audio or video recordings or photos the same as would be true in new orleans the audio will be recorded as usual of course and we appreciate record citations when you can give us those and finally because of the unusual nature of this type of argument we will give you the minutes uninterrupted time at the beginning of your behalf of the opponents ruston louisiana hospital company l l c and may it please the core i'm going to go briefly through my argument and i'm happy to address questions at any time obviously we're dealing essentially with cross motions on summary judgment so i'm going to try to not retread material to the extent that i can this appeal seeks review of the district courts granting of a motion for summary judgment or the appellee lincoln he foundation inc throughout the course of my argument i'm going to refer to lincoln health foundation d inc as foundation and lincoln health system inc as system it gets a little confusing and from consular going between  want to say foundation and system if that's ok with the corps just to make things a little bit clearer the district court granted l h f i so foundations motion for summary judgment and rostrums motion for summary judgment we submit on appeal that was an error that in fact our summary judgment was appropriate this time however in the alternative we argue that at the very least a genuine issue of material fact exists d which should have precluded summary judgment in the favor of foundation going back to the facts a little bit in february of two thousand and seven system but not all of its assets to ruston specifically its sole lincoln general hospital and the related disability as part of the sale system took on certain post closing  in the purchase agreement it also provided in that agreement that the agreement and those obligations were binding on successors heirs in the signs as the court is well aware that language is very commonplace in transactions and contracts in louisiana throughout the history so part of what is at issue here before the core is what happens if that language is essentially rendered meaningless for other transactions ten years after well before it's ten years after six months after the closing of that transaction system dissolved ten years later ruston received for the very st time in notice from the centers for medicare and medicaid services that it was being assessed over seven hundred thousand dollars for charges by system which predated the two thousand and seven sale system would have been liable for those charges under the post closing  obligations but it was dissolved so rusted made a claim against foundation foundation claims it's not liable because it's not a successor and because it was not a party to that contract ruston disagrees with both our emotions for summary judgment and then we end up here very briefly our argument stems on the fact that in our opinion and under the law and based on the evidence foundation is the legal successor of system for two reasons one it assumed systems liability and two it's a mere continuation and we've briefed both of those issues in detail both in our primary brief in our reply brief there were several acts independently which we believe constitute an assumption of liability first in order to secure the sale foundation told the louisiana attorney general who required this to happen for the sale go through that it would have meant this articles reorganize itself and put itself on the hook for the handling of the distribution of systems proceeds and not just for proceeds but all of their assets in the amount that they were dissolved so the only way this transaction happened is a foundation said we are responsible they did that they did it in writing between their members changing their structure they did it again in tw after the sale again reaffirming they were responsible for distributing any proceeds or other assets in acknowledging the sale of the sale and already happened at that point later they lobbied to be named the legal successor in quotes surviving entity a system to many rd parties and in efforts to secure what's called the sturgis bequests and we brief this at length but this is a church bequest a system that foundation wanted and now they were asleep they were successful in those foundations attorney told rd parties over and over again we are systems legal successor they were successful in that and they end up getting this money now it's important to know the system has claimed her foundation has claimed that ruston is saying they're liable because they're a shareholder that is not what we're doing but it's not what we're pleading we're claiming they're liable because they assume liability we're not going after any of the other shareholders there are two other shareholders the other shareholders were not recognized as the legal successor by the sturgis bequests only foundation has gotten this money and so when foundations says we're just a shareholder the only proceeds we ever got resales proceeds that is not true they are they're treated very uniquely they put themselves in a position they indicate d that they will be responsible d for distributing the sales proceeds and liquidated assets now it's our position that when they're telling the attorney general when they're amending the polls to say were responsible for handling the distribution of that money that includes distributing that money to people that are owed that money it doesn't it but there is no requirement in the law that says we have to line item where that money goes they are saying hey we're going to take a big pot of money from system and we're going to distribute that money we're going to handle managing the army and isn't there a big difference between just assume the responsibility of distributing as and assuming outstanding beagle i believe well that's that's certainly foundation's position that was the lower court's finding as well we do not think that the law is that specific and we think that when system erwin foundation includes in its articles over and over again that it's going to be responsible well what does that mean you know when someone says we're going to be responsible for distributing assets does that include liability do they have to say hey this includes if system of those money we're going to pay other people that money now foundation has said there has to be a written agreement between essentially ruston in foundations saying we're going to be responsible for specific liability for this specific transaction and the law is not that clear it's the express or implied assumption of liability and it's our position that if they're saying hey we're responsible for distributing these assets including to us which they work really hard to be named as legal successor they have to be responsible for paying people that are owed money i bought a successor hat was as a district court held was contingent on whoever purchased the assets of the hospital that's the successor right now in law i'm sorry i don't mean to cut you off with the image of the happens all the time law the successor is the person who takes over the business and other words if there were a rd party tort claim that arose unless the parties had contracted otherwise they would sue reston hospital  right i think i mean that is correct to an extent your honor however i think it's important understand that the there were substantial assets that were not included in part of this d transaction and the law that you know what i'm not too sympathetic with that because if ruston had felt they needed to hold back or is some kind of agreement for an escrow account for a certain period of time they could have they could have contracted for that well and they did your honor and that's kind of the problem so the the language included indemnification obligations there d was money set aside in astro and it was held for about three years the problem is the nature of the underlying obligation w amount we did not even get notice of this for ten years well that's not the foundations problem that's the problem of the government well that ends up being our problem because we end up paying seven hundred thousand dollars which we had contract at four am and put a scenario in there to cover it and then when we pointed that out to foundation they didn't say hey this is the reason we're not paying as because there was a three year statute they were saying this was a system obligation and we are not system and it's our position and i understand i'm running out of time here but this this the level of control and the extreme steps the foundation took to control how this dissolution happened and i understand the judge's point we contract it for this there was three years there was and that's for a however six months after this happened they dissolved and when the foundation was faced with the butt tension of not getting the sturgis bequest money they specifically told him these are the same directors as the same chair people it's the same controlling people in charge of both these companies they reached out to sturgis and said if you're not going to give us this money and not going to say d we're d the legal successor we will dissolution the dissolution so this is foundations of turning saying that they will stop systems dissolution because they are the legal successor and they're not going to recognize the way they'll merge the two companies that is a level of control that is extreme and shows that this company these are two hands doing the same thing they controlled every aspect of this dissolution and as a result our client my client ends up paying seven hundred and three thousand dollars which everybody agrees as if they're the legal successor they've got to pay this money just very briefly eleven dollars final point about that's in three minutes i don't know what your problem is you've got three and a half sure i was trying to reserve a little time for a bottle  understand that on the mere continuation side of things you'll see in the record there's extensive evidence about the shared control of these two entities six out of the ten system board members were foundation board members seven out of eleven foundation or system directors at the time of the dissolution were foundation directors surely reagan who signed the dissolution for system then went over and directly took the role as the chairperson d the foundation these foundation is system and they they funnel of this money over to foundation and then wash their hands and saying hey we have no control or just a shareholder the law provides a remedy for legal successor and about this the purchase of substantially d all assets because that's proof that like a no they're going to address a the law provides that in the event that company b purchases company a in substantially all those assets then you look at these factors in this scenario we agree that the looking at those factors is appropriate however we do not think that the purchase of substantially all  applies or is a d condition necessary to reach those a factors because the facts don't line up this is not a fact where the foundation purchased all d their assets and we're trying to hold them accountable we're trying to hold them into a company mean as you know as the court knows i'm going to be able to tell the united states government when they saw it sent us a bill from say amounts that this is not our responsibility we don't even actually have the opportunity to respond they literally took the money as a as an offset it never even had our bank accounts not like we wrote it on still be argued before you were asked to repay the money you had received the money instead of system i don't know that's the case the well but i  with them that was not a part of the transaction so i'm not entirely sure that's correct and i understand my time is up the request reversal of the lower court's decision all right  shareholders are not liable for corporate debts nd the foundation did not assume any of the system's obligations and rd the foundation is not a continuation of system before getting to each of those points i'd like to respond  believe your honor judge poe you asked for a record cite to the specific basis that opposing counsel thought would provide an assumption and the for the court's convenience record page five and fifty five is contains the joint stipulation between the parties of the amended articles in paragraph sixteen and seventeen and i would like not only time i like that record cite but also the word responsibility was used a lot by counsel and that is not contained anywhere in paragraph sixteen or seventeen which are the amended articles and of course the court can read for itself there is like once no assumption of any every single case deals with a rd party suing the buyer of substantially all of the assets here we have the buyer which would be ruston suing the shareholder the purchase substantially all of the assets of the predecessor that is the threshold requirement from which the rest of the analysis flows and so i think we really got here by accident if you look twenty one of the foundation's complaint they started to this litigation with bad information paragraph twenty one states that the foundation was formed after the two thousand and seven asset purchase agreement for the purpose of administering the system's obligations if that was true that would seem like a plausible basis for successor law billeted problem yes that's just bad information that's false i'm not suggesting it was a deliberate misrepresentation   just to say that from the inception of this litigation to right now this entire successorship argument has been a creative effort by ruston to try to put a square peg into a round hole that just does not fit and for that reason if you look back at what was not pled in the complaint two years ago the very arguments being made today assumption and continuation they don't exist anywhere in the just the exact quote for your honor and then a corporation of a nonprofit company shall not be held personally liable for the nonprofit companies debts and or mama court the foundation isn't  nonprofit louisiana has a very strong public policy to enforce article two hundred and nineteen and the very activities that rusting complains about there are three as i understand it except into evidence amending it it's articles of incorporation and accepting a charitable bequest there's nothing illegal about that that's no basis under any prior decision for successor law bill of eighty that is common basic shareholder activity in so ruston has made several public policy arguments and it's brave saying the waterfall of litigation that won't sue if the district court's ruling is upheld in reality i think the scarier version is if ruston is argument it's accepted it would transmute every single shareholder of a dissolve company to be synonymous with a quote unquote successor to my nd point your honor which is that there is no successorship by assumption where the between the foundation and the system or the foundation clearly in expressly agreed to assume the system's obligations no such document exists here and now to even go further and say i believe ruston has admitted that no such doctrine exists here if you turn to record page five hundred and fifty five the joint stipulations and up hammer that its joint stipulations because this was not a str by corporate representatives who got just worn down in a deposition this was through a document that was carefully and deliberately drafted knowingly in intelligently between counsel before it was signed by the very council making  argument for us and here today paragraph eighteen system did not execute any written instrument whereby it assigned to the foundation any of systems obligations pursuant to the agreement paragraph nineteen there is no specific writings the amended articles which are reference for judge who are a lawyer and the sturgis bequest neither of those writings mention assuming any debt let alone expressly assuming the debts owed under the asset purchase agreement and as the district court correctly recognized neither of those writings even constitute an agreement and of course they have an assumption under one thousand eight hundred and twenty one you have to st have an agreement stow i bring up that just black letter horn but hornbook lall to emphasize that these amended articles that have one party the foundation and the starred as correspondence that have one party the foundation they don't even constitute an agreement let alone a clear assumption agreement and one rd and final point for my co counsel mr jones takes over the foundation is likewise not a successor continuation again as judge jones you noticed at the outset of opposing counsel argument the threshold requirement for successorship by continuation is a purchase of substantially all assets in the and here is not only is the foundation not a continuation of the system the exact opposite is true it is ruston who is the continuation of the system on record five  continued hospitals operations pursuant to the agreement paragraph six ruston purchase substantially all of the operating assets that system utilized in connection with its operation the hospital seven the foundation did not purchase any of systems assets under the agreement and it has not purchased any of systems assets since the agreement was executed in two thousand and seven and finally paragraph eight and the foundation itself did not continue to operate the hospital after april of two thousand and seven revisit that again paragraph eight and five hundred and fifty three the foundation did not continue to operate the hospital after april one of two thousand and seven and the joint stipulation you've got they did not questions from the court if they have any rush to knew that the system was going to dissolve when it shoulda rushed all of its hospital its operations and all the assets in connection with the operation of the hospital if we look at the asset purchase agreement and this is found on the record on appeal page number six hundred and seventy seven it is paragraph one point one phrase however ruston would allow the system to use its name in connection with the winding up of its affairs after the closing which of course is normally what happens when a company sells all of its assets d there's nothing left for it to do other than distribute proceeds to the stockholders and dissolve now ruston was a sophisticated purchaser it's wholly owned by a community health systems which is the largest for profit hospital publicly traded company in the country the risk free close enough obligations coming back on the purchaser was well known to the purchaser ruston they negotiated a three year escrow agreement whereby they escrow one they were willing to take if they had judge it a risk that they didn't want to take they would have negotiated for various other things such as making the stockholders guarantors of the systems  lawsuit is get this court of appeal to retro actively a man the asset purchase of rayment to make the foundation a stockholder the guarantor of the corporations dish that's what they're trying to do with this litigation that would not only be on an unfair and an equitable it would also be an counter venture and of clear louisiana law that states that stockholders of nonprofit corporations are not liable for the corporations dish with that if the court has any questions  mention the fact that there is an allegation about the foundation being organized for purposes related to a system that was not an error that is based on their own articles the reason it's in there is because they reorganize themselves completely i understand that the existence of the end of the predated that but in twenty million seventy two thousand and ten they they declared amongst themselves and to the state of louisiana in order to ensure this happen their purpose was to support and distribute its assets and the proceeds of the sale so that's the reason that's in there that the whole point of this company was to do the thing that we're trying to hold it accountable for now and to that public talk about we're trying to amend the contract to hold shareholders responsibility and it's going to have all this fall off that is not what's happening here we're trying to hold foundation responsible for its extraordinary role in systems dissolution and the aftermath as as far as ten years after systems dissolution foundation board members were sitting around having meetings about the c m s notice about systems obligations about the skeleton bore d and what they could do to either reduce or avoid liability for system and for themselves and this is after ten years after system was already dissolved if this occurred if if is so centers for medicare that come back with this overcharge claim within one or two years after the transaction a not likely that you might have argued something about piercing the corporate veil and gone after all the shareholders no i don't think we would have needed to the point of the money would have been in escrow for for that purpose that it what's what's really interesting is is what would have happened who would we even have sent the demand to because the money was said and asked for oh but system had already dissolved so where would we even send the requests now the money was set aside and presumably they went on of their obligations system was winding up and the foundation was involved but it's very interesting because they they were gone the whole argument is that the entity doesn't doesn't exist so the claim then wouldn't have been after the shareholders or even after the concert of the us for we're not trying to hold the shareholders responsible beyond the requirements of system what we're trying to say here is the foundation and system have a unique relationship and they d d orchestrated this dissolution and they continued to control systems obligations for years and years and years afterwards and that's not normal shareholder behavior that's your best case in support of the propositions that you're arguing they are applying american situation dr and they're not they're not looking at those eight specific factors but they're looking at a general who are the shared members who are the shared officers those cases d in our poetry if we the judges don't think it's fair for them to that there is a genuine issue of material fact on this issue there is extensive evidence that was considered by the lower court and the lower court and the siding with foundation we obviously had crossed motions we would request and we think it is appropriate for this court to reverse and grant our favor how are we think of the very least there is substantial evidence here that shows that this is a contentious issue it's a genuine issue a material fact and as such the lower court's judgment was inappropriate not unless you have any other questions out i have no additional comments or who are i don't think so thank you very much the court will stand in recess until nine thirty tomorrow morning