debtors in this case caesars entertainment operating company and and a number of other debtors principally have to assets around which they hope to reorganize one is their ongoing business the other are claims against c e c arising from alleged fraudulent conveyance of c c being the parent company of the debtors the action of the guarantee actions have been brought in delaware and in the southern district of new york against c e c seeking essentially to collect on about twelve billion dollars of guaranteed claims whereas the market capitalization of c c is about three billion dollars the value that  potentially available in a in an in an agreement that would facilitate restructuring would be between one and a half and two billion from c e c to the debtors if the guarantee actions go forward and the judgment is entered c c is indicated that it would enter into bankruptcy that would make it impossible for c c to make the kind of contribution to the debtors the states in settlement of the debtors claims against c and it would also as a practical matter severely disrupt the bankruptcy you'd have a situation where debtors would potentially have claims for equitable return of the assets as as our expert described it in the bankruptcy court you know it up with one of the great in a related mess of our time so the injunctions that are being sought or to temporarily enjoying the the actual rarely for how long for so there is a court appointed examiner that is looking at the very disputed transactions that give rise to the daughter's claims against c e c and also the guarantee plaintiff's claims against c c the temporary injunction would run through sixty days march assuming that's when the same you do do so every fifty that's exactly what the examiner had previously represented that that that he had hoped to have it by december fifteenth the latest information that i have is that it's more likely to be sometime in january and this is the independent examiner appointed by the court the better to shortly working with the exam this examiner examiner is what was his relationship to the bankruptcy judge the examiner was appointed by the bankruptcy judge and the examiner sued jammin to reports january and then what happens so one of the questions and some of the allegations that the guarantee plaintiffs and others have made is whether or not the settlement of the the debtors claims against c e c that's that that's been discussed been proposed is a sweetheart deal or not and the examiner is examining all of the transactions and is going to issue a report on what the claims are that the debtors potentially have and would result hopefully in a valuation that could form a consensus restructuring here where the debtors and all the stakeholders could hopefully reach there been a number of different examiner reporting to the bankruptcy judge you're not enough to know the examiner hasn't yet reported to the bankruptcy judge these there hasn't yet but in january is that what he's going to do is going to report to the bank it'll be a report to the bankruptcy judge it'll be a report to all of the parties as well so that the parties will have an assessment of the examiner so you say th they're not just waiting on the report but the parties are engaging what's the bankruptcy judge doing i'm not sure i follow the we have a bankruptcy judge don't you we absolutely do your art so is examining a recording to him  reporting to everybody over the examiner would be reporting to to him and that would be a ok now why do they need to the public eye doesn't report now and i don't think there's a particular action that's contemplated by the bankruptcy judge upon receipt of the report the purpose of the report is to facilitate a consensual reorganization of the bankruptcy judge has to approve that that's right your honor but we're not so how long is that in the tech well that's so i don't get the sixty days you don't want the you know one of these in judge you don't want these state court in the federal district court decision somehow disrupting the bankruptcy that and yet sixty days after the examiner these suits resume but meanwhile the the the bankruptcy hasn't been resolved well if it may not have been resolved judge posner i mean the i again the idea is so then what are you going to ask for another injunction against the yes these state courses well i think it would depend on what the circumstances were in the time that follows after the examiner issues  report and what the prospects of a consensual reorganization look like at that point in time i think the idea is that yes during that period of time the parties will take have the independent views of the examiner be able to take that into account in their own negotiating pursuit positions hopefully facilitate a consensual reorganization propose a plan of reorganization i don't know whether that could concerted meanwhile but these suits will resume at some point your honor yes these suits would resume and less there magic to sixty days judge posner i think that that the judgment was that that should provide provide a sufficient period of time in which the parties having received the independent report of the examiner would be able to assess whether they will be able to achieve a consensual bank restructuring in bankruptcy or not and i think that that was the thought behind the sixty days if of course you know the the end of the sixty days were to be approaching and it looked like there was the potential for a  consensual reorganization but the parties weren't there yet yes i think it's something that the that the parties and the bankruptcy court could revisit whether a an extension of that injunction should continue we never got to any of these discussions of course because the bankruptcy court  found that it did as a matter of law didn't have authority essentially even entertain the injunction being requested because it can i'm up with a bright line rule not supported by this court's cases that injunctions against third party litigation can only be issued when they when when the debtors potential claims against the third party arise from the very same acts as the third party plaintiffs claims against the third party and that's of course the focus of what was our appeal to the district court in our appeal to this court is whether the back to core simply wrong as a matter of law the related axes would hear this story that's that's exactly right john to me and i mean at the end of the day the fundamental test the way that this court described it been all the way it's been described in other cases as well is to ask is the third party litigation sufficiently related to the bankruptcy and courts have assessed that by assessing would the third party litigation potentially affect the integrity of the q and the reason for that is because the guarantee plaintiffs here are themselves creditors of the debtors and pursuing the guarantees which were really guarantees of convenience at the time that the guarantees were entered into c e c didn't have substantial independent assets what happen and so they understood that if you did too if they collected on the guarantee what they would been collecting was equity of the debtors but now the  debtors allege that c e c has improperly transferred assets from the debtors to c e c those are the very assets from which they guarantee plaintiffs would be trying to collect and then the very assets that c c is has claims against  court in new york before an effort is made to wind up the bankruptcy judge posner the testimony at trial the representations made by c e c and its public filings is that  if it's adjudicated to be liable for the guarantee claims it's going to enter into bankruptcy and if it does it's not even in a position to be able to make a contribution to the debtors estates in settlement of the debtors claims and the type of consensual reorganization that is hoped for here simply won't be able to be achieved and so that that is why it threatens the integrity of the bankruptcy of state no one's talking about extinguishing their claims for all time the point of this  temporary injunction of or a temporary stay of the ongoing litigation but it's to prevent the harm to the doctors namely that one of the principal assets around which they are hoping to reorganize well then the guarantee plaintiffs would be second and and lower tier creditors to try to recover in a bankruptcy but instead they're doing an end run around bankruptcy process essentially trying to jump the line because they're trying to recover from the guarantor c e c from the very assets that the that the debtors allege were fraudulent transfer and wasn't wrong or that well what's wrong with that judge posner is that if you have number one is made to determine how many of c c s and subsidiaries assets there are and how they should be the bankruptcy process should be allowed to run its course and the point is the very things that the southern district of new york is in the process of examining are the kinds of things that should be examined in the context of a bankruptcy proceeding and so  effectively extinguished so the quite of the question would be whether or not they could or should be discharged in the bankruptcy proceeding and respectfully judge sykes that's a discussion and debate that should happen in the bankruptcy proceeding as opposed to in some other litigation and if if the there's a decision that the guaranty plaintiffs don't like in the bankruptcy they can appeal that all the way up to this court but the key point is that's where this should be happening as opposed to the southern district of new york where the district has indicated she's going to look at all of the transactions not just the b seven not just the senior unsecured notes transactions but all of the transactions and assess from the overall course of conduct whether or not the debtors were engaged in an out of court restructuring if this case isn't sufficiently related to the bankruptcy so that a bankruptcy court has the authority to enter an injunction it's really hard to imagine any case in which a bankruptcy court would have that authority beyond the facts of fisher itself and that's inconsistent with the holding a fisher where this court made clear that that was the case not at the outer limits of a bankruptcy courts power but at the heartland of a bankruptcy courts power because this court explained if you change one fact you wouldn't  in in the state court suits and i don't think that what the southern district is is examining would be precludes of as to the debtors and its claims against c e c but it's very troubling that you have that court examining essentially what judge to judge posner i mean the guarantee final see how these two sets are two sets of cases fit together well i don't see how they could possibly be any any closer related and not actually be property of the estate and let's just look at the facts that show how they're related the guarantee plaintiffs are creditors of the database so they're seeking a recover it's so confusing you say all you want is an injunction for sixty days against these is against these that will depend on what the best so you have the notion that the bankruptcy can actually extinguish all these mawson's is it possible that you could have a confirmed plan of reorganization that would have affects on their ability to pursue these claims you guys have that act you mean would it would extinguish that is that something that's potentially possible yes it is judge posner you know is that currently before the bankruptcy court no it's not it and part of the alternative b let these let these lawsuits go forward to judgment but but but not permit not in the bankruptcy court would determine how much of that claim should be allowed well a couple of you think you'd like to have all of a geisha unresolved since it's all enter intermingled before actually presented here which is some a very simple one which is did the bankruptcy court have authority to enter an injunction and that was the basis for the bankruptcy court denying the junction injunction he concluded as a matter of law it lacked authority and that would be true under its rationale whether you're talking about the case going forward or execution on the judgment so even if you were to conclude that the perhaps the most sensible thing to do here would be to allow these things to go forward but perhaps you could enter an injunction to stop execution right now the bankruptcy courts holding says i couldn't even enjoy to stop the execution because i don't have authority because it's not because they don't arise out of the same x so that you're going either way you're going to have to address this threshold issue which is sort of the key issue and then as i said at the at the outset the danger to the debtors is that if these claims go forward and result in a judgment whether or not it's there's an attempt to execute on it that's going to drive the parent into bankruptcy and that is going to make the assets the very assets that the debtors allege were fraudulent transferred from them unavailable to the debtors at least in any type of of  consensual way as as as hoped for under the r s a so there's there's questions of authority and propriety that are antecedent to the questions of timing when an injunction might be most appropriate while they are there are so i think the two things that are rolled into that judge mannion first yes but the error by the bankruptcy court was in concluding it didn't have authority to enjoying the litigation against a get by the people guarantee plaintiffs against c because it said that in order to be able in joint third party litigation it's got to arise from the same acts as the debtors i don't claim it doesn't make sense on its own terms because there are lots of cases in which injunctions are issued in which there are no claims whatsoever against the third party and then with respect to the examiner's report the examiner is going to be assessing what are the claims that the debtors have against c e c whether or not only that some of the transfers from the debtors to this c were improper and hopefully by having an independent court afford examiner assess those claims and the value of those claims then all of the relevant stakeholders here can sit down and agree to  plaintiffs claims don't result in a judgement against c e c then it's hard to see a scenario in which c c would need to enter into bankruptcy ok with the thank you let me tackle judge posner's question sykes's question first to cut to the heart of it if the debtors get their way there will be nothing left of the guarantee soup's what the debtors want to do is protect c which is their corporate parent act the entity that directs their actions by imposing an injunction and then confirming a plan which they've already proposed that would contain a release of all of c e c s liability to my clients as well as to the bankruptcy estate with respect to the examiner's report and when it will be filed the answer is we don't know the latest word on the record from the examiner is in a statement filed in november where the examiner said given the delays in document production to him the volume of documents already produced requests the parties to reschedule repeated requests the parties to reschedule interviews to later dates the final report will not be filed on or before december fifteenth so all that we know is won't be filed on or before december fifteen what happens when a december or january december fifteenth simmers yet now what happens after the examiner report is file well the debtors file a plan or a new plan judge posner as you indicated the plan process takes a long time you have to propose a disclosure statement get approved by the court send it out for voting and then have a confirmation trial text i have a what a confirmation trial confirmation of the plan itself that process in a big case like this typically take six months it would be lightning quick for it to take four marks so the idea that this is just going to be sixty day cooling off period is an illusion what the debtors will do if they were able to get an injunction would be to come back and say judge we need more time why do we need more time we need more time to confirm our plan the effect of which would be to wipe out my client's claims once and for all in the meantime there's trial schedule there's a trial scheduled in march and two trial scheduled in may on the guarantee claims this temporary injunction would completely derail those cases who knows when we get another trial schedule it would be severe prejudice  least in this case right but the bankruptcy court didn't even conduct any kind of weighing the competing interests here which is ordinarily the kind of analysis we would expect to see a domain like this where flexibility is key right in fashioning a remedy in determining whether it's appropriate determining its timing determining its scope and i mean this this request didn't even get out of the gates because the judge sent that our cases impose this rigid same x requirement before the court can even entertain the possibility of through a two day trial so the evidence was before him but i submit that the analysis that he went through is not rigid and it is the correct interpretation of the scope of the law what she held is that the debtors alleged desire to have first priority on their parents assets is not a legitimate basis for in joining the guarantee cases so we didn't have to engage in the balancing analysis and that's true even if you assume that the debtors truly are trying to maximize the bankruptcy of states and not just acting on the inherent conflict of interest arising from c d c s control over them under technic which we all read a lot about a bankruptcy courts not free to issue an injunction whenever a debtor says it wants to sue somebody who is also being sued by a third party or whenever there is a quote unquote competition for that third party's assets but that's the only harm you've heard this discussed this morning this competition for c c's assets the bankruptcy code just doesn't have a debtor goes first priority even in cases where there may be common facts and the defendant can't pay everybody if that was all that was needed for an injunction technic would have come out the other way in technic you had the same defendants the same pool of money and an effort by those defendants to abscond with money from your assets from both the defendant and an affiliate but that wasn't enough because there were different injuries there were injuries to the debtor and then injuries to the third party creditor because the creditor was just pursuing harm to the affiliate its lawsuit wasn't closely related enough to the bankruptcy case to justify an injunction if the just the bankruptcy court were to determine that it was related to but would still not enjoy i that there was not a dispute over the bankruptcy courts jurisdiction to hear the injunction motion but what the bankruptcy court held and what the district court held applying technican applying fisher was requirement that's a bright line rule or whether it's just a factor to be considered it's certainly a very very important factor and there the lack of the connection or similarity of the claims asserted by the doubters and the claims asserted by the guarantee plaintiffs was just overwhelming here so there was no connectedness that would justify an injunction why is it such an important factor that's a really good question it's because the role of a trustee in bankruptcy or a debtor in possession bankruptcy or the bankruptcy court itself is to marshal assets of the bankrupt of of the debtor for the distribution to all  creditors where you have that and where you have a plaintiff who's jeopardizing that role by asserting claims for harm to the debtor it can fairly be said that those claims should be pursued in the bankruptcy by the debtor for the benefit of all but that's not what we have here what we have here are guaranteed cases where my clients and the others are suing to enforce their individual contract rights for harms that are imposed on them our claims don't have anything to do with harms to the debt or the debtors couldn't assert our claims and we couldn't assert their claims right but they're going after the same pool of money and the hol company is the only source of for them to be at least the major source of funding for the reorganization plan right i think it's fair to say we are going after largely the same pool of money  satisfy the judgment if any in the other suits right but that the the case is teach us that that is just not enough that the fact that you may have an insolvent defendant who may be sued by the debtor and is being sued by the third party doesn't warrant an injunction in technic the court held that that basically the rule of requiring some similarity same acts of misconduct  debtor quote ensures that the trustee will be able to fulfill the purpose of bankruptcy laws without allowing the bankruptcy jurisdiction to swallow claims only tangentially related to the debtor and that's really what's going on here our claims are premise c s independent liability separate from any misconduct to the debtor so judge gold bars ability to do his job just isn't threatened if we were asserting claim for harm to the debtor like my clients were before the longer being pursued in delaware they hopefully will be pursued in the bankruptcy ca turn briefly to a few issues that i think were were something of a of a sideshow in the briefs the debtor's notwithstanding the fact that we're suing on contract guarantees tried to muddy the are still for enforcement of our guarantees they're not related to any c e c misconduct to the debt ups which again the types of claims that properly would be pursued on behalf of the estate or times are based on any of the same acts the only over last that the debtors identified in their brief is that the trial court might determine that the guaranty stripping transactions were part of a larger out of court restructuring that's one of the elements of the but that's not a claim that the debtors could assert at worst the debtors fear that the trial court might make some factual finding that about their preposition conduct but the answer to that is is so what an unrelated litigation aren't in basis for an injunction that are there's no case that says that we also heard this morning that well an injunction is needed here because all of cc's assets came from the debtors originally that's not completely true but again even if it was so what that's not a basis for an injunction claims with the same sorts of recovery as i mentioned earlier aren't the same as claims based on the same tax of misconduct to the debtor the looting of the debtors in the creation of the good caesars in the bad caesars are irrelevant to our guarantee claims was certainly  difference and yes yes and we are hopeful that the debtors actually assert the claims against their corporate parent and prevail but none of that it's relevant in any way to the achieving a judgment against c e c on the guarantees c c will file for bankruptcy where frankly it should be right now if c c files for bankruptcy with and cannot enforce our guarantee claims we become creditors in the only question here is whether their liability to us is determined so if i say file for bankruptcy the amount of money that's available to restructure the will will be identical staying away from c e c those assets are still there and then the bankruptcy court determines who has priority to them and who they should be distributed to the debtors are trying to avoid that critical step they're trying to say put our cases on whole don't determine our liability we're going to go confirm a plan and we're going to wipe it out once and for all that's not the way the bankruptcy laws work object to a voluntary contribution of c c was in bankruptcy and that would seriously just real the pending bankruptcy you also asked did the bankruptcy court err right out of the gate and it did because it asked the wrong question it looked at whether or not these things arise from the same act a test that never before nor since has been applied by any other court in the circuit or any other circuit court and if this court were to affirm that it would render this court a national outlier on that on that issue because it that the things that you hear the guarantee plaintiffs complaining about about what the timing of an injunction should be whether or not there might be releases of their claims against the e c as part of this bankruptcy process those are all questions that are fundamentally for the bankruptcy court and whether or not the issuance of an injunction would have an effect on that is something that the bankruptcy court could and should have considered after it got past the question  and then these cases the state court cases in the southern district of new york they go to judgment and c s c pays then that's the end of it what would that have to what would that have to do  bankruptcy of the subsidiary with judge posner if c e c could pay then this case would be like technic and there wouldn't be a reason for an injunction that what the what this court found in technic was that the the the third party defendant there was a there was only one there was only one creditor so all the concerns that my colleague was talking about about the duty of the trustee or the and so forth didn't apply because there was only one collided and second  surprise think that's part of the point judge posner's that it won't be so it certainly wouldn't be sorted out just in this bankruptcy and the ability of the the f c c to make a voluntary contribution in settlement of the claims that the debtors have it is liable for the guarantee plaintiff claims then if it has represented it would be in bankruptcy and it would not be able to make a voluntary contribution so what  c wouldn't be rendered bankrupt by was unaware that they were going to be rendered bankrupt no just posner i said they'd be rendered bankrupt if the guarantee plaintiffs succeed on their claims but in terms of the claims that the debtors  give them to the subsidiary to enable it to have better terms in the bankruptcy and then c d c is left naked and these lawsuits against it become worthless so judge posner couple points first to the extent that the assets that were allegedly fraudulently taken from the debtors by c c are returned to the debtors or compensation for them returned to the debtors than that puts everything back in the position that it was at the time that the guarantees were entered into that they understood at the time the guarantees were entered into c c didn't have substantial independent assets it was a guarantee of convenience because  and c e o c had consolidated financials so but but at the end of the day those questions and this really gets one the questions the judge mannion asked are ultimately questions for the bankruptcy court in deciding whether or not to issue an injunction and whether or not to potentially confirm a plan of reorganization that would follow later down the down the road but the bankrupt but the bankruptcy court faltered right out of the gate because it tied its own hands and said i don't have authority to enter an injunction here because of because it basically adopted the guarantee plaintiff's competing litigation rule a rule that has never been adopted anywhere else and courts routinely enjoying third party litigation where it will threaten the integrity of the bankruptcy estate and that's exactly what is at stake in this case