any recitation of the procedural background the summary of the complaint the overview of the motions and the and the decision itself referencing knows only where it's pertinent to the argument so i'll get right to it a leading defendants claim that there was adequate disclosure d in the court agreed with them both parties agree that the central issue on the proxy claim is whether it adequately disclosed a risk that upon a public listing the price of american finance would discount materially to reflect the fact that it was extraordinarily managed and that the ext management was under the terms of the rd advisory agreement both parties also agree that the proxy statement does not make any specific closures of that risk issue thus is whether the proxy statement was materially false and misleading due to the failure to disclose a specific advice pacific i mean specific that there will be a risk of a material discount upon public listing material discounts from the net asset value which at the time was in the twenty's as we know from references in the record that upon the public listing in july two thousand and eighteen the stock opened down about th disclosure of what it calls the internalization fee that was a component of the rd advise hearing that they say that the formula was provided they and the court both said that the formula was provided that the proxy disclosed that the internalization fee would be extremely high and approx the specifically disclosed that that would have an effect on the premium if there were ever a takeover the court said that implicit in those disclosures was inadequate disclosure that there was a risk of a material discount upon the public listing due to the external management structure we say that the specific disclosure should have been disclosed that markets and investors discount a extraordinarily managed property read upon a public listing that's where the same cast of characters and actors in that company and in that disclosure as or here so that is our contention as to what should have been disclosed what was not disclosed  we say that the warnings to so called warnings were much too generic and much too vague to constitute any clear and specific warning as yes yes here is my problem you actually brought suit before there was any market loss and you said in your brief that that  was ok because it was so clear that a loss would take place but if that is so isn't that a pretty clear suggestion that the warning was already there that the thing was already known if you could bring suit before the loss isn't that a sign that what they told you was enough to give you all that you needed to know about this risk right no no your honor it was not because while we we take a stab at what was omitted and what was materially false and misleading it's not known you sort of knew that you were going to have well we sort of knew we were going to get it because we had the prior admission of these very same defendants with respect to another stock and company that they controlled but it wasn't disclosed in the proxy and and information that is not in the proxy does the taken together the amounted to the same thing well your honor that was that was the essence of the ruling in the court below but this is a very very complicated  complicated issue so the essence of the warnings like let's go to that question st what were the warnings to warnings were all generic the warnings were all we cannot guarantee where this will trade upon a public listing the price may be higher or lower if there is a takeover we may get a lower premium so so taken altogether they're just generic disclosures and what we have the year is a complicated issue of the effect of external management upon public listing with respect to a discount if the court will take note of my paragraph thirty seven dollars in the complaint mission at the same group of defendants made with respect to another stop it pretty technical because of a dream the bank shares case of which is left or a market professional to tease out what the implications could be then that's not sufficient disclosure for the shareholder on a proxy client and  and that specific contractual undertaking said that the nature is to do share the fiduciary duty arises out of the relationship and the operation the court below held that the seduce jerry breachin duties we were describing were beyond the scope of the contract because of the specific duties undertaken we contend that was error was the the contract says that duty yet there was no contract yet because of the deal the deal hadn't been consummated so i'd like to be a little clearer when you think that this what this  duty arose out of the advisory agreement and the complaint details the evolution of the advisory agreement it was an original one upon formation of the company there was a nd advis management of the company or do we also go to any deals that the company might get into well first let me make the prior point very clear for the record all iterations of the advisor greenman had this to do sherry undertaking i believed at paragraph flies now did the contract extend to the deal making the contract extends to all investments and all operations of the company and the contract makes clear and the proxy statement makes clear the extent of the control of the forever to advisors where they were they married forever well they weren't married forever in so so so if f and wanted to go and get somebody else to to perform the test they could have correct as of the  agreement it was a non can sell of all twenty year renewables terms so i understand i know what it was i'm nancy a question if if they could have at the end of it they could have gone and done business with somebody else at the end yes publicly listed and they were able to make their allegations because those risks were well known as mr squitieri highlighted this morning in his complaint he notes that the industry discounted externally manage research in fact the complaint say that paragraph thirty five that these disadvantages were well known in a paragraph thirty eight dollars that the disadvantages were obvious when it's attempts to fashion a claim could discourage the reporting acquisitions as district court held reasonable shareholder we've understood from those disclosures she could be extremely high and could reduce the value of the shares upon extensive warnings about the risks of external management as well knowing the industry that bottom twenty tips bought and externally managed reet that was the product that was their you you've got five minutes total three minutes of which will be uninterrupted and you'll get a warning at the two minute mark thank you your honor may have please the court audra following for paul white's representing american finance advisers air buying properties or collecting rents or otherwise managing its responsibilities rather what the appellant contends is that duties were breached when advisor negotiated certain favorable terms for itself when it negotiated those contracts with a friend's independent directors the district court properly dismissed this claim for two reasons the st is that the contract do not impose a duty on advisors that pre dates the creation of the contract and specifically the duty to create a contract with the least desirable terms for advisors now in reaching that conclusion the district judge considered whether if advisors had had the ability to dictate the terms of the advisory gr that would alter the outcome and what the district court concluded was that the appellant had not pleaded such control to the contrary both advisory greenman were approved by a skins independent directors with the nineteen independent director abstaining the agreements were also ratified by shareholder vote and with respect to the rd advisory agreement that contract was negotiated during the merger by a special committee of the board comprised only of independent directors who were advised by their own lawyers and financial advisors so while the appellant here is offering conclusory allegations that the advisor somehow controlled the funds board and the board was not independent the complaint actually lacks any well pleated factual allegations supporting that conclusion there is a nd alternative grounds for dismissal the district court found that the breach of fiduciary duty claimed as a derivative claim because the alleged hardware minute thank you was suffered by a fan and not by its shareholders and as a result the plaintiff shareholders now the appellant has suggested in response that the shareholders also suffered a direct injury because voting rights were somehow impaired but the appellant has been identified any injury to voting rights that was committed by the advisor and certainly the appellant hasn't cited any cases that apply the theory that a rd party service provider to an issue or can be subject to a direct claim by shareholders for the alleged impairment of a voting right by that issue or this is a quintessential derivative claim where the where the alleged harm is clearly that a fan over pay for services and the district court therefore can be affirmed on that basis as well with respect to the additional arguments proxy one which is that you sure do decline the proxy claim trust counsel hammered the point that full disclosure was made everybody knew it i had enough to frame the complaint  but on at the pleading stage and on a motion to dismiss what i pleaded is enough and new is not enough for the court to make a factual conclusion that the talk about disadvantage is being well known and obvious they are they are well known an obvious in an abstract sense but not in this particular case and that makes all the difference in the will are exceptionally risky that's a specific thing that was in the other statement the other merger that you referred to and is not here but that's exactly the abstract thing that you're saying no i don't understand how what you want isn't what you already say you know i respectfully disagree your honor because it's statements in a proxy and the the law has held repeatedly have to be specific have to be tied to the to the issue and the disclosure is in the hands general information but your but your reason for bringing it before they started even gone public was that was that there was a general understanding you cite to a moody's report you say the industry is generally agreed to understand says and that's your basis because it's generally known that your basis preprint pleading in advance but if it's generally known then when what's that and why is there a requirement to disclose it there's no guarantees that the stock is going to go down it's just generally known that this take would have present the material risk of a material discount upon the public as a risk with the risk was disclosed to in terms of the nature of the substantial costs that were going to be incurred if there was internalization wasn't there they were able to calculate it they were able to look at it a shareholder not calculate that based on the complexity of the formula your honor ok and that's in essence is their argument now getting to the negotiated arm's length in our complaint a paragraph forty one and sixty three we detail the fact that there was no it's a special committee that the sign and truly advise it to the special committee disqualified itself from any analysis of the financial effect and that both the trust and the advising were represented by the same counsel which i believe was proskauer so it was not a border or deprived of the board in some way or or controlled the board is that your allegation yes that they dominated and that is that is that not a quintessential derivative coin and how do you have standing to stock because it's an injury to the corporation and therefore the corporations devalued in some way causes an injury and cause an injury to the stockholders but that's the nature of any driven point is not about that that is but does  franchise and dilution to the status of an injury directly to your client it's an injury of your client as a result of the devaluation of the corporate of the of the corporation because of the track because of the huge debts of the of the and they arise out of out of the broad scope of duties tendered to the advisor under the contract where already