first question is can you hear me yes i can your honor all right good morning good afternoon to all of you in california all right let me just say that we are familiar with the record in this case which is an interesting one we've read all the briefs i'm going to urge you to listen to our questions and answer them we're going to have some this is an interesting case that with the intersection between admiralty and bankruptcy law and you do yourself a disservice if you don't respond to the questions we ask my first question for you was would you like to reserve some time for rebuttal yes i would yeah honor thank you and how much  i like to reserve least half of my time for a bottle so let's do seven minutes thirty seconds all right and we won't necessarily give you a warning but i'll try to sometime around seven minutes and let you know you're getting close if you're not in the middle of a response at that time so you may be it in this case i represent h three zero communications l l c which is the creditor in this case and in this case my client had provided fishing supplies to the deborah and fishing vessel and as a result of that was a secured creditor in what is troubling to me as counsel is that my client provide these fishing supplies in under admiralty law my client was supposed to have priority in being able to recover some of those monies that he advanced to the devore in the fishing set sail as far as i know for quite a while and it would cost an enormous amount of money to actually get it sea worthy in fishing ready to get it back out on the open market in order to catch fish and s well it's always a risk but it needs to be put in that in the context of what the law is meant to protect and my client was the last creditor who was trying to save his vessel you know the thing is is fishing permits are very valuable and on the open market they net a lot of income and that industries had a choice they could have continued to supply fishing supplies that every man in the captain of that vessel and kept it fully operational and run it and not let it stay in fall into a state of disarray where it's not  in operational to catch fish however vacuums are stres it reminds me of those coal mining towns when there would be a supply store and they'd give supplies to the people who work for them the company store and they'd keep running up the debt so much that the person would never be able to pay it off and be able to get their freedom from that debt and that's exactly what happened in this case with back industries but at the council i had to stand a couple of things and i guess i'm missing the point of the argument because it was prepared to show them that that book the parliament carette pre bankruptcy that pre bankruptcy vaca obtained rights  transfer of the permit correct that's correct and to and you retain the right to it you know no matter the condition of the deborah and your client could arrest  vessel institute a claim in admiralty sour it and get the first dollars out as what you're arguing correct well that the fishing vessel isn't really in a condition to do that so that's why well my client was trying to obtain the permit through a sale i can process if if the permit is pertinent to the vehicle that's all it wasn't in the hands of that which it would have to be for you to have a lien on of your client to have had a lien on it at the time of the bankruptcy which is what's relevant here don't you still have a while we still have a lien on it but my client was unable to secure the fish and permit because vaca industries was allowed to keep it and the trustee abandoned the fraudulent transfer claim to take the fish and permit back and keep it with the fish and vessel the dibber in if the trustee had not been the fish and permit fraudulent transfer claim and pursue that then the permit could which is very valuable be match with deborah and which what's the duration of those permits are they one year or two years and permits only give out so many at a time and that's why the value of the permits is so valuable so it would have been worth it for my client as a secured credit or to have that permit and he actually engage the bidding process and try to keep the permit with the vessel the devore in which is the whole point of keepin the permit with the vessel so that way the person who supplies the goods can choose to use a valuable permit to have a good incentive to to make sure that vessel money will be expended to make it fully operational and put it back at sea and in that captain i mean the whole point of the bankruptcy proceeding statutes and congressional intent is the kind of keep the the debtor from being taken advantage of and also the creditors from not really having a fair shot at getting what what they are entitled to under the different  trustees account for the bankruptcy proceeding and that's a sale it reminds me of the expression a rose by any other name there's consideration there seventy five thousand dollars it's transferred to the trustee for the t the thing or the value of the thing right so the trustee was not obligated to get the thing back in any event right i don't agree with that your honor because the fission permit is a lot more valuable on the open market press not the closer the question is if there's a foreign transfer of the remedies are get the thing or the value of the thing is not obligated to get the thing correct well the trustees obligated to act in the best interests of the debtor sure in taking seventy five why don't you look for that while you're in your reserved time so rather than making you burn time while you look for something you can look for that the other question that i'm going to want to answer when you get back up is all under what case law in admiral you entitled to the proceeds of collateral when you have not commenced an enron proceeding so that that's a that's a legal issue that i think needs to be explored so you can think about those two things and will allow the you may proceed my name is the main challenge i'm appearing on behalf of the trust the elizabeth aking this case is a garden variety settlement of in avoidance claim and there's nothing more to it there are three main points in this appeal the first is that the h b o does not have a security interest in the settlement proceeds sakin the trios council has already stated the vessel was not c worthy as of the commencement of the case as the permit could not have been could not have served any to the vessel at issue and the cases are clear for the principle that if the parent does not provide services or value to the vessel itself the creditor does there is no think you can just say yes and we'll find it when i when i said it means i don't have it at my fingertips but i trust you and i'll go back and find it go ahead i i noted here it's in the of record page forty eight so it's labeled t r zero four three and what is the relevant law that says that the sending of that notice is sufficient as of the time of the notice as opposed to the time of receipt or some other term to sever the debra ans rights to the permit there is i am not aware of case law that specifically states that but it does indicate the intent of the owner of the permit to show that the permit would no longer be use for the  to that particular vessel there were an is it necessary that we come to that conclusion to rule in your favor it is necessary because it shows hanging on the permit it is still free to pursue it and that's really the question is you the trustee did nothing to interfere directly with any lien rights that h t m l would have had trustees no longer within the trustees ability to recover the permit but they can't let us has already they can't go after v a k on a fraudulent conveyance theory however that terry can repeat the question they can no longer go after v a k on a fragile conveyance theory however is that not correct the trustee has settled the fraudulent transfer of queens with a k so they would have to be pursuing rights as a secured credit or because the fragile conveyance rights would be unsecured creditors rights they would have they would be litigating their respective rights has secured creditors i am not certain that they are secured creditors but whatever claims they do have against  whoever whoever has an interest in the permit they can pursue that i'm not certain about what procedures they have to follow in order to pursue their claim against a parent of conflict and you would make the same argument that there should be any appearance of impropriety if given the time go back to say overseas settlement whatever it was the order did not provide that liens attached to proceeds is that not correct bankruptcy from the trustees perspective what did it what didn't happen that gives the trustee whatever authority the trustee asserted in this was no longer valuable to have us itself they could not have transferred to that permit however again if to the extent they do have any interest in the permit at all they are still free to pursue it because the trustee has a honour's thank you so you know i think i think one issue that's kind of overlooked is that allowing the trustee in this case to very valuable with its permit attached to it and it's not the whole purpose of the bankruptcy is to protect the debtor and make him be able to be in the proceeding and not be taken advantage of in allowing allow in fact industries to for the trustee to allow back industries to run it like a coal mining town and say if you don't pay down the debt fifty thousand within one year then i get the permit and then for the trustee to say ok if you give seventy five thousand i'll just give up the permit so the the permit was supposed to be attached to the vessel in the whole away and the way it was that happened pre bankruptcy correct well but the fraudulent transfer was during the bankruptcy and i think that's an important point that's an important distinction yeah but when you have the look back it's still supposed to be within the relevant time frame for the to look back because it didn't happen not long in advance of when the debtor initiated this bankruptcy proceeding  r section five fifty that we cited in our opening brief and if if the trustee looked at the look back and said by looking at the time frame of went back in streets acquired the the devore him of the permit that was still within the section five fifty to try to recover that well nobody is questioning that this was that they had a right to recover it as a fraudulent transfer but you're saying you 're confusing two time periods when you talk about the company store argument which was well before the course of the case and the fact that they could recover it if it was fraudulent from the perspective of u under or unsecured creditor so i'm just i think you need to keep those arguments clear because you're confusing me or confusing the record of nothing else well supply goods to the deborah and not also be a secured credit or with a maritime lien well there are secured credit or at that time too but they have a junior you just said they were not lea claim and not keeping that permanent with the the vessel is deprive in the debtor of all that income in the credit is and what about all the other creditors secured in unsecured that will action and that's what we're seeing was a sale of the permit because seventy five thousand of valuable consideration was exchanged from back industries to the trustee and back industries got to get the permit why couldn't it do it why couldn't your client have sought stay relief to do that during the course of the case why couldn't a client have done it the minute the permit exited the case why is your client done nothing well and admiralty really because they're the one that brought the fraudulent transfer claim and assume that duty and that prejudiced my client because if he doesn't appoint if the trustee did not bring the fraudulent transfer cl my client would have done something but by the by the it's kind of like when someone's a swimmer and they're drowning and someone goes out to rescue them and then leaves them out there in worship and they drown that they can be liable for th negligence with the trustee did in this case because started to save the fish and permit that's tied to the vessel and then abandon it so after my question my client was prejudiced by that action of the trustee commencing the fraudulent transfer and then  continuing it for no good reason especially for seventy five thousand which is a pittance of money compared to the value of the permit your time is up thank you very much for