i guess we're there's so many so many possible start points here i guess we're where i would start is perhaps dealing with the eleven eleven b issues that were dealt with in the bankruptcy court in the district court make sure you save their briefing cite some cases that indicate that the same thing the bankruptcy court said which is this eleven eleven b doesn't operate to  to make something that had been nonrecourse into a recourse loan except in the context of a distribution which this is they did cite some case that write it right around and i think that i think those cases are a little bit they're definitely distinguishable here but i think when we look at the statute itself it just simply says that you can convert you can try think even the d or w court used the word trance transform you can transform the non recourse claim into a recourse claim by confirming a chapter eleven plan where there is no election and there's no sale at respond to the argument i understand your homes to make on eleven eleven be with us that too except you're reading about what would in effect permit a double recovery you've got a circumstance where the the property is taken subject to the mortgage so they're still recourse against property whatever it's worth is what you've got it's not subject to some undervaluation in a bankruptcy setting where you're going to lose value so to allow you to have both the security of the property and to have recourse against the debtor personally is giving it a double benefit which the statute wasn't designed a while now i'm sure i didn't do justice to that mr value of the collateral plus any deficiency that could arise in the event the value of collateral is insufficient all the eleven eleven b is doing is converting the non recourse where they didn't have that right in conjunction with confirmation of a plan and giving the the creditor that right so yeah you're right your idea of eleven eleven b is it's a really great deal because it gives people more rights than they ever would have had i mean if this is never going to bankruptcy you'd have no argument that this suddenly became a recourse loan right i think that's exactly what the stench got right just so that the bankruptcy code eleven eleven b is designed to give folks in your client's position better rights than they ever had before and i think that yes and i think that's exactly what the statute says because it says it makes it converts it from non recourse to recourse what's the purpose of that your honor i think it has to do with the entire  facilitation of the chapter eleven process everybody everybody gives up to get in this once what do you give up you get some well you know give up anything you're getting something extra your honor for years they gave up the right payment until a plan was confirmed they received nothing they gave up plenty to be in any creditor in any chapter eleven case when that playing field gets level basically it starts with position of having to forbear from their ordinary state court remedies for the from collecting as a ordinarily would outside a bankruptcy for in many instances especially as in my family's words face receive nothing for many many years until the plan is confirmed in the end what you get in exchange for that is you get some additional rights provided in statute ok i don't know whether my colleagues have anything to ask about eleven eleven b but if they do assure welcome and i'm interested in the cam argument bankruptcy court parties here have treated that phrase that shorthand term k m as encompassing all the common experience not just thirteen of these paragraphs or t v expenses but but everything well i know that we have and i believe certainly most of the time when administrator has but i think in terms of when they say that the that the cam claim this discharge i think they necessarily then slipped back in arguing that was on the thirteen viki as we lay out in our brief there's much more than that so if the if the bankruptcy court in the parties were talking about this in terms of saying look there is no cam liability that's a statement that there's there's no liability for whatever common expenses there might have been whether they were covered by thirteen b or court be faulted for understanding and and operating on the principle that if it viewed the camp's office as handled it handled everything not just thirteen the stuff it can be faulted when it went in looking at all of the yes all right now if i understand that you folks dispute what the meaning of paragraph one in the stipulation says means but if we accept what bankruptcy court is that that would indicate that all the liability associated with him was resolved by the stipulation correct if i had to what theory well be because i think the problem is with the bankruptcy courts position that in the start i think they're walking in saying that like a ward wouldn't be responsible for cam they are there they've  left of what they have looked at in the context of what was settled who settled it how much was settled for what goes well beyond what any of it provide with any ok so again your disagreement is how the bankruptcy court read the stipulation but you don't disagree that if that if that were an accurate reading of the stipulations you have no claim for can correct yes if that were an accurate reading of stipulate al right i know that i have a couple minutes left and i want to make sure that i realize it's across feeling really shouldn't but we don't have much time to argue and i understand your i am prepared to address any particular question that your honor may have with respect to a well what interests me is whether the plan administrator can really said to be the successor and bound by what was done by the debtor in ward  debtor's i'm not sure to what asked what manner they perhaps existed as well but the imagine they were possibly very different from well if you accept the interest would be the same and i think the focus is on is on the interests that were that were at heart i mean you can't administrator you know so until one is required by the second plan but the fact of the matter is that the plan administrator is interest are you know identical to the interests of the ward two daughters the war its creditors compared to the fiduciary riddick relationship of the ward one debtors to its creditors is what creates the common interest now their work route crossover us i'm sure if we spread out the bankruptcy schedules there's crossover for more than one to work to and i'm sure there's additional creditors as well well watching respond to the argument that the interests are really very divergent because in ward one it's a reorganization war two it's a liquidation so things that would make sense to do in the context of the first makes no sense to do in the context of the socket well i guess i would take the opposite approach your honor and i would say that if the the issue remains creditors being paid whether it's in the context of a reorganization and i think we would rather have th a reorganization than in a liquid ation right absolutely ok and so creditors in a reorganization will want certain things to stay with the business and be prepared to give things up to have that happen we're in a liquidation that they just don't have any interest on the contrary they want to get stuff liquid and i mean that's it seems to me that self evident right yes ok so if you've got such divergent interests with the first group of creditors then you have with the second group of creditors how is it that you can say there's an item that interests of the second were adequately represented by the first because the focus shouldn't be on how the creditors being paid for their fee through reorganization or liquidation the focus should be on the clerk creditors claim how they get paid i don't think is where the focus should be and i apologize rather was i'm trying to duck the question but that's where i was trying to get to was that what the debtor proposes the pay the claim shouldn't dictate whether or not something that occurred in the first case should be barred in the second case the fact of the matter is that the parties are the same the claims exist that in the same issues exist that they should be part is there if if it is the case that judge gross and then in turn judge for not you were correct in concluding the dike were doesn't have any recourse with respect to the mortgage the police and and the subways and if they are correct that there's no claim for cam expenses does that resolve the matter entirely and make the question of race   what happens here well those are the only issues that have been brought to us and i'm trying to when you say they're issues that are would be unresolved what's left if if in fact there is no substantive right under eleven eleven b as you describe and there's no can claim what would there be left for the bankruptcy court to do or for you to argue about what and those issues nothing you're on well and i understand that's all that's before you on those issues no right and the only issue that i understand the raise to cotton point is me to is as to those issues right there something else ministers claim that their job or contract or the financing rather than a true lease let's start with that i'll ask you to answer the last question that i put to mr welch is your honor that's exactly where i thought you were going i apologize for hurting you all i wanted to explain characterization claim joe would not be entitled to assert what would be a six million dollar lease rejection damage claim and therefore the distribution to general unsecured creditors would be increased all right taylor says if you've got a successor in interest or nasa any relationship that's a sort of special recognized relationship in the law which which means there is an identity of parties  why why are they wrong and understanding pillar to say that taylor is crystal clear in that it holds that there are six very limited exceptions to nonparty preclusion i don't think any of those exclusion it or are they the folks who who took over in effect the assets of the bankruptcy estate and and tried to operate the business before it came unglued for the last time pre war one montgomery ward with a public public company following the ward one confirmation order g e took the company private by purchasing all the equity interest through the ward one plan g s equity interest were subsequently discharged deemed valueless in the word to plan so what you've had is this excessive number of equity interest holders and you've had success or better cases and what i hear them saying is there a successor in interest in the sense that there was a business called by gum reward it got reorganized at the back end of that there was a business called monk gum reward it was being operated and then it got liquidated and the business that emerged after the reorganization is the successor in interest of the business that was operating before and therefore you've got a successor in interest is that factually this is it logically flawed what's the problem with viewing the business that comes out of the reorganization as a successor in interest to the business that went into the reorganization your honor i think it would be a mistake to simply bind a successor in interest merely cos the names were identical i think what taylor directs is that you have to look at the respective interests of those entities and the mere fact that their names are the same doesn't mean their interests were aligned here you have successor better cases and for example in james hold on to second before you go off on that i think we used the word interest in an equivocal way here and i don't want that to happen because it will confuse me for sure i understand the word interest in success or an interest to mean you had something now i've got something not to mean will you like something to happen but i want something different to happen in the sense of success interest meaning you had something and now i've got it is is the business that came out of the reorganization a successor in interest to the business that went into the reorganization as a matter of was that because that seems to be what their pin and there are on your honor i'm not trying to duck the question but i think we have to understand the ramifications of confirming the ward one plan and to what extent legally the the post confirmation ward when debtors can be deemed the successor in interest to the pre war one debtors what you had there was a confirmation plan discharged all the debtors all the ward one debtors presupposition obligations so while it succeeded to certain rights it wasn't burdened by some of the other obligations and addition it's equity interests were different so i think legally speaking you were looking at two different entities i'm sure that that's not my question question is it in the ordinary use of the word successor in interest in the legal parlance is the post were reorganization like i'm reward successor in interest to the preview organization like i'm reward that's the only thing i'm trying to ask i know it's a different kind it's a different legal entity that's carrying on the business i'm just trying to figure out if you're if your argument depends upon them not being a success or an interest in that ordinary sense i'd like to know in your honor i think that for purposes of this argument i can see that they were a successor in interest because what we're proposing is that it's not the end on be all fine then explain why the reason being is because i think taylor would or would would direct this court to look at the respective interests and when i'm using the word interest i'm talking about their motivations and desires and game to look at their respective interests and to determine whether in this case the plan administrator interests were adequately represented in the ward one case that is one of the narrow exceptions to the basic rule against nonparty preclusion so this court would have to look at whether the interests of world one were aligned with the ward two debtors interests if they were not aligned then there can be no operations and keeping profitable stores open to determine which stores were profitable the ward one net or the ward one debtors did not need to review the true nature of the underlying job or documents or determine the legal relationship and it all depends on how broadly you define interest i mean basically the in curse always has been you know in the sense to get the best deal for the creditors right that's what it amounts to and for instance if you know a reorganization is not going to do for the quitters then the you know they would then the op for a liquid ation i mean they could have done that the first time but they just chose not to so the end game is the same  your honor i apologize if i'm not answering your question directly and if i'm not then please jump in but my response would be that in ward one there was a meeting of the minds amongst the ward one debtors and creditors that reorganization was the result that all wanted that was the result that everyone wanted to be achieved in word two that was not the case it was a liquidation from day one so what i'm trying to convey to the court is that in ward one there was no economic or other incentive for either the ward one debtors or the ward one creditors to ever look at the joe word contract to determine whether was a true lease or a financing and what i'm proposing to you was in word to those interests are completely different than what they were in word one in words every contract has been picked up and reviewed to understand the underlying nature of the relationship between the parties because the plan administrator is charged with maximizing distributions of general unsecured creditors and the only way you can do that is by picking up the joe or contract to determine the true nature excuse me of the relationship whereas in ward one there was no such  interests what exactly would be the the legal effect of the determination that there was a error in saying that there had been raised to to cause you would you would presumably go back to the bankruptcy court and you would have to you would have to make the case and win the case that this was a structured fight supposed to truly right that waiver or stop all could not apply to bind the plan administrator to the actions of the ward one debtors whether it be via a stop or waiver well of course there's another basis on which to to the waiver and the stop will claim your honor you make a very fair point there are three prongs that refute a cot as you well know and if this coordinate this isn't on either of the other two prongs then i don't believe that would it stop sorry to use that word the the economical stop away argument or the waiver argument however like i said if it did hint it's opinion on privity then i do believe that those other two arguments could not be raised by virtue of the courts finding i have just about a minute have to i'd just like to quickly address the recourse nature of the more star the non recourse nature of the mortgage note and can very quickly the factual legal record before this court clearly establishes that the lower courts correctly held that the mortgage in no war and remain non recourse obligations there were three documents the work one stipulation the ward one plan and the one one confirmation order which each unambiguously provided that the legal equitable contractual rights under the mortgage appellant argues that section eleven eleven the of the bankruptcy code converted the mortgage in no to recourse under the ward one plan and amended the very nature of the mortgage in no to recourse after confirmation of the ward one plan claim secured by a lien on property of the state shall be allowed or disallowed under section five zero two i'm sure we've all read it a few times and i point that out your honor because i believe that the reference to section five zero two is extremely important here because when this court looked at section five of two of the bank's code it will see that section five o two only deals with claims a term which is defined in section one hundred one of the bank's decoders involving a right to payment so under section five of two of the e issue with respect can and resolving the issue with respect to where there's recourse would not that affirming on those points would not  dispose of this appeal it's entirety so run that for me one more time explain what that that lease read characterisations issue is again there were two claims filed against the war t debtors one claimed by state farm which was on account of the mortgage and note the second claim was filed by joe ward which was a lease actually damage quoting it is montgomery words position that the non recourse nature of the mortgage and no if this court affirmed the lower courts and held that camp could not be asserted against the debtors it takes care of one piece of what is the jail where rejection damage claim but it doesn't get rid of the claim itself which has other components so what miami or other components specifically are well there is a lease rejection damage claim so for example the lease that was due under i'm sorry the rent that was due under the lease up until it expiration can be asserted under the bankruptcy code as a rejection damage claims so you have that piece you have other components which may include failure to maintain the premises or failure to pay taxes right none of those issues will be finally determined by this court's ruling with respect to cam thank you thanks very much thankyou your honour's struggle to rebuttal and i'll ask you right at the at the start do you agree with that final point your honor and and thank you that's exactly what i was going to go with on that point i do agree with mr wisenberg and that's where i was getting confused and i response to you it was trying to differentiate between this court and elsewhere not know privately but if i could go back to the to the to the interests argument that we've been having here a little bit that i just don't see where the taylor case says to focus on in conjunction with whether or not there's a reorganization or a liquidation i call i think i agree that the focus is on paying the claim and whatever it takes to get the points or that's the interest that i think are being talked about wasn't taylor about rejecting the idea that that there could be virtual representation that if somebody was sort of close to where you were in what was it's they that that that wasn't good enough because we wan make sure that only people whose legal arguments they are motivated to make really end up getting bound by what happens in their earlier proceeding that seems to be the gist of the or at least that's what your opponent argue is just a failure if that's true what's wrong with their assertion that these people were motivated not all to make the arguments that are crucial to us and therefore they can't possibly be viewed as adequately representing our interests well you're out i think it goes to  think you were talking about when mr wisenberg was standing here and that goes to it's the whole bit whatever but whatever ward want to have went toward to whatever ahead whatever business whatever assets whatever liabilities it had were the one it became the assets the liability in the business end of financial obligation of war to how ward two ultimately and i mean ultimately because on the back end they ended up liquidating the pay but that certainly wasn't what wasn't expected when the ward one plan was confirmed so i think the focus really isn't on how you get to pay the claims it's what did the success in my word the successor what did the successor acquire it acquired everything that ward one had on the asset side in the liability side in under those circumstances how ward two could not be considered a successor in interest toward one i think is exactly the sort of argument that frankly is an easy argument under the taylor rationale that you have prove that the in many questions is not a short break i'll ask the court crowd to clear the court room and we'll go ahead because we have our video link up here we'll resume here in a in three four minutes if that's alright with just the she man yes discussion so let's recess briefly