understood thank you for your honour's this court illustrates the competing plans that are at issue in this case illustrate how chapter eleven can be used either for the purpose of giving a viable small business the breathing room that it needs to thrive and to successfully repay all of its creditors or alternatively how it can be used to serve the self interest of motives of opportunists at the expense of a business built through decades of hard work and perseverance a plan that the debtor proposed in this case would have allowed it to complete the remarkable success that it cheve during the bankruptcy case in significantly paying feasible and it would have maximize the value of the estate and it would allow the equity holders in this solvent bankruptcy case to retain the state's most valuable asset and i can i  and to miti i'm not so sure what it would mean to stay the nile of confirmation and if in any event the judge had discretion to approve one lamp and not the other i think you know you might be better to spend the time on you know some much what's wrong with the denial i'm not sure what you mean to say that what was wrong with confirming the other plan of not you know it's totally up to you but that's just a suggestion that thank your honor and i appreciate the suggestion so let me start with the court's confirmation of th creditor rd party borrower of the debtor without any consent of the debtor without any type of arms like we go she ition whatsoever and it was proposed by a party that had absolutely no incentive or motivation to maximize the recovery to the bankruptcy estate but in fact of the exact opposite motivation which was to minimize the estate i can i interrupt her her quick questions which are understand where presumes an actual agreement between the parties to be ballin buy and that is not what you have here which you have is saying go unilaterally dictating the terms of its own release so that is not acceptable under the bankruptcy code because it's not a settlement that bankruptcy for relied on the th circuit's decision in n c properties to analyze it under that four factor test but i think what's important here is that the threshold that the th circuit laid out and see before you even gets about that four factors is that there must be more than a mere good faith negotiations a settlement by the trustee determine whether or not it would it satisfy the a n c factors well what she did she did go through the analysis in and see that looks at those four factors is it fair and reasonable what would be th difficulties in collection and i will address why i don't think that the court correctly analyzed those those factors however i think what the court did not do is decide is this really a settlement that is right you know your honor i don't really quite understand what the distinction is between those terms but i've looked them up in black's law dictionary and every other type of dictionary and to me those terms are essentially equivalent except that perhaps it just been as a specific meaning in the think you're going here in the whispering pines case which i think you cite for you know some support for this argument and he didn't that case in fact say it wasn't so much of the settlement couldn't be done without the debt or the trustee as much as it was that the court there did no analysis and based apparently gave a deference that might have been appropriate for a trustee or debtor in possession of the state representative to somebody who was not one so i understand what why you might be you my think that's supportive of your position but doesn't that at least imply that this could be a supplement even if it weren't a trustee and the court's job is to analyze the factors which which did not happen and whispering pines or simply wasn't any analysis of the fairness doesn't that imply that this is doable you know i'm under the st circuit about opinion in whispering think perhaps there is at least some implication there yeah i thought that  this panel held in that case is if you want to have a settlement that's proposed by somebody other than a trust the or a debtor in possession you've got to meet a minimum of two requirements number one there has to be a sufficient reason to allow somebody other than just a fiduciary to pursue a settlement for example that the debtor doesn't pursue it itself it doesn't have any incentive or motivation to pursue it to the person who is pursuing that settlement on the estates behalf has to have a sufficient motivation an incentive to maximize a recovery and neither of those things our plan that the debtor wouldn't really have any ability to expend unlimited amount of money on this litigation we've put the controls on setting litigation budgets and using his state funds in the hands of an independent professionally litigation if there isn't a settlement which reasonability in the amount of money that it expects but to i want to address the nd factor as well there certainly is no incentive here on the part of cinco to maximize the recovery to the bankruptcy state it's the one that is going to have to be paying out money to the debtor in order to get this claim settle it's incentive is to pay as little as possible and that's exactly what it did that this settlement payment that think it was making is the absolute minimum that it would have to pay if he did it absolute complete unconditional success on its argument that it's argument and i guess i want to waste some time and say thank you for having it judicial proceeding out in daylight this you know there is insanity in other places and to have courts functioning is is literally something everyone here on this call would tell he was of was with respect to recompile injury and let's see the questions i'm not going to augment our papers and in particular because mr pac hasn't talked about that issue but it seems to me that both judge winry did a better job of explaining her position than i did in our papers explain our position with respect to success on the merits i agree with judge lafferty we're talking about confirmation of the single plan and let me simply focus on five grants and we've tried to give you some gentle authority for that and i think that if judge wintery were on this cult she would have said something almost blurted out in response to one thing this capex which is really not directly on any state law a manager can act disregarding the directions of the sole member was simply not in the best interests of russia but to go back to the point about it is true that you can read the st circuit whispering pines and saying they think that a settlement offered by a creditor should be treated differently and they say we really don't know how and good like bankruptcy court figuring it out and i would say respectfully that's the position that mr acas put judge wintery in this issue comes up in his closing brief there's no suggestion of a standard in the brief or before this panel and there is none in the case law no case has ever looked at whispering pines and said what that means is a settlement proposed by creditors plan can never be approved because the creditor is self interest which they always are in  having lived through the great recession i don't mean you could just left the i can see a question so i say just like here's my question and i stopped but having lived through the great recession every time a secure creditor proposes a liquid confirmed as a matter of law because it's not negotiated with the estate and if that were the law one would think that by now we'd see some authority for that proposition if you go searching though in this says hey i've got a great idea let me buy the cause of action for cheap and i'll make it go away and that'll solve the problem and when you look at those cases and you look at back opinions you'll see more courts do that without going and twenty nine or is she incorporated fair and equitable through the requirements of the code but she went through fair and equitable and not in a cursory way but in a detailed comprehensive factual way and to go to judge lafferty's point i wouldn't be surprised if she thinks but we'll never know that mr zarif will never settle this issue because he cannot it's just not in his nature to ever give up anything but her clause in the the notes made in july of two thousand and six january two thousand and seven we need five hundred thousand dollars there's no money anywhere it's a raw land deal it's not even planted yet explains why because he's on the bank you're in seat for three million and six he's agreed among the members he'll pay a quarter of the bank debt twenty five percent and he's even guaranteed the four million dollars debt that so  zarif intentionally decides then and through two thousand and fourteen give or take when the bank loan is finally paid off schieffer i want your money you're not going to we're not going to send you bills about interest we're not going to default the loan when it matures in two thousand and eight we're not going the same thing about that when the six year arizona steps in limitations comes up in two thousand and fourteen then we'll do a modification that says there's an issue and that's left being but i think the question comes up there when there was a claim by your client and in some way i guess this resolves an objection to the claim and i'm not sure how is this was teed up in a bankruptcy sense i'm not suggesting this is exactly you know commercial western finance where you just decide well this is the proposal we were going over here but how did this in your mind how did this get busy just we decided to compromise something in a plan confirmation or was it otherwise teed off in a way that would have given mr kraft and the other side the a classic debtor stretch out offer as little as i can castillo payments for as long a period of time as possible and and cinco said we have a claim we'd like you to true exclusivity and let us  judge where he said yes follow your plan and the full payment plan that you see from from simcoe today is essentially the plan that was filed back then so how we get there from here is skyline has spen the next number of more than a year if you close to two years trying to incrementally increase their offer to make it look like what mr zarifi was interested in doing is reorganizing a small the this in a way that saves an invest that's of course not at all what you which you understand when you read should win or has been so what can we get here because a complete competing plan was filed that said instead of stretching out creditors for a long period of time we'll pay this of your client losing she found that there was some chance at soaps a significant chance you're quite well we're but not one hundred percent chance m m c in a fact their argument is well she that gave them a victory complete absolute victory looking at this can you think of what your response to that occurred yes they get paid the interest but there were other factors how would you monetize the value of the overall settlement under the plan one of the reasons why she doesn't go through to the end is then you just try the case and so that's why i think you have to get asked but as to the argument that get that sink against everything it could have possibly gotten that is not true that no has never been on any does the things all do now to us is contradicted by the course of the nd single has been increasing legal fees in this fight for years and they are not in significant we've asked for it fraction of them to be reimbursed under a substantial contribution those are way so in our view those are at least two materially better outcomes for the estate then and the rd obviously is from jed's lebanese question this should have been converted to ethical and we think we have a good argument there might individually have a restitution claim but but those things go away we pay right now in full the balance of creditors can be  i'll try and use it while you're on or before i address irreparable harm i want to address just two things that mr troll said st he said well you know if you take mr pacs argument you'll never be able to have a secured creditors plan where they you know give up some value in exchange for being able to liquidate the debtors property single is not a creditors this is not comparable at all single is a borrower of the debt and they're they're not what they're doing is simply unilaterally releasing themselves of liability they're not releasing the estate from liability for a secured claim so that is not a comparable analogy to you know with respect to our plan debtors plan is not a well we'll wait for as long as possible to pay claims it is a whole cayman plan they all creditors in full with interest and now as of the time of confirmation there is efficient fund in these they pay everybody very very quickly if not immediately on confirmation then very shortly thereafter and the manager has a duty under the plan to pay everybody is probably as there is money available to pay them with respect to irreparable injury what we have now is a senior deed of trust on understood although i know that the single valued the property at six million dollars for their appraisal that enabled them to obtain this bank but if their plan gets confirmed we lose our senior deed of trust at that we cannot ever balanced should should the court of unbalancing something or what how should we look at that i think in a large sense your honor it is as a matter of law irreparable harm because a st priority lien is a constitutionally protected property interest but as a practical matter this certainly gives rise to a significant probability of irreparable harm because at best we're going to be subjugated to a bank lien whose terms have never been disclosed to us so we have no idea what the terms are if there's a default on that they're going to be able to foreclose and wipe us out completely and we'll get nothing and as mr charles said the only way that better has ever been paid on its note is through lot sales so are no longer in a st position priority and there's another bank with a lien on this property they are going to dictate what terms lots are going to be released and whether any payment if anything at all costs of this loan waiting origination fees and other things that we don't even know about and that aside no matter what we're losing the full value of of this loan so even if we may not be able to recover the additional amount of money that we're owed in excess of that two million seven hundred thousand dollars that think oh it's going to pay under our plan and if we lose that st position we need that's never going to be recovered the well there may be some benefit simple equations and i just state it's really a much more complicated numerical analysis you know your honor i agree that there's no question it would cost some money to  maid it would cost somewhere around sixty thousand dollars to litigate the bankruptcy court kind of this because that is well that's that's just speculative and that's based on my personal knowledge of this case that i've spent you know the last two years working out of my knowledge as a as a litigator maybe in my underestimating it you know i don't think so i think this could be done for that much but you know i think in relation to the amount of money that is owed on that  thinking about them respectfully i think that we do have a likelihood of success so it is not just irreparable r and b and irreparable harm i think is very significant the context of this particular  is so obviously wrong that it stays appropriate i think estate is appropriate because there is a very significant risk of irreparable harm and because we have a strong likelihood of success on the merits i think it's both address your comments judge taylor about the fact that we're saving interest here if a court were to confirm the debtors plan we could be saving interest on all the secured and all of these secured claims because we could pay them in full immediately so we would be saving interest on that we would be paying less money under our plan to creditors so there's no savings to us oh yes if you get an agreement with them or  mr mcdonough's client that we would pay them six hundred thousand dollars inclusive of attorneys the same goes plan is you'll pay them six hundred thousand dollars plus all of their attorney's fees so there is a cost savings there and we could pay that  immediately they're paying two hundred thousand dollars to a creditor file that a claim that has never been proven valid that they had previously taken to the registrar contractors and have rejected which is based on a we've got construction defects on this home but it's a home that skyline never built so they're suing us for construction defects for another builder that's two hundred thousand dollars it's going out the door to them without any real and we felt that our decision would be well would be well to make it easier but that the decision a process would be improved by giving you this opportunity to argue here today and i will just say i agree with with  r charles that it's not a great day in many ways and the march of democracy but this is the kind of civil proceeding where we meet as