credit union service organization and it's inconceivable based on the party's practice with each other based on reviewing the operating agreement as a whole based on the admissions made by the credit union c or by the defendant c e o be based on the parties past practice and course of dealing and based on accurately that we would find ourselves where we are today which bellwether community credit union was permitted to withdraw under the operating agreement but they were not compensated for their interest in the company which c d c had booked as six hundred fifty five thousand two hundred thirty three dollars they still own fifty units in the l c but they're no longer a member and they can't sell it to anyone and under the district courts analysis they can c d c can dispose of this capital account as they well actually that seems to me that it amounts to conversion of bellwethers interest in what it all while they're free to sell it to whoever they want was like  can they cannot your honor based on the after reading agreement under section eleven point four words of the operating agreement eleven point fo c if the company for this is under the purchase option section if the transfer does not transfer the interest within the free transfer period the right to transfer sh cease so they don't have a right to transfer it they have nothing they haven't got they have the right to transfer the sheriff within a specific time period and then that period expires then they lose the right is that not the case right so so that period expired and now they have nothing but the expire because your part chose not to solve the shares to a third party that is well right that they had is not necessarily true your honor what happened here was the the transfer of shares provision which is the eleven point four first of all going back value of your interest in the credit union and that was in february two thousand and eleven and that is our exhibit nine from our motion for summary judgment and c d c s exhibit g and then  subsequent to that the credit union said no we're not going to pay that right because there was a mistake they were mistakenly fall for the amendment and gone through that would require them to purchase and everybody acknowledges that was just a mistake i actually don't think that everybody acknowledges that that was a mistake your honor because in this case the it goes on course of dealing and it goes on the amendments but what had happened with every previous member of the credit union who withdrew they were paid or they were offered to be paid the their a d adjusted capital balance their interest in the credit union and there had been an offer of purchase or there had been an offer made to america first credit union there was in two thousand and ten that was before this so called meeting happened at which a vote was held on the proposed a when we had the vote on the proposed amendments the by all the uncontroverted documents the vote occurred sometime in december and the results were known in january of two thousand it was in february of two thousand and eleven that the c d c said we will pay you the fair value interest and then at some subsequent point to that said no we're not going to do that now now what i will acknowledge is that my client said  the vote that was taken was not a proper vote and it was not amended at that time his point was it was an amended yes to a subsequent section section nine and his point was there was irregularities in the vote and i don't think there's any any dispute that there were irregularities in the vote this poor me i'm supposed to look at this operating agreement which is you know lengthy twenty seven pages i think document on some kind of a  handwritten handwriting all over and it wasn't it wasn't to him something that was procedurally you know proper that he could read and he made that known to the credit union but the point is that after they said they were going to pay it then they said oh no we're not and oh by the way we've we unilaterally rescinded the offer also to america first and have never given any indication of what the authority is for that this is a problem that happens with this case the defendant says that you know the case lives or dies on the operating agreement but uses that operating agreement fast and loose however they deem appropriate they didn't file the articles of or they didn't indicate in the articles of organization that it was something that was going to be managed by a board of managers as required under the michigan statute so it was flawed from the inception it didn't it admittedly didn't you know handled the vote correctly february of two thousand and eleven if c d c offered to bell whether to pay them for the fair value of their interest in the credit union then that was an action that was authorized by the board as indicated in the february of two thousand and eleven letter it had to have been because they couldn't have acted unilaterally and even if even if you say that section twelve point two b was not  it that's really irrelevant because the credit union could still do what they did that is that the credit union could still offer could still pay bellweather that amount which is what they had done well first first about under eleven point four one could argue and this is where you know and i were arguing in the alternative either even either the operating agreement is uncontroverted and it silently has to withdraw provision additional withdraw distribution and therefore the michigan statute comes in or it is it ambiguous and has to be considered again c d c but under section fourteen excuse me article eleven point four a the company may elect by majority vote to purchase with written notice of the transfer so one could say that this falls under that provision there is a written notice to transfer also your honor the under article eight no under article seven point three day to day management of the board c e o and under that it says majority consent and under that seven point three says care for and distribute funds to the members by way of cash income return of capital or otherwise all in accordance and subject to the provisions of this agreement the only point that we ever got to the super majority didn't not disputing that it says in the agreement that it required a supermajority to modify that the contract but it also said the supermajority was required for disposal of one's capital account i don't quit disposal and that was the decision that was reached by the district court i don't equate disposal with a withdrawal distribution to me that disposal probably goes to what the c d c will try to do with our argument and i'm not entirely clear on the manner in which you rely and it seems to me that eleven point four provide a mechanism for withdrawing member to recover value here and few your honor first of all under eleven point four the withdrawing member is not required to offer them after the the it's interest secondly article twelve of the agreement is the only one that is you can't say well if they had agreed to purchase it and gathered and we paid the whole interest then that would have been a withdrawal distribution well no because if they didn't then it's not so then there isn't an additional withdrawal distribution but what i would just argue these provisions are so convoluted and they contradict each other so much so that we was true we notified withdrew less than a month later they said ok this is what we're going to pay you well maybe under eleven point four that's what they c i want to address first the issue of whether they had the right to sell the shares they absolutely did they had that ninety day window and their c e o testified under oath they chose not to even try they didn't try this on because they couldn't justify the price so they absolutely had the chance to do it and they chose specifically not who will consult with that why just curious why is it if in the past operating just the way the c d c operated they always bought back withdrawing members shares why did they not do it in this case well they didn't always buy back withdrawing members shares they had a specifically negotiated deal with workers credit union that wasn't necessarily based on the value of their capital account they were then going to amend the operating room to require that may change their minds they decided they didn't want to operate that way and with respect to america first it's important that you look at the dissociation agreement because it makes it clear that that offer that was going to be made to america first was based on what was going to be the amended twelve point two b it talks specifically in the dissociation agreement about that so essentially judge if they wanted as a gesture of good faith and that's in the record as well to pay workers credit union upon their withdraw america first that was in the timeframe where they were going to amend it to say we're going to pay your capital account over five years then the decision was made internally after it was voted down to not do that but the fact of the matter is that agreement was never amended and there was no course of conduct that would show that this is what we're going to do with every single drawing number going forward the shares really worth nothing is that the problem that's what the other thinks i mean mr leck we're testified specifically no credit union in their right mind would pay six hundred fifty five thousand dollars for these fifty units which is why he didn't even try to sell them but i mean he paid three had bellweather paid three hundred thousand for the fifty shares initially all they did in it i think it's important to recognize the structure of c d c in the purpose of c d c it's not an investment vehicle it's a service organization the reason for joining is to bolster your own offerings to your credit unions as a member like about weather so it's not like they're investing in this hoping to get some return on their capital what they're doing is pooling resources so they can better service their credit unions different makes sense but i mean they apparently bellweather thought it was worth three hundred thousand dollars to do that they thought it was worth three hundred thousand dollars to join this co operative to try to better enhance the services they could offer no bellwether seems to argue that section eleven point four really deals with the transfer of shares from members and withdrawal well you are that well how would you respond to that argument what i would say is this your honor eleven point four is specifically incorporated in a twelve point two but deals with withdrawing members right if you look at the definition of  distribution of the michigan l l c act there's no question that a payment under a one point four in exchange for those shares is a distribution which is a very broad definition it's a direct or indirect transfer of money by an a o l c to or for the benefit of its members in respect of their interest if c d c had elected to exercise its purchase option eleven point four there is no question that is a withdraw distribution under the definition of distribution in the michigan  and that's really what this comes down to is the agreement silent not does it require it withdraw distribution not does it say you're never going to get one is it silent does it make no mention of withdrawal distributions and it clearly does it says there's this mechanism when withdrawn or section twelve we go to section one point four and we have the right to purchase your shares at the transfer price if we had made that payment that's a distribution any case you have directly on point that supports you there is well the definition of distribution before it cement case that we cited which talks about this broad definition of what a distribution is and really it's the concept of interpret ing contractual language that there is no case directly there's no case to directly addresses are situation l but the fact of the matter is we're looking at the contractual language we're analyzing the contractual language in the question is is it silent and you can't say based on some extra nil fact i e whether we exercise the purchase option it's silent but if there's a different extra in fact it's not silence it is what it is the language is what it is you sound or it's not well it's either from it or not but if there are the you argue that there is no ambiguity in the language from operating agreement absolutely in they agreed with that below at the district court level i know they're not changing their minds and trying to argue it's a big it was but it is not it specifically sets forth the process for withdrawing number what they're going to get paid when they're going to get paid there's no ambiguity there silent how the transfer prices reached i'm sorry what's at the agreement is silent on how one reaches the transfer price that terminus referred to from only maybe an eleven point four way with the transfer i guess its purchase price i believe that set by the withdrawing member they decide what they want to offer the shares for and in this case they just said i'm going to take my capital account divide by fifty and that's the unit price per unit and that only goes to what they were would offer c d c as opposed to how any other or any other third party corrupt third party yes in i want to touch briefly on this idea that mr davis suppose admission that it's silent or the memo which is privilege and should not be part of this case somehow can change the analysis with all due respect to my client it doesn't matter what mr davis thinks that agreement interpret it in have it be legally binding on the company again the language is what it is so whether he thinks it's silent or an attorney at a law firm five years ago thought it was silent it's irrelevant and they can't rely on that to say you've admitted it you're stuck with it and i think it's important to know their argument on appeal with respect to section seven point six they specifically say that a payment to a class b member who is ousted from the board for their units is a withdrawal distribution they say that on page eleven of their brief they sent a picture twenty of their brief they say if you have a class b member who's kicked off the board and the company buys their units back that's a withdraw distribution that's exactly what the payment one point four is a member leaves the creditor leaves the company gets paid for their units so they can't say on one hand seven point six is a withdraw distribution for a class b member but somehow a payment of one point four to a class a member is you know the michigan liability limited liability x speaks in terms of an additional withdraw distribution guess what does the word additional have analysis analysis today it should have no impact on your analysis and here's why if you start the beginning of that statue it talks about it withdrawing numbers right to share in distributions until the effective date of their withdraw so if you say in january you're going to be out but it's affected at the end of march to the degree the company makes distributions in that intervening period you're entitled to share in those then it goes on to talk about an additional distribution so in addition to the regular course of business distributions you get an additional one when he was draw that equates withdraw and distribution different and kind of a transfer of units as contemplated by the operating agreement and that would in that would involve the transfer of money because under the definition it is a direct or indirect transfer of money by the l l c to the member so whether there's a transfer of the units or not when we're buying them as we would under a one point four if we have to size a purchase option it's the same it's still a distribution very briefly on this issue of the amendment of the agreement through this vote or this course of conduct that they keep arguing about there was a vote taken in january two thousand and eleven they claimed in their briefing that there was a supermajority they misread the record there were only five and eight votes it was never formally amended to get voted down and then they try to argue well course of conduct based on workers credit union based on america first well workers credit union we've talked about that was an individual negotiated deal america first we talked about that that was all at this time where twelve point two was going to be amended to require this and that's very specifically set forth in the dissociation agreement but i think this is the most important fact in this course of conduct argument you have all these things that happen before january of two thousand and eleven then you have a specific vote that would require them to amend the agreement to pay this out over five years and it got voted down they explicitly manifested their intent not to require this in january of two thousand and eleven so anything to happen before that can't be the basis of a valid course of conduct argument when you have this express manifestation of their intent not to amend the agreement that way this issue of tom davis made an offer in his february letter tom davis didn't make an offer on his february letter didn't make a promise he thought it had been amended if you read the letters it's very clear he's basing it on what he thought was the amended language of twelve point  mr leck we're thought the same thing he said no no no that didn't get amended i'm relying on course of conduct he didn't say i accept your offer under a one point four i accept your offer under section eight he specifically said i have a lot of what you do with workers and what i think you did with america first so there was no separate agreement between the two very clear from the correspondence that was exchanged what was the percentage of the super majority required so it was seventy five percent it had sixty eight and what happened your honor was initial e mail went out that said here's kind of where i think everybody's at let me know if i'm right and there were six yeses and then one of those members who was in the yes column responded said no you've got this all wrong i'm not voting in favor of it so that's why i think where the confusion came in on this issue of the equitable argument they try to make this unjust enrichment claim a couple of points on that number one you can't have an express contract like we have here and then have some type of one just enrichment claim the law doesn't allow that but even if they could there's no factual basis for it this is a sophisticated business they had the chance to really operating agreement they the chance to have counsel review the operating agreement they voluntarily entered into the operating room and now they can't come back and say well this is unfair the way this worked out their big boys they knew what they were getting into so there's nothing in equitable about holding them to the agreement that they and then just briefly on the issue here is could they read tender at a lower price or they just have one shot under this operating agreement like they came back that i will sell it for three hundred thousand because they do that and then have another ninety day window i don't know food retrigger ninety day window i'm not certain if they could say we want thirteen thousand units and we say you're out of your mind they say ok we'll take ten it will take five i don't know the answer that you are but the fact of the matter is they didn't even try after we said we didn't want to buy them they could have gone to some third party under the operating room and said we want you know to be paid they'd have to use the same thirteen thousand something per share i mean they could offer lower to the third part part and i offered it they probably would have to offer the same but you know they wanted to get their six fifty five that's how they set their price and that was their decision and then mr look we're specifically said i could never sell this to a third party there's no way to justify this price and that goes back to this equitable argument about you know alternative basis to affirm they presented no evidence of damages they basically presented unsupported argument saying fair value of my interest equals balance of my capital account there's no authority for that anywhere what we do know is they had no valuation done what we are as i said admitted no credit union their right mind would pay six hundred fifty five thousand dollars for these units they didn't even try to sell it to a third party and maybe most importantly if you accept their argument that fair value of your interest equals balance of your capital account that leads to absurd results they want fifty units other members on fifty units and they have different capital account balances there's no logical way to say my fifteen that are worth this and the exact same fifty units in the same entity i want something different so there's really no basis in law or fact to say fair value equals balance of my capital account it's their burden to prove damages they didn't even try to do that they just made their argument and we cited the case law for the court that said they can't rely on speculation or conjecture of guesswork to establish damages so even if you want to say there was some breach of the operating agreement or otherwise entitled to distribution they failed to prove damages and that's an alternative basis to  address the last first or maybe not less but again specially judge gilman you were talking about the offering the purchase to someone else and why didn't bellwether do this and they could have done it but i would direct the court's attention to paragraph eleven point two of the operating agreement and that's a transfer of units and under the transfer of units it says the transfer assignment of the units pursuant to this article will not result in the transfer or assignment of any of the memberships of the transfers other membership rights and the transferee will have no right to become a member or a manager further so that is if you did sell these rights you would not get any voting rights you could not be a manager and you cannot be a member and less c agreed to that but more importantly why did c d c want to withdraw on the first place this was a credit union service organization that was supposed to be providing mortgage service agreements and didn't do it and that is the exhibit  mr davis wrote an exhibit g of the motion for summary judgment brief filed by c d c they didn't they didn't do what they were supposed to do and during the course of the time when they didn't provide the service agreements bellweather was also hamstrung by this operating agreement that it couldn't use any other ones so what was there to sell to any other third party and that was a frustration with the head in this case  counsel says you know bellwether were was a sophisticated party and they were devised by counsel well in this operating agreement c d c could have said in the operating agreement a you can't withdraw a for some operating agreement say that b you're not going to be getting any withdrawal distribution some operating agreement say that and when you have that in there then you know eyes wide open going in what you're getting yourself in for and if you decide to sign up for that that's what you decide to sign up for it didn't say that here and any when they were faced when when c d c was faced with withdrawals from members did they get together and talk and sat right we're going to amend this so that value of the interest of their just a capital account that's exactly what they said that's exactly what tom davis said and they point the point and the excuse me the question that has never been answered by c d c is why didn't they pay bell whether they said that they were going to pay about whether the adjusted value of their capital account over five years tom davis says well well we just didn't well why didn't you well i don't now you say you're going to do it i'm giving you the there's authority within the provisions that you can make say say it's not under zero withdrawal saying it's not under the transfer that the board must have decided because tom davis can't unilaterally offer to pay people he can't you literally do that it had to be a board decision whereby those people said here's our member they're withdrawing this is what we're going to pay them well that's the agreement that you made then i honor that agreement and just with regard to the distinction between the class b withdrawing members and trying to equate that to eleven point four so you have these class b members who in this case were withdrawn for irregularities and who exposed c d c to liability but under the provisions in article seven they are completely made whole and they and it says must it's not discretionary and that's the distinction with a difference in this case because an eleven point four says well maybe we can but maybe not so then that is not a withdrawal distribution again that's something that indicates that there is no withdrawal disassociation agreement wherein they also paid them the the adjusted value of their capital account and it said that all others said the parties here i agree that any operating agreement for the company shall