the first four cases on the calendar are are submitted on the briefs at this time which leaves so far given those zero four zero one six five my seventy zero five one five four six nine and zero five one five seven five one he crown is everywhere so far as i can tell that a wrongdoer cannot invoke his own wrongdoing as a bar to recovery the to petition doctrine applies to bar claims against third parties there's a number of authorities for this bring actions against the debtors officers and directors for breach of duty or misconduct standing if it was grazed in that context your honor and  y held that even in the context of this defense the wrongdoer cannot set up his own wrongdoing as a defense to a breach of producer duty action for example in the health south litigation in the delaware chancery court the judge there said that mr scruby who was the defendant c e o who raised a defense of encouraged to work go in the course of that was a transparently silly debtors insiders on account of their own wrongdoing again in re mediators which the case relied upon by the defendant's side or new york law that a bankruptcy trustee suing on behalf of the debtor ma the innocent director can go outside the corporation and effectively blow the whistle and that was regarded as sufficient to to defeat the the sole shareholder argument in the wexler case but again  cases where the status of ownership itself is sufficient to defeat this innocent decision maker and if you think about the rationale behind the agency's law here that makes sense  that the notion is that the there is no one to whom the agency can provide information or from whom he can conceal it and that's the that's the basis of the soul act or rule watkins and we have played in the complaint that had they been told had they known of the truth they could have taken steps to stop the fraud either inside the corporation or had they been dismissed because they are in a mind minority position on the board they could have blown that's why the case is that uniformly held that is as long as you're one innocent decision maker that's enough to invoke the innocent decision maker exception for that i just cite the works that faced sharp international out of new york as well  they stand for the same propositions as long as you have one that's sufficient now your addition to dismissing the causes of action made against the directors bad management and conduct that's distinct from that we sometimes refer to this as a churning claim because it's based on the wagner case in the next case the claims against the third parties for cooperating with the not related to cooperation with management i would have such claims in this case why would the law firm as you know represented around until two thousand they have as lawyers a fiduciary duty to their clients contract gave rise to independent duties on the part of who i am working so little of the fairness of painting it was wrong because the mill was grossly undervalued solomon brothers in one thousand nine hundred six they were hired as a financial advisor to advise presentations to the board of directors and april and december this two gave rise to an independent duty quite separate from cooperation with bad management they advised on the possible sale of the south st francis management those claims should not have been dismissed the third point i want to make is i think that the court misapplied the e p taishan doctrine altogether as we discussed earlier the  their contractual indemnity they are required to be a prevailing party and as we cited in in our brief relevant case law states that for contracts purposes you are not a prevailing party until the final appeal is exhausted that of course has not happened therefore they were not entitled to wind down the second and this is really the main reason is our contention that the post that the action is not a rise out of of the line they got paid off first before all the other creditors because this these were identities that were created prior to bankruptcy they were picked petition agreements for preposition services and the invention of these included in those agreement means that the should be general unsecured claims and they should not have job conspirators out of yours i mean the creditors may have a what do you care well because we represent the trustee who is prosecuting credible claims among other things and has obligations toward creditors so you have a trustee here with very little money who's being forced to actually couldn't pay the fees have been advanced the fees in order to pay them so there's a real chilling effect argument as well pine for purposes of attorney so i think the point though is that those are that's not with respect to contractual indemnities attorney's fees i understand the prevailing party and there may be a right to that was a separate action that still before the district court the court dismissed all the claims against third parties as well as claims against james river that overlap of the claims against the third parties the the every court every circuit court that has addressed the question which now add up to nine circuits the first second third fourth fifth sixth eighth tenth and eleventh this court in the seventh circuit are the only ones that haven't considered a case where there was a sole shareholder and in fact in every case where there has been a sole shareholder the courts have rejected the argument yes i can tell the court  applying new york law here which we're not because it's fairly consistent with the idea of the relevant shareholders being the hundred percent shareholders that we have here that's what is relevant for purposes of th circuit again f d i c versus ernst and young in the dublin securities case all of which addressed this exact issue which is where you have a sole shareholder where the fraudulent actions are being behest of the sole shareholder or by the sole shareholder the trustee can't recover because the trust the actions of the sole shareholder and or the parties acting at the  won't consider arguments that weren't part of the reason for the district court here there's an expressed finding that this one was not in the direction of the district court went on to say correctly again that the argument is without merit it rests upon a statement in mediator and actually mediators really did not mediators really addressed it as an issue of standing as your honor noted in connection with the earlier sneath decision of this court there's a difference between standing analysis and whether the trustee can actually prevail and defeat defenses that would otherwise be applicable that was mediators a couple of cases have cited mediators for a broader proposition that somehow in probably the little defenses don't apply to a trustee claim again now don't implicate the defense as well as the strongest case i think going the other way on that but there's nothing in any of the case law other than this idiosyncratic new york line of cases that's arguably wrong while i'm on the subject of labor because that argument was waived the other argument that was waived is the distinctiveness argument the crown is now making that somehow the claims against some of the parties are different from the claims that might be are depend on the same lack of knowledge in other words an element of the claim is that crown the debtor lacks knowledge of the the sergeant nature of the s was raised and discussed in the plates but there is no case i misstated no clues for the proposition that knowledge acquired by a corporation under one set of shareholders or management somehow changes or disappears when the company has a new set of shareholders or managers every case that has addressed that question has said of course that's not the rule it's if that was the rule then a corporation could always avoid knowledge of the its own just knowledge in liability cases by simply changing shareholders or managers which obviously isn't the rule we stated two cases that squarely address this point one of them called fireman's fund which plays new york law and  then changed the new owner said well gee we didn't know about it we shouldn't be inflicted with that knowledge we're in a sense ever questions now that knowledge is the company's knowledge and it simply carries over judge says no second decision was a straightforward strippers i did not do a good job earlier when the judge ever been asked me about the innocent decision maker role and i'd like to make two limited points one is in the bennett funding case out of the second circuit in that case there was absolutely no dispute that there was a sole shareholder bud and kathleen bennett they owned all the stock of one at least why is it that the district court allowed a year of discovery and a four day evidence you're hearing on whether there was an innocent decision maker why did the second circuit review that decision and review all that evidence if this if there was a soldier hold a rule that would have been the end of it but instead the district courts recall this evidence the court of appeals the second circuit reviewed all the evidence why because they wanted this find out whether the evidence supported the existence of an innocent innocent decision maker in five one but the point is our case was resolved in a twelve b six