rebel ac any number seventeen dash thirty six zero seven mr moskovitz and mr cooper think this whole issue in this case it really and they probably have pointed out in their briefs and of course absolutely correct the property has been resold so we don't care about the future rent then let's go back in time since you don't care about the future right ok so my question to you this aren't you jurisdictionally barred in some way from reviewing the bankruptcy courts june twenty fifth team determination that  an appeal from that decision you're absolutely correct and that's an interesting point for this reason both parties are barred because neither party appeal what that decision back then said is that the tenant have possessory right we don't  because the june opinion that you referred to i'm sorry i meant to reserve three minutes of the opinion that you refer to does not say anything about this issue that came up later so that the rights of said often recruitment are preserved but they are preserved against the debtor because you have other paragraphs that make that clear you have to read the contract i don't know what it says it's preserved notwithstanding the debtor's assignment  incumbrances and other interests on or against such assets other than the permitted to conferences etc how do you know that that's great but how do you get around it you have to be able to read eighteen again in contact with twenty nine right just elected to be retained by the founder of course counterparty under the bankruptcy code three sixty five eight does not provide any requirement that a purchaser in good faith of an asset suddenly have all kinds of include things that are pertinent to the possessory interest in other words while the lease of self doesn't survive the language in the least with respect to what you pay for rent with your term your right to possess those lease is not you can't look at everything in a lease i surviving it up but anything with respect to the possessory interest does or but that's the distinction locking up my problem i go back to short paragraph you got without further action by any person released with respect to the assets as of the closing date and the end of that paragraph says all persons and all holders of liens based upon arising out of all related to liabilities retained by the debtors clear of any interest under three sixty three f does not include defenses the claims three sixty five it does not include defenses with respect to the debt or in other words if you reject the lease you have claims against the debt but the whole point of the bankruptcy proceeding is that you have to be able to sell your assets if you take a look at paragraph peak of the sales agreement that makes it clear that the purchaser would never that's why we're not appealing the possessory interest we're not appealing the rent we're not appealing anything that is a pertinent to the possessor interest what were appealing is an issue that even the bankruptcy judge said is not part of rent and that's the a single transaction how it requires an identity of interest and it requires the act which that's how you get to recoup and this whole case is about recoup and that's all we're talking about right there is no single transaction kol nor had nothing to do with the construction of the property the poems were purchased this property negotiated a price with the idea that they were going to have liability not a single transaction so you're characterized recouping amounts as liabilities yes absolutely so  mean let me explain that it's complicated this is not a simple factual matter there's a six billion dollars approximately pot that was put aside because there was a dispute between the debtor and i d e a as to what percentage of should be getting because of various issues with respect to the construction so that money was put aside and never resolved by the time my client purchased the property the lease itself has two separate provisions one is you pay the monthly them the same prince act nor identical because just because you calculate it in a similar fashion you have a provision that says you pay this read monthly without several or recoupment and then you have another provision entirely which says oh by the way if you paid constructor if you paid the construction amounts and that's in dispute but not important for here that there never gets to that point if you paid those amounts your intitled on a quarterly basis has nothing to  was very clear you lose your claim to get thrown into the pot if you were to say by the way ideating get paid with their entitle to but nobody else does that's a preference that specifically excluded by the by what just three sixty three actually i what it means i mean it will it affect you if europe in effect you're saying that rebel going into bankruptcy causes an increase in ideation overall cost to wreck the premises right is that the end result not people could but you can't recoup you know the rent remains the same what they do is they lose their claim against the debtor because of the bankruptcy and they have a separate consequences are very real good the consequences of bankruptcy are never good for the creditors i mean wells fargo lost tens of millions of dollars in this case hundreds of millions of dollars the consequences of bankruptcy are are not good for relatively small compared to the cost of the building but it is what it we would never have gotten this if in fact we could not release the purchaser from the liabilities so the estate which eventually got distributed the estate know what happened with the focus here have to be on the fact that the recoupment construction costs really is a separate liability just happens to be in the lease but it's a separate liability it's not a reduction of rent and that's the threshold issue if it's not a reduction of rent like it wasn't five steps if it's not a reduction of rent then it's treated like any other liability in bankruptcy it cou that h says that a tenet isn't told to remain under the same rental terms as are set forth in the lease and you're saying but actually that doesn't mean anything here because i want to say when i gree one hundred percent with what you just said they have the he choose what i don't understand how how is it that you can define that as a liability rather than as an essential term lease which was really negotiated and why would that saying and all the case law says that when you're dealing with bankruptcy when you're doing with tenants they don't get to keep every term of the lease they get to keep their possessory interest and they get to keep those things that are pertinent to the possessor interest and what that i can speak with my colleagues have a different view like staff than you do so maybe you want to give us another what i was saying with respect to plaque there is like death very clearly noted the opposite of what the bankruptcy judge noted here that in flagstaff the lease makes that liability a part of the rent thank you for bankruptcy court answer thank you wanted as if your honor no this is the second time that idea had been before this court in order to preserve its right under the lease in the fourteen and eighteen y the the rights belong to the claim not go karting and if you look at cases like ford or adams and other cases even when a claim is sold to a third party if it is something of a recruitment that recruitment is not a disarray did by the sale so that the ultimate defendant can still raise it against that third party asked any of the claim of that of the estate he seems to have argued that the distinction liens claims of compensation interests and as this court and i think it settled on the third circuit discussed in folder adams defenses are not included and they're not included in the three sixty five after a cleansing if you sold its interest so we presume that we actually mention in a footnote i think that we didn't know if your honour's were going to consider that those interest going forward i still relevant to the case but certainly it would be we believe that th should be allowed to continue as a defense if you want to point that out you know the water itself and preserve it in certain paragraphs i suggested those paragraphs cited by i'll give talent that he argues cut off those rights do of a single integrated transaction and that it would be inevitable to allow the other side to get the benefit of the buildout of these very fancy my club and a club facilities without taking on the obligations arise out of a single interview a transaction so it would be an equitable for the debtor to enjoy the benefits of the transaction without needing the top occasion both courts allow found that based upon the amount that was paid and the benefit that was applied to the property protection of the defense and because a part of the analysis is not only be integrated nature but the fact that it's inequitable to do otherwise thank you very much  separate claim our claim out of that six million is for rent they have a claim against that six million it is why it was never distributed they have a claim for their construction costs not a defense to our claim it's a separate claim so that's a very clear that up there is a indirect relationship because of the way it's calculated close formula right it's important right but the formally formula is not exactly the same number one if similar and number two the provisions of the lease itself make it very clear you're talking about two different things of course i mean with the form of the form that it's based upon and it's an entirely it's a different formula based on the revenues of course it's based on  separate i can say that they're not so i'd say both depend on revenue but neither one depends on the other the rent is due with or without what happens to them and the very entitled to the recoupment of constructive course if they pay them regardless understood but how much money we're talking about the terms of the difference i can look at the lease ok five each after rejecting a landlord is no longer obligated to continue to perform under the lease other than to provide the tenant with possession of the premises and the right department there too and then he cited all those cases i mentioned earlier just one other thing ahead all right and sixteen by agreeing to the debtors request to withdraw the portion of the sale motion that seeks a sale free and clear the possessory interest the purchaser is not waiving any right you may have with respect to any arguments concerning the extent of such parties right under the