he had a choice to make the loan agreement it was operating under was to come due in january two thousand and four and tex trans lending partner united bank had already made the decision to exit the relationship they were paid off and they left instead entered into a new loan agreement with the fraudsters with a new promissory note in a new lean and in fact a bigger lending commitment than textron had under the original agreement to make up partly for the exit of united bank over the next three and a half years textron proceeded to infuse millions of millions of dollars into tim durham's in jim cochran's ponzi scheme and at the end of the day over five thousand ohio families lost their entire investments in the company to to a total amount of over two hundred million dollars what is textron is the answer to all this they don't deny their bad faith for the purposes of this appeal instead they say no matter how bad our conduct was no matter how bad our faith was we are protected absolutely by a lien that we got under the first loan agreement in two thousand and two and the district court did find as a matter of law that that two thousand and two lien remain valid that decision was error three separate reasons and the first one i'd like to focus on is really just a simple reading of the contract the two thousand and four loan agreement because if we're trying to determine what the effect of that agreement was on the prior lien we have to in the first instance look to what the party said in their contract first their contract created a new wing express paragraph eleven a in throughout the rest of the the agreement there are repeated references to the lien created here by here by means by this agreement by this document is there any argument  the argument i think that textron makes in that regard is that there is a provision in the zero two agreement the prior loan agreement which states that this the lien created in that agreement could remain in effect to cover new indebted this we acknowledge that your honor but that agreement was superseded in fact in paragraph thirty nine of the four agreement the operative loan agreement there is an express superseding provision that textron tries to actually touch on doesn't even acknowledge the existence of that of that provision he in addition to that your honor there is none of the language in the old four agreement that is found in the other cases on which textron relies on this issue for example in in re to so which the court the district court also referred to the the court in that case expressly relied on the repeated references in the contract at issue there to the fact that the parties intend to carry forward and to remain in full force in effect and for the old obligations to remain in full force and effect that that language is nowhere to be found in our agreement to two thousand and four loan agreement there's also another provision in our agreement  paragraph twelve a which sets forth all of the operative liens it says except for the lien created here by the lien created in the old four agreement and except for the item that they would include it on this list of existing liens and they did not instead of they didn't need to well i think they didn't need to your honor because this is a new agreement creating a new lien and the a new agreement expressly supersedes the one so if i am in their shoes and i want to protect my old lien and make sure that the world understands and that the debtor understands it's in the fact i'm not going to leave it off of paragraph twelve  uniform project on transfer act provides for a four year stand you from the date of the transfer of the obligation or if later a one year period from the date that the transfer obligation could have been discovered every court save just one or two across the country who has examined that language in in various other states u f t a provisions has concluded that that obviously means that the plane of hasn't one year from the date of discovery of the fraudulent nature of the transfer and to hold otherwise would of course defeat the entire purpose of the u s d a because it would reward parties who like textron actually participated in helping the debtor to conceal the fraud and in fact that happened in two instances here that we documented in the complaint in january fifth two thousand and four just one day actually before they closed the two thousand and four loan agreement to tax trans lawyers had expressed the opinion that the disclosures excuse me for finances lawyers had expressed the opinion that the disclosures that fair finance was making to the investors or inadequate the disclosure relating to relating to the improper insider loans by which this fraud was being carried out and textron stepped in agreed with tim durham to delay making those required additional disclosures to the investors why runs own words we don't want to set send an unsettling message to the market later went when fair finances accountants recommended that fair finance comply with the anti fraud accounting provisions of fin forty six which require consolidation of related companies balance sheets and tim durham obviously was not willing to do that textron against upton and said we agree that fair finance should not have to  comply with those provisions and why because in text graham's words and i'm quoting were unsure as to the prospects for repayment to our borrower in other words textron understood that these improper insider loans were not being repaid were not going to be repaid in text and went on to say that if if we require them to comply with in forty six that could adversely affect our borrowers ability to continue to issue that the notes the fraudulent investments which in turn jeopardizes our borrowers capitalization so here we see in two different instances textron intervening to help durham and cochran to help the not be a discovery rule at all if it was just to discuss when you're from the date of the transfer is this a matter of ohio law terms of discovery rule this purpose it's a matter of ohio statutory l a although it's found in but then the interpretation of what the discovery rule means is we would look to ohio look to ohio law or two or other persuasive authority from other jurisdictions because there is no ohio supreme court determination there isn't i don't believe there's any ohio court of law there is a bankruptcy court in ohio but they have to the other the other  reason your honor why the statue limitations is not a bar here is under the ten year lookback rule for the i r s on unsecured client which the trustee is also able to step into the i r s issues to assert that claim and this is recognized by section five forty four of the bankruptcy code as well as by virtually every case across the country who has interpreted this this type of situation and that your honor would be a matter of federal law in all but one case which we small i think they say it's two hundred fifty dollars the but this you know this is an instance this is an instance where size just doesn't make a difference and in every court to ever since oliver wendell holmes decided more it's been understood that even a large discrepancy between the i r s claim and the trustees claim doesn't matter there's nothing in the statute that requires a certain proportionality and there's nothing in the case law that does either in the case cruel you would have us apply under the discovery you know i'm sorry are you referring to the discovery row yeah ok there are there there are about eight or nine cases that we cited you at your best i would say the best is those for some of the development of the case out of hawaii and there's another case out of the eastern district of pennsylvania name which is escaping me at the moment but both of those go into some detail as to the rationale as to why you would have to both took both to support the purposes of the u s d a entering the statute correctly because we have to keep in mind that in the very same sentence in the in the prior wording that very same sentence there is a reference to the fraudulent nature of the transfer and the fraudulent nature of the obligation and is the court and schmidt i believe that the subsequent reference to transfer an obligation is obvious a reference back to those fraudulent transfer could you address the civil conspiracy claim and why you met your pleading burden on that yes your honor the defense said i was offered there is in perry to look though which are which is the court knows means that  however there is an exception to the impaired looked out doctrine for an adverse interest where the wrongdoers are acting contrary to the interests of the company obviously the case here where german cochrane were stealing the company's money the  investors money that they had placed with the company was being stolen by these fraudsters for their own purposes so they were obviously working against the interests of fair finance however there is an exception to that exception for the sole actor doctor and then exception to that exception to the exception which is the unison insider doctrine so i don't believe that there is a that it would be appropriate to require the trustee as an initial pleading burden to deal with the exception to the exception to the exception to the purely dilip doctrine and this was decided on twelve on a twelve b six correct so the district court decided as a matter of law that the innocent insider exception didn't apply and this is it i mean you have to step back and think for a moment as to how complex in fact intensive that inquiry has to be now we did identify numerous people who worked at the company who were not implicated in the fraud including the controller of the company doug arose and to determine is a pleading out or whether that individual was quote unquote innocent or not of this complex ponzi scheme is not something that should be done for closed at the pleading stage it's something that should be we should have the opportunity to take some discovery or including for example mr de rosa's deposition and i'm taking you beyond your time allotted your red lights been on so thank you very much thank you the amended complaint against t f c expressly alleges the t f c did not have a security interest against the assets of the debtor in two thousand and two and indeed goes on to allege that one of the reasons for the two thousand and four agreement was to make sure that if c did for the first time get a security interest against the assets of the debtor you can find those allegations in the amended complaint in paragraphs one seventy seven through want eighty and one eighty six this was this error was promptly pointed out to the trustees counsel in the bankruptcy court and they have acknowledged that error and not pursued that position since they did not however amend the complaint to remove those allegations what they did instead was come up with a series of legal arguments which are not found anywhere in the complaint this whole notion that the two thousand and four agreement constitutes a new innovation of the two thousand and two agreement is not anywhere in the complaint it appears for the first time in the briefing below now why is is this important in a fraudulent conveyance law the for the threshold element of the claim is the transfer of an asset before you get any questions about reasonably equivalent value intent to hinder fraud or delay creditors good faith or bad faith for you getting any of those questions the threshold element is was there a transfer of an asset in this case with judge gone correctly found on the undisputed record is that there's only one transfer of an asset in this case and that is when in two thousand and two the debtor gives a security interest to t f c that's the transfer of the asset the complaint does not contain any allegation to suggest that there was anything wrong with that transfer the complaint alleges that at that time though the debtor is a robust company earning a lot of money and has an excellent financial condition there's no suggestion that there was a ponzi scheme under way there's no suggestion that t f c had any inappropriate knowledge or that there was any knowledge to be had so it's undisputed both in the complaint in the bankruptcy court in the district court and here that the the grant of the l in two thousand and two is perfectly fine and there's no attack on it whatever so the case then for the trustee turns entirely on the question of whether at some point after two thousand and two that evaporated and judge gong concluded based on the what she found to be the undisputed language of the un invigorates language excuse me of the two thousand and two agreement and the two thousand and four agreement that it did not it would be possible for the two thousand and four agreement to wipe out the two thousand and two lean right and the two thousand and two agreement it would be possible for that to happen and not just more if what you're asking me  i think it's you've got to look both at the two thousand and two agreement the two thousand and four agreement two thousand and two you see see one and the two thousand and six you see see one and if i can steal from from sherlock holmes not all are wendell holmes there's the dog that didn't bark in the night there's the fact that there is no two thousand and four you see see one let me just start there if in fact the two thousand and four agreement were intended to wipe out the two thousand and two lone lean it would have been necessary for t f c in order to perfect the two thousand and what the what the plaintiff is is saying is a new lead in two thousand and four to promptly file it to the a u c c one in two thousand and four it did not do so strong evidence that the parties did not believe that the this was a lead second of all the the two thousand and two agreement expressively provides that the lien granted under that agreement is true the one had is that come into the record i'm to comply to to my motion to dismiss judge well are you permitted to present additional evidence in connection with the motion to dismiss to the extent that it's referred to and relied upon in the complaint we are there's never been an argument there's there's and there's no way hewitt in your mind about the propriety of considering that there's no issue in my mind and  is to cover all indebtedness from the debtor to the lenders whether it exists as of that date or whether it exists in the future whether it arises out of this agreement or arises  other agreement and there's some there's some belt and suspenders line which the effect that to even if we don't mention it in this agreement if it's a debt it's covered ok then you go to the two thousand and four agreement and there's a recital that opens the agreement with as i believe it's recital see that says the parties want to amend and restate the two thousand and two agreement to reduce the amount of money that is available i'm paraphrasing obviously to reduce the amount of money that is available to be borrowed that is the recital and in the it opens the two thousand and four agreement does not say the parties wish to cancel the two thousand and two agreement the parties wish to knit novitiate if the parties wish to to release the existing lead in the two thousand and four agreement it says that the security interest covers past indebtedness present indebtedness and future indebtedness this is a seamless uninterrupted secured lending agreement there is never a break in the chain there is never a moment in time when some other creditor could have lent money to the debtor and gotten a better security position ahead of t f c there is no new collateral in the two thousand and four agreement that is that's the key fact in two so that the two thousand and four agreement doesn't give the lender any rights  in collateral that it did not already have there's no new category of collateral in fact your honour's and i don't recommend this unless you're having trouble sleeping at night but if your read the two thousand and two and two thousand and four agreements next to each other they are obviously identical they're obviously from the same so why doesn't the two thousand four replace two thousand and two that if they're identical and is in their language you know this way better than i do at this moment in time negotiations prior to this time they're merged into this agreement and obviously the two thousand and four greenman changes its it says it's an amendment you know bank is dropped out the can the the ceiling lending ability is dropped it's a it is it is an amendment to the question under ohio statutory law is does the leave change the lean evaporate is there a break in the chain in the security interest and and judge going i believe correctly read the two agreements as an ambiguous and said no there no there isn't but so maybe you could explain to me what detriment to any of the parties would there be if what happened was the two thousand and two agreement and lien expired at the moment that the two thousand and four agreement and lien starts is there any problem for anybody if that's what happened other than what's happening in this case this is honestly well i think i have an you're going to have to forgive me i didn't anticipate that question so my answer may not be complete but i would want to think about whether there was a problem for t f c arising out of that we had not filed the two thousand and four u c c want another word if the two thousand and four agreement were intended to be innovation and the ohio case is that we said you have state cases that we cites say there has to be a clear expression of intent before the court will not presume innovation has to be a clear expression of intent to do saw no reason to let me also stress point out that in the two thousand and two agreement there is a provision as you would expect that as you know at some point in time the borrowers not going to owe us any more money any more and therefore the lien is going to be gone and when that happens we textron will file the appropriate paperwork to tell the world that the u c c one we filed to know is in effect anymore is terminated right just like if you take out a car loan invention or you pay it off you get some letter from the bank saying the lien on the on the car is released that never happened here ok instead in two thousand and six because you c c ones expire after a certain period time in two thousand and six we file a continuation notice saying hey world remember that two thousand and two u c c one filed just letting you know even though it's two thousand and six it's still good it's still in effect we've still got the same leave it why don't do all of this amount to a dispute a fact not appropriate for resolution or twelve pieces because under ohio state law if the language of a contract is an ambiguous book two things first whether or not sorry whether i just restate my question why don't we have a sufficient ambiguity here  to subject the to the defense you offer to some discovery i don't know what that discovery would be judge the the the question of whether a contract is  understand your argument your client didn't think it was necessary but but is there any affirmative showing in the record what we know other than that they didn't file one well what we know in the record judge ok what we know is that under ohio state law the parties intend to nov eighth if that's a word can never be presumed and must be expressed clearly in a contract we know that there is no such thing in the two thousand and four and there's plenty of language in the two thousand and two and two thousand and four agreements that makes clear that it was not a wise i think was not required well what's required under ohio state law and i don't have the case name in front of me your honor but it's in our briefs is that it can never be presumed and there must be a clear expression of intent of extrinsic evidence just this just this the intent of the party can be proved under any other ambiguous writing don't you agree with that basic principle no i of ways for lawyers to say things the question is whether in this agreement is there in any language that clearly evidence is to the trustees client's intent to no longer permit t f c to have a leading on the on the assets that it previously had a leader i would respect tendency to show what your client thought just be that maybe so you had to be the agreements however expressly say what the debtors intent is there in section eleven and i believe in section thirty two of both the two thousand and two and two thousand and four agreements and of course in the recital to the two thousand and four agreement the language provides what the debtor's intent is it's in it it's a rigid mission by by the debtor about what they were intending to do in these agreements my red light is on my mind i just say want to brief moment about the state limitation because i know you're honest about it i just wanted to point out a couple small points i won't i won't greatly expand upon my time one the one year discovery rule has no application to the conspiracy claim and has no application to the constructive fraudulent conveyance claims it only under ohio law has application to the intentional fraudulent conveyance claim second of all i would respectfully ask the court to look at the ohio statute one three three six point zero nine which is the section that has the one year look back in it and if i could just read one phrase it says it's says it's four years after the transfer was made or the obligation was incurred or if later if later because it may not be later right within one year after the transfer or obligation was or reasonably could have been discovered by the claimant the only case in the sixth circuit within the six thirty that we have found or within the state of ohio that we've found that's on  thousand and four lien in the two thousand and four agreement there's a provision for a lien yes your honor a lien is a security interest in the security interest is reflected expressly in paragraph eleven any of the two thousand and four agreement where it says and i'm quoting as best i can from memory a security interest is created here by in here by i looked it up in the dictionary it means by virtue of this document but if if if there were any ambiguity on this point judge davis you've been further to your questions this this would require remaining for discovery and that in the cases that are cited by the parties vation and i believe even textron cited cases to that effect i think it's unambiguous but if it's not then we need to take some discovery the question here your honour's is not whether there is a s relationship it's not whether the collateral remains the same i'm not even sure it's necessary for us to establish a complete notation the question here under the u s d a is which lien is in effect and the lien that's excuse me it is the executed security agreement in other words the loan security agreement two thousand and four that creates the security interest not the filing of a financing statement and what's really interesting is that textron cited to this court a whole both of which are cited by textron them which directly refute what counsel just told you with respect to the civil conspiracy claim that i didn't get a chance to address the statue of limitations issue there and the statue limitations has an exception in most jurisdictions for adverse domination this court as we noted in supplemental authority that we provided to you  recently in the antioch case held that the ohio supreme court would it as an yury guess not recognize the evers domination doctrine that's an unpublished decision judge moore you obviously are aware you wrote a dissent in the case where yes and you know we believe your dissent was absolutely correct and we would urge the court to adopt that reasoning you are not bound by a panel of the court that issued an unpublished decision as they did in antioch  finally your honors you know i would just ask the court to to consider the consequences of what textron is really saying here in addition to the fact that there is a new lean we also i mention there are three reasons why the decision below was wrong and we haven't gotten a chance chance to discuss it today but we certainly have in our briefs the trustee is able to avoid a fraudulent application as well as a fraudulent transfer and the obligations that were created by  four agreement were fraudulent we did a legit they were made with the intent to defraud and there certainly was bad faith on the part of textron and we can avoid those and then as a matter of ohio law once an obligation is avoided the l