brought up three arguments in the bankruptcy court and then you renewed them these three before the district court plan wasn't feasible that the claims were improperly classified which is in effect what you just alluded to a moment ago and the agreement didn't and titles thirty to both the claims we start off by talking about number three the thing that would to me that was interesting about this case had been brought up is whether even if the agreement entitles thirty to vote the claims were that violated the bankruptcy code because there's like were cases they go one way and where they go the other there's no circuit court has decided that you didn't bring that up in the bankruptcy court and the district court said that you had waived it when you brought it up there isn't that isn't that particular you're saying we read three point two differently in light of two point two didn't really grant a voting right if there was wasn't a default that's your argument but by the way you know that the next argument would be even if that occurred because of the argument made to the district court even if that ocurred then it was a violation of the  policy of the bankruptcy code but you didn't make that argument of the bankruptcy court we literally counsel a confirmation literally lack the opportunity to make that argument and i would say whoa how do you lack up to make that argument the issue was not presented before was not present isn't it up to you to make that presentation to the court i mean you've got you've got some decent case where you've got a really good bankruptcy judge judge weed off on your side and the argument wasn't made judge i can't overstate enough to this panel the gain changing nature of what happened at the close of the confirmation hearing and what i would really psych the court to is if this argument was so plain it's interesting to note that neither the put you into a class four and you thought you belonged in class three you made three objections that your claims were impaired doesn't titling you to vote so you focused on the voting that you were i properly classified and that the plan wasn't feasible under eleven twenty nine you didn't discuss the even there the implications of the agreement that you we did not and nor nor did the debtor know that there isn't the ball in your court to bring it up at the o i would be but if you're going to object to a plan i mean i've been through this you throw everything you can against the wall and then you sort it out later on as the ones you really want to go and present to the court and what was your time off these are the ones you decided to do and i gree with that general as a general question of strategy but i literally can tell this court that the record i think is clear that there was at the first time that the idea that the subordination agreement allowed story to vote my client's claims literally occurred at the close of the confirmation hearing us everywhere spotted an issue that it got you should have brought up why other story wasn't titled to vote on behalf of the object under section three point two of the agreement and i would say to the court that if that if that was really what the better believe there what would study believe i would have thought that those those two points were made in the pla closure statement or in arguments for and against you to take a step back when you think there's a waiver i'm sorry when you think generally there's a waiver forget this case i think in general there that's when there's an intentional relinquishment of a known right and i would say that appellate purposes it's the it's not bringing up something that you could brought bring up in effect my senate i'm seeing it more in lay language but isn't that correct i think that's correct ron ok so you could have brought up with the court brought up post there at the end of the confirmation hearing and had a post confirmation hearing you didn't post a confirmation hearing about it that is whether you had the right whether its thirty had the right to effect you're saying the code prohibits the latter a policy the granting to another of your right to vote as a creditor correct and i would say that my new argument that you're new or that you never you never argue before that the assignment was prohibited by the coach we certainly did not your honor and again i would point to the clear reason why this was never raised by my client's bill i was because it was never raised agreement itself ah but that opportune was limited temporarily and was limited in scope and i think the judge in the bankruptcy judge millette this particular issue and you or your friend on four corners that docking which i understand and i wasn't counsel for these of these opponents of the bankruptcy court so i can't speak on first hand knowledge but my understanding was it was based narrowly on what the agreement said and i would submit one perceived that would be just favorable in order to set up a strawman to knock it down i see my con has expired thank you very much thank you now ms dublin is there anything that you wish to note on your own i'm not sure that we have a whole lot of i may have one question for you but do you is there anything that you think you need to really deal with i do judge for tall and read open trying to us while pairing on behalf of the debtor coastal broadcasting i would point your honor in looking at the virtually every loan document known to man involved if the debtor is sued and it needs to be pointed out that the appellant's in this case sued this debtor prepositioned thereby triggering an event of default so i believe that the argument regarding whether or not an event of these the parents would be entitled to their regularly scheduled payments and that would not in compas payments under a plan and that's what we believe that section three point two in tar interprets that when you work your way through the agreement the beginning portions of the agreement is sort of the regularly scheduled workings of the subordination agreement and when you get to the later section of the agreement you talk about what happens in the event of liquidation reorganization or other kinds of unusual events occurring client's decision to file for chapter eleven reorganization and they didn't even get to vote on the plan and it just seems a little unfair tell me why that is is nuts i believe there are a lot of things that happen in a bankruptcy that are unintended consequences of preposition acts and the subordination agreement as has been pointed out is very carefully tailored to protect the right of that the bank in the event of distress of this  and i i do not believe putting aside the two or three lasalle case and some of the cases that have followed it that there is anything special in the bankruptcy code that puts the right to vote above the right of pre partition agreements are to be honor were guard lists of the way in which things fall out there after and i think the use of the language in five ten day about enforceability under non bankruptcy law is critical here because i think that they passed the test of consideration to rest and all other state courts state law defenses to contract that if they pass that muster that when they become part of the bankruptcy process they are to be enforced according to their terms i think there's a sense that your friend across the aisle may be making a gesture in which hasn't really been fleshing out that they were  referenced in the plan it is seeking to be inforced in the plan a particular provision of it to be sure and not the voting and that's because the structure of the plan by debtors council was to treat that class of creditors as  unimpaired so the issue of voting rights was not front and center but in fact just as declaring them as unimpaired did by by virtue of the implication of the bankruptcy code stripped these creditors of their voting rights so the issue of voting rights was in of itself front and center certainly the treatment under the subordination agreement of voting rights was not something that was discussed at length but there was a remedy available these these creditors were quite active in the process they filed a state a motion for stay pending appeal while at the same time they could have issued a motion for reconsideration if they believed that there was a legal error made at the time of confirmation there was a practical and procedural mechanism to bring that matter forward and so there's a broader policy here which i have to advance to the court which is voting is one of the cornerstones of a chapter eleven process and we believe that the case law such as a two or three of us sal case and the other cases that follow that you  a way you can give away constitutional rights can you not in a certain settings yes and so why can't you give away a right to vote when you transfer your wh you assigned to another your interest in something i think a constitutional right as i don't think it's constitutional i think it's a statutory right i think that it's just  successfully defeated the plan or record would have been in a position to resolve it in a manner that would have been protective of my client's interests thank you thank you thank you to both counsel take the matter