in the limited partnership agreement alliant took canal's thirty nine unit building in marin county which we believe is worth more than ten million dollars based on insignificant and completely likely found and could have found under the instructions given in the evidence given the failure to file a report was a basis for taking away canals building possibly shifting let me go through the breaches then the alleged breaches they were all minimal the first was the failure to file reports that was cured in august of two thousand when all of the then do monthly reports were filed and then after that the principals alliance told mr andrew wicks the managing partner of canal not to file any more reports so he didn't do it meanwhile he was filing weekly reports tax information and tax returns this was a problem caused by the accountant selected by alliant you know the gratitude of many deals with the law it and at one point because mr wix was seeing one accountant and then another accountant than another person overcrowded he went out and hired rice accounting and it two weeks prepared the tax returns but a lie and said that's no good you need no overcrowding so all the income tax returns ultimately were filed there was no loss of tax credits there were no penalties all the k ones had been presented on time and so you and there were a lot of time in one thousand nine hundred ninety ninety nine no irregularities found in those audits so you have no problem with the reports they were all cured no problem with the tax returns let's go to the alleged misappropriations these were purely accounting and allocation issues of putting in adjusting journal entries there was nothing ever hidden nothing secret nothing covered up and in fact there was no damage and that's why judge alston just looked got rid of the jury's damages and looked at the forty two thousand five hundred liquidated damages and stench we imposed those which arguably was was you know taking the place of the jury in any event the breaches were small but what did mr wix what did canal properties lose after buying this building for one point three four million dollars and spending two million dollars to renovate it working twelve hours a day for two years to put this building in shape gate at the commencement of the partnership gave the building to the partnership for the period of the deal but then was entitle to one hundred fifty thousand dollars per year of revenues to expenses was entitled to ninety percent of all the additional revenues and what do you do about the corporation commission code that says that these forfeiture provisions are enforceable they were it was in our motion for judicial notice there's legislative history of one five six one nine that essentially says two things and this is immutable and judges and was dead wrong on these two things the first  damages language from section one six seven one and puts that in that means the two other cases it was me the regionally case ridgeley versus topa thrift and the harbor holding this case which say a complete four picture where the forfeiture bears no relation to the size of the breach it's a penalty and it's under the forcible california m pours of corporate your california courts would not tolerate this you're on that proportionate she did by that time i respectfully suggest she was somewhat locked in well not really if she had the benefit of the trial she  she was bound by her earlier rulings and by the jury find exist let me tell you how this deal works it's about a two hundred page agreement you can't possibly understand english spend days with it i know and what happens is if there's a material breach which could be the failure to file a report you know a one page report then that automatically under the agreement equals a major default and that means you lose your interest i did this before and they've lost in court trying to take people's property there's another case and basically this was a form of that he kind  onerous provision in it well it was agreed to by client was essentially a mom and pop operation they bought this building and through hard work tried to make something of it a lie it had many many of these deals they did hire a lawyer a good lawyer stephen ryan of lendl's ripley and diamond mr ryan looked over the agreement to ultimately my client was given signature pages not even the whole agreement and sign the signature pages because you wanted to get the deal going probably not very prudent but you have a situation where mr ryan testified block that after reviewing in one thousand of these deals he had never seen a situation where anyone had tried to remove a partner and take relevant standard she does refer to the pretrial ruling but then she says she does not believe that this agreement resulted in a disproportionate forfeiture so your mother wears the hats on page  equitable discretion i don't think that can be reversed on it if used to discretion standard and your honor i would also refer you to the next section building canal sold the building to the partnership and received money for that the building was valued in the agreement at one point three million when the partnership was formed canal sold the building as a partnership in the partnership to title the partnership assume one point eight million dollar mortgage the partnership a canal three hundred thousand dollars for a developer fee and paid all its rehabilitation expenses so the time of the partnership is formed canal has no equity interest it has a right to cash flow to ongoing cash flow and perhaps a right to sales proceeds in the fifteen year future if the building is ever sold and all that is in exchange for canals duties performing its duties and that's important because that makes this we have a party that's not doing its job but is supposed to be getting cash flow in exchange for its duties there's nothing unfair or just proportionate about saying you're not going to get the castle because you're not doing your job we're going to remove you as a managing partner when remove you from the partnership so you don't answer the second part versus can help on going right to cash flow because it is no equity interest in the building and which is roughly how much two years there were do is disputed evidence on that a trial you are and i was a trial and one hundred number of one hundred fifty thousand dollars i think was too high i think evidence f repay to the partnership and the liquidated damages the world war two aligned didn't compensated for the over one hundred thousand dollars a canal misappropriated from the partnership and never repaid secondly there was even this is a problem with the the lot for the tax credit this is a highly regulated federal programs and canals failure to file the tax returns and keeping the books and records and what the accountants were the worst is seen in ten years and missing some deadlines on the tax credit front endangered the tax credit into question your honesty your fitness to be a partner you can be removed from the partnership and you can't put a dollar value on that but there's a huge inherent problem inherent harm with having a partner that's misappropriated funds from the partnership and use partnership money for its own purposes and in that light the remedy of removing it from the partnership and taking its economic interest is not a disproportionate remedy and if i may i'm in my last some couple minutes here i do want to stress the court did not stop we believe with the corporation's code analysis the court looked at thirty to seventy five independently and light of all the evidence and came to the can correct ruling that this is not an unlawful forfeiture and we can now really material breaches the court invited further briefing and then a lot of the jury findings and in light of the other evidence which is all recited in that order on the post trauma motions the court declined to exercise its discretion to release canal a for future and  first of all let me go to judge silverman's question earlier about one five six one nine if a forfeiture provision congealed an unreasonable result where a party who contributed one hundred dollars no more can take another party's ten million dollar building that is not a reasonable provision at this under the circumstances at the time at which the contract is made so i think one and that's why mr ryan testif hundred two hundred seventy nine thousand dollars that was supposed to be paid by a line into the partnership which never paid so in terms and the other thing is their payments were so late mr weeks is running around with this credit card trying to pay the people who are doing the dollars to this partnership they're taking a ten million dollars building there is no thirty nine unit building in marin county that's not worth ten million dollars but even if you assume it's three million four million five million it doesn't make a difference it's a disproportionate for and there has been compensation these were entry let me let me tell you about the four elements of the alleged misappropriation there was no misappropriation one was interest paid on the loan prior to the formation the partnership n messed that up the jury didn't even countenance that another was security deposits which were being held obviously they were in canals account because the checks were made out to canal but they're being held in trust for the tenets that wasn't going anywhere and then there was other a thirty eight thousand dollars payment that was made for another property from canal accounts these were all things that were adjusted by novick rhotic they got their payment under thirty to seventy five there was compensation you can't i mean getting down to work a line of contributed nothing they got this building they got the cash flows like at the economic interest it's not fair this is an equitable issue i they took away the building and i'm asking this court to give it back with respect to the second phase appearance person everything how would we do that well very easily because we've asked for a hearing and in fact if you go to you don't really want us to order that building somehow returned well i'd like to try to answer your question it's best i can i know what you're after you just got through saying why she would like for us to give your building back my question is how do you propose that this court order your building well i'm i'm speaking you know euphemistically you might say in terms of building i'm talking about the cash flows i'm talking about the interest that was lost in fact the foundation for affordable housing which is the managing general partner has an option which they have now given to can now with respect to the possible return of the building at the end status of that is a little bit unclear but what mr weeks lost what canal lost was fifteen years of cash flows which i think ridiculous new low the estimate of one hundred fifty thousand dollars per year that's still over a period of fifteen years comes out to something close to two million dollars so it's a dry question that you w would you you get reinstated as a as a partner is that the necessarily what we're saying is if you going to go with the removal and frankly there's no reason for the remove all but you go with the removal find what we're saying is unlawful under california disproportionate it cannot stand and let me take mr wix does not did not have an opportunity to vote on his cakes and that's why the other arguments the materiality instructional argument and the amending of the complaint if you look at eight four forty nine and four fifty one at the end of the trial he's pleading with judge will stand i didn't have a chance to put on my case there were issues with mr weeks and his lawyers but this was not a fair result he's asked now for a hearing in the request for judicial notice there's a lot of evidence and this is only an excerpt that could be put in front of judge but the bottom line and this is a disciplined dispositional issue for this court if you are inclined sent it back for a hearing on equity because all of the evidence did not get presented then you look at the question is the hearing really necessary or is this four picture unlawful as a matter of law and it is under hill versus