it please the court good morning your honor is my client absinthe bar l l c has been in and out of court with its tenant bourbon saloon since around two thousand and eight and holds a valuable lease several state court consent judgments and even a bankruptcy consent judgment my client state court victualled proceeding was interrupted by this bankruptcy in two thousand and eleven this court has been consistently clear at least assumption is not an automatic right of a debtor let me ask you a question about that we haven't agreed order that says the leases assumed now witt well irrespective of whether or not that order  comprehensive is requirement three sixty five at what point did you raise that issue did you raise that to judge brown we raised it to judge brown but we raised it immediately i'm sorry  cut you off we did not realize that the position the bourbon saloon was going to take which was hey we're not just duking out cure here with this isn't just a construction dispute for the first prong and we'll fix everything later this is a comprehensive we didn't find that out until march twentieth when they filed in opposition or in opposition to our lease right still a week before the trial occurred and some months before judge brown issued his opinion and water truck me was that his you know he knows the law and in this area and his opinion did not dwell on that argument at all and so i was wondering how you could properly preserved  and thirteen that was four months before he issued his ruling and we strenuously argued that you know we were under the impression here which is why we me only moved as soon as the first happened we immediately move saying that this is as judge brown said in a february hearing this is a done deal we have a failure on the first prong which we contractually agreed to this was how we're going to approach cure without that we can't have assumption and judge brown in response to our to that motion actually issued a scheduling were and that's that record fourteen forty five that's scheduling were ordered us to brief to brief whether or not this agreed order was subject a suspense of condition which would in which would basically dissolve the lease or at least assumption under the code or whether it was a resulting torrie condition so we knew that we had properly prepared preserved and that portion of the memorandum opinion was puzzling to me as a let me tell you what was what what i drew from the random opinion aside from this not ruling specifically on that was that that he had perhaps forgotten exactly what was in new greed order because in the memorandum opinion he goes into oh they agreed they said it's assumed i'm reading that he says to himself it's assumed right and this is just you know something that they have to do in connection with the assumption and he but he went on and added that they had spent three hundred thousand dollars and then that they would claim to set aside thirty or forty thousand for future repairs but i think in the months following that when we moved for what we call the lease rejection which one of the let right to remove for rejection but we do what it was a supplement to our early almost a year early over a year earlier our opposition to assumption how do you get around the fact that you agreed to in order that said the leases assumed well here and i think i think judge brown keyed in on that really well because this was in october this is in october after everything had been submitted after we had time and again urged this really wasn't an assumption can a consent judgment on assumption it was a cure it was a roadmap to cure it now in the written ruling judge brown openly admits that he asked the fact finder in the ultimate arbiter didn't understand what he agreed order was about at that point he's obliged under louisiana law attorney a contract that is at that point that is de facto de jure a that is a doubtful provision and he has to start applying the proper code articles to interpret what that was and if that had taken place whether by judge brown whether either judge brown district court judge brown either lives in happens why is it so simplistic for me to take that to infer from what he wrote and what your orders and some assumed is assumed well what about the other two problems of three sixty five that's a remember that's a starting point is prohibitory oh you didn't you didn't i don't think you cited a single case where an agreed order of the and i'm not you know i'm very enthusiastic about of enforcing three sixty five as it was written but on the other hand this is pos confirmation i'm sure that the confirmation depended on the meaning of this business which was the solution so no other creditors are adversely affected it's an agreed order and and  and they you know substantially complied with their duty to make repairs noting your first point that this was post confirmation that's an that's a very that's an equitable argument that we shouldn't bear the burden on  the fact that they waited to do anything and when i say way to do anything it's obvious they were delayed dialing so we we you know we did everything as soon as we could we were there we were ready we submitted every bit of  default and it was in front of the referee and it wasn't almost a year later so the fact that this was post confirmation and remember there were several strenuous objections from creditors gold king filed an objection to plan confirmation the the two leases had not even been assumed a confirmation there were two assets actually three assets one a management contract in two leases neither lease had been assumed and would not be assumed until about a year later after confirmation so there were  creditors that noted this and even judge brown a trial is essentially said in response to that equitable argument look confident firm plans are not always considered consummated and three sixty five has to not by law the assumption would not have been automatic because we had not we had yet to discuss either attorney's fees or adequate assurance of future performance but we would have demanded that type of hearing which in the fifth circuit is extremely specific and the judge when we approached him do it i mean if you prevail on the attorney's fees you get the option of recovering all costs and the bankruptcy court has made a finding that they have cured that finding was only in the to the extent that we could call this dict the cure wasn't even necessary now remember the lease was assumed under the bankruptcy ruling the lease was assume strictly by virtue of the re greed order done after that it considered our lease what we call the lease rejection motion which was still well you can call it whatever you want but you were saying that they weren't complying with the deal would have been struck well at that point at that point your honor there was no more of the three sixty five percent well in the third other thing was he said that they had put away thirty of forty thousand for future repairs right you're like adequate assurance your honor that that number one in terms of the that assumption was taken care of by consent so he gave you more than you you know he gave you what you wanted or what we would have been entitled we would have been entitled to those attorneys fees as opposed to the assumption breach which are still administrative expenses didn't he substantially comply did did the debtor substantially compel the history of the bankruptcy judge no he erred several times very badly that the problem is that we not only does three sixty five guarantee certain stuff it guarantees you certain stuff in a certain order and until that happens there hasn't been assumption here that guarantees you certain stuff in the order these agreed upon assumptions are pretty common do you have any case that's formalistic that way in that had he actually then spelled out each element whether there's no objection in a timely fashion or not then your argument wouldn't exist you just s and the judge said yes you're right the rights that you have spring from the code and regardless of this consensual agreement these code rights are still here until you express leeway of them and he did that by basing it on the starting point which is prohibitory you cannot assume in bankruptcy the default at least unless one two and three and a consent judgment fallen short in two thirds of that  default in the monetary right lease right the rent was being paid but remember there is never been there is no as far enough and i've researched this now from a five years there's never been a no one debtor landlord in this position where there vixen proceedings were actually interrupted and that that basically don't believe that that happened not reported not reported service at things that's got to happen all the time it could very well be it could very well be you know the problem though the problem though is what's what is this this is a twenty year lease ninety seven so it's coming close determination anyway no sweat there a second second term of twenty years on an option so we've we've been in court for the half of our first term state court in bankruptcy court first term and snacks year guests yes ron and so so the idea here the idea here is that this type of landlord is protected by three sixty five the agreement that we got and you get it why didn't you get the stay lifted or you know immediately after on the basis of nonperformance i mean nonperformance with our consent big dispute on that in the that that that delay sixty days one hundred twenty days or by consent you don't have to assume within that you just have to follow your motive to make your decision we we really there were several creditors that were all huddling and we were saying these guys are never going to be able to assume within that and finally we realize that the the rule really is you just have to decide whether to assume or objection make the appropriate motion which these guys did we went to work right away we opposed  continued our opposition we we made it clear that we wanted everything under the code we confected in agreement we confected in agreement which has been interpreted incorrectly well why would why did you allow planned to be confirmed before you would definitively handle the assumption we didn't have we didn't have the authority to block it and my client didn't want to vote oh i know you're disadvantaged creditor on the major way contested and even provided for the remedies went in in the event that it was rejected so we did what we could see i'm just about that time thank you you have a chance for rebuttal ok and i would assume that in a lot of chapter eleven reorganization as you have a financial considerations i think the important thing on this one is that once the reorganization plan went into effect four years ago creditors with confirmed twenty months ago it was well once once we do twenty more months we're going to be outside of the chapter eleven totally we're going to have repaid all creditors will be a standalone corporation but you said you already paid them a hundred percent yet we're paying them i just said so in dollar in accordance with the plan i have a time it's completed yes sure so in twenty more months we're going to be it wouldn't be a standalone company i mean this is exactly what chapter eleven is for i mean so when we're looking at did you judge jerry brown do the right thing the consummation of the plan occurs after your option to renew your lease yes it does your arm and so that would mean at that point it will be a standalone corporation obviously when this was entered we had twenty years and twenty years no one knew that this would have would have been nothing that's an interesting point i mean you know back in one nine hundred ninety seven bourbon street was a whole lot different than it is today and rental rates were a whole lot different than it was we were walking into a failed company in one nine hundred ninety seven failed business on and thirteen decision footnote forty i believe that's why we're here and i think that is the entire thrust of this case testimony came out at trial that there was a huge financial incentive a one time very large payment as well as a nearly double lease payment that was being offered to absent bark if they could get out of our lease you're arguing the practicalities again i understand your are there are there are three three things that i want to talk about or talk about the may fifteen because it's not extensive enough under language number two that there is suspense of condition a number one that it's void because it doesn't include enough language your honor we go back to the fact of this was an agreed order between counsel that was then submitted to judge jerry brown who then approved in filed into the record counsel if counsel wanted something different in the agreed order that is certainly something that could be negotiated between parties any of those issues once you agree to the agreed order any of those issues are going to be waived your own when did they first object to the lack of description of the second and third element they objected to the agreed order it was months after the that they filed two weeks they filed their motion because you had not completed the repairs that is correction on and that goes to the substantial completion of repairs that is under the twenty fourteen  civil code oracle the second argument for the may fifteenth two thousand and twelve agreed order that they're making is that it's to a subsea a suspense of before you get to that second on this waiver notion what's your best case that the parties can by agreement forward on the suspense of condition the the agreed order once again drafted by counsel approved by the court clearly says that the lease was assumed the fact that it says subject to does not create a suspense of condition under twenty seven or so under seven hundred sixty seven of the civil code you're on the reason for that is when you want to create a suspense of condition it needs to be delineated in that agreement saying subject to would be an expansion on the obligation articles in your are you'd asked before when you said that nothing was provided by able are and judge jerry brown it said that in his decision of we would judge brown was referring to was the fact that no support for that proposition that saying subject to automatically transitions an agreement into a conditional that's going to be under seven taking is that it does not it does not happen until you fulfill these requirements and that's where the subject to comes from we're all subject to usually means suspension of thought you were arguing  us talk about that for one second if we have a lease no party is going to lease a premises from party be subject to the following terms one of which is the payment the lease just because you would be a day late on a payment of a monthly least allegation doug would not extinguish and that's exactly what i'm getting at that doesn't extinguish the entire elise i mean that the lessee has rights at that point just because you'll be one day late technically if you're going to take their argument you're going to take their expansion that the word subject to transform this entire agreement to seven hundred sixty seven of the civil code you put it in the context of what the history of this case and on december thirty one th to say that they didn't do anything they did not get close enough and under civil code twenty fourteen they didn't comply with their obligations and therefore the lease is going to be dissolved in that as it's going to be taken out of the chapter eleven but what does that would be allowed to complete performance as long as does it does not substantially affect their rights that's correct your honor now when that is one part of it once we get to civil court article twenty fourteen you know substantially affect their rights we have nothing in the record nothing's been provided at all by a bar talking about what is the substantial effect on their rights as a less sore because it was not paid timely nothing is being put in the record at all that we haven't seen any debt service that they would have that they would be able to do there was no for sale from the great commission there was nothing it was really an arbitrary date that we spent three hundred thousand dollars replace thirty seven when last sympathetic that part of it because it's an arbitrary date based on the fact that for five years you don't mind making their players yes your honor which was the whole reason why we had to go into chapter eleven put new management in place and get the company were reorganized which thus far has been quite successful when were you need to find a website what's the name of the bar the name of the bar is mango mango when we are talking about the substantial performance you know what the judge did we're taking the main asset in this chapter eleven and doing the fact finding on it when he saw that we had done three hundred thousand dollars he saw that was substantially performed and then he forced us we had put thirty to forty thousand dollars in escrow to make sure we were going to complete those repairs and that completed the cure we had to serve throughout that time and i understand your honor there was a delay before that certainly that's the record is very clear on that but once we started that we had to serve a lot of ministers over the six months so you save the thirty to forty thousand is for repairs that had not been completed as  of sometime in two thousand and fourteen hours are adequate if your essential adequate assurance going forward that was for adequate insurance going forward for some of the deficiencies as of december thirty one two thousand and twelve that was really still part of the substantial completion that would have been the additional part that would have brought it to were brought to completion so there's no adequate assurance going forward as you would have to happen during three sixty five honor we had and what assurance of future performance it's like normally a statutory condition of three sixty five yes your honor and it you know we had danny shaw who was the referee who was ordered to provide a report i don't care what i don't care what the past was the point is when you you know if you're if you're only you know that some not you know what adequate assurances that means you have some kind of escrow or something in case you fall behind on the renter the roof falls and or something maybe insurance it can parties can negotiate it but you don't have it here your honor that thirty to forty thousand dollars was to cover any additional repairs and anything that was getting uncovered i mean this is a two hundred year old building and so that was part of the problem during that six month time period is we would go in and we would fix one thing and then there would be three or four of the things that i think recreation there for fifteen years again you know that's not here there or here nor there i was i was trying to help you out by suggesting that any fact judge brown treated this as a regular three sixty five therefore you know basically fulfilling it by treating this thirty to forty thousand as adequate assurance of future performance but now from what you say that's not clear to me no you're on a believe that is exactly what he was doing i think that he was doing both things he was assuring that whatever additional punch list would get it done during in this entire time we are still making all of the payments it will require not just to them but to all the creditors and that's something i know that here we're looking at everything in a vacuum where it's just two parties but we have millions of dollars that are owed to other creditors and all of them every one is depending on this one asset that's in the chapter eleven right now that this is based on this is creating the cash flow that's not the issue i understand your honor i'm just showing that there are there were other concerns as well when judge brown was looking at this of course he has to follow the law but in his deference in saying that there was substantial completion it was also when we look at kind of the whole overarching goals of what we have for a chapter correct your honor the pre december thirty one two thousand and twelve these back she didn't see anything in the record saying where they were waived she sent it back to judge jerry brown saying do fact finding on it to see if they are due and if they are until the key or the cure was completed he provided for attorney's fees the only thing we say on that your honor is that that was not no motion was made before him that was not before judge jerry brown at the time so there was no fact finding he had contemplated that in fourteen days there would be some applications on let me let me ask you my at my problem about reviewing i have a procedural problem  substantive problem procedural problem and i don't see how you can split the attorney's fee baby for pilot purposes because since it is no quantum of attorney's fees and i think it i know it's true in federal jurisprude e i think also in bankruptcy by reference but you know on the attorney's fees as she's stand on their own as a separable item so i'm not sure why we ought to review that issue at all if we pretty substantive argument my substantive question is how you could just arbitrarily cut it back to december thirty one of twelve and not give them what they're that whatever is before the court right now the december thirty first twenty twelve forward that that they were in the in the back to judge brown for fact funny because we don't have it right now for a fact finding on if their own if they are owed how much is a joint that with what has already been referred back to him i take it he hasn't ruled on yet he has not ruled on he's decided to go in wait to see what happens on the appeals before he did that fact finding in the end but if we could send that portion of what is currently before the court we may end up back for fact finding on would be an amount so then he would have both things before him it would be very clear that would decision and then what let me ask you in your experience i assume you have experience in the bankruptcy law and in your experience i mean i'm aware that there are a lot of agreements some made on three sixty five ish assumptions but how many of those agreed orders are interrogation that is to say do not necessarily provide for the cure the reimbursement of the damages an adequate assurance your honor i would say it's all over the map i mean as we've seen in this case we have different orders that were prepared by different counsel delineating whatever items were important to them it isn't like they went through the check sheet and put in each time there was one of their curators that they wanted to include under  we would ask this court to affirm the district court also to affirm the bankruptcy court decisions that that lease was assumed and that this asset that is the main asset in this chapter eleven could continue to service that chapter eleven debtor and hopefully will be able to come out of bankruptcy when he wants to be a scandal and go all right thank you which was assume that lease which i provided you guys your honour's a copy of it's tab twelve as well and it's in the record of twelve fifty they checked each of three boxes they added they cured they provided a checklist i'm sorry let you get there but i only have four minutes of if you go direct to me i think it's tab twelve and it's that's ok ok i'm sorry  they provided for care they stipulated that there was a stipulation of no p q neary last meeting no tourney's fees necessary and then stipulated a separate section on adequate assurance that no other adequate assurance whether for cure or future performance was necessary just right down the street a month before that's how you assume a lease they were assuming an identical lease at two zero one bourbon another mango mango daiquiri shop there are two two mangoes and the old absinthe house those are three those are the three businesses so with respect to that yes yes they're all all over the map but in this case it's clear when they wanted to assume a lease they did to twenty fourteen the application of twenty fourteen article twenty fourteen substantial completion as your honor sat on court with judge rubin back in one thousand nine hundred eight just a few years ago just a few years ago just a few years after twenty fourteen was revising judge ruben held twenty fourteen in the in the comments specifically says this does not change the law it does not apply to anything other than construction contracts and hauling clearing of land substantial performance now in the thirty years since the louisiana supreme court has never applied it to a lease situation now it's become cottage industry for  landlords and tenants to bicker over this because the long term lease of this is that this is the defense on bourbon street just say twenty fourteen it's a long term lease we were halfway through you can't throw us out but that is not how the law works here and ruben saw it in one nine hundred eighty eight and briefs his his definition of suspense of condition was mutually acceptable performance criteria your honors your honors adopted that as a suspense of condition actually cut and pasted his own ruling is essentially saying if if you if you determine what the acceptable behavior is that is going to become that suspense of condition here subject to every commentator recognizes that the word subject to means it's a suspense of condition judge brown recognized it too and when he ordered us to brief on it he just never he just never did the analysis necessary third are adequate assurance of future performance we approached judge brown we approached judge brown at the cur if we need to have another hearing on adequate assurance of future performance i'll let you know you cannot build in especially with that especially in the fifth circuit the richmond leasing cases is clear that we go way back into these parties history to determine what's going to be necessary for adequate assurance a future is it just going to be escrow is it just a personal guarantee or are we really going to look at how these guys behaved in the ten years prior and even during this bankruptcy time and again we've heard this is their dress rehearsal adequate assurance of future performance lastly if i can have just several more moments i've also provided you with a transcript of a hearing from february twentieth this was a hearing which was held in response to my objection to judge brown's extending the cure period remember we we agree contractually december thirty first is going to be our day he gave them until february twenty eighth i mediately objected to this hearing and i don't know the best way to illustrate i've give excerpt but basically this hearing demonstrates one that he you know a month before trial assured us december thirty first is the date as long as you're not complaining about an unpainted wall you're going to be fine if you  feb eighteenth we have a one page e mail from an inspector who in early january looked at this and said just basically said looks ok then the director of the b c c larry has door for he just retired he came in testified and admitted under cross every bit of brick that we showed him he said yeah that's that's inappropriate yeah that's inappropriate yes and then essentially said well i'd have to see the place in order to really be of help he admitted that he hadn't seen the place i mean he  wasn't involved they sent him there's no real testimony but that's not what we're here we're here for the contract interpretation and the suspense of condition and this december thirty first deadline which we were promised not only by the debtor but by judge brown himsel