and we'll turn to the final two cases on our calendar a momentous performance materials ok thank you my pleasure judge toler may it please the court philip banker wilmer hale on behalf of bank of oklahoma i want to address both of the key issues on appeal the interest rate on the replacement notes and the clam let me start with the interest rate in bankruptcy unsecured creditors often typically are not paid in full but secured creditors as a matter of statute are treated differently they are entitled unless they consent otherwise to be paid every penny they are owed i submit the plan here violated their rule and as a result as we cited in our brief it is ignited an extraordinary firestorm in  lending community even without consideration of the make all my clients loaned one point one billion dollars there is no dispute they were owed that amount of money rather than pay them that amount of money in cash  confirmation the plan gave them notes where that one point one billion would only be paid seven years later and it provided for interest in the interim as it had to but the bankruptcy court said that interest rate could indeed absolutely as a matter of law had to be less than what the market would require to value that note as worth the full amount paid and that's the nature of the error that the bank of that is the nature of the error that's exactly the nature of urges cooler to move the rule you think should have been applied i submit the rule judge parker is exactly the rule of the six circuit the six circuit in the american home patients case said the following this means that the offish that the market rate should be applied in chapter eleven cases where there exists an efficient market but where no efficient market exists in a chapter or for a chapter eleven debtor then the bankruptcy court should employ the formula approach first sentence which would come up to this court if at all one is an efficient market and efficient market is a market where there are real there's a who has market weight and market strength this was not a consumer this was a multi billion dollar company represented by a wall law firm with one of the leading investment banks in the country who sought to get the best rate possible having gone to not only three of the world's largest lenders chase city and credit suisse but having gone to its own equity spots or apollo which has twenty five billion dollars in liquid assets it negotiated in the words of its own expert it had a quote broad marketing process that was competitive that led to the best available rate you the following and i quote virtually nonstop multi track investigate negotiations not every case will have that kind of world in it this is an extraordinary case and the proof is in the putting these debtors filed with the securities and exchange commission as they had to disclosures and they listed the liability to my company under penalty of s c c rules as not one point one billion but nine hundred fifty seven million they disclose the liability of the one of the f winders not a two hundred fifty million but two hundred two whether there is or is not an efficient market in some hypothetical case is a question to be decided in the future judge parker but it's whether there is competition let me tell you what i'm concerned about here and please have you give me whatever help you can let's assume hypothetically that this is really spoken on this yet and bankruptcy judges throughout this circuit are going to be looking at chapter eleven cases and and you know i remember in the expensive with expert witnesses economists and so forth how we're going to spear the chaos that this might cause bankruptcy your honor i'm a bankruptcy litigator i do it every day and i do it frankly  chapter eleven cases ok this is what bankruptcy judges do for a living valuation valuation is what i spend every day doing more than anything it comes up in the one in one hundred case i don't do the chapter eleven case of the drugstore or the restaurant that is getting to be reorganized this is a rule that will apply where you have truly competing parties of equal economic power in a w each other i do not ask this court to define what is it is not an efficient market that seems to me judge parker something to be done over time and i could make one more point on this and then i know my time is up i don't know if you want me to turn the maaco i'd love to have a minute i see the answer is no judge brown's i'll save it for rebuttal or let mr parker if you look at till i would ask this court more than anything to look at section five of the roman five of the opinion where the plurality takes on justice scalia's dissent and what the plurality in justice stevens opinion says is the market for sub prime loans is anything but competitive and it can lead this a direct quote rates that are greater even greater than what a competitive market would allow why if the supreme court was saying the rule of law is always to apply a formula rate and never a ploy a competitive rate where it's a competitive chapter eleven why did the plurality take on the dissent on that very issue i submit that was the decisive issue in that case i urge this court to creditors such as our clients are not receiving cash they may receive a stream of payment but that street payment must have a value as of the effective date which means the present value of at least the value of the allowed claim that means they were entitled either to two hundred fifty million dollars in cash or a stream of payments worth a present value of two hundred fifty million dollars by the debtors own acknowledgment in their ten q s published at the end of september under a fresh start accounting they said those notes were worth two hundred two million a discount of eight eighteen percent that was not a surprise that was not something that could not have been fo be eighty two percent of their face value exactly what transpired because effectively this is math when we know the market rate we can do the discounting and that is what the house report said that accompanied a level twenty to a we cite the cow years discussion of it citing it in our brief at pages twenty to twenty one if the note bears a market rate of interest the market will discount the note at the same rate and the present judge train did was categorically reject the relevance of an efficient market because he determined that in any efficient market there would be some profit and he believes that all profit must be extracted from the from the rate but what profit refers to intel and in the n t is not the the rate that will produce a par value of a present value equal to the face value usury statute prohibitions not the rate that was produced by a broker that was you know first in class on the view of the bankruptcy court the broker that was paid millions of dollars to negotiate this  highly competitive back and forth between two equally sophisticated parties produced a rate in the open market that had two hundred million dollars of extra profit in it for the lenders that's the there's an efficient market and if so what the edge is trying to pass your honor we think that we've proposed that at the very least where there is an efficient market rate that's readily identifiable the court should have to use that and that's what we have here because we had the exit financing that was negotiated at precisely the same time with the court has done is adopted a categorical rule the other way we think that the very least where that rate is available the court needs to utilize it if i may just very quickly on the may call a point out that the other side wants to have all the benefits of the contract but not to allow our clients their the benefit of their rights under the contract that is not permitted in bankruptcy thank you if you're out we have a scheduling problem which is not your problem it's our problem so at the risk of doing something unusual we're going to recess for a few minutes and then we're going to come back and hear another case with another panel where the judge is available only during certain period of time and when that is done which hopefully will be will hear the other case then also we are in re