andrew woods your honor this case turns on the court's interpretation of section fifty to be seventy of the bankruptcy code mr woods is respectfully requesting this court protect and to forwarding come from being reduced by a statutory cap that was never meant to apply to earned deferred income but is instead meant to cut off large severance payments that are compensate executives for future earnings that have been lost due to terminations the basic facts of this case are very simple mr woods had a written employment agreement that had been sent to bonus clauses in them that could be earned during the term paragraph three b of his employment agreement mr woods quote shall be entitled to receive the following incentive bonuses and quote it to stipulate did in this case that he earned those  acceleration clause in the executive compensation agreement that merely accelerates the payments not the earnings in other words there's a distinction in disagreement and it's an important distinction between what the word acceleration means and the use of the word acceleration in the statute it's undisputed that mr words performed what he needed to do which is to get the events before congress passed to the bonus he wanted the bonus the ten million dollars of bonuses that's not disputed that company and mr woods decided that he could defer he could default and they could do for payment of those bonuses over a five year period so the only thing that is accelerated would be the were conditions subsequent that were closely intertwined with the payment obligation of the company which included him staying on of the company for five years to received measured payouts as well as executing a release following the terminations of his employment and at them seems kind of substantial and and not you know his continued service fairly broad about the looking for damages related to the terminations of employment and where the cap applies so it seems to me it's not quite so simple as as you've said discounting entirely two conditions subsequent can you tell me where i'm wrong in my thinking about that yesterday i completely agree with you that this is complicated i don't disagree at all that this is not complex  it's not the easiest thing to follow but let me start with the following st century books and why ability the book to five million and paid him one million that's part of the bonus they didn't book the other due to factual dispute just not relevant here but when they did that your honor they exhibited the notion that this was they prove that this was earned they booked it and paid part of it meaning that he  and tax consequences that might have been useful to both of them to have differing account different accounting treatments for the payment but really what we're looking at is how do you interpret the section of the bankruptcy  which is looking to impose a kind of equitable solution to with in the context of highly paid individuals or elements that have penalty elements as in the landlord tenant context and so i'm not cap let me address that judge and i will address the statutory language sec the section allow those under paid compensation do under such contract comma without excel aeration that's what it allows what it what what is for bids is bringing future obligations to the present in other words it says unpaid compensation do under the contract without acceleration what it is forbidding is bringing future obligations to the present because the statute does not allow the inclusion of amounts to be earned in the future in the to be allowed amount the phrase without excel aeration does not refer to bringing past obligations to the present because employees are allowed to be paid past two amounts what's the example of that accrued earned unpaid vacation an employee may have eight weeks of accrued unpaid vacation but is only allowed to take two weeks a year just like mr woods is only getting a portion of his bonus pa year if that employee is terminated there's no dispute that she can get all of her accrued earned and paid vacation in the sense of being accelerated now because of the terminations and she could only take two weeks a year but what the phrase without excel aeration is doing is saying do not accelerate from the future to bring a future obligation to the present do not apply that phrase we would ask you forbid bringing past obligations to the present that have been earned and i think your honor that is why the release itself is also what you mentioned earlier not a factor for release was important they wouldn't of paid him the one million dollars he didn't sign a release to get the one million dollars that he st got he didn't sign a release when they booked the four million in their books the release yes is incidentally relevant because it came up in certain types of triggering events for an acceleration such as terminating he did not your honor what happened was when he was terminated he sent in the release with some changes to preserve his bonuses that had not been paid he sort of put a few red lines in there said listen guys you haven't paid me my bonuses here's a few red lines on the release let's agree to this the release because i haven't been paid my bonuses and instead of getting a response they sent him a letter through counsel saying you know i've been terminated with cause you're not entitled to any more money so within the sixty day period he had to sign a release it was mooted because they told him he was got not going to get a penny and they didn't even talk to him about modifying the release but the release your honor is a fallacy such as the condition that he stay working he could have been disabled to the day after congress passed this bill where he could have passed away the day after congress passed the bill and he would have been entitled to the full bonus under his contract and likewise if he was terminated for cause or just terminated work five years  compete for example one can force the things that have been earned and yes there was a provision your honor is correct that if mr woods was terminated for cause which is eventually what they converted determination without cause to if he was terminated with cause he would forfeit he would lose his entitlement to that payout and that's really how we got to where we were because that's what the ended up  doing why wouldn't want to say that all these years of income were excel related only because he was terminated without cause and that therefore this  payment was prospective relative to his time of employment during two thousand and one and not have an entitlement to get it immediately and therefore it's in the nature of seve and severance usually i think would usually be deemed to be something that is that is an exoneration the reason i disagree with you judge is because there are many instances in the employment agreement where mr woods was entitled to the money immediately upon death upon disability upon a change of control upon a sale of the company it was he he did not necessarily have to wait the five years to get the bonus  dealt with severance separately and and were not appealing the judge's ruling with regard to limiting mr woods's severance what we're appealing is that there was an earned bonus that was not triggered by his terminations and your honor that's the nd reason we think  here the statute only applies to contracts that are the damages that come out of a terminations are resulting from the terminations of an employment contract and in real a value which we cited not papers says whether damages quote result from a terminations and quote largely depends upon the triggering mechanism for the commencement the commencement of the employer's payment obligation the commencement of the employer's payment obligation was mr woods performing performance under the contract which he did and they started to pay mr woods in accordance with that so the triggering of the obligation to pay and the booking in this is why go back to the accounting your honor it does tie to his agreement it does tie t he law that we believe allows an employee easy to get past earned compensation paid without the cap we know it's passed on to compensation because up they fact that they started to pay it and they booked it the full amount they book the full amount of the five one million dollars bonus which was the one not in dispute and so your honor when mr woods ferment that was the trigger for the payment of the money not his term a nation yes the lawsuit resulted out of his term a nation and the lawsuit brought us to where we are today before your honor's but the triggering event that entitled mr wood's to the money to the money was not determination of his employment agreement because he was being paid these funds during the term of his employment agreement and so here this obligation to mr woods and the consequent damaging associated with not paying him did not come from the terminations which is key under the under the contract  reduction in medicare reimbursements achieve a package that would reconfigure the medicare reimbursement plan by c m s and have the company elect to participate all those things happened in tw fifteen and he stayed there after there was nothing further for him to do and he's supposed to be in it to accommodate a payout schedule which frankly could have resulted from negotiating about tax consequences to minimize tax consequences to his receipt of these payments but his task to been completed and these conditions subsequent seem really relatively minor  ministerial the task had been completed and so i have some sympathy for your opponent's argument that they actively concluded the earning was done this was not payment for future activity this was not in the nature of a severance to ease the blow of a transition to a new employer this was just a payment schedule for achieved goals and why am i correct in receiving it that way the reason being your honor is in or view he was required to actually work the additional five years i mean this was a highly compensated employee who negotiated a contract  i don't know the particulars of its bankruptcy filing but this is a highly group of operation providing radio ration services and being compensated by the federal government to care and other  also in the contract that was negotiated that they would be paid over five years for continued services with the company and that was very important to the company and that's why if he was terminated without cause it allowed him to set forth in section three b there's also an amendment to his agreement where he's supposed to provide legal services to the company for those five years all of those conditions and those requirements are embodied in this agreement well look at the difference between retirement benefits which is what begin this or case looks and some of the other cases cited to there are those type of benefits and those type of payments cannot be lost  in our situation he had the ability to walk away from the company either without good cause or to be fired for cause and would forfeit these benefits the only reason he was entitled to those payments at the true forfeit and truly earned that's where it would have been written in five days not excluded five b and that's really the key to the to the case here and this is it really was drafted by mr benefits or accrue compensation where if he is terminated without cause he gets to pay that money the bonus is in three d or two into a severance payment because what they're requiring is early termination  and there's numerous bankruptcy cases out there which look at five dollars o two b seven and you don't need to be defined as severance in order for the cap to apply its any compensation from the terminations pointed agreement to result in the acceleration some former officers and directors over the terminations of his employment and the company's reimbursing so that's the only open matter otherwise all distributions have been made except for the distribution to mr woods which has been reserved you look at the constellation of facts apply couple here and not labels placed by lawyers in documents such as the word accelerated and i'll refer you to two cases that i think illustrate the danger of deciding these types of cases on labels rather than consolation of facts we cited the in recent fanatic origin paper case to your daughters in which some executives labeled something a retirement benefit but that retirement benefit a rose from two years of employment similar to mr woods he earned the bonus while he was there these executives earned their quote unquote retirement benefits by working for two years and the court did not cap those quote unquote retirement benefits because it had been earned during the term of their employment not because they were retirement benefits judge train also cited the newman versus bank of new england court case which nobody cited to you on or some is going to give you the cite one hundred and eighty seven dollars b r four o five in that case an enterprising lawyer deemed what was really severance quote unquote a signing bonus a signing bonus and everybody would think a signing bonus was earned upon signing but the court strong suit saw through it and deemed it to be an attempt at securing a severance and so the court in the newman case did not apply the label of signing bonus and deemed it to be sevens which is not recoverable we would ask that you authors do the same here and find that mr woods earned his bonuses they were vested they were earned otherwise they wouldn't have been release