violations now this appeal we've narrowed of we've narrowed our class period a little bit the focus of this appeal we've narrowed it down to august two thousand and eleven through august seventeenth two thousand and twelve and that's the date that p filed for bankruptcy we think or allegations are stronger during that period so he sighed to focus on less now it's clear that by this august eleventh time period and then even more so by two thousand p was quote very well within our financing capability and quote well you know that can't be true but it would how i mean obviously the district through statement by statement and we have different legal regimes for the past present statements opinion fact future yes so wanted to start for it would help me if you would start with the statement that you think is most actionable under the law would it be well for well i would say  i think that the most actionable statements are going to be those that address the liquidity the liquidity strong strong capital position and then and particularly the i think the claims are liquidity to pay out clipper and so if i think of them together the most difficult part of your position is that at the same time as they're saying we're sound we're we have liquidity they are giving considerable disclaimers meaningful cautionary language well i would say that cautionary was lying cautionary language was many thought i don't believe it was much more meaningful than despite our anticipated production growth we remain highly leveraged servicing our debt other long term will continue to play significant constraints on us makes us vulnerable to adverse economic conditions specifically financing derivative etc significantly burden the future net flows from our production so they're saying we're sound to the market and to investors but they are giving pretty strong cautionary language that we're really leverage we don't have much production flow and it's going to affect an impaired future income stream interest and they'd sell them in are our eyes for president just read that certain of our financing derivative transactions require us to make payments in future periods from the proceeds from the sale production well it's describes the problems could occur in the future but it doesn't say that the problems were you know apparent that in there and that the captain was out of cash and gives no indication of these this production revenue that a t p got to keep for itself with  logic of your position that's a fact or problem which with the logic of your position mean that they could have given no opinion other than that we're in an irreversible death spiral well know they didn't have to stand them say or liquidity strong and one april seventeenth two thousand and twelve this is two minutes before they hired the bankruptcy advisers one month before the c e o of america carol came on and so this guy declared is there a great capital position statement fact is they hadn't spoken to a lawyer here the statement is we've sound the underlying facts are but look at our leverage position and with this will impair future revenue stream and we're highly leverage it i guess i'm asking for a case that says that that type of opinion statement present tense opinion statement is actionable with those cordell in which this kind of maybe goes to the virginia bank share cases the  not cases of virginia bank share case which says that if you put out some sort of corrective like truth on the market information it's got to be to such extent that it neutralizes whatever you say was the site and really up these are these are facts questions these are really questions as jury questions that nowadays everybody has to try to scientists trying to decide sayings on a motion to dismiss but it's a question as did whatever these warnings which we think are you know we don't give him part as much credit as you are we don't think they're all that terribly meaningful or whether that is not to neutralize these statements so that you know investors go out there and they say ok well you know there are some disclosure share that a t p seven financial problems but hey these executives who are in the know they say the financial position strong so that much main they they know they eighty paid only spent twenty of the hundred fifty million dollars that it was going to take to complete the pipeline yes but that could be consistent with their approach to leveraging future in other words we are pre when they when did it happen it is the circumstance where they thought they thought that the going to be the producer but when they went back and started to open the well and bring down production they knew immediately then that this was going to be a nice thing like that are in the situation where over time they unearthed it and it just did come to think there's a situation where we don't have the benefit of discovery we don't have any of the documents we haven't so so if tape isn't the contradicting factor then it's the internal reports attached to the e mails that the confidential witnesses said the higher ups were getting correct the higher ups what the higher ups are getting weekly production reports that have it are well and company wide and so they're going to know what the production is well when you say they're going to know what's your best case that an a email going to an executive is presenting them they'd have to go into that p d f they'd have to go down well by well this isn't a single well it's twenty five percent of the revenue if they don't have to it's a big well but what's your case that says that that allows us to impute knowledge that they got a monthly email that contained a report that had all the wells they'd have to see it and say oh that's not what i said back in august it's no longer seven thousand barrels  it's now three thousand five hundred that's the reasoning that you're saying allows inference to see it or what's the case that stands for that you mean that internal reports can be attributed imputed the knowledge can be imputed to the executives that receive the emails sorry i can't i can't cite to specific i mean i could see if well forward the only product and if there were just four employees but this is a mid size company and they have a lot of wells this one is significant it's sole so the logic you urged in argument to judge vance was that that alone and you do need a case that stands for that well it's circumstantial evidence of ok of c n n or and really of the executives receive the report tate said that the world drew down to thirty five hundred barrels basically immediate right why why don't you gotta be kerry careful about attributing words  record he didn't say basically immediately ok that after production if he'd said capitals great if it said immediately then you've got real problems to draw from but if you add those words and they don't exist that's problematic did he ever say from you know the the admission that it was that it upon production because the average is a production started on august twenty actionable meet restatement is one month later so we were talking about a short time it is a short time but this is this are giving exact quote here since that's what you want bowman said in the august twenty fourth two thousand and eleven car for tory announced the seven thousand production in thirty one thousand overall production is quote well you know reese didn't have to start speaking about production had his conference if he didn't know or at the numbers you are i mean this is important well that everybody's interested in it's the first one is come on and they really need the afraid of getting in trouble in the industry retribution or whatever and that's what makes these cases difficult is the fact that you just don't get discovery and get to the standard you know you don't have to the standard is we do not have to prove our to reopen the well and bring it on production it wasn't there because they used that language about efficiency and so forth and that some of the jargon so tell me as best you  question so the time line is this the company makes its announcement in august based on a well test and it and it announces overall company wide production including well number four which is about seven thousand barrels equivalent per day three weeks later history says the c f o is at the rodman renshaw global investment conference and he's actually talking to the conference attendees about the august announcement he is not talking about any current production he's not an operations person he was talking about the august announcement and it's very important to understand that this system of our securities laws does not require continuous disclosure mystery's kiss is talking at a conference if you stay with the fact of the fact so  the second american quite what we see is alleged is mr take in november says that the august announcement was based on a well test but as production went online they discovered that the pressure there and it was about half of the production he doesn't say when you know and as it came online now if it's one thing if if if if you came online and and you still expected it when it came on my understanding is what i took from that right and that's why would you help me with is that when they came on production they knew then that this was not seven thousand barrels that this was something it's not a seven thousand producer they don't have to wait around for months to know that what i took from that is the moment they started running it on its own production in those few hours they knew then that they didn't have that well in the problem with that question your hon happened was during the completion we the well test was indicating that the seven thousand as we brought the well off production what we saw was a completion of fish and see where there was more well or draw down near the well as we want as we reports as to each well and therefore before september twelfth reese would have seen that the production wasn't seven thousand dollars or that well that that the allegation is that essentially what you're saying to jean's in is that and we know from from  abrams and southall in another circuit case is that the mere receipt of some internal reports by e mail or otherwise that might have conflicting or contradictory information is not enough to sell c enter plains would have to plead that mr aris knew how and when that the production because as your question to counsel indicated there's one hundred wells that a t v has and if there's an e mail with some production but there is some line and ate the nathan some case if it's a small enough company it's relatively small and if they'd flag the e mail and say take a look at well for you then that would be sufficient so there's i guess what's the get best case the verb that seemed to come out of goldstein was presented was he presented with that inconsistent internal report there's no allegation to that of the six or so confidential witnesses your honor say essentially at bottom that he had access it was it was in box and what's the best case that draws that fine distinction between access isn't appropriate to impute but presented asset in elin's was not enough and i would say that's exactly the same case here when you have one hundred wells yes you have one that's come on the first one since the moratorium was lifted it's close but i appreciate the answer what about the statement that it was that clipper was pre funded that seems very problematic and it was in that statement i believe was made in one of the bankruptcy first day hearings and so there's no allegation really beyond that there's nothing in the record what he meant by that what you can do is look at the financial statements and see that in the first quarter of two thousand and twelve in the first quarter q that actually comes out in meg so we're talking really at the end of the class period where they talked about  selling an n p i and or which put two hundred million dollars of cash into the company so that this goes to the larger point which is the data in the financials names at the twenty eleven ten k and  the timing that first quarter sale that put that much in cash infusion and cash flow and liquidity into the company was certainly something the company was looking at to pre fund clip and by the way  then well it's it's not a problem if you look at the timeline your honor because plaintiffs are complaining about statements and they try to hone it down in terms of tom but if you look at the end of two thousand and eleven or in two thousand and twelve even leading up to meg right well they make a transaction in q one that puts two hundred they have two hundred twenty five million dollars it's in the ten that comes out in may they have two hundred twenty five million dollars of liquid but they had the warnings that a production didn't continue or accelerate they were going to be in a cash squeeze and that's exactly what happened they predicted this with the detailed and repeated warnings that judge vance talked about through several i mean that we have to par that report i love that that had cautionary language and trying to dispell in the days before he disagreed with the characterization and again the case was clear on that point which we've cited that as long as the data is there in the in the financial status which it was and the company's making guardedly optimistic statements they don't have to go out and say you know we agree we're going to go into bankruptcy in six months or we've got about the fact that this isn't the future looking we are well within the funny unsinkable capability that's today that's not future and they're in a difficult spot even then with financing capability because they know that the money's already being having to be applied to the other obligations well you know when what time frame are we looking at for your statement or required to and did treat the n p r as in the overall odds in the end but listed on the balance sheet so they had all that every transaction every balance how much they had paid during that period and most importantly what they expected to pay over the next twelve months that was all in there so the council's point in the briefs and even alluded to this morning twenty eleven ten k you could easily look at the financial statements and show that fifty percent of the production revenue was used to pay september the twelfth race both at the rodman and global investor conference and he said he predicted total production at thirty one thousand barrels then he goes on and he said you can see the numbers here and they of of a total of thirty one thousand quite plainly material on its face and then then what we found is that that well four was actually producing far less per day and and we why lie in september and to tell the truth in november there's no there's no motive to do that and that's what judge vance said there's just no see enter here and there's no there's not a step to go sand around town but possibly for the moment right and when did it when it was  asking and answering questions about that he wasn't giving updates and current production numbers most logical oversea didn't know that this is a moving target day by day as as a well tester done in production is you know the process you know meeting when there's nothing specific in the complaint tying any of this information to mr aris who is the speaker and that's their obligation of the p s l rights of the closest they come is he had access to information which we know from south london abrams is not sufficient wanted they bring that well on line they would know even our lines apparently one of the vague terms mr aris is quoted in the complaint is talking about well test and pressure tests and as we develop production it sounds like it's a process i don't have any more statement and i don't understand why we seem that there's no sea enter on the idea that you know the ability to get financing and to have cash was the name of the game for this company going to make it a viable going forward why isn't that in and why isn't that in there and why isn't that enough oh well there are several things we know again from the owens case that even in that case would guarantee bank it was critical for them to have financing that wasn't enough for the high in france and the strong inference of c enter without a severe recklessness and then the other part is more factual the data supported the optimistic statements when the company made the statements in two thousand and twelve that liquidity is strong they had a quarter billion dollars in defense of mornings neutralizes their statement of present facts that was untrue will you out i just i just i thought went through that it actually was true because they were sitting on a quarter billion dollars of cash in the and twelve when they made these statements and there were detailed warnings that we got to keep production up liquidity may be an issue cassel maybe and i mean they had detail warnings that judge vance went through so my whole point is the statements are factually accurate there's not a difference of c enter it any c enter in france it could go down if you were in the fourth year anywhere the poor we have a strong capitalization and the fact that most of the companies twenty twelve products are completely accelerate they're going to end up where they ended up that's right and your honor if i if i may briefly i would like to address because i do think for future litigation securities litigation cases in particular that  turnaround he expected to turn around but when he got there he didn't have any idea how bad it was and i'm paraphrasing here and the advisory directors of the company which goldman is one is to big to begin restructuring as well then certainly it's plausible that a reasonable investor's not going to be at least going to his statements as alleged don't say that he told the defendants why he was leaving correct that is that is true but i mean it's pretty obvious that that productions been given away for present cash you have a thought on the final point that if we do look at the four looking statements about the quotidian clipper and we require actual knowledge because southwind controls what in your dept mormons knock and so we think mormon controls but what some courts have done is they say ok we we think it's just jerry dave but if you're saying something that you know is false well then your disclosures to be