that involves an order of the bankruptcy court that approved the bankruptcy trustees sale of his unique avoidance powers and related causes of action to a affectively a defendant liable client did not been my client made a different proposal your client made a motion do you claim that is a bit well is a different proposal now we're not claiming it was a bit meaning that my client did not put in earnest money deposit in making monetary bid on the think but we don't know how we're no evidence that there's any return of the estate no estimate of how many attorney fees it would take and your client could walk away from this any time they wanted to is that right isn't that the motion that is i would not characterize the motion that well i don't know what what is wrong about that well because what we what we said your honor is that the value of the motion was the preservation of one million six hundred thousand i understand that but it was no idea of how that was calculated and then i read the motion to try to find out what it was and i couldn't find it well there were complaints on file that asserted claims for one point what about the real evidence what is there in there that we that we would have brought into the state at our own expense would pour one hundred percent into reason i ask about that is that there is some idea in this record that you really didn't want these claims to proceed against against a particular claim but you wanted them to use in an overall settlement of some dispute that i don't know much about yeah and that we think is a gross misnomer i know you so it think it's a gross this characterization but that's why i look to find out what would be the return to the state and i wasn't sure they were going to get any yeah the return to the estate would be whatever dollar amount team in as a result of the lawsuits that at that point were pending and so the proposal in in to keep it in context your honor the judge had stayed the bankruptcy court had stayed in those two adversary proceedings pending the outcome of some claims objection litigation so the idea was why are we selling these at all right now we have these claims objections that are pending the court put the brakes on those adversary proceedings the court previously denied a motion to settle those claims once the status of those  was granted in favor of my client you're talking about the claims objection is a partial summary partial summary judgment was granted in favor of my client and we just completed a ten day trial on those the bankruptcy court has the trial issues under advisement the issues for trial now were limited to about eight hundred thousand dollars of claim meaning the partial summary judgment reduced the asserted it started out as a six two one million dollars claim to bout eight hundred thousand dollars maximum limitations issues now section five hundred and three the particular subsection new you invoked in the motion uses the word creditor what's the authority that says that that's available to an equit holder well there there let me answer that in two ways and i will directly answer that question in one sense it doesn't matter because we are creditors if you look at the definition of the term creditor in section one hundred and one of the bankruptcy code creditor means someone who held a claim against the debtor as of the date the relief the order for relief was entered in the case of voluntary petition that is the official date of the bankruptcy we have an allowed claim the allowed claim was allowed after the date of this order true so but you're not relying on that to say you were a creditor at the time the motion was filed the definition of creditor says that as long as you have a claim against the debt or as of the petition date you are a credit now granted that happened afterward the other part that i would rely on for the proposition that an equity holder can qualify under that statute is actually the the i think fairly well accepted doctrine that derivative standing can be granted to any party in interest in the case you have any case that has recognized the right of an equity holder to bring a motion under five and three as you did i can't think of when we can certainly we're happy to provide that in a letter subsequent i can't think of one off the top of my head the way that we got there and i think the bankruptcy court very clearly accepted this proposition is the abundant case law that says if something says creditor but you're into solv a state a surplus of state equity holders are our stakeholders and beneficiaries of that state just in the same way that unsecured creditors are stakeholders in the presence of a secured claimant the claim is going to be satisfied there something that's coming going to come down in the priority scheme to unsecured creditors the same rationale holds for equity holders so although the code does use the term creditor in fifty three any other places it uses different terms that clearly would reach equity holders it does i think there is more elasticities in those provisions of the code for structure of the structural reasons i just talked about and we're happy to look at at that authority there certainly in the case of fitzgerald that we cited from the bankruptcy appellate panel i think would be one area where it said look this is a lodge on the like situation and it's not enough for a trustee merely to cover the administrative expenses claims of the state and the claims of non insider  creditors and throw up their hands and say that's good enough in a solvent or surplus to state the interests of equity holders must also be taken into consideration and in that case the court clearly said the court needs to consider those interests and it's not enough just to cover the expenses of creditors so i think there is elasticity in that usage where as we know from the u s supreme court and other cases in the precedents of this court that the term trustee carries particular significance when it comes to the pursuit of weapons claims and use of those powers in particular congress vested that role exclusively to the trustee and certain circumstances in chapter eleven to a debtor in possession but the cases where those unique powers are transferred to a private party and that private parties are going to pursue those claims against others or extinguish those claims against itself this court has been say here right understand it i think the district court poll well understood these two different views and therefore undertook to different analyses if you will one an analysis that had a settlement type of approach that's my my term for it and another a sales approach both of them trying to make sure that they courted sufficiently analyzed those two different approaches and made that determination you're now talking about well that the problem with that is that certainly the factors were identified on the record and i said by district court i mean that the trial of  sorry the district and certainly that analysis was undertaken in terms of identifying the standards and then walking through those standards so i asked if they have the standards i'm sorry to interrupt because i didn't want to i want to hear the end result but if they had then apply the standards to be applied then at that point isn't to be use discretion standard there after it is an abuse of discretion but it's an inherent abuse of discretion and even when you identify the correct standards and you to misapply the facts or that but just a minute it's a matter of that when we're talking about a mid abuse of discretion standard or clear or standard which are you want to say then i've got to find that what they did as no foundation nothing now in this particular instance there was no bid other than the bid that was put no bother bid whatsoever valuate anything else but if there's no other bid there how is law johnny got any precedent value whatsoever well i would explain that two ways one is technically there was no monetary bid present if there's bid there isn't a bid well law johnny and other cases suggest no longer johnny doesn't say what a bit is law johnny just says the trustee ahd to evaluate that which is in front them and then this particular case there was no other bit in front of them so how is log johnny precedent for this case even if it's controlling on me which i'm not sure it is right well johnny says that the trust has to evaluate bands it also says that in situations where there is a limited number of bands and especially in situations where the only bid is by the defendant on those causes of action bidding is constrained and is therefore subject to minute the the other creditor they made their claim absolutely over their over the bidders claim they were going to get paid all the administrative expenses get paid everything's been paid that's true without regard to this particular bit meaning the claw back claim bit in the in the bank going to court and this much so so this bid was either going to go back to the defendant was settling this claim as assuming that its claim were allowed which we don't think was a safe assumption or any excess was going to pour over to us in under those circumstances law johnny said it doesn't require you to make a cash bid as a on top of the competing proposal and or five o three it requires the bankruptcy court and the trustee to evaluate those two proposals and there is nothing at all in the record that indicates the trustee analyzed the five hundred and three proposal at all in fact the record indicates they had no idea of what the upside would be that they had well you're the one who made the five hundred and three proposal they had the five hundred and three proposal that you made in front of them if in fact you're suggesting they didn't didn't put enough evidence forward to let him look at it i mean if i looked at that five hundred and three proposal i said it wasn't worth a dime and is all he got to say is it's not worth a dime and then it's ok that's not sufficient that's not devil's advocate right but i'm just trying to say to you it seems to me if you thought that proposal was very valuable you oughta said what it was worth but what it was worth was what was in the motion that's why i tried to figure out what the motive was in the st place and perhaps and i'm running out of time but i'll answer this question and hopefully reserves more time but on rebuttal but your honor what we said in the motion and maybe this did not come through but certainly we said it at the hearings well the value of the claims is one million six hundred thousand dollars and when we tried to provide that evidence when we tried to say we have documents with us your honor if you want to see this we can we can show you we can go through the evidence the bankruptcy court said i i think i have some idea about what the arguments are going to be so no and so it's not enough to say hey you didn't present something in the motion and when you tried to put the record in from the bankruptcy court bankruptcy court refused therefore the trustees off the hook in valuating a viable claim so i would unless you have other questions right proposal is on par with what's being described in law a johnny johnny the bab describes a situation where a creditor is going to bear the risk and expense of  estate and pursuing litigation is not going to harm the estate that's not the situation that the trustee was presented with in the proposal made by the omaha seldon's instead what was being offered was something along the lines well more or less trust us we believe that these claims have more value then you think that they have trustee but by the way we can walk away any way and any time that we want and doesn't consider the added expense and risk it's going to be borne by the estate if we were to go down the road that the omaha sultans one of the trustee to go for example at the very sale hearing we had just other the successful bid was two hundred and sixty thousand dollars there was an earnest money deposit that was made of eleven thousand seven hundred and fifty dollars upon learning that the court may consider not going forward with the sale of the claims that are that idea she and and stated that they would be subject to losing their earnest money deposits you're not talking about a situation where near a quarter one million dollars is not coming into the sky financial bankruptcy case if we're going down the road that the wanted to be in the back a bit or at their two hundred and fifty five thousand dollars bid they declined so those are the real risks that the trustee needs to look at aside from the other obvious expenses and keep a state open the fact that the trustee is going to be a lightning rod for depositions and discovery that's propounded upon him he's going to have to continue to retain general counsel to deal with all of those things there's all crusty even giving discretion and even given that one considers the general law relating to this particular motion that they didn't do enough to evaluate three motion in relation to the bid and therefore we ought to send it back well the the evaluation that the trustee did was to identify what was going to be the key issue in the litigation that was being sold the fraud there either fraudulent conveyance claims that are being sold or their preference claims that are being sold and the key determination that needs to be made to figure out what that value is going to have or the estate is to make a determination as to whether or not casey i had a valid debt owed to it at the time they received the transfer as the one  motion and as far as value the motion and the thing that might be different than a typical case where valuation you know maybe can present an appraisal or something like that the key situation here is that the value is wholly dependent upon whether this is going to be a situation where casey i received these monies based upon an antecedent debt and therefore they're potentially preferences or they receive the money for no consideration in which case they're fraudulent conveyances so the trustee as set forth in his declaration had been a value weighting the that discovery that's not exactly what's at issue at the  in the claim litigation because what's being determined there is whether or not casey i had a valid claim on the petition date not one year prior when they received the money but it's helpful in that there's all of this discovery that's going back and forth the key witnesses are been deposed trustees counsels attending those deposition combing through all of the documents that are being produced the trustee filed his own motions for rule two thousand and four exams to get these documents they're supposed to be coming to us and we've been told that they are being produced to us as discovery is going forward in that claim litigation and based upon all of that information the trustees counsel had based on the analysis of what is your sense of this is a better not probability that this is going to be based upon an antecedent debt or no claim whatsoever the trustee based upon that information is stated in this declaration believed that the ever events tended to to be that that this was based upon an antecedent debt and therefore if you've got preferences the unique situation in this case if you have preferences out there and we  preferences which we believe to be valid preferences but we bring all of the money back in the mathematics based upon the creditor pool is such that if the trustee successfully recovered those monies there's only something like  dominated the general unsecured to unify ninety seven percent of the creditor pool so the only people that are benefiting from that would be the administrative claimants and that just didn't seem like a very satisfactory way to go for the trustee and that  i suggest at least in hindsight that that this was misjudged i don't think that it does your honors and i and with respect i haven't been pain super close attention to the claim dispute but i do know that this is not resolved i know that there are still final briefs to be submitted and i guess until i see that outcome i don't know that i necessarily take what omaha seldon's council's appraisal of the matter is certainly mr bruno who has been involved in that could probably speak to diving more because certainly you know the court could take into account not just what is the value of this as a settlement but also that even if it did have a lot of value it's all just going to flush through to k c i or because the claim is so big right but if the claim actually goes down we're now it's well below what they're claiming the value you know of the  the perspective of hindsight that that that risk was misjudged well we certainly interesting to see what the outcome of that is but even at that again as i had stated earlier and i really have been taking up some of mr bruno's time but i just want to state this last thing even if that's determinative that it was eight hundred thousand dollars on the date of the petition as i stated before that's not determinative about what casey i's claim was approximately one year prior to that and that's truly what would have to be litigated in the subsequent preference or fraudulent conveyance action thank  seldon's had an opportunity to bid on the avoidance claims and do whatever they wanted to they didn't bid because the reality is they explained that the reason why they didn't bid is that they didn't think the sale was appropriate and it would be inconsistent with their position to do that the court seemed to recognize that as well and we don't we disagree with that i mean if they're sitting there coming saying this claim has so much value and we could have acquired it for sixty five thousand dollars and one dollar cent and made a one million and a half dollars in a reasonable business people which they certainly are represented by capable counsel would have bid they didn't do that and judge smith touched on the issue one of the reasons we believe in the trustee considered in the bankruptcy court considered is they wanted to acquire and abuse the powers of the bankruptcy trustee and the powers of the bankruptcy court to go after my clients in a long running bitter vatican souk order the district court in reviewing the bankruptcy court decision making any findings to support richard justice or i think so i think the trustee had pointed that out to the court and i think there will in the court's findings i think so certainly because they consider the the animosity amongst the parties i think the district court express referenced the litigation that was ongoing involve the parties in the dispute the bankruptcy court certainly factored in in a way the potential cost and the expansion of the bankruptcy court proceedings in in doing so this was a fair bit in process  seldon's had notice of this claim and they came in now after the fact saying well it's worth one million six hundred thousand dollars we don't think that's fair we don't think it's appropriate and one of the reasons is because as the trustee in the bankruptcy court considered the value of the underlying of all avoidance claims was weak these claims were facing a motion for summary judgment because the crux of them was that it was somehow improper or fraudulent for the manager of the debtor to receive a fraction of its management fees and expense reimbursements for managing the debtor for more than a ten year period this debtor and this manager came and saved the investments managed for about ten years returned about twenty eight million dollars to the investors that otherwise would have been lost  and at the end of the day at the end of the day waited until all other credit creditors were satisfied and then received a fraction of its money and then it was sued saying that was somehow wrong or improper at the time these sales were impending there was a motion for summary judgment based on vigorous and various defenses there was a motion for rule of and sanctions on file because we didn't believe there was a factual or legal basis for the claims in the st place so the trustee factored all these considerations factored the voluminous material and discovery that was present it made the decision to sell these claims of public auction what happened at the public auction the market spoke they came in and said these claims are worth sixty two thousand five hundred incentive they were trying to avoid vexatious litigation from the omaha seldon's that had been going on in other courts at various times since two thousand and nine and that is still going on today and will still be going on probably for a couple of years down the road i want to however i think the biggest question we have here first of all are you suggesting that we ought to adopt the rationale of the johnny opinion portions of it like the parts where th where they say that the trustee should be given deference but we do we kind of agree with the court we don't think the law johnny really has that much bearing on this case there really wasn't a bed made in this case and even if the trustee was required to compare the motion made by the omaha sell you think gianni suggests that they are to compare the motion to the bid i am if there was a bid maybe but i think whatever the law johnnie suggest was done in this case by both the trust and the bankruptcy court i mean the trust the bankruptcy court took a belt and suspenders approach the judge collins to to steal your term and and considered both of the factors i considered every factor under both requirements were were set forth by law johnny or anything else was clearly satisfied by the bankruptcy court as determined by the district court as well you do you have anything you wanted to add to counsel's idea that your claim was a lot worse than it was when we should harder to hear it's certainly lower i wouldn't i wouldn't say it's worse the bankruptcy court made a finding that some of our claims were barred by the statute of limitations we don't necessarily agree with that finding but it doesn't really matter to this case because the avoidance claims we're seeking monies we have already received the claims that are at issue now in the bankruptcy case are for future claims so we don't think one has anything to do with the other and we think based on the merits of this case even if our claim is whittled down to the eight hundred thousand dollars that it is now we think we're going to prevail on that so it's really a distinction without much of a difference but you can't go back in hindsight and determine whether or not the trustee or the bankruptcy court abused their discretion based on the record before them and the motion that was submitted by the omaha seldon's there was no abuse of discretion or anything that was illogical or on reason thank counsel i'll give you an extra minute as well thank you hear i'll be brief in rebuttal in terms of did just clarify a few things there is nothing in the record in the court made no findings didn't  even make any suggestion that it was agreeing with this bold assertion that somehow to give the use of the powers of the trustee were what were we were after there is nothing in the writer record to support that and frankly that is a fallacious argument  in terms of the status of the claim is that exists today we do think it's important to now look at what we tried to present to the trustee at the time and the record is very clear starting in two thousand and fifteen we tried to meet with the trustee we tried to give the trustee the evidence that showed the strength of the avoidance claims we tried to talk about how the claims were time bar the court granted partial summary judgment on that basis the monies that were taken before presumably were applied to management fees that even predated the two thousand and eight timeframe and we think that there was no basis for those fees to be paid which would give rise to a project transfer action the trustee wouldn't talk to us the trustee filed a motion and said well what is the motions say and the truth in this is right in the record in the trustee said well we've already cut our deal if you don't like it object to it that is not consistent with fiduciary obligations of a trustee and the same rationale happened when we filed the fifty three b motion it's important to remember your honour's that you read the record very carefully at the hearing they didn't do anything to evaluate the five hundred and three motion what i heard up here is that johnnie requires them to quote consider the motion and all that would mean here is that they acknowledge that one was filed because there was no one else is done so unless your honour's have other questions that is our argument we'd ask that the judgment be reversed the case just argued will be submitted that complete calendar for today and this session of the court is a