its regulatory authority when it determined that entities in active bankruptcy should not receive loans under the paycheck protection program the district courts contrary of the bankruptcy courts contrary conclusion rests on a failure to afford s b a the deference to which it's untitled and a misapprehension of the statutory scheme i can walk through the specific arguments in detail but i'd like to begin by stepping back and setting the scene congress was responding asserting it as a threshold defense your honor we think the proper way to we are our preference frankly is for you to resolve the merits and to have you up all this this program which we think does survive a p a review but we do think that there t and there are decisions for example in the trade ways trade ways case from the bankruptcy court and the district of maryland that cited several times in our brief that the case for example where the the court did not view the six did not think there was an obligation to resolve the six hundred and thirty four dollars b issue st and cited some authority to that effect and we agreed that it would be appropriate for you to to get to the merits to the merits here you know about that is well actually it's about the journey issue that's involved are you  i guess i can ask each defend each defendant separately but are you have you consented because i noticed that during the hearing during one of the hearings the government was saying that it had not consented and then afterwards to withdraw the reference so that the other issue the other sort of threshold issue are you have you consented to jurisdiction before the bankruptcy  that that being said we were in an interesting situation here because of the strange posture and which this case reaches this court and i should say we explained all of this in our filings at the at the stage at the petition stage before the motions panel that was deciding whether to allow for an answer or for discretionary direct review here and the reason things are complicated is because though this is a non core proceeding as to the injunction that the bankruptcy court lacked authority to decide it nonetheless incorporated that analysis subsequently into it six hundred and thirty five i'm sorry it's three hundred and sixty four before that authorized gateway to take and while we think that that was a misuse of the three hundred and sixty four b procedure that water nonetheless is in fact a core bankruptcy matter that the bankruptcy court had authority to issue and because that order is wrapped up in the previous conclusion of the court that the rule was invalid and should be enjoined this court has the effect of power to review the merits through that back great test i think the right way to think about this at this stage is not through strong versus marshal lines as to that but rather perhaps through attendant jurisdiction lines so that the matter is because the court has determine the rules on enforceable to be extent that disqualifies the debtor from participating in the paycheck protection program the court orders it's appropriate to overrule the objections and grant the debtor's motion and then in the necessary you have to necessarily have decided and in deciding the issue i believe that's correct so it really doesn't matter whether you talking about the strength or the  court the court nonetheless granted review here obviously that's that's not binding on on this panel and if there's a jurisdictional defect obviously that's going to be a bar that's going to prevent the court from reaching it so our issue is whether or not it function the core function is to decide whether or not this debtor can undertake this obligation this long if he can get if it can get all that all the bankruptcy court has to say is not whether the lender should give belong but whether it's ok for the debtor to take out along if the dat lend so i would certainly agree agree with that framing of if the court has further questions about the procedural posture i'm happy to answer them but i would in my last two minutes like to least briefly touch on the merits and in case the court does decide adopt a test that would only be administered bowl and allow it to get hundreds of billions of dollars out the door in a matter of weeks to millions of distinct borrowers by using a streamlined test for determining whether a sovereign immunity against any and all injunctions against the s b a is that you end of all if not necessarily i there are a lot of complicating factor here including the ending of the program there are statutory deadlines for when they these funds need to be used their war alternative claims played in the in the original complaint  light of those claims i think there's a fair argument to be made that those should not could not be finally decided by the bankruptcy court but i think i can't say that under the th circuit it all go decision or this court's or or or the expedient this judge anderson if i asked one most question did the credit union tell the bankruptcy code that it was no longer willing to lend  inaccurate statement as to bankruptcy status program loan to the debtor gateway radiology under the cares act us after only had two prerequisites one that the s b a was going to guarantee the loan and two that the debtors twofold representations were accurate in that it did indeed meet the eligibility requirements under the program and two that the funds would be used pursuant to the p p p rules that were enacted those are the only two requirements that had us didn't do any additional underwriting because none was required and as mr sal's men noted none was really encouraged because the focus of the program was to deploy funds very quickly during the pandemic so us are for allied on the stas guarantee and the bar was very limited representations and didn't do its own additional underwriting but the problem  neither of the preconditions to the loan were met the s b a obviously did not guarantee and the debtor was obviously not eligible at least under the statutory framework of p program and application requirements that it not be a debtor in bankruptcy and so in that in that u s s free will to make loans was taken away without its consent  if he that one of these preconditions or lack thereof had been disclosed we would have been in a situation more like a doll go where the debtor was refused a loan as opposed to here where us initially funded the loan into escrow did not release the funds and then later upon the application ssion approval it's true just its intentions were disclosed to the bank and the fact that it was a debtor in bankruptcy was meeting and of the mines was disclosed to the bankruptcy court as mr salzman noted but it wasn't ruled on directly and even if you get around the initial prohibition against was wrong because the bankruptcy court has a means to enforce its orders and control process in the bankruptcy court and ensure repayment and the reason it's ironic is because this debtor didn't comply with all of the bankruptcy rules and processes in order to obtain this loan it application was incorrect which puts us where we are today so i think when you get down to the arbitrary and capricious nature  of the argument there's certainly no guarantee that a bankruptcy court authority would necessarily prevent wrongdoing or necessarily ensure payment of p p p alone in accordance with the the s b a was correct in its risk analysis imperiously but whether its decision was reasonable and i see i'm out of time so i would request that the court just simply reverse the opinion of the  i mean at this point if they didn't if they had objected previously which they did and if there was a requirement that if it wasn't necessary for the bankruptcy court to resolve the exceeding aready issue isn't there a problem in other words if the bankruptcy court as judge anderson was alluding to i think could have resolved  it be any extra complete or client in that circumstance i think it is because the the way it was created was by virtue of an application which inserted a specific  discussion are you are you not in bankruptcy that is not in the statute that is purely created by the s b a so it's certainly necessary to get to that if the courts but we've obviously did for a long line and then when called in the line can argue well they didn't have really authority to ask me that question i would st i wouldn't characterize it as a lie because to exactly what happened with the application i don't understand that dispute but but to get past the fact that the district court didn't resolve it i think you have to assume it was a lie because you can assume well if the district court had resolved it the district court would have found that it was a deliberate misrepresentation it was just accidental however that could have happened because you're you're assuming the facts against the party that you're making the decision against if you're going to say well it wasn't false then find the bankruptcy judge should have gone into that but i think what the back to judge did was what was the question presented and is it political so if it is not what i think cripps the court did whether it articulated it this way or not is i will assume that was a lie it doesn't matter because you know to agree falsely answer is your position corrected if it has no bearing on the application as one of those as opposed to saying yes we are in bankruptcy but this has no application to th legitimate long process and you cannot consider it under bill all your position is a lot st exploring later if you have to i'm not criticizing you and i don't mean you personally but that's your client's position  sumed in the course of its decision had to have assumed that it was a lie and then basically ruled the only ground it ruled on was it doesn't matter if it was order a lender to change the terms of the long this is not of pre bankruptcy long this is not debt the debt this is  chapter eleven and a lender says let's take this op the lender says i'll loan you x amount of money that you want at the rate of eleven percent and then the debtor applies in bankruptcy court and says approve this loan and the bankruptcy judge says i think is a good thing i think it will help the process i think you'll have to debtors and creditors and the debtor and all the creditors but i think that long interest rate is too high i'm going to knock it down to eight percent and a bankruptcy judge  would not have sounded that long had they known that gateway was in bankruptcy so it seems to me that that the bankruptcy court has changed a term or condition that led to the long just like if it had turned changed the interest rate i think it goes back to proven process has the bankruptcy court we've agreed doesn't dictate the terms it may dictate the terms of approval but he can't force the lender to accept those terms so all the bankruptcy court can do is say proved this long run don't approach this mark this bankruptcy court went beyond that and said i approve this loan and by the way don't you with your all are you better reinstate the with but but but remember the loan was approved the loan was made and then the bankruptcy court made the determination that you accept cannot go back on that and that was the reasoning was because of discriminatory nature discriminatory nature of the rule created by the s b a as to chapter chapter eleven debtors going back to what the overall reason for the loan was this is not the ordinary business this was a loan in the middle of a pandemic to keep employees employed throughout the country and in this particular instance in pinellas county florida so the bankruptcy court occasion of the application as the bankruptcy and that was when it was adjudicated that whether or not that was valid that's what the court took up that's what the torque the court discussed was it valid to not prevent a loan to prevent a loan based on chapter eleven data and the courts reasoning was clear because a chapter eleven that are is under scrutiny from courts and creditors where as any person on the street i'm using the word person any company with less than five hundred workers who was in business as of february th two thousand and twenty and had a payroll could obtain this loan period and the statute specifically did not exclude chapter eleven debtors so that was the reasoning for the court approving and requiring the loan to specifically or tried by u s s on the false occasion issue and the court said it doesn't matter because we're going back to the core issue of the discrimination of chapter eleven debtors the ordinary business won't this one make sense but this is not the ordinary business woman this is the cares act in the middle of a and then they get money to employees so i think when the court looked at that and looked at the reasoning and the actual language of the cares act or there was no justification for eliminating chapter eleven debtors from receiving these funds because the s b a is reasoning for not allowing chapter eleven debtors to receive p p p loans or the the infrequency of repayment that is not an issue and was not a factor at all this approved on had made a debtor gateway goes in and ask the judge says look i want you to prove this long they had made it but the reason they didn't make it is they discriminated against me because i'm in  mean it's still the national emergency we have an economic deal in congress want to get the money out fast as possible and this is clearly discrimination against somebody in in bankruptcy that's the reason they didn't make or prove a long now i think in general on it on this you know but in this instance i would say yes because the can as act had specific statutory reason and groundings which were to get position then is that the bankruptcy court would have been required i'm sorry would have been authorized to order the s b a to approve a loan it had not approved and us have to agree to make was otherwise a discriminatory issue there's no way and then the approval and that's part of the approval process the bankruptcy court gets the final say on whether a loan is approved that hasn't been made and whether it but in this instance because the loan was approved and the underwriting the only underwriting done was those two issues and then the melted on issue of whether or not the entity is bankruptcy that's the reasoning and that's the reason why the rule which eliminated chapter eleven debtors from eligibility for these funds was arbitrary and capricious because there's no other palpable reason to not send the money out to employees or to businesses operating during a pandemic i think in the end in the ordinary course of business we're not even discussing this but because of the national emergency the issue of the cares act the specific findings of the cares act the specific reason for why it was created the stas actions were arbitrary and capricious because for the only reason not to pay the loan so to speak allow the use of the loan was a discriminatory nature of the rule so the bankruptcy court  was basically enforcing and otherwise valid the loan there were only two possible underwriting issues for payment of the loan obviously were you in business did you have employees had questions for me i think the court's already fully explored several respects in which the bankruptcy court overstepped its authority both as to the core proceeding non court perceiving issue  to that piece of this and then you certainly have further precedent that comes from from the expedient case which was also in the former th circuit is binding precedent here so so you've got that piece of it you've got the on on us that federal credit union and we would submit if the court finds that it is has jurisdiction to to reach the underlying merits here that it should conclude that just as the district court overstepped its authority in those other respects it also overstepped it this had nothing to do with well suppose there was no requirement that the debtor not be in bankruptcy it was a it was a underwriting consideration but not a requirement issue core function activity claim i could certainly imagine a suit like that in district court so i do question whether that would be a court bankruptcy proceeding bankruptcy court overstepped its authority in several respects both as to its sort of threshold authority to decide these issues and then ultimately in substituting its judgment for that of s b a we would ask you to reverse thank you