settlement is the liquidating trustees conclusion that only about sixty five thousand dollars in transfers to an american express were recoverable under an employment contract fraudulent transfer and transfer theory and what we think is that this conclusion does not demonstrate that there was an adequate an adequate investigation into the facts forming the basis of the claim and that the bankruptcy courts approval of a settlement based on this conclusion was an abuse of discretion why did your client declined to purchase the claims from the liquidating trust me it was a lot of money it was still three hundred sixty or three hundred thirty thousand dollars and it was my client position that it had to stand independently under ninety nineteen and you couldn't just bypass ninety one thousand all together by using persuaders that had been approved in this court mickey thompson as an option honea as an option was a bad case that talks about the ability to potentially treated one thousand is sale so here's the bankruptcy court accepted numerous filings held a hearing and stated that it considered everything that was proffered why isn't that enough to show it fully considered the case what more do what they had what other then you disagree with that what more should the bankruptcy court of done i think that it has to show that it just wasn't rubber stamped and if you go back to n c properties or martin martin became this court's the seminal decision on the settlement factors the court this court noted the issue how difficult it was to assess whether or not a bankruptcy court weighed all the options correctly if it was not put on the record and counsel that that should happen in the future in properties however that problem was remedied because the parties specifically outlined the claims in the settlement agreement and so you had a discussion of the claims in the actual settlement agreement and the factors that went into winning that settlement and also in the cost benefit analysis in the agreement so this court had an independent basis to weigh how the parties assess the claims and that wasn't done here because in the supporting motion that was brought under rule nineteen although the liquidating trustee said he thought something less applied true and i'm not sure if it's not a distinction without a difference i'm not sure if there is this huge difference between what the business judgment rule requires and what ninety nine thousand requires from a practical level  i think that what you don't have here is a discussion at all in the moving papers of or in the initial moving papers anyway of this theory at all and that it weighed into the settlement discussion and you don't have anything in a declaration saying that these this claim was consider well but ok the bankruptcy court noted that the trustee provided quote a detailed explanation of this analysis included exhibits in support their unquote the bankruptcy court cited the trustees quote extensive legal authority in his analysis of the facts in support of this good faith in important belief that the complexity of the potential litigation makes the trustee thick jury less clear cat and appears to argue of the issues unquote so and because of the complexity there would be a substantial expense and delay quote without a corresponding increase of the probability that the trustee would prevail to the extent  unquote so it's pretty it with with all deference because i believe in the most cases of first one thousand of ever objected to that that might be sufficient in some cases if there was actual demonstration that the party's arguments were considered and so the crux of the argument on on the employment contract for transfer theory from the trustees position is we started with the baseline that only sixty five thousand dollars was recoverable under this theory presumably because there was a medical expense reimbursement provision in the employment contract and it tied to it but what i wanted to know what i was trying to point out to the court below is why is that medical expense reimbursement provision stronger then the general expense reimbursement provision right below it and so you have a situation where medical expenses were reimbursable under section four point three of the employment contract and right below that a four point four you have expense reimbursement provision and it's undisputed that about half of this two point two million dollars at least half was made to reimburse the coopers according to themselves for expenses that they fronted for the company so how could a witnesses of the coopers going to be for your position well i don't think that you need them i think that the coopers have demonstrated that they're not credible as witnesses through  also the court can just say you're not credible i mean and a litigation they can just say we're not going to believe anything that the cooper say well i think that their own admission their offset chart showing that these were for expense reimbursements is enough i don't think th they can get around that to say yes we are reimbursing our x intitled to a start and credibility you impeach them but i mean they are the witnesses here of whether something was a person al expense or not and everything have a motivation to make everything that you know that they have a motivation to not make things you know not that wouldn't help you i don't think there's any dispute that half o point one million dollars was made from space expense reimbursements is not dispute is not disputed by the coopers the coopers themselves indicated that on the amex charge and make statements themselves and in their offset accounting and so there's no dispute that half was for is expense reimbursement and the other half was for other items that the coopers say gave them credit such as bonuses which are also in section four point two of the employment contract salary reimbursements which is in section four point one legal indemnification which is in section twenty eight of the employment contracts so your argument is even under a narrow interpretation of the employment laws the things would qualify absolutely that's my argument and it's the argument that under either a broad or a narrow interpretation it qualifies if it was a broad interpretation which i think it should be given congressional intent in two thousand and five to add this provision also is shown directly on the face of the offset chart at the coopers and sells prepared because if you look at that offset chart which is at the record starting at your one sixteen if you look at the right column that's the balance that was running on this so called offset for things like expense remembers finance or employment contract payments about eighty percent or ninety percent of the at the time amex transfers were made there was no debt owed to the coopers under these agreements and so if you look at five forty eight d two which specifically defined value requires there to be a present or  cited in the brief talks about abuse of discretion in the context of settlement review and if there was a correct interpretation of the law and here i don't think there was any interpretation of  thought ok that and see factors but under both standards found the settlement to be fair and equitable society standard i think that you need to go a little bit deeper under it and see on the analysis i think you should have put it in the record of why that position was wrong i think what the position showed was a lack of investigation into the actual facts and so there was not a sufficient factual foundation and see says a settlement that's approved without a sufficient factual foundation is inherently an abuse of discretion you want to reserve five minutes are hard you want to keep going i would like to see with the value i couldn't per say of qualify as value under d two because there was nothing owed to the coopers at the time of the transfer so american express ok bankruptcy judge it would help me a lot will do there are only two issues that are actually on appeal both of them reviewed under the abuse of discretion standard the abuse of discretion standard as you know is whether the underlying bankruptcy court failed to apply the applicable and correct legal standard or applies it in such a way that is illogical implausible or unsupported by the record we see in adequate argument on any of those three factors indeed most of the pollen sabrine is a rehash of what we would consider to be in the weeds arguing the details of the possible merits and possible upside of an employment contract actually don't doesn't spend much time arguing the underlying bankruptcy court made an implausible application as you are going to say with these with these arguments raised before the bank judge oh yes i mean when you say these arguments are going to or that a couple ways there in terms of the employment contract theory it was brought up in both grice opposition to the original motion it was discussed in the trial the liquidating trustees reply it was discussed extensively in the supplemental objection of cry if it was discussed in the supplemental reply of the liquidating trustee it was law goes but he's made it interesting argument that it's not just the medical expenses but they're the general expenses weren't really considered so do you think under a narrow interpretation of the employment  transfer void ability of possibility that the generally expenses were considered and where do i find that the general expenses were considered because i thought maybe just the medical expenses were considered ok we believe that price actually slightly mischaracterized was the main thrust of our argument and that main thrust of the argument is that it's getting outside of the person of subsection four is interesting wording which would lead to a broader and there are a few but instead the argument is is you have to look at the first prong reasonable value in exchange that's plus the ordinary course of business with the cooper being the essentially the only witnesses as to what that would be that is the ultimate sense of the argument on the words were arguing you don't really have to get into the details as soon there are verses broad if you accept that the majority of the argument was that according to off the chart a reasonable value was indeed received and alternatively and completely dispositively that the cooper is who are the only substantive witnesses will argue that all of these transfers are great in ordinary course of business so with respect to question if you take a look at the legislative history of subsection four which is very sparse but it's discussed a little bit in the golden parachutes argument the the origination of that statute  is because people were abusing detention agreements and severance agreements and just seriously abusing the process both right prior to the bankruptcy as well as after the bankruptcy and just you know essentially looting companies under the guise of an employment contract and if you take a look at what the nature of those contracts are by implication the transfer those that are being discussed or transfer is that are at the time of the contract or signed because the obligations of a coming so we're arguing that even though the transfer charge will say amount of here's a bounce and here's an annex charge and then there's an amount owed and so forth all the way down that instead the actual transfer ocurred at the time that the employment agreement was signed because all of these bonuses these quarterly bonuses that hit for example that you see on the offset chart those transfers were made at the time the original  the settlement did it limit itself to just the medical transfers as as possible billet he's under the employment went before of five forty five forty eight no your honor ok that was one of the trustees arguments but as i mentioned earlier the primary thrust of the trustees arguments is that he's going to get slaughtered on the reasonable value thing this is not a claim ok that is worth much and that was expressed lay in part of the record and there was over a thousand pages of a record in arguments in pleadings that the bankruptcy court expressly included in her decision you know i understand on the  what would the two sides arguing that and that allowed them to end up on january two thousand and thirteen well they got two to answers on first of all the facts particular issues not up on appeal but good faith standard is that something that should be applied to the trustee or not or is that the larger thing but going with your argument the issue as is is that we are so young man we has a months doing informal discovery with american express it was substantive it was deep there are examples in the record of printouts in the trustee liquidating trustees pleading indicating for example balance sheets of the company going back in time and then if you if you end up looking at the balance sheet of a company who is actually solvent all the way to the date of the of the bankruptcy click so we had to go through and back out items that were implausible and that backing out of items that were implausible there were six line items on the balance sheet that were carry over liabilities and so forth that needed to be backed out and so by performing that analysis in excel we were able to generate a argument that it was in seoul than a few months before that december timeframe december january much wanted of costs to do more than that i mean i think that generous johnny saying well you didn't hire an expert on that tech come up with that what is that cost usually the trustee had estimated the overall cost of litigation  approximately one hundred twenty thousand and that would have required two separate experts one would have been an expert on solvent see the other one interestingly it would have been an expert on the accounting of subprime financing companies which is a very specific area and that's with got a very specific accounting rules as we discovered and so it would have the embedded in that  overall litigation cost of the been about fifty sixty thousand about or about half just the higher the experts to generate an expert opinion report and then there would have been a carry over by the time to get the report on you'd be in discovery now you're several months and or so a good chunk of the overall that occasion costs which would have been expensive and assessing what was the likelihood of prevailing what right well it depends on the client and it was the trustees informed good faith judgment that for example the employment contract was not a very good claim for the reasonable value of arguments that i had presented before to the insolvency arguments it was the trustees estimate that it was going to be extraordinarily difficult to go back just even a few more months before january because the way that the company had been financed for example they had undergone a funding event the prior year there were flush with cash at that got thousands of pages and many many many many hours of analysis over five months as to why the trustee made an informed decision at that point  and other questions and thank you very much or you don't appear to have additional questions thank you  but it was about the investigation into that you could answer that yes or no did you make i mean honestly i was focusing on the employment contract theory i thought it was the strongest and not the weakest claim in the complaint you didn't make that argument i made an argument that there was a failure to properly investigate it was an abuse of discretion to stamp that there was adequate investigation i want to point out two things one is the trustees still won't answer the question that was asked why under that narrow scope of the employment contract theory don't these other transfers qualify as being made under the employment contract as even under a narrow interpretation still woman answer that and that's my problem there is a declaration on file from the trustee that says only a policeman area analysis of the claims was conducted before they were settled they may have spent five months negotiating that point mary analysis but there was still only a preliminary analysis and i think what you can find here is that at least from my perspective the investigation is a pretext and there's two new nevada supreme court cases that i actually found yesterday right one on a a pre that that has sort of that that generally i mean we use that word that it means like there's a pretext that they fired you really because you're black not because you're incompetent or that prete a legal i don't know if it's a legal anything that happened here i think that there was a contingent fee agreement that was in place that were awarded substantially pretty these and settlement before an answer was even filed in the case or a discovery it happened so i don't know what that motivated that's just a fact that's in the record i also want to hit on the second point well i just think if you want to make you know if you want to say ill of someone in that sort of way you have to kind of be able to back it up if you want to disagree with their methods or that it's that they didn't do enough that's a different argument and that's certainly when you can you know trying to dovetail into the new nevada supreme court case talk about the business judgment rule and counsel what the business judgment rule requires and the newest one is jacksonville police and fire broke in ray dish network there's no pacific reporter so you know it was just decided a couple weeks ago on september fourteenth it's one thirty three in the viet nevada advance reports sixty one it talk about it talks about the protections of the business judgment rule in that you're entitled to him  a border or an officer however in order to get that protection you have to show an adequate investigation and what you're looking at according to jacksonville police and fire is whether or not there's and in the record that there was an adequate investigation and what i'm saying is there's no and before i pointed out that the employment contract theory was considered at all in the settlement negotiations and and if you read the employment contract particularly article four of the coopers and employment contract i don't know how you can get past the fact that these were reimbursements for expenses under the employment contract i don't think you can get by it and no one has answered that question for me and that's why i'm sitting in this court ok thank you thank you for your argument thank you both their argument in this matter and this will stand for that and the court is now