and then we'll go to our next case joyce please the court we're hearing three related appeals all of which grow out of the resolution of the fifteen million dollars forfeiture assessed against mike siegel personally misuse of the insurance brokerage premium fund trust account no insurance company or brokerage client suffered an economic loss and siegel had no intent to defraud any in the sure or in shirt especially under the circumstances really it's mr siegel another element of the conviction related to criminal tax fraud when signal was released from prison he pro s case what the tax court case in the textbook concluded that there were no deficiencies do in the income tax in that there were no fraud penalties to be assessed so after she was released from prison the only money he had was a social security payment part of which was going to the government to pay restitution as a result of the settlement siegel was to receive two million one hundred fifty thousand dollars in cash he also received two options which were exercisable until august thirteenth two thousand and thirteen one option gave him the right to acquire some insurance policies on his life the second option gave him the right to repurchase from the government an interest in three chicago full partnerships the siegel his assigned to the government pay part of the fifteen million dollars forfeiture before she will could decide which of the insurance options the terms policy if any to purchase he needed information about for example who on the policy was just a policy the government owned you're in our own or someone else owns you also needed to know whether any liens against the policy or any contractual problems that affected that you siegel contacted the insurance company that they would not respond to any of us questions or give  because of the injunction and restraining orders that were still in place segal then asked the government to authorize his contact and to sign a letter to the church company's authorizing that that aspect of what he needed joyce the the settlement agreement provides specifically for an exchange of information about cash value but about nothing else correct you're right that's specifically dealt with the nothing else so never the last  when we look at it when we look at judge his studio's decision here on the insurance policy question are we looking you know in essence his review of factual disputes between the parties about this long back and forth concerning you know who is going to write what letters to whom when no i think we're looking at a judge just deal with review of the supplement stipulation in the full sense of the word all the and i think it's significant that on july nineteenth two thousand and thirteen the government finally agreed to send a letter to the insurance companies the signal requested in the letter it says quote in order to facilitate the liquidation and or transfer process of these policies the government and mr siegel need information relating to these policies including but not in with the to the premium cash or undervalue the death benefit or the policy and annual cost of the policy to assess future value gave the information within days of august thirteenth the drop the date on the exercise of the option the other carrier gave it weeks later did mr siegel exercise the option on the policies for wh had the information know he did not for a second reason mr siegel was entitle to get as they said two million one hundred fifty thousand dollars in cash the settlement stipulation provided  would get that cash when the court accepted the settlement court accepted the settlement on february thirteenth two thousand and thirteen the first cash the bill ever sought was two months later it was five hundred fifty thousand dollars so not knowing that would be the last case you'd ever see until long after the actual dates he paid some bills including bills to his attorneys would not been paid in ten years so siegel wouldn't be for the district court before the option expired and i asked for more time to deal with these issues because he didn't get the information he needed and secondly he didn't have the cash he was entitled to cash and you haven't got the information you still must exercise the option to be it was a brother and reasonable interpretation of a written settlement agreement now we've laid out in our briefing of quickly go through it the first pitch is released on april thirteenth two thousand and thirteen that left a million six you released the government then held back eight hundred forty one thousand dollars to pay restitution that had been levied against siegel in their north jointly ten years before europe had the cash to pay and should have paid but didn't just go steal concluded the siegal only had to pay three hundred twenty four thousand dollars of that money and consequently five hundred twenty six thousand of the restraint i'm losing the thread of your argument with regard to the insurance polic said the settlement stipulation says that he had until seale had until august thirteenth two thousand well just thirteen two thousand and thirteen to information from the insurance carriers within weeks of the signing the settlement stipulation the government never agreed to assist in that regard they would not tell the insurance carriers please give them the information you  because they were subject to the restrict the restrictions of the court order so they couldn't toss a sequel so siegel asked the insurance companies for the information and they didn't give it to notice that we can't give it to we can't even talk to you what they said we cannot give it to you and we cannot talk to you and you say what the government should have told them to give it we went to the government then a proposed a letter to the insurance companies authorizing the information to be released the government refused to give such a letter and they didn't give such a letter until july nineteenth two thousand and thirteen and what was the government's reason that the government never gave us any reasons for almost anything they would ignore requests they wouldn't deny them just ignore them and they inferred at one point that they'd sent a letter which they never did send so bottom line is as we're approaching august thirteenth sequel doesn't have the money because the government's imbrie to those provisions doesn't have the facts because they're not cooperated which you're supposed to do under paragraph one thousand so we ask the court for more time and the court concluded do not entitle more time and the court what the court concluded you are not entitled to more time because there's no provision in the settlements to feel lation that says if the government doesn't give you the money and therefore you can't close you get more time in other words when the court i think we should have anticipated the government would breach at least tooba tiriel aspects of the settlement and provide specifically if they did that we would then get more time to perform and that to me is it's unreasonable for someone to presume the other side is going to materially breach and it wasn't the government the court didn't know this the court under numerous orders of the government to release funds all of which were ignored for months and to ultimately the final funds were released in february two thousand and fourteen i'm sorry you say that this is news to me i'm sorry the court ordered release of funds on specific terms that the government i'm sorry just taking one second the order with respect to the five hundred twenty six thousand dollars that was being restrained as part of the restitution order entered into five twenty one two thousand and thirteen that money was released the pember twenty seventh two thousand and thirteen then the government withheld seven hundred fifty thousand dollars to try and compel siegel to help them interest in the development in may actually he says he has signed his interest as part of the where was the dennis where was what you say is disobedience of the court order this seven hundred fifty thousand dollars the court concluded on the bumper nineteenth two thousand and thirteen that both siegel and his wife should send an additional assignment in there for the seven fifty should be released the exercise of the bulls option well the district judge didn't seem to think that let me ask you the the the insurance provision in the stipulation of settlement it says that the way you x the way seattle would not able to come up with the money within ten days well he asked the court for more time to do that and he asked the court why didn't he send the letter he didn't think it would be effective if he didn't think it would solve the pr that is not a good reason it says if you want to access the option you send a letter by august thirteenth that's the simplest thing in the world to send a letter and then you can explain  letter i can't i can't comply with the ten day payment requirement and i have the following reasons and so on but you would have invoked your your option i agree that sending the letter would have invoked the option we thought well i don't understand why he didn't send the letter we thought the more prudent approach you know while you were wrong because it says the way you in the way you are actually size the options send a letter so you a motion before the exercise date of the option asked the court to give us more time the government then informed the court we thought we could work this out and get more time so the government then i'm sure the court then does not see the urgency of addressing the motion for more time after the due date passed the government changes mind said well we can't work it out too bad you lose we're going to sell the policies so we asked the court to enter an order bulls appeal the bulls action siegel subtle part of his forfeiture by assigning one half of his interest in three bulls partnerships to the government he retained as part of the settlement stipulation the option to repurchase those interests and he also retains and certainly government retain the right to try and sell those interests in a commercially reasonable t f sale if the government could do so siegel had the right to meet that offer  week later and said we have a buyer for your interest and we think it's a commercially reasonable purchase we looked at the purchase and concluded that it was not commercially reasonable a principal reason was the offer itself said this is an expression of intent this is not an offer to purchase and then we pointed to other aspects of the proposal where the offer or was not bound to do anything not act in good faith so the court also concluded now up that's that's a commercially reasonable offer even though the the buyer is not obligated to buy or clothes or do anything we also appeal  that there is where we have a problem the court concluded it was commercially reasonable did not enter an order refused our request for protective order not enter an order finally we asked the court to enter an order the court did so not pro to  issue how far do you think the u s had to have gone with its potential buyer in terms of getting approval from the bulls and the n b a before there would be a commercially reasonable offer i'm not sure they had to go get the approval of the bulls or the n b a but they had to come up with a cash waffer i will pay this much cash for these interest well with there was a dollar amount there why were there there were but there were a lot of contingency so asking you apart from the definitive agreement those reservations what about the permission needed the consensus needed from the other bulls owners in the n b a no contents were needed because the only thing the government could sell was an economic interest in the partnerships they could not sell the right to be a partner under illinois law under the partnership documents no partner had the right to convey the right to be a partner the most you could do is convey your economic interests so the government only have that to sell and the purchaser could have said i'll buy that but he didn't but i ask you about the russian oak in essence my question isn't it obvious that under paragraph eight exhibit a had a mistake because the russian stock was never listed on exhibit a the under paragraph  exhibit a is supposed to identify all of the property that the government had restrained all the property of the government claimed an interest in us that it restrained yeah the government could not reach claim an interest in stocks siegel had only personally since one nine hundred seventy the government typically claimed an interest in stocks legal purchase while at near north so the government acknowledges they got paid their fifteen zillion doesn't is it correct mr joyce that the stock had been subject to a restraining order from the court absolutely every effort siegel and was ok so why isn't it covered by paragraph the assets that were being given up to siegel at the end of that exercise i don't see anything in paragraph eight about a claim of interest i see it is agreed that pursuant to various orders entered by this court property including proceeds from sale etc are either in the custody of the united states marshal or the court appointed trustee or restrained by the property custodians that description includes the russian stock correct that description does but it was never and it ended n says that the property is identified in described more fully on exhibit a in exhibit a did not identify the russian hope stock that is correct so why is that not obviously a mutual mistake with respect to the contents of exhibit a because we negotiated the contents of exhibit a and b and there was never any negotiation to include russia or corporation so if there was a mistake it was the it was  reconcile the fact that russia stock was in joined under control of the government in not listed on exhibit a with the text of paragraph eight please i have a hard time doing that except i know that the negotiations were about what access would be listed on a and b well i understand negotiating what would be listed on b then i mean that's what he gets to keep i don't understand how you could negotiate didn't need it to pay the fifteen they never claimed they needed it they just wanted it ok thank you m to united states your honor we're here today as we've already heard talk about three aspects of the settlement agreement which was the result of a great deal of negotiation between the parties following two appeals to this court and to the district court the latter of which last which in two thousand and eleven resulted in a potential forfeiture trial in which proximately forty seven million dollars which had been restrained by the  government was to be determined as to tighten initially then after that assuming that mr siegel on any of that property evaluation of what he was to be determined in the second portion the government would get fifteen million dollars five the gradation of whatever assets were available and he would get the overage or the difference afterwards this settlement agreement was reached in february early february two thousand thirteen and almost immediately fall apart it resulted in the expense of litigation from the beginning of march all the way through a hearing that took place before the district court in november of two thousand and thirteen on november thirteenth interim period there were probably at least ten perhaps fifteen different appearances before the different before the district court and various different aspects of the agreement it was contested primarily by the defendant and various  crowns starting almost from day one we're here today to talk about three particular aspects of that that is the insurance differential or the insurance option the option to purchase the chicago bulls and the rush  e bank stock and let's start with the insurance as the courts are already heard mr siegel had a option purchase stroken why does the government care if mr siegel is ready to pay the cash value could you expect to get any more for those are you waiting for him to die well from the you have serious no we can't expect to get any more for a while why are we having this debate we're having a debate because there were three different disputes here actually more than three but it really boiled down  resolved several of them there was another one that was resolved the side it issue in these peels seven hundred fifty thousand dollars in the shared shared house because all of those together were tied together in the it was just a hostage i mean what what do you what are we doing with the insurance policy it's part of the overall bargaining that we tried to resolve as i explained to the district court we had numerous for many many months settlement negotiations with judge have curious just asking what is the fiscal significance for the government the insurance has diminished over the period of time in that the premiums are being paid by the money that has already been paid to the insurance companies many years ago  always on these policies so that if today the the policies were to be sold there they're worth less more less money for insurance value for cash rendered value for example they're not worth the two point one million that they were a year and a half ago two years ago but wasn't wasn't the amount of the option specified the no than the boston provided that he could purchase or six insurance policies for their cash surrender value at the date the option was exercised and contrary to a mr joyce argued to you the provisions in that auction where that at the time the option was exercised the government then had thirty days to determine what the capture and or value was after mr siegel wrote a letter that the group that you've already alluded to church closer enough to pay any money the government then had thirty days contact the insurance companies get the cash or undervalue give it to him and then he had an additional fifteen days to decide whether or not he wanted to purchase one or more of those policies so a total of forty five days passed the the aug thirteenth option exercise drop dead date what happened was he just totally blew the option to he didn't address it at all during the month of august two thousand and thirteen at all he didn't raise it again until september fourth when he went before a judge to revitalize an extension motion to extend the period of time to purchase those policies and just to see his response to that was i don't think i have the authority to do that under the settlement agreement i don't remember it clearly as i sit here but if you are going to the defendant's positions on that he found that there was no authority for an extension of time and more importantly contrary to what mr joyce has argued for you here today he found that there were was no breach by the government of either of the provisions for cooperation in general paragraph nineteen of the agreement nor of the provision regarding furnishing information to the church to mr siegel from the insurance companies in fact we found to the contrary was after having reviewed all the information submitted by the government policy or policy that gives the government the right to as it says very plainly liquidate the policy to keep the money for payment to creditors and one of the things that my payment of predators one of the things that might be overlooked might be and if we liquidate two million dollars worth of policies it's not something that we can then go back and pre purchase so that but the answer to my earlier question is that the value of those policies has been diminished mission because of cream ok i hadn't realized yes fine he also found as i've already alluded to specifically that the government and he says specifically in this findings i've carefully reviewed everything that was submitted by the government the e mails the documents that were provided i found that the government did not fact reach its obligations for cooperation with the government in fact did was go well beyond its obligation which was only to person to furnish the cash or enter value information and we did in fact contact the insurance companies we said contrary to what  argued here today a letter to the defendant in april of two thousand and thirteen shortly after the settlement room was reached suggesting that there be mutual cooperation in approaching the insurance companies to provide information that mr siegel why did that letter went on responded to it's clearly marked as a draft the caption letter is to the relevant insurance companies went to the defendant it was not commented upon until late june of that year it wasn't till late july that they came option period the other insurance company responded with approximately fifty pages of materials which i've submitted to this court as a government supplemental bendix that has all of the information requested by siegel that information was return within the thirty day period following the expiration of the option in which the government had to furnish just the surrender value that any other dish information so mr siegel had long before he ever had to make any decisions about paying any money to the government for these policies all the information and he could possibly want it all he had to do was write a simple letter in august and he didn't do it the reason he didn't do it among other things it because he got off on a side track regarding chicago bulls option which was also to expire the same day that is aug thirteenth shortly before that now the provisions for the chicago bulls option have slightly different timing but it says is that mr siegel has the right to exercise his option shortly before fargus thirteenth if you watch too if the government doesn't have a higher offer what mr siegel did was wiped letter to the government on august second of that year can i can i just ask you before we dive into the details of the yes is want to nail down on something on the money insurance yes the the way this was structured was exercise the option by sending a letter no cash wrecker government can then provide cash value and you're saying all of the additional information was misguided it was it was not in there was in those thirty days and if at that point mr siegel sees that information and says this is not as good a deal as i had hoped no i'm not going to send the cash there are no consequences for him first you keep the policy as it doesn't rain he's got the cash that's a separate issue that's exactly right it takes care of the instantly infor in those states are the thirteenth of the of august and then to the twelfth of september for the government to provide the cash value and then to september twenty seventh through mr siegel to if he chooses to actually pay for the policy you know he will back the bulls fine thank you for the with respect to the bill sure honor mr siegel wrote a letter on august second saying that he intended to exercise his option to purchase bulls for approximately one two point one million dollars in that letter he specifically said i will pay you by august sixteenth the provisions of the settlement agreement however provide that ten days from the exercise of the option the money is that is august twelfth and august eighth mr siegel wrote to the government and said i need more time i don't have the money i want you to grant me an extension of two weeks from august sixteenth to august thirtieth to come up with the money on august ninth the government wrote back and said no we're not going to grant that extension what was the reason for there the reason for that your honor was that we had been in the goshi ations with a higher offer and in fact august ninth was a friday and monday august twelfth we solidified the contract for the hire offer for next year nine hundred thousand dollars and we furnished it to mr siegel that day timely the day before the expiration period we told him we had a higher offer i'm august twelfth mr siegel's time to pay the two point one million dollars ran out he didn't pay it what he did that day was spend all day writing to merge the motions to try and stop the bills transaction that we had furnished in the information on aug twelfth on aug thirteenth he filed two emergency motions to try and stop bills transaction did nothing at all about the insurance which expired that day not a word about it in either of his motions one of the motions was to clarify the dates regarding the bulls or the other when it was essentially what he characterized as a protective order to try and stop the transaction in asked the district court to clarify whether or not option the proposal that the contract that the government had in fact receive met the terms of a reasonable commercially reasonable cash offer as required by the settlement agreement itself we appeared in court on aug fourteenth no mention by mr siegel scouse of the insurance at all instead what he did mr shields council asked a district court to determine whether or not the contract which had been provided to mr siegel the night before were two days before met the terms of the cat commercially reasonable cash offer judge just steele said i would consider that come back and see me on the twenty first mr seales counsel did not say wait a minute i have an offer out here on the bulls that actually expired two days ago because i didn't make the payment even though i thought i was entitle to make the payment on the sixteenth judge to steal my deadline for making the payment in my mind is two days from now can you please decide tomorrow or can we come back on the sixteenth so i still have time to make the payment if if you decide that this other contract is not commercially reasonable he said nothing at all in fact went on his merry way and came back on the twenty first on the twenty first judge to studio in response to both a brief that was submitted on the thirteenth this emergency motion and another was submitted on the twentieth recounting all these alleged difficulties in the contract that mr siegel perceived rejected them all as a matter of fact finding he said that it that the  the a stent symbol difficulty in due diligence for example was not something that just gave the purchaser the right to unilaterally walk away mr siegel raised a number of different things or spelled out in his brief it's great length their address in our brief could you focus on the paragraph requiring a definitive agreement a definitive what definitive agreement that the blanket includes such other provisions as the parties in their sole discretion require can recall the paragraph that you're referring to there are six different conditions that give the offer or an option to terminate the agreement they are in judge still fact finding not unusual quote unquote was a word that he  they do not give the are for the option to simply walk away they are i understand the position but i have a difficult time reconciling that conclusion with the text of the requirement of coming up with a definitive agreement as officer to conduct some due diligence that is that's a separate requirement ok i'm talking about the divinity of agreement and all of us are familiar with cases in which parties agree on material terms and there's there are limits on the discretion regarding a definitive agreement this is drafted in such a way as to reserve it looks to me complete discretion to walk away on both sides well that is the argument that was made to just disappear that he rejected honor well i'm explain to me given the text why that's correct or at least not clearly erroneous because there are conditions in there as judge to steal found that allowed the trustee  to if that determination by the purchaser to walk away was on reasonable gave him the opportunity to contest that how it was in later telling you're telling me the conclusion one of the the things the offer is contingent on is satisfactory is the negotiation an execution of a definitive agreement except it will purchase or in accordance with the section of this offer in total definitive agreement correct return of that paragraph and we see it's supposed to conform to the terms of this offer customer covenants that's the kind of thing where there's room for the for somebody to say no you're being unreasonable right and then we have and such other provisions as the parties in their sole discretion require i think that that's a normal contract term that it leaves and they'll vote to contingencies that might arise and what is the word definitive me a final signed contract after due diligence has been conducted so that's my interpretation just chrystia found that that was a reasonably commercial term in a contract that he found  recently commercial plays a perfectly reasonable for parties to include that kind of term but the question is given the you know the the war these parties have been in for the last decade or so i don't i have trouble seeing how that is an offer of cash on the table when the buyer seems to be reserving the right to walk away that it is in its sole in his sole discretion your honor i understand your question  where is it reflected in the court's judgments in the court issued a minute while first of all it said orally that day on twenty first of the parks and in the next minute order of the same day it ruled on one of the two emergency motions that had been filed on the thirteenth that is the motion to clarify the time that's i think dock in the embers seven hundred sixty three docket seven hundred sixty five is the one that mr choices can play about in his brief that was your honor one that claimed that it wasn't a reasonable offer at all and the judge to see or should reject it however once again that motion wasn't filed till august fourteenth mr siegel's option expired august twelfth is his obligation to make a payment be fired august twelfth that motion was filed out of time mr siegel has made it plain over and over throughout the district judge take that approach the conclusion your say should have been for the peeled reflected in that i don't even see a reference now i just don't see well if that motion asks him basically to determine whether or not it's a reasonable cash offer and concurrently or can kind commonly then would presumably give siegel the right to match it siegel has maintained all the way through these proceedings that he never had intentions imagine his lawyer stood up in front of just to steal said he says it needs breached he never wanted to match the higher order all he wanted to do was quote exercises option his time for paying for that option expired before he ever filed a motion it expired on the twelfth ok thank you very much  you know touch hamilton seem concerned about the fact that the gesture and it was diminishing as time went by when siegel proposed needed more time the written proposal said that we will reimburse you for any diminution in the cash or undervalue in the event we're not exercise the option so the government had no risk at all of giving more time the government pointed out a minute ago the siegel did not raise the issue of the insurance option you know august two thousand and thirteen no it it had done so already in july two thousand and thirteen and it's been continued because the government said we're going to work this out the government mentioned a minute ago there was a a letter prepared on april thirteenth two thousand and thirteen directed to the insurance companies to get siegel more information when you read the writer in the file you'll conclude the letter in first it was sent it was never sent it's not marked draft