the next case for all argument is case number fourteen dash six zero zero seven and race cindy foster johnny larson the third versus cindy foster and all insurance agency and at the time of our acquisition there were representations there were no claims pending and the debtor would not compete my client agreed to pay four hundred thirty thousand dollars within three weeks after we signed the contract or my client signed the contract the debtor was in fact sued because there was a claim pending by mr stevens who ultimately obtained a judgment against her for well over one hundred thousand dollars on his client in the meantime my client had been making payments on this contract and got them down to about one hundred seventy thousand dollars by which time he discovered she had in fact been competing against him all the time and was taking business from one of these facts a really good record or that these are all your allegations well these are the allegations in the in the petition to set aside the fraudulent conveyance orange stamp that they're all i would not yes there are these are all the allegation that's correct  what it's not only to hear the facts what's in the record i'm sorry what you think happened what is not an allegation is that the debtor who has who has admitted this in these pleadings the debtor in fact assigned the contract against my client assigned that to a third party mr stevens who had the judgment against the assignment which has been admitted here stated no consideration she was not released from the judgment and then she filed her chapter seven and the bank which you base that she was released from the judgment that the assignment was because the assignment did not mention the judgment and when she filed her chapter seven she listed mr a creditor to the full amount of the judgment and indicated the basis of his claim was the judgment so she by her chapter seven indicates she still owes the judgment she filed for bankruptcy within a year perhaps a let's let's start back to that for a second what wasn't there some agreement that there were a dollar for dollar collection by mr stevens would apply against the judgment and that's an allegation that's not that's not a perhaps nine months later i believe clearly this assignment was a fraudulent conveyance in her statement of affairs in bankruptcy under chapter seven she did not indicate that in fact she had to sign this contract within one year prior to the bank to bankruptcy and consequently of course did not indicate whether she received anything in exchange so whether intentionally or unintentionally now goes only the this assignment was concealed from the bankruptcy court and from the trustee in the meantime mr stevens sues my client on this contract that was assigned my client was not listed in the bankruptcy keep in mind our allegation is that she competed against this took business from us we have a claim against her on the same contract my client finds out about the bankruptcy and directly we file a claim in the bankruptcy based on his allegations and get permission to file the claim late because she was not listed and at that point i alert the trustee in the bankruptcy that it appears there is a fraudulent conveyance time is running out what do you want to do i get a response from the bankruptcy trustee there's not enough time to determine so i on behalf of the creditor file a suit petition to avoid a fraudulent conveyance do that in february of last year  under electronic filing a copy goes to the trustee he's aware the suit was filed answer is filed copy the answer goes to the trustee and we continue from that point through late august to litigate the case discovery back and forth motions to do this motions to do that there's a variety of activity in this case over the next eight months the trust is three asked me why was the debtor named as the defendant i'm sorry why was the defendant named visit why w answer and i case indicates we don't know anything and in fact there's a set off in a counter and why what's the status of that case that's on hold because of the stay why the courtis has set that aside pending a decision in this court whether mr be my position in that case is that he doesn't own the asset it's owned by the bankruptcy so therefore it's the trustee who would be pursuing the claim not him so he has no standing there right but you don't have that i mean why why not just settle this in state court i guess i'm just not understanding why we're going through all the fraudulent transfer when he's got the right to collect i mean forget the fraudulent transfer he's got the right to collect your disputing that you owe anything why not just sound like there because what i'm disputing is his right to even file the suit that it's a fraudulent conveyance and he does not own that asset and have he doesn't have the right to pursue it because it's an asset and bankruptcy one of the intriguing aspects of this case is that and i think there is a plenty of evidence as to what happened on the record as far as to transfer whether it's fraudulent whether it should be set aside the same day we were set for trial on the fraudulent conveyance action the debtor mr stevens filed a motion to dismiss on the basis that my client lacks standing because this is an action that should be owned by the trustee and that's primarily that's the first reason why we're here i responded by a motion for retroactive approval to stand in the place of the trustee the issue became whether the trustee consented to my the creditor pursuing it or whether trustee abandon the claim and i had no right to pursue  sidelines so it appeared obvious i had the right to pursue the claim the issue was not raised at all we could wait but i think that motion was filed two hours before trial so we were proceeding along as if i had the consent the debtor and mr stevens a third party didn't at that point the court denied my motion for retroactive approval on the basis that the trustee on the claim and i did not on the client and my point to the court here and then was that the trustee consented by his inaction to my pursuing the cla case and not intervening yes the trustee consented but as a matter of law he consented by that and they actually believe that's in my brief your honor i can't give you that case off the top of my head but it's in the brief the interesting aspect is ok so the fraudulent conveyance is set aside now what and i'm sure my opponent waar give us well i am ninety percent of the creditors in the same tempter seven case my clients claim represents ninety and brief basically says well you're not a creditor because i didn't list you i don't think that's the test so the interesting thing is ok what happens now do i by pursuing this claim that the claim is really against me and i'm the one who set it aside and brought it into the bankruptcy court what happens now and i think that's premature the debtor is going to argue well it's a moot point because that asset isn't worth anything we don't know that yet that's up to the trustee to determine  set aside then the trustee can a pursue the claim determine whether or not it sufficient to pursue the claim negotiate a deal by which my client subordinates his claim pays money in and all the other creditors get one hundred cents on the dollar we're not there got he got all the pleadings and got and saw that there was a not a variety of activity on the case but didn't participate in discovery had no conversations and no communication so your your position here is that the claim against your client has merit yes it well that's the intriguing thing it has merit on the face of it and what it has in our account worth through it's worth pursuing it's worth pursuing and a for the best interest of the creditors and i think what that's what we're here arguing about and it made that may be a determination well that's where your client you're not really representing your client's best interest at this point you're really a robot i read about that i think and that's the intriguing aspect because i am because i've got the ability once it gets back into the as an asset i've got the did we didn't get this far without talking to the trustee and having a face to face meeting and attempting to go shoot something didn't work out that's my presentation or thank you thank you but before you sit down is did you perhaps want to apologize to us for being late i do apologize there were three accidents on highway forty i'm really sorry your honor of expected fully to be here you are as i said my name steve barber on here behalf of bruce stephens and just very quickly for the bankruptcy court did on abuses discretion and finding your holding that  there was no standing on behalf of larson to pursue this adversary complaint she she further had the bankruptcy judge further held that the trustee was justified in not pursuing a fraudulent transfer  estate but then it's the trustees claim he's not half so far at least has not asked for permission to pursue the claim against his client so it's all over the trustees class be that as it may there are certain certain assessors necessary steps that he needed to take to set aside the transfer as a derivative party and he and they failed to do so as he is in as he admitted in this or argument that they never  requested the trustee to pursue it the trustee kind of said on the sidelines i would submit that even though the trustee did not formally oppose their claim it's not the it's not tacit consent for authority to proceed to rid of lea you need the bankruptcy courts authority to do so and that was never requested or granted and furthermore larson never named the trustee or the bankruptcy of state as as the real party in interest which was noted by the trustee and as his own response it's simply one of the elements set forth in the racing services that by the eighth circuit none of the elements to allow a party to pursue a derivative avoidance action were met here with larsen ever petition the trustee to bring the claim or have the trustee refused to do so never sought permission for the bankruptcy court to initiate the claim and the trustee did not unjustified derivative standing pursuant to ecuador stoffel there is a case cited in the appellate brief but it's a new york state case dealing with a foreclosure a mortgage has nothing to do with bankruptcy i personally could not find any bankruptcy cases dealing with this issue a providing for authority i think the elements of allowing for drouet of actions are fairly strict proceed primarily because i think the statute eleven u s c five four eight eight one expressly says that is the trustee is the one to pursue such avoidance claims and to allow another party to pursue it there are certain elements that must be met and they were not in this particular matter so i  would submit that larsen failed to obtain a derivative standing and the bankruptcy court was correct and so holding i would note that the element the issue of standing is something that can be raised at any time it's a component of so the subject matter jurisdiction cannot be waived and therefore the fact that there was raise at the eleventh hour which i concede does seem odd but it was raised and it was brought to the bankruptcy court's attention and it's my position that she properly found in her order that stand it can be raised at a time when there was no so standing here i would ask the panel to affirm the bankruptcy courts order and hold that mr larson did not have to authority for the if the proposition that the trustee consents by has an action and i found that in my brief that's the inri racing services case five forty fed thirty eight ninety two which specifically held that a creditor was deemed to have  under oath that in paragraph three i advised the trustee in the case that i discovered evidence to support the conclusion that that or had transferred an asset of more than nominal value without adequate consideration i asked the trustee if he would be pursuing any action and he responded only that he would want to additional information to avoid the entry of a discharge would have terminated the right to pursue the fraudulent conveyance i filed the instant complaint and thereafter continued to advise the trustee and send  he got copies of all the pleadings and what was going on but he did he did formally object before the court he formally objected finally when the motion for to dismiss was filed that's one that's when it hit the fan and all the issues were raised a couple hours before trial but the trustee a party to the suit that time the trustee would have not been a part of the shoot at that time so how did he if so how did his objection come up the trustee had been receiving and then received a copy of the motion respond to my motion for retroactive approval will be in the recess until further notice