may please the court paul these hicks let your mad for the better john allen hartmann your honor and i'm here to address the issue of feasibility of the plan because that is is what is before the court and it's the only issue that could have brought this case to this point in two thousand and two mr harben filed his bankruptcy he was subject to a judgment for four hundred fourteen thousand dollars and for mr sherman after the filing of his chapter seven bankruptcy there was a declar relief judgment in the superior court that essentially took away personal liability for mr harvey when he moved to dismiss his chapter seven bankruptcy mr sherman objected mr hartman then converted the case to a case under chapter eleven and proposed a plan that would reserve payment for mr sherman in the event mr sherman ever succeeded on appeal mr sherman objected and opposed the plan during two thousand and three through a series of motions and hearings before the bankruptcy court in san those are factually and legally different from this case for a couple of reasons first of all they didn't evolve or feldman and in essence the bankruptcy courts hands were tied from reconsidering the case of the mechanism of the bankruptcy i don't understand i don't understand the record feldman argument and it may just appeal or to take account of the fact that that was a possibility that the state court might overturn what the what had been done so what they were asking you to the court to do was to defer to the state court in force with a state court might do not over overturn it there's a there's a twist to that that maybe you need to bankruptcy your honor and it's that the bankruptcy court ultimately has to get some kind of a plan of reorganization into place so that the other creditors aren't required to sit by the debtors not required to sit by so it can confirm a plan the plan is the seminal order of a bankruptcy case and that will determine the the all the treatment of claims there are a couple of specific mechanisms to deal with exactly this situation under the bankruptcy code and and other creditors to wait to be paid in full holding for a claim that under federal law can't be provided for because worker feldman gives effect to the state court judgment that so there's no individual liability from this debtor to mr sherman and so that plan that bankruptcy plan can't require the reservation for a creditor who doesn't have allowed claim on the day of confirmation now there are mechanisms to get there he could come in under five o two j later which is specifically reconsideration of disallowed claim provides that in the debtor didn't make this up that we just we took the law the way it came to us on the day of confirmation there was no claim that we could provide for there was nothing we could do with it except pay the allowed c then post confirmation really what mr sherman is concerned about what he's upset about is the fact that the plan should have gone forward it's the consequence to his claim it's not the feasibility of the plan this appeal association certain about whose house  gathered so that there would be enough left in the estate if it was reconsidered its get paid in full of that correct that isn't clear on it because they've taken a variety of positions through the underlying litigation as to exactly what that house would stand and frankly it's an open issue of the value of the house of the million five is that right your honor when we came in we had an appraisal at eight hundred thousand the court had it appraised appointed an independent appraiser so a confirmation it was a million two hundred fifty thousand dollars i don't know where it is today the market has gone up and gone down but at the date of confirmation there was a court appointed appraisal for one point two million dollars your honor of that i'm sorry i was just going to comment that of that only one half of mr of the confirm plan so that mr harding can pay his creditors pursue of the feasible and confirm plan mr sherman has the right to come in under nineteen twenty four has it is claimed reconsidered have an order entered for the claim five o two j says that he will be paid up to the amount of his claim the funds available in the bankruptcy estate tell these claims equal that's probably a meaningless remedy some of the frankly anywhere yes your honor if you can provide the story's ability he's got a judgment that's free and clear the bankruptcy and he can do whatever we want with the remaining assets that were reversed and properly under section eleven forty one and mr hartman pursuant to the plan of person into the bankruptcy code if you can't prove it he's out and that's just the way it is and inning and your honor bankruptcy is a two edged sword this debtor has spent substantial time and effort in bankruptcy and said to propose three different plans get one confirmed is has contributed exempt assets to the payment of other creditors to get this plan together and in that he has a shot at keeping this house free and clear mr sherman that claim has not been brought that issue hasn't been decided yet and it's not right it's just not there yet this should be back to judge hargrove with a confirmed plan to take that argument next that's the basic that's where the case should be here that the  bankruptcy court correct in light of that pending appeal explain to me how that worked and that follows up on this worker feldman issue yes your honor chapter eleven was built to corporations it was built for corporate entity debtors that go into bankruptcy and the feasibility requirement is one that says look when this corporation which has no assets other than what it can bring in and potentially no existence beyond this legal fiction of the corporation is that counts in its operations if that company doesn't account for an expense that will have to be paid in the future this ties this if you took why in those cases then if there aren't adequate funds that we know that this plan can be paid as it's written then it's not feasible it's different from a corporate debtor or an individual debtor who has just assets on his own john harbin will never cease to exist until he dies and has a state out there he will have his house the property reversed and him by operation of the bankruptcy code and so he will have assets from which a judgment could be satisfied so there's a little bit of a distance jointer as to how a feasibility requirement can apply to an individual debtor who will undoubtedly have earnings and property in the future whereas a corporate jet or one isn't ever entitled to a discharge under the bankruptcy was correct in stating that the confirmation was not likely to be found by the need for further financial reorganization or because it's not necessary to come back into bankruptcy and reorganize at that point and ask that can be sold but that doesn't make it not feasible for the purpose of the bankruptcy code the bankruptcy code is focused properly on the plan and can this plan be in front of its best the dictionary definition feasibility and it's consistent with this we have enough money to pay the allowed claims there are specific isn't that mean but that circular honor yes the the problem is that you could have thousands of creditors and accuracy case and it can go on for years at some point the debtor's and title to reorganize in the mechanisms or in the bankruptcy code for reconsideration of those claims the fact that case depends on this technical application among others or fellman anyway my meaning question i like to ask you what should the bankruptcy judge have done in this case i think i read your briefs is what she he should have i'll try to answer that of without giving you a little bit of reminder of the history of the case the court described this as a two party dispute and the rest of the creditors he really considered to be incidental since actual two party dispute between sherman  harlan the court granted us relief from stay so that we could liquidate our claim in the california court of appeal on the date of confirmation we had already submitted our opening brief on appeal to the california court of appeal the court knew that the court also was informed that the briefing schedule would be relatively expedited perhaps compared to the federal courts of appeal and it was slightly off and i'm sure your courts are very busy and this is your calendars are controlled as efficiently as possible but the california law actually required that there be oral argument within thirty to ninety days typically when the brief search the method the court of appeal is required to render a decision within ninety days of that being submitted we were not looking at a year or two we were looking at months if a case open for an eighteen months and there were things he could have done he could have he should have refused to return from the plan because likely you're not what i think that the cliff you read the court's comments on december eleventh he seemed to assume we were going to win our pill because he talked about you will have steak or regulating their work or film and ducking when he doesn't know he film and you know he has to he have to make a determination well what will happen in the future what is likely to happen in the future he knew that the issue was a jury had issued a verdict he knew that that was on  appeal he knew that we had submitted to him our brief showing that the trial judge in that case said to the jury this is yours and yours alone and then when they issued a verdict the judge didn't like he decided not to follow them  findings were he's painting one hundred twelve thousand dollars he has the hundred twelve thousand dollars he did not even analyze whether it was likely to be reversed on appeal but he said in the event it is reversed on appeal will have the same rights as if harvin had never filed bankruptcy which means you'll have the right to try to collect on your debt outside the purview of the court which means it was not a proposed plan that was conform described in the plant and this all occurred in the context of the court telling everybody there is a way to do an estimate to do some form of the a pro rata interim distribution there is a mechanism to first plan proposed the very thing that would have made this plan more likely to be feasible they proposed initially that they would withhold a pro rata share just in case they lost if you will they propose they told the court or on multiple occasions we will propose a plan where john harbin will maintain this property in the india state so it will be protected in case he loses the state court appeal then they get to their second amended plan and they i believe that the cases that have analyzed the statute have said there may be a slightly different standard between an ongoing corporation and a liquidation plan but in this case the plan was i will liquidate and then nothing's that at all about what will happen if i'm forced to liquidate again and let's not forget john harmon only entered into this bankruptcy because of the state court verdict and once that mix of very likely that if the court of appeal did what it actually did that he would be right back where he was needing a liquidation and that liquidation was not proposed in the plan was not supervised by the court and the judge was basically saying you kept him in bankruptcy so you don't get the benefit of the bankruptcy and when mr leeds was talking to this court he talked about well there are debtors rights there are creditors rights we were in there as a parting interest trying to preserve our rights to make sure the mr harmon didn't dissipate the assets and we know from this history that he would have done that because he lied in his initial application said his house in corn out of california was worth eight hundred twenty five thousand dollars and we showed the judge it was worth over one point one million he tried to sell the house to his wife for a million twenty five thousand dollars at the same time the bank appraised at one point two million dollars and then told the court with a straight take there's no way my house is worth one point property invest in the debtor and the day after the effective date he could have sold it to his wife at a discount he could have then anything taken out another refinance loan and hid the assets somewhere else john harbin is doing everything in his power to not pay this debt and it's now going to judge by the courts in california that he told more than five hundred ninety four thousand dollars and with interest it would be six hundred ninety four thousand dollars that is over eighty four percent of the claims that he listed when you add our claim back in it's eighty four percent and to say i'm going to give everybody else one hundred percent and if you win your appeal you get whatever happens to be there if it's ten percent or twenty percent you're not giving fair treatment to one critic to the largest potential creditor and somebody who was never finally fully disallowed the court always said i'm only doing this and reserving all of your rights so that you can come back it is discharged the rightness is it goes also to the feasibility and the fairness of this point and it shows that this is an issue that should have been a reason for the court to have not signed that order because it contradicted the very statements the court what is the test we have cited the cases blessing industries for instance where they said you cannot just come in and say i was negligent you can't just come in and say well i made a mistake there has to be something extraordinary in the circumstances you have to explain why you didn't get the loans to be approved before it was issued and in this case the evidence came in very clearly john harbin a bankruptcy attorney knew he had to get bankruptcy court approval he ignored the law because he wanted to get a favorable loan probably so we could propose a plan that he did propose to harm sherman and in investigate whether or not a borrower is in bankruptcy or bankruptcy court approval is there that is their fault and they should have to be suffering for it stay in business it was an emergency that i think would rise to an extraordinary circumstance and that got approval but in this case it was february two thousand and three the court had just denied a motion to sell the property and there was there's not a ninth circuit precedent but there are other cases the talk about neglect does not rise to an extraordinary circumstance and i think that those other cases should apply a correct the correct legal standard i think that the standard that the judge adopted was incorrect and i'd like to reserve the rest of my time to respond to whatever misses are he doesn't have much time but you know neither case does that for the standard for not protons decision making by the court in in a nice circuit and that test which isn't the exclusive test that the court can use as ask and say the court can also apply  knowledge that this is the under the standard set forth by mr sherman a bank is not permitted to lend lend money to a married woman without looking into the finances of her husband we certainly think that's not the standard just before this court in fact as ms graham states in her declaration likely violates the equal opportunity equal opportunity credit act that the bank tries to ascribe to so from that standpoint i think lender to make an inquiry into whether or not they can and issue alone what they conveniently forget to emphasize is mr harmon was on title until the day of the loan fund and if they were looking at this loan and saying there are two people on title can we issue this loan and if they would have said has this as either of them filed bankruptcy they would have found out they chose not to the broker that was handling the deal clearly knew that and borrowing this money because her husband was in bankruptcy and they should be charged with the knowledge of that what they're saying is let us violate the law and in the process say we honestly thought we were violating the law and then the more the law becomes irrelevant because every lender in this country would then say well we just won't ask if anybody's in vain cripps we will do the loan will make our profit and then we'll tell the  emergency some compelling reason you couldn't have discovered this it would have been impossible to know he was in bankruptcy they could never satisfy that test and in so doing they are trying to get this court and they got the bankruptcy court to completely the entire meaning of the a three sixty four that requires prior approval before these loans are issued so i'd ask the court to reverse the court the bankruptcy court on both issues and affirm the district court on its reversal of