good morning your honor counsel made please the court i'm here representing the crown paper liquidating trust which is appealing a district court ruling that vacated the preliminary injunction that had been entered by from continuing to prosecute a lawsuit that they have filed in the chance record of delaware bankruptcy court found that that lawsuit violated the barton doctrine which is a bankruptcy doctrine that's been around for one hundred eighteen years and it also interfered with the bankruptcy courts administration of the crown bankruptcy of state the delaware actions he's doing joining the bankruptcy trustee from proceeding with litigation that he was authorized to do by the confirm plan in the bankruptcy in the california district court in fact it's litigation that's for change one of the appellate actually had begun some eighteen months before the delaware case was filed and returned for a second to the and ministration of the bankruptcy set up to liquidate the entire state is in the process of filing cause of actions including preference claims the fraudulent conveyance claims that are at issue in the california litigation other claim  the liquidating trustee for all of those all of that conduct until the end of the bankruptcy case which has not yet occurred and that the plan contemplates that at the end of the liquidation that the court will distribute the funds or is the distribution set forth in the plan the distribution will be pursuant to a liquidating trust agreement that was developed with the liquidating trust over which the court approved financial advisors auditors and certain insiders and directors which is also one of the issues in the california litigation that particular case has been dismissed by the district court and is on appeal and at some point in the future i'll be back up here on that case but yes there's a reason right questioning it's often in bankruptcy leave get a slice of the case and occasionally other things have happened in the bankruptcy that we're here today as i said that delaware action that was filed that we got an injunction against judge knew some of the bankruptcy court ruled and enjoined that action in part because he felt that that action was just a little slice of what was already going on in california and now the district court vacated the injunction as i mentioned earlier and although the  answer to that question is that the barton doctrine implicates subject matter jurisdiction there are numerous cases within this circuit and throughout other circuit courts in the united states indeed barton itself states that selection clause in a prepaid tuition option and settlement agreement that had been entered into between crown and four chains was not enforceable or would not be enforceable and the short answer to that question is even assuming the validity of the for selection clause it does not and cannot trump the bankruptcy courts inherent power under eleven u s c section one hundred five or any or under the barton doctrine to control matters within its own jurisdiction or private contractual pre partition form selection clause cannot by itself confer subject matter jurisdiction on a court in violation of the barton doctrine or in violation of the bankruptcy courts exclusive jurisdiction over matters that are before it and third the district court ruled that the trustee had not demonstrated a real threat of a reprimand harm well the short answer to that is number one irreparable harm is permission to sue someone outside of the jurisdiction irreparable harm is not one of those factors judge knew some in the bankruptcy court performed to shiny analysis and after doing so relied or tell me why you think we should adopt a logic when we have all these other cases talking about the considerations you take the traditional considerations upon or injunction but i think it really goes to the fundamental principle that animate both section one of the five day and also underlie the barton doctrine which are that the bankruptcy court has been given why discretion and substantial power to control its own jurisdiction and to control the administration of the states that are before it and i think if you were to hamstring a bankruptcy court into conducting a rule sixty five preliminary injunction every time it perceives an infringement to its own jurisdiction it would make it much more difficult for the court to to carry out this statutorily in legislatively empowerment indeed there are numerous cases that authorize an injunction under section one  i guess the bottom line is what we had here was for james filing a lawsuit in delaware that violated the barton doctrine then they belatedly come to the bankruptcy court seeking permission to file that laws one o five which authorizes it to enter injunctions to control its own jurisdiction i think the answer is clear that the court is already authorized to do that therefore the consideration of irreparable harm is not part of that calculus now because he has five factors and those factors are you know you have to meet those factors in order to for the court to fairly deny permission and in our case i think we need every one of them even though christianity itself as we only have to meet one and if the court will indulge me i'll go through the factors quickly the first factor is does twenty eight u s c section nine fifty nine apply and as the court knows from reading the briefs that is a statutory exception that essentially incorporated the descent of barton and what that says in a sentence is if the trustee is conducting the business of the debtor just carrying on the business you don't need permission because it's not like they're really in front of the bankruptcy court they're still doing exactly what they what they had been doing previously say so in other words are the core claims are they related to claims well the trustee believes that these are court claims there are attempts to interfere with his liquidation indeed section one fifty seven confers core jurisdiction on a bankruptcy court expressly to determine proceedings affecting liquidation of the state of the assets of an estate at a minimum it's related to and judge newsome found that i mean he expressed was found it was related to a minimum the third question a factor is whether the trustee is acting within the scope of his authority and again we have a confirmed bankruptcy plan we have a liquidating trust agreement  both of which were signed off and approved by the court that expressly authorized this trustee to bring the exact claims against these exact defendants so i think there's no question that he personal capacity well the relevant inquiry is not what you're calling him but whether the press is being sued while he's minute administering the state and there's no question the liquidation of the state is still going on  the trustee but over the trust and indeed the trust can act without the presence of a trustee and any claim against the trust that the trustee had is an indispensable party moreover that was already tried in the laurian case in performing the tasks that are authorized under the bankruptcy law they get that same protection from the barton doctor and then finally could try to factor five asks whether or not the claims involve negligent or willful nope misconduct because if they do arguably the trustees not really acting as a trustees outside of his his authorized powers here however for changes admitted that they've not allege any misconduct by the trustee therefore every factor raised in favor that the bankruptcy court was fully empowered under section one hundred five a day to deny permission to for james after denying permission what was the bankruptcy court to do well i think the answer is clear it relied on it the first point i'd like to make your honour's is that the that the injunction that was entered by the bankruptcy court was improper from marilee for the reason that the law in the case and the record in this case showed that no permission was required before the delaware action could be filed based both on the nature of that action and on the nature of the bankruptcy proceeding that was then concluded and deposited in a trust and also based on the law which i have a confirm plan it's operating under my jurisdiction and regardless of whether permission was needed or not this case should have been filed because it affects the assets of the estate it's seeking to stop me what's what's fundamentally wrong with that struggle on his part a couple of points your honor primarily appellants do not argue in this case that that for change the mcguire woods should have filed their claim based on the release before judgments and that is to say in the bankruptcy court their primary argument all along including before this court has been that for change the mcguire was should have presented that defense and any adjacent claims for attorney fees and any other issues that they raised in the delaware action to the california courts in the context of the case that the trust and the trustee chose to file in the california courts one of those acts were sent to the concerned bankruptcy plan pardon me pursuant to the confirmed bankruptcy plan your original action was filed by crown the debtor in possession before the plan was confirmed following confirmation of the plan the the power to pursue that claim was transferred to the trust right and the trustee was substituted in as a plaintiff in that case and then the trust subsequently bought a case in california state court the assets of the trust are no longer in the possession of the bankruptcy court that's a critical fact that is made clear by the liquidity trust agreement and the plan under the plan and the liquidating trust agreement the assets are transferred to the trust the trust is by the trustee and distributing the assets the court has no role in that the court retain jurisdiction over the trust and disputes arising under the trust but the operation the function of deciding how the claims  of little importance to the issues currently before the court the sole basis for the bankruptcy court injunction was frightening was the part was the notion that under barton the plaintiffs in delaware should have come to him  and gotten permission before filing he has power under section one hundred five but that power cannot alter the provisions of the bankruptcy code the automatic stay by virtue of confirmation of the plan was lifted as a matter of the automatic state is no longer in place and likewise there was no discharge of the obligations under this contract which was which was a completed contract by the time the can plan was confirmed in fact it had been for several years items of which he would change just diction which generally relates to the provisions of the plan right if there's a dispute over the execution of the plan if somebody has a problem with whether the trustees properly following the plan generally look to a bankruptcy judges determination and construction of the powers under the plan first and we defer to that and he obviously thought that the plan conferred sufficient power on him to either one of five thing to rewrite what judge newsome did and i don't think it can be said that he made any finding whatsoever that that the that the prosecution of the delaware actually somehow in church here with any aspect of the plant holding of barton which was that permission had to be obtained before you could sue a state appointed receiver over an operating railroad for something that arose out of the operation of the road has been super seded and or overruled by at least three separate developments one is nine fifty nine which mr love discussed a statutory limitation on the actual holding of martin which was the statute says that if the arises out of the operation of the business by the trustee he can be sued without permission the second major development is that instead of all cases following barton most notably jurisdiction over that over the rest that involves the receivership or the trusteeship is not affected and therefore permission is not required for a suit that seeks only to establish liability against the estate and to reduce a claim to judgment the rule applies only to an action that directly interferes with the in the ram aspect of the court's jurisdiction that is to say the control over the property if the state court lawsuit seeks to establish a lien outside the process of the receive the receivership what's what's the property of years of the property cause of action the property is the jurisdiction then i'm pointing to a speech well of fact the size of the estate even if it directly affects the size of the assets that are in the receivership or the trusteeship it doesn't matter the mission is not required chapter eleven is really not going to be available perhaps to bankruptcy judges because if everybody can run out and start filing claims all over the united states and a local jurisdiction and have them take this out of the everyday bankruptcy administration but aren't you really saying that once you do that the bankruptcy court if we adopt your position watch out because we can completely emasculate the fundamental basis on which you created the trustee has absolute discretion under the trust to decide where to sue now he sued the delaware action is entirely in response to two lawsuits filed by the trustee both of which were filed not in both of which were filed in are being prosecuted in courts other than the bankruptcy court the the court the case against for changes being was brought in district court the other case was brought in state court they're not consolidated before delaware actually has found before the answer was found in california the answer does preserve the fats in california however there's a form selection clause that was with the reason why it was found in delaware it was what prevents what prevents the possibility of differing judgments on that issue well more as a person's jones is very clear that the that if the delaware case goes to judgment first that that judgment is full faith and credit in california is entitled to full faith and credit by the california court that was what morris versus johnson was all about it was a full faith and credit case the action was not without permission in another court a court that wasn't the appointing court defense was it controls the litigation and it is not controlled b the function of the bankruptcy court or of the trustee that if there are claims against the state and they're being pursued in in a proper court where there's proper jurisdiction that is does not implicate the rules requiring permission of the bankruptcy court in addition here i think the third development i was going to say in response to judge fisher's question i diverted you on my apol that the that the imposition of the bankruptcy code structure as we pointed out in our break does affect how this permission will operate because now you have the automatic done here is confirmed likewise the obligations that are not discharged in the bankruptcy remain obligations of the debtor here we have an express contractual obligation of the debtor that said these claims are released it also said that anyone forced to defend these claims needs to pay the reimburse for their reasonable attorney's fees it also said that any lawsuit brought to enforce or or arising out of this agreement shall  brought in in the state or federal court in delaware which is exactly what was done now here in addition to the problems with this lawsuit doesn't implicate the concerns of barton for the reasons i just described the bankruptcy court in joined the proceeding without considering the fact that the automatics they had been listed i just wanted to correct a couple of factual things that make impact your decision making the first case filed amongst these parties was filed by four chains in the bankruptcy court against the crown while it was still a debtor in possession that was in april of two thousand and one the next case that was filed which is the first case crown filed was in the bankruptcy court against for james that case for james bro extent that mr miles may have given the impression that somehow we were filing after delaware or something like that fact only inaccurate secondly the confirm plan of reorganization express so again to the extent that miss mildmay has stated that the plan of confirmation does not say that it does and it's in the the record my right to refer to that the court can and last i would just like to state in some that are not saying that they can't assert the positions they're asserting in delaware but we're saying that the bankruptcy court should determine where and whether they can sustain we believe they've already stated these issues and put in that issue in in california and that they therefore have a perfectly good legal remedy in california one that they which is really the continuation of the cases that they started in the bankruptcy court they had the reference was