is seventeen fifty six westlake street first says american chartered bank explain in words of one syllable the transaction in this debt forgiveness and its relation to the the the loan i'm happy to do so your this case amortizing lawsuits over the course of those forbearance agreements essentially what ended up happening is that two affiliated companies seven hundred fifty six on the one hand and eighteen hundred westlake street on the other began to cross guaranteed each other's obligations provided additional collateral and security for each other's obligations amongst various other consideration provided to the bank in exchange for the various accommodations it appears that these transactions were arm's length the negotiated in good faith but ultimately at some point the bank required in connection with yet a separate loan obligation to get a nother affiliated company for purposes of acquisition that ball seven nine hundred provide deeds in lieu of foreclosure to be held in escrow by the bank so that in the event that there was a default that the bank could presumably record the deed and circumvent the foreclosure process and that brings us up to speed basically in connection with this instant litigation at some point a default does occur to the bank instead it goes to some affiliated holding company of one of the bank of the bank by the name of sure still real estate a codefendant in these proceedings now the entirety of why is that important well it's important certainly in the event that this matters remanded because it was not initiate even addressed in the court below because sure certain objective leak does not give any consideration for the receipt of the deed certainly the argument can or no this is just but it's just an affiliate of the bank allegedly your honor it's what i mean allegedly well they're not affiliated with it well it's only found have but the you didn't contest it during the summary judgment proceedings correct it was not and it was not even a point that was really raised and again so can we forget in our we can for the purpose of pale ale to serve in any event possession then files and proceeding to avoid the fraudulent transfer under section five forty eight of the bankruptcy code in the district court in this is important because it gets to the question regarding this court's jurisdiction a notice of appeal on the proper parties that this appeal because all to know i'm interested in the transaction fair in terms of the transaction the complaint is filed setting forth various allegations which we are given below and reiterate here make out a prime facia case for a fraudulent transfer constructively in other words it was a transfer of the debtors property made the creditor you differently the deed now what the underlying court finds based on the subsequent alleged  to a third party by the bank that the fair market value of the real estate is one of the banks so some of your property and got money for you they never close the transaction they didn't sell it nor they still have your deed that's correct and to this day and upon the most recent information obtained this purported purchase are now almost eighteen months later has still not walked away from the transaction is still interested in concluding the transaction i would posit that your narcs perience these are not the actions of a typical investor motivated under normal market conditions typically i would argue that an investor acquiring a piece of real estate which is a fungible asset if they're on able to utilize the acquire this asset at a particular given time they're going to move on from the deal they're not going to wait indefinitely i don't understand what one significance of all this the bank has the deed whether it's so old or hasn't sold and you don't have  correct so what is it you won't we had an appraisal quote do you want to look well we want the court to return and do the transaction under the fraudulent transfer statute what is the not actual book constructive in that the i don't know what that means well constructor fraud would indicate that the value given for the transaction is not reasonabl know that's a pretty mushy standard and eve got one point five million in debt relief that's uncontested right and you got an appraisal on the other side of the transaction that it's worth one point three i know there's an appraisal at one point seven as well but then judge course also details all of the other benefits that your client received in the form of interest rate modification and extension of the loan and all these forbearance nine forbearance agreements over the course of several years and so with this standard being a reasonably equivalent value and that being a pretty  seven million if we can assume that the debt forgiveness which was equal to one point five million was the value provide then it least we know if the appraisal  unopposed which it was and if the court below must take all inferences in favor of the nonmoving part it should have accepted the gutters one point seven to this particular point if we're going to talk about the totality of the circumstances which is what judge course gets into when you determines that assuming the one point seven million value the bank gave all of this additional value to the debtor then he must look at both sides of the ledger he must also look at and conduct in analysis of what the bank received in return now granted the change and present any evidence that what was the evidence that you presented to judge her course of the benefit that the bank received by forbearing for all those years the evidence is identical to the evidence that was presented by the bank the court accepts the lower one in conjunction with the purchase offer because they're the same one point five million there's one point five million in debt one point three million is the bank's appraisal and the bank's purchase offer that it has from a third party the debt forgiveness is one point five your appraisal is one point seven accepting your appraisal leaves a two hundred thousand dollars gap and there's no quantification of the in direct benefits that fills that gap and that's the issue here neither side quantified it so we have a failure of proof correct and we agree precisely with that point that it was the bank's burden to precisely quantify there's no doubt that some point the burden would shift to the plaintiffs here is that our case i don't think so i've but but assuming that there was some attempt to quantify it then it would shift the burden but that is that nobody made any effort to quantify the indirect benefit so we don't know and judge chorused didn't quantify them either he just said it makes up the difference there's reasonably quibbling value we're going to go  fraudulent transfer here it's so you know there's really kind of it a step in the analysis that's missing as i understand this case i agree and i get how solid is your one point seven million dollar we're now who made this million seven hundred thousand dollars there have been a part and there have been at least two such offers that i'm aware of the names of the actual offer was a scam time at the appraisal did what was his methodology i believe it was a comparison of sales approach and there was also a cash flow approach with capitalization immediately move first summary judgment so why didn't the one in your client ask for additional time to take discovery it's just the record is really thin here and it just seems to me that the response should have been hey this is premature we got a lot of work to do so we were not counsel below and i certainly can't read the mind of his former counsel i agree with your honor i agree that the record is extremely thin here this case is one that ought to be decided on the merits given the underlying record before i sit down i have a procedural question there is a case a parallel case going on in judge c same transactions all the same series of transactions all the same for parents agreements it's all the same debt and the same analysis about the value of the eight hundred property and the extent to which it the reasonable equivalent values should consider the in direct benefits of all of these for parents agreements and the interest rate reductions and the other intangibles is at issue in the other case is not right indeed and we've got inconsistent rulings by two district judges involving the same set of transactions and package of real estate and loans correct and so why wasn't this case treated as a related case and consolidated with the case in front of  can't precisely for that question what i can tell the court is that each of the cases arising out of two separate bankruptcy filings they should or likely have been consolidated both at the brain race but we have a real danger of prejudice from inconsistent rulings about the value of these intangibles no doubt about it and one of our arguments is that if the court's going to take into account the totality of the circumstances it must look at the value including the eight hundred property which has over a forgiveness the same debt forgiveness same all the same kind of same analysis regarding the failure to quantify with any precision the value given and the civil cover sheet for this case that was filed with this action didn't identify the other case as a related case i do not know that question i've looked at it and it's not there so there was never a judgment made by the executive committee in the district court about whether these were in fact related cases and ought to be considered together s here if we just forget about the forbearance agreements and all that consideration and we just assume that the one point seven million dollar praise all that the that lake street has alleged is correct we've we're already over eighty eight percent in terms of reasonably equivalent value so i would stipulate that there doesn't even need to be anymore proof there isn't we don't need to quantify any more consideration wouldn't even need to get into the formats agreements if all it was was the debt forgiveness alone we'd be at over eighty eight percent of the value for the property that was given uncontested lee in debt forgiveness that alone should reasonably equivalent standard this court has always held that no dollar for dollar comparison is required there's no set determination for reasonably quick one value you look at it under the circumstances you have a third party here and arm's length transaction real estate subject to factual ation and differences in opinion on value and you have over ninety eight percent value given just from the debt forgiveness now on top of that you have the four ma'am says if we need to get to them you have four and a half years of consideration that was given related to that and no one has contested that all of that should be considered as part of the reason we've quit going value some of it hasn't been quantified some of it can't be quantified or at least not very easily but some of it is pretty clear one hundred thousand dollars new loan given to lake street right after we took the deed in lieu in s a gram the interest rate reductions alone are easily quantifiable i think they are your honor and  perhaps we should of course to fight them more but i think that the form answers do speak for themselves in that regard had they done that now we've done all math we've done some of that i think that doesn't get us to the two hundred thousand dollar gap it doesn't your honor but but the hundred thousand dollar additional law the interest rate reductions there and then on top of that you have hundreds of thousands of dollars of law new loans that were given to the affiliates and this isn't what is four years of didn't get to trial on this we were right it was decided on the summary judgment record but this could have been put in at summary judgment to see if there's actual material facts in dispute on that but your i don't think there are material facts in dispute even without that even assuming that's worth zero there is no material facts in dispute first of all you have over eighty eight percent of value without even getting to the four masses then you have a hundred thousand dollar new loans then you have hundreds of thousands of dollars of additional new loans given to affiliates and not just affiliates but companies sister companies that were all owned by the same individual all run as some as a commingle enterprise with which overlapping on a ship this is a family run i'm a principal one could be i don't know if it's worth bothering with but in principle one could cases considering reasonably quick going to value the the courts have not done a lot of math calculations this hasn't been a lot of let's precisely calculate this let's precisely calculate that let's add it up with  see if we got two hundred percent that's just not necessary because the code says reasonably equivalent value and courts have struggled with this some courts as this court has recognized and disagreed with used to use seventy percent as a benchmark here we have over eighty eight percent but i think what's what this court has always emphasized is you have to look at all of the circumstances here there's no bright line rule and what you have here as this court has has struggled with i think in the prior questions is is something seems off here and what seems off is you have a third party third unrelated party you have an arm's length transaction you have substantial value conveyed and you have a lot more value that either hasn't been quantified or can't be quantified and under the circumstances this isn't a typical fraudulent conveyance action this isn't a typical construct a fraud situation you don't have a question in the transfer of the deed  whether that is an appropriate substitute or foreclosure no one has judge that's just accepted as permissible alternative it does your honor but apparently this is this is ok where you come from your honor this is not it's not a typical that and context of a situation where there is default and where the bank enters into a performance agreements that at some point depending on the circumstances sometimes it happens sometimes it doesn't hear it didn't happen until three or four agreements into the forbearance transaction that the bank says ok if you want to continue you need to give us more i think that under those circumstances the this is an arm's length transaction and there's you're already at eighty eight percent of the value before one is governor is there though in light of the suit that's ongoing in front of judge c a danger of double counting indirect benefits i don't think so your honor that that case is first of all very different it like all the different property and it's a degraded gap in the appraisals right much every single case and everything is other than that he didn't deeds in lieu of themselves every single document that these parties signed together they were they were the same documents but your honor that the massive distinction that i think judge conelly made is that that case is not as close of a call there's a huge there's a much bigger value gap between i think that a trial i'm going to be able to easily show that there praises wrong and that that we actually did get a reasonably can st value but right now if we assume all the facts in their favor that value gap is big well right but you're going to want to count the same benefits in that case that you want to count here that case i have to honor this case i don't have to i respectfully would it it here so we are going to have a double counting problem because as a matter of law they were counted here to make up the two hundred thousand dollars gap and in the case down the hall they'll be double counted as recently equivalent value for that well your honor judge chorus does discuss that but but in connection with their early in connection with everything else i think barely is is telling because it's not necessary under the circumstances because you have such a close value even without it then you have all of these new laws let's just take the loans your honor you're talking about over six hundred  fifty thousand dollars in new loans after we took this deed in lieu which we just need to cover two hundred thousand assuming you have to give one hundred dollars and you are having a very strong case that the question is whether this should have been resolved on summary judgment independent of case down the hall or whether they should be resolved by the same judge in a consolidated proceeding to avoid the double counting problem to avoid you know resolving this case on an inadequate record your honor i think under the circumstances it's not necessary because you never have to get to that judge to course consider said he would sit in with everything else in judge canal his case it's a much bigger value difference that is probably going to have to be proven  extensions oh right  circumstances you could just have that you could have just stopped right there and you've got it over eighty percent on real estate with an unrelated third party arm's length transaction seems pretty clearly reasonably equivalent value but you even take one thank you for our and i'll be very brief to the extent that we're going to start taking the cow any of the indirect benefits that may have been given to when it look you know obviously point is that when we start getting into the indirect benefit analysis you start to look at the totality of the circumstances here and if you start looking at the tail of the of the circumstances then yes compartmentaliz ing just what seventeen fifty six received without taking into account what the bank received in return because if the indirect benefits were on account of the direct benefits to eighteen hundred and and eighteen hundred and thirty has over a million dollars in equity and this property has over two hundred thousand dollars in equity we're not looking to make up that small gap now we're looking at making up a gap in excess potentially of one point two million dollars and so the error that is made before below is that in complete analysis the looking at the transaction sole wanted two million the one million dollars in equity as alleged and per the appraisal in the eight hundred property the sister case and the two hundred dollars in dollars in alleged  again when you start to come compress these transactions you have to look at both sides of the ledger and what the bank received and gave you think the bank got an extra million two hundred