thank you your honors this case comes to the very core of the integrity of the bankruptcy system in this country it's a rare and unique case where the bankruptcy system failed you had a court finding of gross negligence against the original chapter seven trustee this created a hopelessly conflicted original chapter seven trustee where he was in a position to determine whether he should bring malpractise claims against himself and his law firm but we're not really here to consider what's fair and what's not fair were here that the term and what the statute is right that's true your honor and one of the policies underlying the statute congress made a mistake congress intentionally set forth the word including in section five zero three be it defined the word including in section one zero two three of the bankruptcy code to me not limiting this issue has come before this court twice it came before the court in the flow lizer case and it came before the court in the worthington case in each of those cases you had a litigant like the united states trustee come before this court and argue that just because certain expenses were not explicitly set forth in section five zero three be that the applicant cannot be awarded those expenses that statute  understand that including an include it and those words are not limiting but congress pacifically put him references to chapter nine and chapter  eleven reorganization step statutes seven is not a reorganization statute and so why should we assume that because these two these chapters rather are widely different why should we assume that by inference of whatever that congress intended seven to be included or it or did not specifically mean to exclude it sure your honor from the very beginning of this case we said we're not moving under section five of the three b three d because that clearly applies to substantial contribution claims in chapter nine in chapter eleven cases what we said and what i was getting to earlier is that here you've got a bankruptcy system failed the parties that were charged with administering the case who would have bad awarded him in a straight of expenses under section five of the three were the united states trustee and the original chapter seven trustee those parties failed to administer the bankruptcy case cofa as a creditor was the party that ended up in ministering the case at its very not find that chapter seven was meant to be excluding chapter seven was never obviously addressed in five of three writing the question is not what constitutes an administrative expense the question is under what chapter of our administrative expenses recoverable care and section five zero three b which we moved under clearly applies to chapter seven nine twelve thirteen it applies to all of the chapters there's nothing and i don't think anyone's that had a case which says that a party cannot be awarded in a ministry of expense under section five zero three b for administering the case right but the category of expenses that we're talking about are the category that is referenced under under five o three b three d and chapter seven is not referenced your honor i would disagree that the category of expenses that we're talking about are those that are to specifically under section five of three b three d did did copus make a substantial contribution in this case of course it did it make an extraordinary contribution it certainly did did it it minister the case yes just because kofi has made a substantial contribution doesn't necessarily mean that that is the only section that you can look to look a bit you know under under r issues where congress and inflow lies or congress provided for taxes fines penalties the argument was while no interest was not included thus congress must have meant not to allow creditors interest this court rejected the argument this court sad including means including just because we might think congress intended one thing we actually have to look at the words of the statute we have to look at the word include we have to see that congress specifically defined that word in section one two three and we need to enforce that word and it was the same thing in the worthington case where official committee expenses  were arguing those cannot be reimbursed if you look at section five zero three b three d a provides for sort of dental contribution claims other than for members of official committees argument from this court well that that means congress sad we cannot provide expenses for official committees this court so i know this court said we're going to look at the word including we're going to see that congress specifically defined that word including and we are going to enforce congress intent but in that case there was no for instance a statute that said committee work can be reimbursed but but only b s types of committees well it said substantial contribution claims can be  averse reimbursed other than for official committees so i don't think we're to a far from from where we are in this case you had the argument that because something was referenced and all other things you know must be excluded congress must have considered those apply the general specific can and unless there are textual indications which point the other direction here we not just have a actual indication we have an actual statute it's an actual statute that says including means not limiting thank you but i want to ask you before you go what is the strongest case that you would cite to us that you believe supports your position or give us the you i'm assuming those lower court case then your brief they are in my brief and i can find them for you in the matter of that which was a bankruptcy case and there are several others that are citing ways thank why couldn't the successor trustee just do what the plaintiffs did with the creditors did we will all of the things that these that the creditors did occurred in order to disqualify to remove the venn trustee once there was a motion there was a trial but the creditors represented the themselves they introduced substantial evidence the court disqualified removed the former trustee ok is it possible i'm asking this at a complete ignorance is it possible for a successor trustee to in effect say i ratify all of that it was done for the estate i will pay the attorney fees because it was done so that i could be here and yes well that's in fact what what happened the they applied to the the trustee to approve the expenditures but i mean i'm not they they applied under this section they they applied for it to be an approved expenditure i'm asking something different whether you as trustee could step in and say this is sort of retrospectively these i am saying that these are tourney's we're representing not the creditors but the state sort of  and therefore you don't have to apply for expenses these are my expenses the same way that the first trustee would've if the trip but if the first trustee had filed the lawsuit right and recovered decided that he was going to sue his own firm and recovered the estate would pay the attorney fees rate ok so that's what i'm asking whether when you step in you can look and say well this was really done for me and so i'm paying it i guess i'm i'm uncertain iran or whether there is some mechanism to allow they have other them what happened here which is that we  is in encouraging and incentivizing creditors to be more actively involved in the bankruptcy process and these creditors here who were before your court it is a policy argument but it's not an argument for congress it's an argument for the bankruptcy judge it's an argument for the bankruptcy judge to use the powers that exist within the statutory system there is of course one to five but the bankruptcy judge is limited by the statute itself no absolutely not in this particular case the argument that that five zero three five zero three b d nine says these kinds may be reimbursed but it says at the very beginning of the whole thing the including work and if we're going to analyze a statute we can't ignore the including but but as i said before when we're looking at the statute that mention is specifically chapter nine and chapter eleven you're saying it's ok for us to read into that based on including seven you know twelve i don't know i can't imagine thirteen but just read all of them in there that now i right think that's necessary and that's not really what we're asking we're not asking you to standard to use in in chapters nine eleven substantial contribution a bankruptcy court in the exercise of its discretion under five o three b can award administrative expenses on some other standards higher standards maybe lower standards in things that are not specifically controlled by nine and that's what we're suggesting here is that the bankruptcy judge should have exercised his discretion under really would have a red lax problem then you really would have a general that someone is trying to get to overrule a specific we're not suggesting that that in a nine or eleven that you can use some other standard than substantial contribution you couldn't do that that really would be the general can't beat scuse me the other way around the general would be trumped by the specific but here there is no specific that control seven  interpret congress's intent in structuring the statute to mean only nine eleven can you get administrative expenses for a creditor then you come to that result but that isn't what it sends so tell me again why we shouldn't interpret it that way you know you mentioned one hundred five again but that's general equitable powers so tell me again how you how you get to the position that you're asserting that provides should be three really short let me start by by going back to the to the question that judge o'malley asked at the very beginning which was are we here to decide what's fair fair is important in this case because ask yourself did congress intend to exclusivity it included nine eleven but is there any reasonable reason to suppose that in this congress meant to say only should we write should you give me rewrite rewrite nine to exclude seven it doesn't say exclude earlier on it just says here's a list of things you know that are all part of five zero three b but it's not exclusive and so the fairness comes in by saying  bankruptcy court have the authority particularly in this kind of circumstance to reimburse creditors for doing the most important thing they can do which is uphold the integrity of the system and helps them but it can help it helps all the other creditors and it helps the estate in this case they spen what about one hundred sixty thousand is that what they're asking for remembers yes hundred sixty five and how much did they recover ok they were not the ones who that were the adult ok and brought in about a million dollars and you paid about six hundred thousand attorney fees right yes it was not an easy case and they got about fifty percent of the balance yes i think that's about the percentage of the  and all of that is something that you would say the judge can take into account but he has the ability to take it into account yes or through a combination of well you know nine in chapter eleven no it doesn't says yeah it's that section says that we allowed this and those two chapters but it doesn't say only those chapters and there is an overall provision that very clearly is not exclusive i mean i understand you can make the argument that because it specifically says that we shouldn't allow it in this case but i mean bankruptcy is essentially equitable and it's uncontested that they spent a significant amount of money that eventually and were to the benefit of the estate so i mean what why should it be allowed there's no dispute they made a substantial contribution and there's no dispute that the word only is not in five zero three three d however five zero three b three d is one of only two sections of five o three that limits recovery to certain chapters so congress knew how to limit it if they want to it's because they made a substantial contribution their request for ms for your priority is governed by five o three b three d but that only allows for it in nine eleven which is crazy ok well let's say they made an extraordinary countr what we won't use the stuff we won't use the language when that section they've been extraordinary contribution day they jumped into the void they acted where no one else would act you could call it an extraordinary contribution or a super great contribution but it's all the same thing we made a contribution we brought in funds for creditors and that type of request is clearly governed by five zero three b three d substantial contribution by any other name is it why would congress you want us to to assume the congress primarily reorganization statutes so in those instances it would make sense to give some creditors but a boon for making a substantial substantial contribution to keep a municipality or a business ongoing those types of issues don't really come into play in chipper so that's why i think it was excluded on an expense such as this of mr him a says that these expenses were incurred to fundamentally uphold the integrity of the bankruptcy system and where someone has made a substantial contribution for the reasons he's articulate it and how does the code permit those expenses i guess to become pin say that i mean is there anywhere that allows that i mean can you can you get it under some of the chapter or can you get it under some of the construction not that i'm i'm aware of your honor they had a financial incentive substantial financial incentive as the lower courts called it to bring an action like this  have paid those fees directly simply say these are if i had been appointed i would have done exactly this now that i'm a point that i recognize that these are legitimate expenses of the bankruptcy of state by i assume if he wanted to be nice and generous he could have paid those but there's no specific code section i'm aware of that would require him to to make those payments in the chorus to about the the amount that's wrong one hundred sixty four hundred sixty five seventy five thousand was incurred before the trust new trustee was appointed the remaining possibly ninety was incurred yeah so i am not hearing in seventy three seventy five thousand was incurred before the new trustee was appointed the so there bounce was incurred after and that's on page nineteen of the transcript the because the court hearing ok so why didn't he pay it to this case i don't think so because worthington's point was the statute is silent this court determine that it was silent in regard to official committees in determining the phrase that was in and it says it says official committees write or unofficial committees the code as it existed then did was silent as to official committees right but it was not silent as to chapters it tells you that you can for the two chapters you can compensate for substantial contributions it's silent on chapter seven the same thing it told you that you could compensate for unofficial committees it was silent on official because only two sections refer to specific chapters there seems to be a very strong indication the congress meant to exclude jefferson they could have just said makes a substantial contribution in a case period but they said in a chapter nine or chapter eleven want they didn't want them all treated the same first certain chapters there's a presumption that you'll get compensated all you have to do is you go when you meet that standard and you get your compensation chapter seven is different you're not entitled to it just because you do this you don't you can't say i made a contribution give me my money but that's very different from saying that the court is forbidden i'm giving you the money if you show that you're not it's not just that you made a substantial contribution you did more you it was it was reasonable you stepped in where people dropped the ball i mean all sorts of thing the court could look at this and go well you know what i hear what you're saying you did a good thing but in my mind it's enough that you got more money and say that's it i don't want to give it to you but that's very different from saying i don't have discretion to give it to you what i'm not sure what the reference to chapter nine in chapter eleven would mean if a big secord could do that just because it seems fair or because it seems like a creditor did a really great job this you know putting aside my view that we're not supposed to be pursuing policy here what can you conjure up a rationale why seven would be excluded from this given that the whole point is that we want to encourage this sort of self help and i do believe seven was excluded because it's primarily a straight liquidation chapter and it wouldn't make sense to encourage that sort of raised to the courthouse in cases that flow through ok but you know under what you just set him in a liquidating bankruptcy the trustee is there for the very purpose of gathering all of the assets wherever they are and max surprising the benefit to the creditors and so if you have a trustee in place who is not doing that job that that trustee is undermining the very function and awarding the very function of the the process so i think that argues against the point that you just made still why that would be a basis for not allowing or granting the expense because if the trustee here is it's almost self dealing you know that's certainly against the you know the fundamental purpose of the bankruptcy court because the purpose is to get that trustee to garner all the assets as many as they can to maximize the value to creditors which is what the successor trustee did but so how does that support what you just said when the mistrial occurred in to two thousand and five but from a point any party could have moved under section three twenty four to have him removed from this case but nobody did it's true the us trustee didn't and neither did co face noted any other creditor in for years coalface had been involved in the case since two thousand and three had the most knowledge in three twenty four allows them or even the bankruptcy court to remove chapter seven trustee and it's true no one did that so they acted with their own financial interest in mind and and it's important to remember that they do reap of a large benefit here so all the talk about policy in equity the lower court said two things first of all there is no great inequity here because they're getting a big financial reward and to any inequities or perceived inequities that may exist are for congress to address not  and why did the u s just did not take any action my understanding is it was the end of the case no one had said anything  but even that was close to the end of the case and bankruptcy even though the case is ended on a section three fifty the trustee can always go out if the trustee learns of additional assets that benefit the body of creditors they can go out move to reopen and still  shall be the valuation standard this shall be the valuation standard there is no language like that in section five of three p three d in the two other cases before you flow lizer and worthing then you have a legislat history which frankly pointed against allowing these ministry of expenses you have no legislative history there's nothing in the record to indicate that congress clearly intended to exclude chapter seven we're not just seeking the substantial contribution claim what we did was we administered the bankruptcy case the case trustee the us trustee they drop the ball at its very core what administrative expenses are our expens case we cited in our brief but it is a very famous supreme court case it's reading kopi brown three ninety one us four seventy one the court looked at the policy underlying section five zero three b it was  a pretty simple case where you had a fire at a bank up company's headquarters and there were victims of the fire and they applied for administrative expenses the trustee in that case said no we're not going to allow administrative expenses the two purposes that the bankruptcy code are to facilitate to rehabilitate of insolvent businesses and preserve a maximum amount of state of asset for distribution what the supreme court's had said trustee in our view you've overlooked one important and here decisive statutory objective fairness to all persons having claims against insolvent thank you