howard may please the court on michael last spring for the oversight board the talents are dividing their presentation in three i'm going to cover the unitary action and litigation state points lonnie for the senior c bond holders will deal with section four o five b three temps to exercise control over property and mr dunn for ambac will cover section four hundred five six attempts to collect or steady applies to all of the claims in the action or proceed there can be no cherry picking of which claims are state in which or not no matter how they are pled that is the plain reading of the statute that's consistent with the state's purpose it's consistent with judge the souces own decision in the brigade case back in november where he wrote that all stakeholders including the oversight board collectively deserve facts and better as playing if and separate that as to the proceedings essentially and i think that that's really what we're talking about here we're talking about planes  that we're not talking about here we have one party essentially we have parties that qualified and i think you do have to decide whether or not it's one claim or one to one proceeding or multiple proceedings i think that here it's these claims are all around in the same issue a question about that what makes some of the claims right before the executive board or others may not have ripened until after the executive board which i take it was a day or so or the same day that from a so went into effect didn't take all right at the same time which is when the executive order was issued well i think that the claims all our premise on the same set of wire finding which is fine but it sounds like that's what you're doing you're saying how determined whether it arises after or before depends on whether it's grounded on some legal argument that could have been made before ok yes  read the pleadings there are defenses that speak in the nature of stoppel and latches that their war reasons to bring these things that after ten years of living with the issue today is that all of these claims really require the same proof the same conclusions with respect to the constitutional issues the meaning of the elbow revenue in january i answered it yes one turned out to be this one but as i stand here today there are other cases pending but none is being litigated none is   private mediation is appropriate parties are consenting to it it appears that that process is underway i'm not in a position to say whether all parties have signed on or not i believe that it's scheduled  which is the dedicated sales tax that is owned by pursuant to puerto rico statute by statute the dedicated sales tax is owned by this entity it's collected daily  essential and what is essential for it will insure all creditors such as my clients have a fair opportunity to consensually me negotiate betrayals of their debt free from litigation distraction this is the explicit will of congress pursuant to the territories clause of the u s constitution from the time the oversight board was appointed by president obama on august thirty first two thousand and sixteen up until may one which is just to have three  district court level the dead to put on trial who are the protected entities it goes a bit to your prior question tonight to my colleague who is protected by the state that define true the cause of this shows is called the government of puerto rico but the government of puerto to ship that property and transfer it to a new account established their bond issuer which is the commonwealth entity to freeze the money there even that government can't use it and then to hold it until the litigation or their rights are determined in their securitization in didn't finance in finance world who pointed the statute which was from two thousand and six is even at that time the general fund of puerto rico was in a state of crisis and the government had shut down for two weeks so the only way question mccauley is a count it was one count one of their complaint was the one that simply said executive order is preempted by police we didn't intervene in that at that time because that act preemption which is contemplated by section three zero three three of the statute is perfectly appropriate to go forward but what flows from preemption it's just invalidation of governor pataki is unlawful executive order right and so everyone is restored to where they were before predators of the common pretty neat they have is with the commonwealth government but they're not satisfied with those us so what the second circuit held in colonial realty is that when  was redirect certain income streams hire them off freeze them and separate them i've found that there is not a bankruptcy case out there that would say that's not a violation of the subsection of the automatic state three sixty two a six for addressed whether executive authority was preempted we didn't intervene on that what he did was he got greedy to try to bootstrap it and said this will be a great opportunity to fight what will be an issue potentially one of these cases if we don't settle it out because he issues and now what's an appropriate made please the court march cancel for applebee's i had a lot of ground to cover i want to start if i could go with a section that's received precious little mention we've heard a lot about mesas purpose for a lot about the purpose of four and five you've heard very little about exactly what happened here and at the posture which this case comes to the court i think we have to take that is true we've never gotten a chance to improve the merits that claim so i think on this record i think that has to be taken as true for all of the talk about how this would never happen in bankruptcy explain why congress intended to stay anybody from stopping unlawful diversion of funds and i think that's crucial so for all of the bankruptcy cases i think none of them arise while trying to reconcile th letter three three three in particular is a dead letter under the reading of the state provisions because there's nothing to be done about it they started to say well maybe they could get a declaration but then that's what beck thirty seconds later we can do nothing apparently even if there's something that blatantly violates three of three three let me make one other contextual point and then i'll get down into the if you don't if you don't mind the three sixty two cases arise in a very different backdrop in bankruptcy world you go into bankruptcy court and the three sixty tuesday kicks  probably so we don't have that we have what is now turned into a ten month free for all and it is there's no bankruptcy court to go to in the bankruptcy set you can go to the bankruptcy court file an adversary proceeding and bring him awful actions  bankruptcy say applies to actions outside of the bankruptcy court and to crawl these cases saying well they won't let you go here they won't let you go there bankruptcy court would never allow this a bankruptcy court or whether the water would get into those cases whether would allow you to go to another court that's very different we have here or there is no place to go in our complaint he said the state doesn't apply and if it does we'd like relief from the state pursue that i heard you to ask my colleagues when they stand up on rebuttal if they would agree that we could we are entitled to relief from this day i'm suspecting to say we are not and  what we want to spend money on here's what's left over for debt service sorry well so relief from the state matters a lot already in applicability of the state matters a lot when your side word is not saying that there's another pile of resources that you can come after later then they told us it's a zero sum game we come last and respectfully that just doesn't make a lot of sense so when they come in and say we can't get we from the say i'd like to see them square that with their position that you get the crumbs that are left over in terms of irreparable harm and the kinds of problems  ry theory your honor a couple of points first of all no one is has addressed the supreme court's decision in jones versus bach which took the word action in the context of the appeal as are a and said the ordinary meaning of action in this there was a case by where the governor qualified for an exception to the automatic stay for certain government enforcement actions and the court said well yes that can go forward except with respect to the government's attempt to get monetary relief and now wasn't who was being sued or who is suing that was the nature of the really sought was over the line of the state so that is a clear claim by klein sort of adjudication and the same analysis would apply here secondly with respect to whether this action could have been brought before then perhaps by application to other bankruptcy cases to say well if a fact occurred prior to the moment in time and that fact we then be implicated by a subsequent cause of action arises i think you would be opening pandora's box to say night i got an email from mr purple on his council saying we're going to say the district court proceeding saturday night i get the motion for judgment on the pleadings sunday monday we're actually do so the oversight board didn't file anything because the liability so that's the test that says anything pertaining to a bond that that stated it could have been brought forward but then there are a series of conditions for things that could have been brought before that go through that actions there are not  good control is not with respect to liability and what i'm hearing is anything that might influence or affect your ultimate adjudication of some future claim to money well that's got to be control or that's got to be next to collect and i just don't think that can be squared with the fact that the broad respect in the liability what about this particular things that are being cited here i mean i take the point that not anything that could influence it in some indirect passion but here the relief sought is seeking to segregate funds hold up so for example if i'm walking through washington by the white house grounds there's a sign that says you can jump the fence and run up to the to the white house and knock on the door there though the secret service is not controlling my con dominic's restaurant they enjoyed it better from operating the restaurant and because he was doing so in a way that violated the trader that is control over property if you take it to the extent that any you know what you're trying to say anything they want to do with their property  that we're in an unusual circumstance because none of the bankruptcy case is applied just the bond it is but but i guess i would come back to our natural why it would matter if i say you can enjoy your restaurant from operating but you can't enjoy going on lawful disposition of assets language under three sixty two it doesn't say creditor property bond holder property and it says property and so i think it's i would say that if you can join somebody from running their business to make money you want to be able to join somebody are respect your honor we've been trying they're going to go she eight four months i'm a little restrained in what i can say because i don't want to overstep letters that exchange but i think it would be unfair to say that this litigation has prohibited anybody from negotiating anything we have been trying to get the money turned off to i'm all for purposes so that we can have a future just a good time it's not enforcing a lien given that you contend you have only him yes or no first of all that we have it is if that were the case just because that is a secured creditor then well if you can enforce it you have a property interest and you can't get any relief i think that would be not that's not an act to create perfect or at first i mean that's an holder and that's the difference i don't think it can be that just because you're a secured credit or you're somehow worse off under this day can take no action in respect of your property may i just i will i i willing if you' only i'm going to deal with the one bit for rebuttal i want to answer the questions that were asked if i have the jets first and foremost to answer judge which is a question about the declaration just to be very clear the declaration itself violates the six because it is an act to assess recover or collect doesn't have to be