the deal was partially financed by a goldman sachs consortium it was further seller financed by a series of contracts there are two other lawsuits pending in the state of wisconsin related to these  million dollars and these these are family related businesses to the managers then the principle of these four players then the notes would all be cancelled because of the size of that subsequent contract there were two separate summary judgment motions in this case the first related to our demand for the issuance of the twenty seven percent interest in the toc investments l l c as contemplated by the agreement that was denied by the district court we were allowed then to repleat we did know the round of summary judgment motions took place they were denied on both sides neither was ultimately tried before the district court and the court ruled contrary to us obviously or we wouldn't be we believe though that the law of tat tracks strongly supports our position that we are entitled to the point seven percent or alternatively the value of the promissory notes there are four main points that we're here to address first that their freedom to patrick principles require validation of that first agreement that first request second that the promissory notes and questions that according to the district court have  no value and we believe that that's a tortured view of what these notes represent and we believe that the law requires that the court take a different approach and look to ways to enforce the cont rather then to give them an unreasonable commercial meeting mr ganser can i pause would you mind if i ask you a question about that point in particular yes the district court as i read its opinion seemed to seem to place a lot of emphasis on what it saw as a pretty clear business purpose behind the notes and that was that than the notes were created to clear an incumbrance upon the assets that were sold in the first instance and by creating the notes and having the incumbrance lifted the assets were able to be transferred free and clear of agreement doesn't make a lot of sense that we don't we don't believe it does here's what why would why would there ever be why would there ever have been contemplation of payment on the notes if the business purpose has espoused by the district court is correct well we disagree with what the district court said was the business purpose and we think that it makes no sense and in many respects but i likened it to the seinfeld episode then these contracts are contracts about nothing  the way that i think it should be approached and their idea is that the indemnification provision provided that the the creditors if they were to attack mr toc his company tac investments on the basis of those notes saying that you know you all of them and now you will us we've said will indemnify for that will make sure that that isn't going to happen and so and so that's what the three year period was about that for three years we'll make sure that you're covered see our our view on this is that the the notes to myself are the two documents when read together provided that  cancelled intact investments would give us a plenty seven percent interest in the business of course if our only purpose on this was to ensure that we could clear those those creditors of transfer the mill then why would we have the twenty seven percent interest provision in the contract that makes no sense otherwise sol as i said i i understand what judged respected but i think that to give this a commercially rational business meaning that you have to look at those contracts in terms of tax hasta or something for the plaintiff companies in order for this to be a valid contract otherwise what's the purpose what's toc giving up nothing he's getting everything which in fact is what's what's happened here i mean obviously there was to be an encouragement of this three hundred million dollar contract it never took place but even in that what's the consideration and in this case that it was that top would hold us either at twenty seven percent interest or the terms of the notes but for you've done that if you had entered into that three hundred million dollar contract we wipe it clean that's what the agreement says so you know in many respects what's the downside for  tact in entering into this agreement it doesn't exist there's no downside getting back to the twenty seven percent issue which we think if that's the rule if you rule in our favor as relates to that then the rest of this need not be addressed but the last contracts in the state wisconsin is premised upon the freedom to contract on the a principle that individuals should have the power to govern their own conduct without government interference part and parcel to that is that a court can only refuse to enforce a contract where it has no doubt that it violates the statute the rule of law or public policy in this case the central issue in the first part of our argument is that the twenty seven percent provision should have been granted we should have been given the twenty seven percent interest i'm talking vessels that gets us to the central argument of the but a reading of that case shows that it's tax case that it relates to really whether a trust can be exempted from a tax which i think is best terms of personal property tax the court simply pointed out in that case that just as individuals can do tax so too can corporations and that ultimately it's individuals who bear the brunt of that  individuals are ultimately the ones that are taxed that case relied on bull by the up lee end of the district court provides that they're claiming that it says that a limited liability company cannot agree issue shares in itself there's no lot of support that there's no public policy that says that if in fact it should be the law that's a job for the wisconsin legislature to hold on hold on that point isn't is there any dispute that that attack investments alcee is a delaware limited liability cut is a delaware company correct ok and why why therefore if that's accurate why wouldn't we look to the delaware limited liability company act  in there is nothing in the act there that is similar to the claims of the at least let me let me ask you to react to something that in section eight hundred three zero one of the limited liability company provision that addresses the admission of members so here you'd be talking about a new membership interest and sub section b of that statute addresses a situation where new member come in after a formation of a limited liability company that's what you have here and the one specifically acknowledges that a person can acquire a limited liability company interest directly from a limited liability company you know quote unquote so doesn't that contemplate that it's lawful it is certainly does your honor as you've read that correct so you talk about in terms of we can't see anything that prohibits this i'm suggesting there may be actually a provision of the delaware code that affirmatively authorizes it in if that's the case we would ask you to to move forward on that basis and in reverse to the district court our position has always been that this constant law doesn't that's what i was trying to figure out why are we talking about wisconsin law on freedom of contract or word and when the question is one of the authority the authority of a limited liability company made and our position was this that the the companies located in the state of wisconsin the jurisdiction is the state of wisconsin all of the transactions occurred in the state of wisconsin we did look at the delaware limited liability law we looked also at maryland at one point because it was deemed that perhaps this was maryland company but the truth of the matter is we focused our argument on the state of wisconsin as a result of what is clear the freedom to contract and no prohibition and nothing  one other aspect of this case the third main argument that we've offered is the physical possession of the notes themselves and what happened at the trial of this case is that t gentleman testified david vanden jubal testified he had two notes with them and he testified he was holding that those two notes only as collateral bread a hutchens from the nickel a bank appeared as well in he too said he was holding a note on behalf of the bank only as collateral they've testified that upon payment of the debt the note would revert back in that this was only being held in our case what we've suggested is that the wisconsin version of the u c c provides that an instrument can be owned by someone offered as security and held by another and that's exactly what happened here the fourth note in question was held by associated bank that was paid off it was not yet returned to the appellants at that point in time yet as it relates to all four in the district court said because we didn't have possession of those ballots that we couldn't we couldn't prosecute them we believe that that's incorrect they are to absolutely transfer would require an endorsement there was no such endorsement here and in fact if actual possession of the notes indicated that there the had to be that they were not actually security  statute in question that provides the holding the note for security is superfluous so it's our position that if we get that far down the line that these notes are actually being held as security there's no contrary evidence to that the indemnity provisions which prevented the enforcement of the very notes the players were seeking to enforce at the trial the evidence also a trial that the plaintiffs did not possess any of the original notes and under both clear u c c statutory order we didn't hear about a case prior to the filing of this lawsuit but there was a lawsuit filed in two thousand and twelve by the same plaintiffs against talking about some cell c and that was under the same theory of originally started in this lawsuit it was to enforce this twenty seven percent transfer obligation in the final business terms agreement the evidence in that case through discovery that was taken indicated that days after the notes were made they one of those notes the four point four million dollar note had been assigned to a third party on that basis in the filed all the documents produced a trial demonstrated that none of the four notes were in the possession of the plaintiffs two of them were possessed by one party a are you'll find no critique of the freedom of contract from the happily but there is a notion that equity will not command that which is impossible and that's well established wisconsin law that's what the opponents are seeking in this case they were seeking i can think it's possible under under that provision to delaware law the district court focused on section seven zero six of the women liability company act which deals with assignments of membership interest but there's a separate provision that deals with the admission of see and you're talking talking dozens inc and their interest in this record reasoned could not be adversely affected by without they be diluted essentially if there were new membership interest create that's true though any time a c corporation would issue shares as well right and i prefer so for example as part of a compensation arrangement and i think they just require reason that l l c's are more akin to partnerships than corporations in that sense so it's a little bit different of a setting in the law of corporations as far as issue new shares and that these ownership interests will be adversely affected of the two members that all ownership mustique want to present and how can they not be diluted as other another thought my only observation i'm more injury actually which i have is that it seems it seems like it's expressly contemplated authorized by the delaware code it is authorized but again not without affecting the members membership interests of the other two for the court that the sale of the milanov connell falls was a separate transaction from this found business terms agreement did not appear on any of the closing documents this final business terms agreement was maybe done in parallel but the parties were there different and it was not hard the closing sheet and the other sale this was done at the very last minute and mr bannon who wolf we believe his testimony and this really isn't a case about credibility the district court judge noted that there were different accounts but because the documents were plain enough you could decide based on the the there was a there was a reason for it in the language if we're going to talk about freedom of contract and the ability to have contracts and force this very plain language an indemnity in the final business terms agreement community planners saying that an effort by the plaintiffs to enforce these notes result in indemnity essentially precluding them from the enforcement they they sought in this in this lawsuit and resulting in don't you think the reason for that indemnity language is precisely the point you just made in other words i'm i'm i want to i'm not going to hold you responsible for payment on the notes but i need i need to get the encumbrances lifted on the notes to transfer clear title on the assets in this in the underlying deal so one of the we can refer to it as a  well that's true enough but the fact that a security interest exists is in the notes is all the more reason to find that the plaintiff can force them to use both statutory and common law forty's and it was consular which state even a secure party has a right to enforce the notes implying that the pledge of pledge or for the party seeking security or granting security does not so there's no way payment and possession is key to it and that's certainly what the plants do not have here there's no no one to suggest that they had in possession of the notes the time they started for some all the evidence was to the contrary a trial and there was  these notes to various their parties which are writing can a company and no one still be an endorsement of a no so these notes from the ghost when they were transferred they were signed they were pledged at their parties as a are just a couple things that were suggested here that i really need to respond to first of all the question about dilution of value that makes no sense that the fact of the matter is this limited liability company received all sorts of value from when they received the tissue mill free of liens and dop so now they've got that equity and these notes were purported to represent the value of that equity they did receive value in it it doesn't dilute any of those shares other than the fact that are really their interests other than the fact that they did not pay in therefore i think got it for free so no interest would be diluted unless it works the other way in that they get it for nothing secondly with respect to the the agreements they were all signed the same day counsel suggested that they were part of the closing all of these documents were executed in the same transaction on the same day finally he talks about the relation back argument and we said this in our brief and it's true that the original complaint in this lawsuit reflected not just the  final business terms agreement but also the notes and not only did the original complaint refer to them they were attached exhibits so the argument with respect to relation back really is a classic example here of the fact that all of these things were pled and now for some reason because there's a potential for statute of limitations issues what they want to do is they want to say well you know the relation back doesn't apply but it certainly does it's a classic case