here the united states bankruptcy appellate panel for the eighth circuit is now in session all persons having business before this court honorable court may now draw near and they will be heard god save the united states and this honorable court verses michael robert quickly mr anderson thank you good morning morning it please the court my name is curt anderson and i represent the appeal appellant lariat companies in this appeal this is an appeal from a plan confirmation order and a previous order declining to dismiss or convert the case based on an allegation of bad faith that the confirmation of the fourth plane correct that's correct the actual contents of the fourth plan are not an issue but a reversal would necessarily vacate that confirmation order  in its brief for a reversal and remained the single issue it raises of course is what i just stated whether the bankruptcy court erred in denying its motion to dismiss or convert the case from chapter eleven to  finding of good faith the facts the court did a summary dismissal order where basically it said the facts are well known to the parties i soon they may be well known to the court too but i will review them unless you decide to that you that you don't want to hear object to the fourth modify plan no not not in terms of its contents ok so how is larry at an aggrieved party with respect to the order confirming the fourth amendment only in the fact that it went to confirmation at all that it that it was denied its motion mr convert ok but if i'm remembering a circuit law correctly in order to be an aggrieved party from a confirmation order you would have had was the one that sort of like asking for an exception in a trial it's well known position that basically it the case should have been dismissed or converted in the first place if if we were to affirm the decision confirming the fourth plan your motion to dismiss falls away doesn't if you if you chose to  sure and but i do i don't i don't think anybody in the bankruptcy court had any illusions other than the fact that that was still a live issue awaiting appeal at the proper time and in fact we had at that actually prematurely detail on that in the two thousand and one that it was held liable on his guarantee for two two point two million dollars a second straight state trial court judge found that in the same time period excuse me the debtor fragile only transferred seven hundred ninety five thousand dollars to his wife finding of actual intent actually conclusion the law actual intent the debtor had big issues and i'm sure we're going to hear a lot about them today about how he should have been credited filing i mean i i guess i'm a little confused a lot of the facts and the documents that you presented to the bankruptcy court related to issues that occurred prior to the filing are you suggesting that action taken pre filing automatically results in a bad faith bankruptcy filing not automatically but it's it goes into the mix up to the totality of facts and circumstances the fact that there has an issue about that would not be perceval or probably even contribute to bad pay so he has continued litigation in state court and then going into bankruptcy court to avail himself of whatever remedies he may have there you know explain to me how that correlates to bad other things failed he went into bankruptcy court again we're just talking about one ingredient mix right here now and then i know the debtor will disclaim any effort to violate ricker feldman ask this court to violate  the court to reject that finding a look at me when it comes to fight sorry sorry we've we've all had our experience or we're to feldman in the circuit well let me let me back up to a judge just showed he was talking about here in the representation as i understand the record correctly at least debtor asserts that your client relate the premises between the time the judge were before the judgment in state court was entered and is that it was unrebutted if i understand correctly is that a true and never informed the state court before dinner its judgment that it had done so far as i know not now let me put a big disclaimer on this which is i'm relying on the fact that this whole leasing file was put in front of a total of five state court judges now when i don't listen don't misunderstand my question i'm not saying that there are that issue hasn't been the nails flush with the board on that issue as far as i'm concerned from a legal standpoint but and this may be a slightly nuanced argument but it seems to me that if that in fact happened as as debtor testified it did in when under about it wouldn't that justifiably upset the debtor that your client hatton played fair in state court and got a judgment significantly or potentially larger than maybe it should have and again i'm not talking from a legal standpoint that was dead but from the standpoint of a debtor who is told he owes eight hundred thousand dollars and finds out that your client kept information from the state court that might have significantly or at least partially reduced that obligation don't you think he had a right to be upset with the system and continue to fight it is hard as he could to try to make it right  certainly has anybody has a right to be upset but what's the appropriate response to that being upset he got the whole leasing file he put the whole file in front of the original trial court judge wright said i think the question goes more to you got a two point two million dollar judgment r woodley availed himself of remedies under the bankruptcy code to reduce that amount that he thought was unfairly high because you had to rely on the premises i guess so you know whether or not you know forget the state court part there was a two point two million dollar judgment he went into bankruptcy court and under five zero to be six that amount was reduced what's the bad faith about that invoking five zero to be six by itself is not bad fa voting five zero to be six with no benefit to the creditors with no benefit other creditors doesn't in the policy reason behind five zero to be six is to make sure that a landlord like larry it doesn't gobble up the whole pot well this is one hundred percent pay plan  if you raise that argument from the bankruptcy court i don't recall seeing it there's numerous passages where basically i point out the fact that all creditors are being paid in full i think it was raised in connection with the previous claim litigation know yeah it's really there and i think there was plenty of case law to back this up it was you know there was claims litigation over it's there to protect the other unsecured creditors in this case they didn't need it the only person is benefiting from this is the getter so so once again another ingredient to be placed in the mix along with things like you know i put a number of thing other things in my brief final section has a quite a litany of them you know not not disclosing the fact that his if i overstated the case in the brief but i do think this is a serious misuse of bankruptcy there is no benefit to anybody in this case except mr mrs weekly personally and i would ask that the court consider the detail in the brief acrimonious litigation but significant history of it you know part of this that these appeals the appeals of these three orders moves the current appeal to the eighth circuit review it in connection with a final order if it was one of the events leading up to that final order and i freely recognize that that's o c d and everything else but just so you know where we're coming from and final orders we keep trying you know what the case the issue is did the bankruptcy court in finding that the debtor filed this case in good faith that is a factual determination and that bankruptcy court has pointed out one piece of evidence that would support of finding a bad faith mr nelson if i understand correctly larry its argument is it had all these documents that it introduced and if you read those documents with an eye toward finding bad faith you can find bad faith again his argument he can clarify when he can back up but let me just finish this if you read those documents with the correct eye or with the correct approach you can view them as demonstrating bad faith if i understand correctly that you then put your client on the stand and he explained in his mind explain away any perception of bad faith and then there was no further rebuttal so the bankruptcy courts looking at every last page from every different angle and you could take as many quotes out of context as you want and you will not find evidence of bad faith there is no evidence of evasive conduct in the state court litigation there is no one ever does or doesn't the appellant assert or at least want to adopt the theory that his continued litigation of the same claim maybe not while being invasive was at least a delay tactic in terms of preventing collection that may be it if if that's the case then they're making a legal argument they want you to adopt a presumption that the ladder in state court and then start all over again in bankruptcy court i would disagree entirely that we did not start over anything in bankruptcy court mr anderson brings up broker fell but that is completely irrelevant to this case but didn't your client attempt to do something through the bankruptcy that could not be accomplished in state court which w protect his wife from collection efforts i'm unclear about some of the state issues which relate to a different appeal but i i would just not you know the things that occurred both before and after bankruptcy do seem to be designed to benefit mr wigley and his spouse there was a proposed settlement of the fraudulent transfer action as part of the plan of reorganization i don't and debtor no so she's trying to settle something in the context of the banker or her husband is trying to settle it on her behalf which obviously didn't happen in the state court so they are preventing lariat from continuing collection from ultimately decided it was not necessary to fund the plan but i can't see how that's bad faith to propose a settlement as part of a plan that it was going through wigley was a name defendant in the fraudulent transfer action so the automatic stay did apply to the fraudulent transfer action they were doing to him and i was no motion was ever brought to it and the stay to mrs wigley i do want to talk about what i think lariats central theory on appeal is and that is that the debtor was not in financial distress and that is there there i don't think there's any dispute that there is no evidence in the record that would support that allegation that argument the evidence the material evidence is uncontroverted they had a judgment in the amount of approximately two point four million dollars and under minnesota law that judgment was accruing interest at ten percent per annum by february two thousand and fourteen that would have been three and a quarter million dollars mr wigley has resources but he certainly could not pay write a check for that as there is no dispute that bankruptcy schedules accurately estimated fair market value of his assets to be about approximately four point six million the state court had ordered mr whately to disclose liquidation analysis testified regarding that analysis and his estimate was that if he like all of his assets over a ninety day period it would realize approximately two million dollars facts i cannot imagine any body reasonably saying that that is not financial distress i mean the threat of liquidation in itself to any extent i believe is per se financial distress there was no suggestion that mr we really would be able to pay this judgment out of his cashflow if i money were talking about he would have had to liquidate in order to pay it off and even on appeal i believe blair lariat take that as a given i think that's the only way you can read their argument what they did not present any evidence that cast any doubt mr wakely liquidation values in other words i didn't say they offered no alternative in fact lariat never offered any testimony none of the allegations that they ever made in their motions were verified or made pursuant to any declaration and personal knowledge so they have no testimony of any kind support these claims what they point me that the value in liquidation to be in other words it's conceivable that there that a creditor could recover more than that from that  an enormous leap to say any reasonable creditor would take a patient approach obtain expert assistance and  receive normal market values for the ass i don't see that there were any evidence that would say that they would receive normal market presumption that there is absolutely no difference between fair market value and liquidation value or its liquidation cannot adjust to school ian told us e loss of value through liquid but larry it is making that argument there's no other way to read it they're saying yes we were going to liquidate everything but it wouldn't matter because we would have taken a patient approach and gotten a fair market value for these us and just make sure we're all clear on this there was no testimony from anyone on behalf of regarding how they would even how they would intend to conduct a liquidation no not this is all argument this is all based on the debtors testimony on cross which he said yes a creditor might realize more than the two million  d now he also did say and redirect he had reason to doubt that larry it was a reasonable creditor and larry it did not present any evidence that would suggest otherwise if i'm wrong or got jurisdictional problems so i'm kind of stuck with it there was a hundred ninety five eighth circuit case on point rather than take you there are just it's examined in a in an arkansas case called west ridge west ridge one get to the main point that i need to make on rebuttal larry it never got the chance to form an intention on how it was going to go about liquidating it had it had a big judgment to collect it wasn't going to do if it obviously had in its own interest wanted to maximize value mr weekley's evidence is that is that a reasonable creditor would do that now his basis for thinking larry it was unreasonable is not supported by the evidence that the eval unless unless larry had in fact did not tell the state court that it had real at the premises and given him this nugget of concern or legitimate issue about whether or not larry was playing fair with the court how would it play fair with him well how couldn't i mean how can i even know that when they're not even disclosing assets that there was ten or eleven days between the order for disclosure and the petition filing that there was there was no time to file bad intent or to form a bad intent there is you know