our next case is sixteen dash one six four six two the estate of juanita jackson and all versus reuben shawn mr actions that would arise out of any nucleus of facts that had been determined by the bankruptcy court with any motion to dismiss her in any trial regarding a march two thousand and six transaction and assume this for purposes of my question although i'm not sure that it's right but you need to assume this if the district court correctly dismissed the state's claims against mr shawn with prejudice does the other issue go had been brought in state court it was removed to the district court judge coming to grief and the initial most your man was denied there after the summary comes from the jackson case  of you had prevailed in this case if you had prevailed in this case all the way through judgment and gotten all the relief you wanted against mr shrum you would have confessed that the judgment had to be set aside for lack of subject matter jurisdiction then the bankruptcy court had jurisdiction i don't think that if we had prevailed in the bankruptcy court i was talking about the original proceeding i'm talking about i'm talking about the complaint that we are discussing in this appeal i think this is the there is ok you had a complaint that included the states had a complaint that included claims against mr shawn right yes that's the complaint that was dismissed by the bankruptcy court with prejudice right yes you appealed yes raising a number of issues the district court affirms that dismissal right yes ok my question to you is this if that dismissal is affirmed here in other words if that dismissal is correct and i'm asking you to assume that does the other issue about the injunction go away you know ok tell me why not in other words if you if you have a binding judgment against you that would serve as rest judicata and any further proceeding against mr truong why is an injunction paradigm example where the judgments been entered by the bankruptcy court and you would be trying to get around that are going to state court and relive a gate that the underlying client no doubt not in this case we started in the state court and there were many defendant jordan the premise of his question the likely one jurisdiction aside would your issue go away than johnson and is your answer yes it would go away because your only defense is jurisdictional we found a claim in bankruptcy court involuntary seventy the judge said i want to decide all collateral or shows issues involving all parties and i want you to follow a complaint here and bring every claim you could think of that would fall under bankruptcy jurisdiction here and that was done by  very narrowly construed to any injunction act if there's a question of which if there's a doubt if there's any question on her you're litigating the same thing the answer is easy court in this court is you don't have support the injunction question that that's what has to happen and in this case instead this injunction was done mr there was no complaint filed for an injunction there's no request there's no description of which order was protected well that last that last part is pretty clear whether it's valid or not it was protecting the judgment dismissing your complaint with prejudice that that gives you an opportunity to terminate was their jurisdiction to take the case in the first message and that's the most recent case i can find on the issues that the but that was not in the roads so again that that case was that the case i wrote ok that if i recall it correctly that case didn't say that the bankruptcy court lacked jurisdiction it said that that the basically the bankruptcy court lacked jurisdiction to enter a final judgment and your seat a final judgment yes and that's where it has to enter findings and conclusions yes and then send those to the district court exactly and that's that's the situation here is there was i don't think there's anybody can argue this was a court proceeding but here i go but your argument in the brief is not that that the bankruptcy court lacked jurisdiction to go to final judgment but that the bankruptcy court like jurisdiction at all which of the two is  agencies there's even argument the government agency has to be a lot he talks about balancing inefficiencies stern address that very clearly and said that because it's efficient or because it's somehow it makes the process work easier that doesn't t short hand why do you think there was no jurisdiction because this did not arise and or from the bankruptcy it was not related to these actions are all independent the towns a case for instance is so far independen so if you tried to file a chapter eleven i would dismiss it for bad faith knowing what i know now and this was we were the very beginning of the process so we can't even find out who the actual representative is he said so for you to come here and ask hygiene who coordinates mr sharon's attorney did not understand what he was doing when that man was given a stock of this company in order to dump assets to complete a very massive venture conspiracy th dismissal was appropriate but because there was nothing left to adjudicate the stay had nothing they had no corporate book that happens all the time and people decide for whatever reason to pursue judgments now usually a trustee steps in and says hey if there's nothing to recover at all we're not going to go forward but if we think if we think we can pursue adversary proceedings fraudulent transfer proceedings we're going to go ahead and we're going to try to recover money for the estate for the benefit of creditors this case the creditors  and we're at least i'm having trouble following your linear your linear argument and then let me take it you are suing because you got judgments against the corporate merits even though it had nothing to do the better ok but you've got a number of judgments against at least some of the corporate entities for the wrongful deaths right yes ok when the suits that were the un tended to file and did file in bankruptcy court whether you were compelled by the bankruptcy court or not all of those were for people who use a had assisted the corporate entities themselves of assets to make them essentially judgment proof that you not was and that the theory of the claims it was one had to put them in shorthand in the beginning it was it was the theory but the facts developed  this ok hold on hold on if that's the if that's the general theory of why you are suing these other people that they had assisted in some scheme to allow their corporate entities to sort of divest themselves of assets make them judgment proof and transfer assets in a fraudulent manner how could that not be related to the bankruptcy estate of the debtor the debtor didn't exist it was a fake dummy corporation that was given to somebody it doesn't  a judgment against that fake dummy debtor you pursued that fake dummy tetter but we got it when we get to know that it was a fake we didn't know the facts at the time we had been given that was part of that does see in this case complaint we did but we didn't have a chance to make every every point what were you prohibited from claiming we were prohibited from claiming the fraud on giving the money cash that came in we found that out about six weeks eight weeks before and the trustee was both ordered to be our co counsel and was ordered to defend the cases this case is there's never been a case like that trust me ten million dollars in this case but i mean mr shawn ever or every cent available to satisfy all the judgments you had got equity what i'd like to get would be the two billion dollars that he stole ok well if you if you hear the total two billion dollars if you're talking about in today's dollars spending ten million to defend a two billion dollar lawsuit the numbers don't seem all that out of whack when you're suing somebody for two billion then they're like well ok maybe ten millions worth while defending you're you're not you're not agreeing with that part of the settlement we want to appeal we're at right now i don't want the history just yes or now you're ok with every part of the settlement except the one part you're not ok with is the part that's the end joining you from bringing further actions against iran means you want to go forward against mr shawn elsewhere but you're also ok with the part that dismisses him if you're saddling you're ok with the part that dismissed the kleins before the bankruptcy court you know we were not in fact we specifically excluded those and we got all the parties to agree to give up the bar order which initially been asked and everybody gave up the bar he was a non contributing non debtor this court held that you can't give a bargain in that situation so instead the judge gave the junction he was in the party to the settlement right now he here decker l l p with me as my colleague kathy wyman so a lot of issues in this case there is a great injustice in this case although i may disagree with mr wilks over where the injustice lies here the court will permit me i'll give a brief kind of intro in court the bank the court correctly entered the permanent junction here the bankruptcy court correctly dismissed all of the claims against mr sharon this litigation began nearly a decade ago as six ordinary personal injury lawsuits against florida nursing home companies after two of those nursing home companies t h i n h m i defaulted state they went to funked they then defaulted the probate estates persuaded the state courts to have jury trials where nobody showed up on the other side in that environment they succeeded in turning one of the male obviously tragic to the individual situation but run of the mill personal injury cases in two hundred million dollar verdicts and so they started with one hundred ten million in the first the second one they got two hundred million the third they got nine hundred million i can only assume that they had got the formula down for for producing these results fueled by these gigantic judgments the probate estates then pursued over two dozen parties in a variety of state and federal courts including the sixteen that were at issue in the adversary that wound up in the bankruptcy court initially they did this through state court in pleader actions of the very first one general electric and mr schroen were were implicated in the jackson case that was removed to federal court this court addressed that address the jurisdiction and essentially said the federal courts can't keep the case because the supplemental proceeding is essentially a distinct cause of action in that case ultimately they found the parent of th m r i is this f l t c i company debt or they put it into bankruptcy they thought they were running at the issues because many defendants like mr sharon had nothing to do with florida had no business in florida so there were very serious and meritorious personal jurisdiction issues with the florida state courts so they to strategically took advantage of the bankruptcy case they didn't want to stay the proceedings against him i because it in the state courts because they they like that environment but they put f l t c i the parent into the bankruptcy took advantage of the is the one with the lease to do with any of these key h i t h m ike he's never been in privity with either of those companies at all he's never received a stent from them of the two motions to dismiss that were fully litigated in front of chief judge williamson in the bankruptcy court he's the only defendant to be dismissed on twelve b six on all of the claims that they do not allege he had ever heard of or th m i before any of this they do not allege that he ever took any personal actions knowingly with regard to any of these companies they are they either do shotgun pleading they just sort of say they throw him in with six other of six other defendants and say they all did x y or z or they say that these two men  informant were his his agents and when gross informant transacted business for their own profit without his knowledge they were acting as his agents and he could somehow be be held to account for that this is why teachers williamson who gave after all this litigation the bankruptcy court actually ultimately did hold the trial with respect to some of the defendants these folks wound up including all the settlements that they got with twenty four million dollars as a result of these proceedings immediately at the end of the settlement at the end of the proceedings they said ok thank you can we now go back and sue mr sharon in state court on the same theories you know this is the context that she should williamson memorably described as groundhog day working lives let me ask you this there  some cases in the circuit and they all depend on their factual context but some of them say that with regard to the anti injunction act that at least in some scenarios the better course for a district court or a bankruptcy court is to stay its hand and let a restaurant or cotton or collateral estoppel issue be litigated in the next forum where the next case gets filed why is this not one of those cases  sure so there's as the court knows there's two bases under which exceptions to the anti injunction act under which these matters are litigated one of them is about essentially as the rest judicata example for the court to protect its judgment the other one is jurisdiction starting with the starting with the power to protect its judgments i would say it's given some of the history that i've described much more in the briefs and in the fourteen volumes of the excerpts of brecht of record there has been litigation again and again there was a preliminary injunction staying the proceedings in the bankruptcy court these folks violated it we had to go back to to teach at williams and he held them you know happy held that they had violated the injunction stop that litigation again they said we're just going to keep going we're going to pursue it again after the bankruptcy court had to say giant case with thirty depositions three hundred pages of complaint seven sixteen seventeen parties the judge issued something like twenty published decisions in this case this is the third appeal that this court has received in this and we have several other appeals has two appeals others have several more appeals in the intermediate courts it's entirely appropriate under under these facts and consistent with the basis of protecting the judgment of the court to prevent the probate estates from willfully proceeding to state courts and hoping that they can argue that they can hear what you're hearing what they will argue of course w sanders law firm was involved in continued litigation that for most most folks frankly some of them were found to have been involved in these in these deals and the law in share of the twenty four million informants company wound up settling with eighteen is in theory you know the monies that got their settlement and nobody's going to undo that settlement maybe i'm not clear on that you can help me and then a minute but i thought the bankruptcy judges argument was look if they get a payday with mr sharon and get millions more dollars that should have gone in the bankruptcy estate and that money somehow was able creditors were able to get is that part of your position well i think i mean certainly part of the interference with the bankruptcy proceeding it's clearly inconsistent for them to pursue these collateral proceedings which are directly attacking the jurisdiction of the bankruptcy court in the first place that's what they would have to argue i you know that think it's i think that the main a not as designer stood it was cheated women was faced with the settlements he had this litigation which had been in front of him for years with all these parties and they started to get to the settlements and the key settlement was with these these fundamental parties right and this structure of the settlement was was as follows once this all started and folks started to once we started getting in pleaded and we realized that even though we had nothing to do with this we could actually be facing substantial  th i receiver among among other things the fundamental parties were for most directly involved agreed to fund the defense of the th i receiver in these florida in these florida actions they  met defense mr sharon contributed two hundred thousand dollars to the pool and i think there were the other defendants kind of paid something like a million dollars one point one and in total but i thought the heart of it the value that the receiver also was getting was you're losing me a little bit  sherk don't let me that the settlement contemplated that the fundamental parties in it would stand down and stop paying for the defense of th i so that the purpose of the settlement in addition to them recovering this money was to allow mr wilkes to return to state court ultimately obtain more undefended judgments in the state courts because they thought they had they were in various stages that's what i don't understand i thought that the settlement was sort of contingent on the fact that this injunction would be issued that that was part and parcel of it is that not accurate but it is not accurate that the settlement itself required the injunction the original settlement contemplated injunction from the bankruptcy court and the bankruptcy court said i can only issue this injunction which would have been a bar order if i'm also issuing the permanent injunction and in fact you know you're not going to get any of the money under this settlement until the permit injunction is final anon appealable not  let fundamental evade its obligations under this settlement it allowed these state court proceedings to go forward potentially undefended without protecting the other parties just wouldn't be fair and equitable that was  these folks didn't like the notion of being barred from return of state court and not being able to appeal they wanted the money first they went back with fundamental and they reworked the structure so that the settlement does not have a borrower any more what it does have is it has opportunity for more windfall judgments in state court was that was that finalized the the modified settlement with timing was was a after judge william simms injunction so  happen first he issued the injunction in connection with the settlement of the bar order he said i approve this settlement is contingent upon the injunction here's the injunction these guys didn't like it because they couldn't get the money until the injunction was finally non appealable they went wimps and we have a new settlement we don't need a bar order from you we still get our money and now the probate estates will indemnify fundamental or f a s is the the the acronym for the particular company for its breach judge that was the one after all the settlement had been modified or not it was after it had been modified and you know i and i'm happy to try to explain as best i can i think that the bankruptcy courts final opinion on the and permanent injunction read it but ultimately what happened was the bankruptcy court said ok you have structured this in a way to try to protect f a s without a bar order you because basically the probate estate will indemnify f a s so i'm still going to issue the injunction because i still don't think this is basically the same thing you're just trying to carefully craft the settlement to allow f a s to withdraw its defense and then the other part of it was that the th i receiver had no money now you're losing me here we are we're here on the appeal from the district court order of september the eighth yes and that order and nothing has happened since then that would change the finality of this that's my question yes no that's correct your honor that order of the district court affirmed a series of orders in opinions that the bankruptcy court issued and so and in the bankruptcy court's opinion on the permanent injunction principles as opposed to an injunction and what is the answer to that so the answer that the law clearly gives a federal court the authority to issue a rescue to cut a injunction in an empty suit injunction like this  it's a recognized exception and then i think it becomes a question of discretion of the bankruptcy court in this case as to whether this is the appropriate set of facts under which that discretion should be exercised in this a case in which we should just let somebody pursue rescued cotton or the facts of this case one in which it is fair and appropriate to to ensure what about the point mr wilks mood that the combination of the of the dismissal with prejudice and the injunction has the effect of prohibiting him from raising the fraud claim which he did not know about it the term they filed amended the last operative part of the complaint well you know mr wilkes is sued mr sharon six times he's had pursu on fifteen claims in the bankruptcy court i heard civil rico mention now it number one i think they've had ample time to do so number two i think but judge williamson would not have approved he said he williamson said he has it just he has to make sure if it's fair or equitable to you know to third parties when it affects their rights this was inviting breaches that would magnify the potential liability in state court for mr sharon he did not want to approve that in his discretion on less mr sharon was protected by what happens with the with that then that's the judge's inclination if we came back and said no you can't enjoin these feature lawsuits what happens to the settlement this judge williams any ability to go back and say oh let's start all over again final or are those i mean the money has been paid you know i suppose we could mr sharon could go and say hey you know they should get the money back mr wilks is not going to complain mr sharon is a third party who's right israel is the only party whose rights will be affected under those circumstances you know and so it would be very difficult i think as a practical matter for mr sharon to give some deference to what was a very important factor to the bankruptcy judge and then i think i mean the  been living with this case for years and i think again if i mean we heard some of the tenor here these claims are are simply ridiculous i'm happy to talk with the you know about the merits of any of the the claims but the notion that mr mr sharon defrauded someone is  this complaint against the claims against mr strong so it's taken the with prejudice part first if i then i'm happy to discuss this sort of the individual claims that they've they've appealed there were fifteen claim to control and i think they appeal five or six of them you know here but the with prejudiced part was they had had fifteen claims they'd had two opportunities to amend their complaint meanwhile discovery had continued to pace when they when they filed the second amended complaint they'd already depose mr trial was three or four months away this is a bankruptcy court things move fast it was simply too late and they've had three hundred pages of complaints and a thousand you know or more allegations i mean this is a quintessential example of where a with any involvement in us talk about the factual allegations so in that second woman that complained so so that the key allegations as far as far as far as i can tell are that mr sharon had some relationship with grun and foreman and that they were acting as agents because there is no there's no allegations that mr sharon took any courses actions at all and of the in the complaint there's no specific facts of what he did but the allegations of agency ironically or  otherwise unfortunately for mr sharon are taken from him a new york law suit that mr sharon filed against granting informant it was a very large case i tried it i went to trial on it this is a very small part of it but one of his claims against russi informant was that they breached the fiduciary duty and what do they do they do serve a corporate opportunity they knew of of baltimore not the defunct company but one of these companies because one was a lawyer for him it was an investment banker who did a deal for him in two thousand and three and having that relationship they heard that th i of baltimore was running into difficulties and they wound up buying it assets in two thousand and six you know threatening it with you know what would they suggested would do would be the sort of the rights of the landlord but sued and said he didn't know about this they did it on their own there was no connection to him and therefore they breached if the of to share duty because they only had this corporate opportunity because of their relationship with him those are the allegations which are plopped in verbatim into this complaint either as he said i wanted and i would have liked to know about the deal and gotten into it but i didn't exactly and so their complaint eleven times uses the word faithful servants which you know both the bankruptcy court in the district court you know found to be probative because faithless servant is someone who's not working on behalf of whatever the complaint say that your client did well basically it's but doesn't say my client did anything specifically all it's saying is though these two men dressed in informant bought these assets there's no question about that undisputed they are the owner of the fundamental company they're the ones who wound up paying and eighteen and a half million dollars you know in all of this but mr sharon didn't receive you didn't wasn't part of this deal the other thing they allegations that say they did this surreptitiously which is again just drawn from our complaint which say without his knowledge for their own personal benefit as faith as faithless servants there is no allegations that trone received anything said she would have dismissed this under rule eight you know but but the bankruptcy court while recognizing that the complaint was comp complicated and convoluted took it seriously and tried to give it its you know tried to give it its meaning into two separate opinions the other argument they make concerns that and schroen company s w c received a one third option in this company fundamental that's that's the that's the allegation that on the face of it if s w c received an twice in the in the dish court recognizes it as well it's even if you would assume that the truth of everything it said it does not state a legal claim for eight to allege a fraudulent conveyance you need to show that assets were transferred from one company for less than reasonably equipment value to the person who who has it hasn't didn't receive anything and is not alleged to perceived anything because the option in this in this particular case because the option was an exercise right to the op they never could there was never any quo well yes and now i'm at number one the assets are always with fundamental the company which would stay sued any assets that fundamental affordably obtained is with fundamentalist basic forms of you know corporal even if mr sharon were in upper tier shareholder it doesn't follow if he never received any benefit from fundamental that he has received any fraudulent conveyance and he doesn't know he never received anything he didn't even personally hold the option it's a company which he doesn't even own his kids own but i mean it is impossible to suggest that mr sharon has any assets that properly belong to th hierarchy h m i there are just no allegations of it and what they do is they throw a lot of stuff on the wall and they hope that you know in this complicated factual pattern there might be something there i mean that that is why three judges now married a williamson and judge of us of it thank you up all recognize that there are serious relate problems with this with this plating because yemen has a because we've heard this morning things get shifted around very quickly kind of in you know it in in this world here and there are just no allegations on any of these claims and again we were the only defendant who was dismissed in its in his entirety on twelve p six there is a reason for  was not in a hurry to get rid of these claims that the plaintiffs have brought the ultimate tried you know tried these you know to try to number claims against six or seven defendants but if you just look there aren't is not a single one of the causes of action that even take them is true state whether the back to court originally had related to jurisdiction he had made that argument before the bankruptcy court the district court i don't really see that in his brief i understand it's subject matter jurisdiction and if this court which you know which is considered obviously it's obliged to do so i think on the facts here you know  and the law i'm happy to go into it there is clearly subject matter jurisdiction they wound up with the twenty four million dollars i would note that this court in that the counting versus schroen case which i think we sent to twenty eight j letter for recogniz bankruptcy court had jurisdiction again i come over my time but i'm happy to go there the other one i've heard a stern claim on this again the stern claim is not really raised in the brief i mean the short answer is as the supreme court noted in sharif parties can consent to bankruptcy courts authority it's not even a jurisdictional matter is the authority to enter a final judgment these guys are the plaintiffs they brought the case they allege jurisdiction in all of their complaints they actually discussed it in open court and there are record cites you know to that effect that they were can that they had consented that they believed this case was related to their not giving any of the money back i think this judge jordan mentioned the shoe on the other foot they wouldn't be arguing it would be confessing under stiction here you know on the stern issues of the stern issue is that both its exits waived and there's clearly consent in the record since we're talking about the plaintiffs on the subject matter jurisdiction you know cases like pac pac or and the like recognize that the bankruptcy is jurisdiction for matters that could conceivably affect the estate is rather broad clearly satisfied here where you know these guys were trying to cap capture the assets you know that would go to you know to the debtor in fact got twenty four million dollars paid almost eight million dollars and it's not twenty for me it was only sixteen me to originally perhaps one thousand me was paid we had almost six meeting cost in the case that we had to pay our fee was less than two million dollars at this point with collection about two point four total in the whole in a paragraph summarize for me what the facts are that you allege that puts mr shawn on the hook for any of your claims the ones that you are raising on appeal like what what do you allege  that was announced as a close sale within three days it was announced a new company called a briarwood had taken over and was now purchasing the company we have educated and we determined a bar would to be a company that was an asset net front and that the operations would go initially to run an informant but he had an option for which he claimed he paid one hundred million dollars was an equity interest and that's what mr engle sued and it was in a close it was sealed court but if you read the opinion of the court judge sure would he describes exactly what i'm describing to you that mr sharon funded this mr strong put the money and he own the interest that he used the fundamental properties then he combined them together and then judge sherwood cites to the stoop where mr sharon also sued brownstein and fundamental and this was his allegation and we alleged that he had these people create the company to strip the assets out fundamental rob he didn't get his share the benefit to him is about two billion dollars that we know of now it's hard to tell the actual words we're dealing with twelve b six are talking about the and we were in joint from taking any actions we asked judge we have sent to enjoin that action if you look at the record february twenty fourth thing we asked the judge that i just had that discovery because we wanted to know what they were selling how much mr straw was making he said my orders very narrow i made a scrivener's error in the plenary injunction when i said no action may proceed he said what i meant was no legal proceeding not a settlement in their case now we were the only credit there was another creditor had a million dollar claim here this is directed had lost if judge we've had let this case go forward he could have been or good judge we should should have given him his argument personal jurisdiction and that force every lawyer keeps the options open you've got him a lot of options open at least you thought you had and so do they it's the way the