of north korea regarding an appeal from the thank the court denial of our proof of claim in bankruptcy proceedings and this case has a very long history as everybody knows  contra number litigations since it was the petition was filed in two thousand and four but what happened in two thousand and fourteen and fifteen was the district court and then again affirmed by the the th circuit was the purposes so in doing so the court recognizes the state's concern that the wagering was supposed to have a charitable purpose and the and and funds were supposed to go to the charities and sticking basically to go after a significant amount of those present proceeds and have with the p b s claim that amount was denied so it opened up the opportunity purser plus funds and way the state red the in this case the take out or better formula was that before those should go to the debtor in this case r s i and its principal  miss bala that the charitable organization should have an opportunity to recover those funds that they were next in line under the way the money had been calculated previously to be distributed so what the state did was a file they prove claim on behalf of eligible organizations and as a result this ball as well as the trustee objected on basically three grounds to that proof a claim st of all the they objected to it claiming the state did not have standing to bring the claim on behalf of the eligible organizations that conducted the account wagering activities and as a result of that the state does not believe that on appeal the standing issue is necessarily a primary honor i believe it's a person takes or the state takes away from that reading is that we made a strong argument or we made the argument at least that there was a constitutional provision that this wagering and there was a the argument we made before the circuit was that the constitutional provisions as well as the statutory dictated that the funds go to charity and  and and the court made this comment that would take away from the state is that the court was recognizing ok if the taxes go back there's a recognition that they should have some sort of it will increase the beneficial purposes and that's our reading of the th circuit decision you so as i mentioned with the the focus on team makers and the consent in assignment agreement the state does not believe that standing is necessarily a primary issue because it would probably preclude jurisdiction as far as decisions on the latches as well as the substance of our claim to the bankruptcy court did was they decided to team makers dollars to be one which addresses defenses that were defenses to enforce ability of the claim at the time of the petition filing but everything in the bankruptcy courts order went be one those are all preconditions and again like i said everything the court relied on on was post petition so it's our position that the five ought to be  one defense under latches does not apply in this case and rather the court should focus on what the trustee has brought forth to the court is the substance of the matter which again is  defense that being that the the claim fails to state a claim for relief and in bringing this again the state was prompted by the th circuit statement matter did not address what should happen when the surplus funds like this were returned how they should be distributed so the state focused on the statutory provision under the bible because the th circuit found that it did not authorize taxation on account wagering but nevertheless it's it's the way the funds were distributed originally it's only practical common sense formula to rely upon paying out these bonds and in fact this ball of relied on that exact provision in claiming that she's a taxpayer for purposes of the doesn't believe that standing is the primary issue because the fact that the bankruptcy court did carve out the makers of primary operator and the how can we decide to separate and apart from the bankruptcy court that teen makers have a claim against that are on the petition date so much of what gave rise to team makers cl make a claim against her on the petition i don't believe that has been developed before the bankruptcy court and getting back to judge dallas point how do we make that decision we can make fun  i don't think the bankruptcy court made any findings for us to review regarding that so if you prevail on one or the other of your of your arguments how can you think going to be the right means there are five minutes i'll continue on that point because i think a lot of this goes to what the trustee had brought up there i a reading of the statute in that regard there would be no facts in this viewed it would be a purely legal argument although we did bring up at the last minute some contractual issues but with respect to the date of the filing what we advocated and dispute i think that's maybe why the trustee is advocating that position let them set that out but but i guess at that that's case it so be it but i think that at this point the objection maybe the the argument regarding the substance is that point but maybe the bankruptcy court does need to develop more facts on that ok thank you ok thank in two thousand and four and at the end of two thousand name eighteen it appeared to be finally over by the end of two thousand eight hundred the bankruptcy of state in the state of north dakota had reached a global settlement of all of their respective claims against each other with the state pain a lump sum settlement of over fifteen million dollars to the escape the bankruptcy court also ruled on the final three disputed claims denying claims filed by two professional gamblers p w e and mr robert carlson and partially allowing a claim filed by miss paula as a result of the bankruptcy courts ruling on the disputed claims of the democracy estate is currently a solvent estate was deficient funds to pay all claims and returned the balance of funds to the debtor however on the last day of twenty eight thousand nearly fourteen years after the state out its st claim the state filed its nd proof of claim in this case we now know that the state filed its claim with the goal of preventing this fall from benefiting from any return of funds to the debtor but in filing its claim the state had a significant problem if it had already settled all claims against the better under the settlement agreement and signed a mutual release so the states ought to manufacture a claim purportedly on behalf of certain charities including a north dakota state university athletic booster club called team makers in asserting its claim the state made multiple inconsistent and often contradictory arguments regarding the basis of its claim and due to the state's shifting arguments the factual and legal basis for the state's claim remains unclear to this day the bankruptcy court saw through the state's charade of a claim and denied it the finding that the state lacked individual standing under the doctrine of parents hatchery and denying the claim under the doctrine of latches which is why we are here today on the state of the peel this morning i will respond to the phase of latches argument and then i will briefly address the statutory argument raised by the trustee and discussed by their state well before i begin i wanted to touch at least on the parents tree issue it's comforting to know that the state agrees with miss paula and the trustee and that the parents patrick standing issue is really irrelevant to this appeal that bankruptcy court did find that the state has a separate standing through its assignment from teen makers and so the appeal of the bankruptcy court denial of the parents patra standing is irrelevant and frankly it's not clear why the state proceeded with appealing that issue but in light of mr anderson's comments today and unless the court has any questions i won't spend any time on the parents actually issue we believe as we explained in the midst of all the briefing that the state lacks the parents patrick standing and fail to produce evidence at the evidence you're hearing published substantial harm to a significant population of north dakota moving on to the latches issue which is the main issue here on appeal in its opinion the bankruptcy court identified the three latches elements st there must be a delay in asserting a right or claim  the delay must not be excusable and rd the delay must have caused on to prejudice the bankruptcy court then analyze the factors and the record and determined that all three elements were satisfied as to the state's claim resulting in the denial of the state's claim under latches here on appeal of the state is not challenging the element identified by the bankruptcy court or even the application of the elements to the facts rather the state is arguing to technical issues first the state argues that latches cannot apply to bar late filed claims in chapter seven cases of the nd the state contends that the bankruptcy court should not have considered post petition events when applying latches i will address each of these arguments in turn but as an additional matter the state did not raise either these arguments before the bankruptcy court contrary to the state's allegations in its reply brief nowhere in the record or the two transcripts is there an argument made by the state that latches cannot apply in a chapter seven case or that the bankruptcy court could not appeal that were not advance in the proceedings below them consequently this court should not consider the state's new arguments concerning latches here on appeal as an aside the state attempts to excuse its failure to raise these arguments before the bankruptcy court by accusing this ball of filing her brief quote immediately unquote before trial to be clear the bankruptcy court schedule be evidentiary hearing at the request of the state and the bankruptcy court provided additional briefing for the parties at the request of the state the bankruptcy court set deadlines for one briefs were due and miss pollard complied with the bankruptcy court scheduling order filing her technical science so your honor as this ball lays out and her i'll tell you briefly the state thanks you mean this fall and the trustee had difficulty really responding to the state's arguments the state's claim shifted from what it was battlement agreement that the state had entered into with with the debtor and so the state's basis for its claim shifted and moved and eventually by the time the evidentiary hearing was scheduled the state went out and got the assignment from kingmakers and so the latches argument really a rose once we understood that the state was asserting a claim on behalf of teenagers which the state did not have that assignment from kingmakers until it collins specifically asked the state kept the watch issue with the state court went through the elements of watches and discussed those and heard argument from mr anderson regarding the different elements and at that time the state did not raise any argument that latches should not be considered in a chapter seven or that the court shouldn't consider close petition facts and in fact the state actually was arguing different on that if i go to it being nine argument that the state is raising that is much more clearly a legal argument i think that there are potentially some factor questions it's not clear to this day if the state is arguing that its late filed claim could somehow be considered a timely filed claim under seven hundred and twenty six a cheat or if it is simply a seven hundred and twenty six dollars a three claim if it were to be allowed that would probably be the only i'm certain sort of factual issue that is not clear today so i would say on the aisle to the nine issue i think it is much more of the straight legal issue which we obviously believe that the state does not have a good legal argument regarding the post petition fact argument i think that becomes much more difficult because the state was arguing that the post petitions facts regarding its claim and why latches shouldn't apply if the state had said to the court your honor you can't consider post petition  state was actually arguing coast petition in advance to the extent there was an error in considering the post addition events it was an invited error by the state petition the great potential conduct to the actual merit of that claim and there is nothing in the record that goes to whether or not the underlying claim held by team makers  thinking but my view in this falls view is that the court the trustee and this ball all struggled with trying to identify the state's claim and the view was that latches is really a gateway procedural issue that if the state is not permitted to bring out a claim under latches then it doesn't matter about the merits of the state's claim the states  issue and it's really unclear under the record but i would argue that that is really an issue for the state so the evidentiary hearing on may th was characterized as a a put up or shut up period by the court it's the court said that we were going to have an evidentiary hearing it was going to take as long as they needed to but that was the time for everybody to bring witnesses to bring put on evidence and to justify the state's claim and so to hear you know this court say that it looks at the record and it's unclear if the makers even has a queen i think is further indication that the state has failed to satisfy its burden regarding the  and and touch on that point a little bit further so the state's argument is essentially that it was unaware of this claim by key makers or the team makers was unaware of this claim until the bankruptcy court ruled at the and eighteen and essentially the state has argued that the claim sort of arose at that time that was the st time that the makers could bring it because under the state's theory that is the st time that there would have been quote unquote net proceeds under the take up that you and so i think arguably the state arguments really focus on a post petition claim although it's unclear what type of claim that would be and so the courts a long recognized affirmative defense that would be available to really any party under federal common law under north dakota state law under rule eighty of the federal rules of civil procedure and rule eight  i directly addressed the issue of whether or not latches can apply in the chapter setting case so both of them apply latches and then without really any discussion about whether or not they are allowed to do so  or more similar to the order that we have from the bankruptcy court here simply accepting that matches could apply and applying those  i would point out too that the state has not identified in eight i case in which watches would not be allowed to apply to a high end it chapter seven though the three cases that the state in fact the feldman court recognized that there is a distinction between applying latches regarding the allowance of a claim and applying latches for a determination if they're late claimed to be a timely filed claim under section seven  so their state is also on able to point to any authority that would explicitly state that latches cannot apply for on the allowance issue for a claim in a chapter seven case finally i think it's important to consider the extent to the state's argument if you take it to its logical conclusion that for equitable defense to such as watches the courts can't consider post peckish an event that really for the courts from applying equitable defense through the courts routinely do so for instance if a court isn't allowed to look at a release or a post petition order that would provide for from this case because years of looking at i don't why i just post petition contractual breach that would give rise to contractual defenses that the debtor could argue that it could assert this year's wasn't looking at an and i think it's more clearly laid out in text in five hundred and fifty eight of the bankruptcy code which specifically identifies defenses that it a debtor may hold and includes a list of arguably other equitable defenses or not explicitly sta the state doesn't have much to add at this point though the state that the the plain language as well as eight circuits cases like sears the plain language of five ought to be exclusive provisions dictate that coast condition conduct does not relate to the disallowance of the claim at best under subsection nine it provides a loss priority and to the claim as the best were we have a low priority which we never claim more than just above the debtor itself again the question is on the date all the allegations have been since since that date and particularly since two thousand and fifteen more particular but we just asked the court reversed the bankruptcy courts finding