your argument next in case fifteen one forty five a ski international electronics versus ritz mr brodsky mr chief justice in may please the court congress amended the discharge bar in one thousand nine hundred eighty eight to add actual fraud as an additional ground for barring discharge that amendment must be given meaning our interpretation is the only one that does so consistent with the common law understanding that congress codified actual fraud is a term of art that fraud with the preexisting terms false pretenses and false representations respondents interpretation is even worse it merely restates a preexisting see enter requirements and in any event congress could not plausibly have added or actual fraud to the discharge bar in order to modify the previous terms to mean intentional false pretenses or an intentional false representation you to acknowledge wouldn't you that if the language we used in field against mans  is applicable or if we meant it that you lose some degree of reliance is required to satisfy the element of causation inherent in the phrase obtained by i don't think that language is applicable here because that language  understand and i understand you argue there but if it is if we think that language does apply across the board you certainly lose yes if you believe that obtained by invariably requires reliance but it does not the the language and field was in the context of the misrepresentation case would obtain by requires its causation in the context of a fraudulent transfer where the recipient knowingly participates in a deliberate fraudulent transfer centuries of common law established that he commits actual fraud show that our state law gail piercing theory is correct that however is not the basis on which the fifth circuit rejected our claim the fifth circuit rejected our claim on the sole grounds that it thought actual fraud invariably requires transfer by transferring assets from chrysalis to his other entities in order to hinder creditors second of all we would have to show that he perpetrated that fraud for his own personal benefit which is what would then allow us to pierce the corporate veil and hold him personally liable for the fraud that he committed are you piercing the corporate veil as to the first company or as to the transferee companies we are piercing the it could be either but i think we are piercing the bail out of the transfer companies because we're pursuing this on a recipient theory right because because i understood your whole grief to be pursuing this on a reciprocal and you brief you know makes some sense as that but then when you look back to your complaint it suggests that the veil piercing actually was attempted as to the transfer or company which doesn't do you any good under your theory so the complaint fully spells out all of that entails related to the transfers and generally this is a joint appendix ninety seven asks for avoidance of all fraudulent transfers to the extent necessary to satisfy point of client throughout the litigation the claims were then pursued on a transferee theory the fifth circuit understood the claim that way and rejected it soley because again the lack of a misrepresentation the problem with the fifth circuit interpretation is that you know a five congress is a man or actual fraud it makes it meaningless simply by restating the previous terms false pretense or false representations when congress added or actual fraud to the discharge bar it was legislating against the backdrop of hundreds of years of common law usage of that term for centuries courts have used actual fraud to refer to fraudulent transfers d he but the point of the classical examples that we let's take one of them is a person knowing that he's about has creditors the esther know that he has creditors maybe he knows of the insolvency and  e transfer his money to his wife rather than to the creditors and she knows it too and this is a way of getting the money away that's a fraud classical right yes ok so now when i look at the statute i see these words to the extent that it's a debt it's a debt obtained by actual fraud now wait who's debt are we talking about we're talking about creditors see who was a creditor of the transfer or and it's the transfer either the wife who obtained she's the one who's got the money and so it sounds like the bankruptcy statues is saying she's the one in her bankruptcy now that can't be right as a how is this supposed to work i mean i think the obvious question to ask you is the question if it doesn't mean representation give me one example of what it does mean but i just gave you one and as you can see i'm i'm quite confused as to how that works and i haven't seen another one i think the way your hypothetical works just as prior is that the recipient in that instance the wife commits actual fraud herself and when she commits actual fraud herself she incurs her own debt so for she the problem with her is she is not trying to deceive a creditor of hers she is not she is not trying to deceive her creditor it's the transfer or was creditors are being fraudulent see true but if she is conspiring in effect with the transfer or she is facilitating his for all right so you're saying in a bankruptcy of the white this  money obtained by fraud which it is and the fact that she's helped him defraud his creditors is sufficient to bring us under the nine hundred twenty four massachusetts statute is copied from the u c c which is ultimately traced back to the statute of elizabeth that's how it works yes thank you ship she commits for she commits fraud in the course of committing fraud she obtains money she then has a debt for that money and it's all under five twenty three a a two that understanding is consistent with the common law understanding of actual fraud which is what congress codified in order to add an additional ground for discharge the legislative history hundred seventy eight code makes clear the congress was adding an additional ground for discharge so it was expanding urbanization granfer barring discharge excuse me so it was expanding the scope of the discharge bar it does make the language false pretenses or false representation is completely superfluous yes it does but the key point here is that it also expands upon that language whereas the fifth circuit's rep or the fifth circuit interpretation also makes the false pretenses and false representation superfluid without giving congress's amendment any additional work to do so too for respondents interpretation which first of all merely restates a preexisting see enter requirement so it gives the amendment no additional broadening scope and second of all is grammatically indefensible because or actual fraud is not a narrowing phrase that modifies what comes before us congress could perhaps have simply replaced false pretenses and false representations with or actual fraud but that might have led to an unwarranted negative inference by the deletion of terms false pretenses and false representations that had been in the statute for a very long time so you would like conduct and so there is no basis to think that when congress added or actual fraud to the statute it was simply restating an existing rule this court has in the past refused to infer to interpret congressional amendments simply to restate existing rules when there is a plausible indeed settled in light of the common law understanding like the one that we offered that gives the amendment an additional function the other problem with response interpretation of course is grammatical or is  disjunctive term that expands on what comes before it's not a term that limits what comes before and moreover actual fraud is a noun phrase that in that represents both conduct fraud and the way in which it is carried out that term in one thousand nine hundred three at least one legislator expressed concern that this was leaving a category of frauds outside the discharge bar and that that was a mistake because the purpose of the discharge bar has long been to afford relief  yes we have we have one legislator expressing the concern of a big this isn't a certain hostile your position but it's kind of a big change should take fraud out of step bankruptcy statute nobody seems to know why  nobody seems to know why we don't dispute of course that typically most commonly frauds will involve misrepresentations and so those frauds were still covered and of course as a result of congress's drafting there are other discharge bars that apply to narrower types of narrow and different types of fraud and so congress didn't completely forget about fraud in one thousand three it did however take it out of this particular discharge bar over the concern expressed by at least one legislator lit one legislator seventy eight as part of a comprehensive overhaul of the bankruptcy code congress close that gap and so we submit that this court should interpret the discharge bar in a way that gives full effect to congress  amendments our interpretation is consistent with the plain common law meaning of the words actual fraud it does not require dramatical distortions and it accords with the purpose of the discharge bar which is again to provide relief only for honest debtors and not to allow the bankruptcy code to be used as an engine for fraud in the way that occurred in this case ms murphy points out that there are lots of other provisions in five twenty three and which have a lot of overlap on this not the transferee and so our reading of five twenty three complements those provisions rather than conflicts with them seven twenty seven provides that there is no discharge at all if a debtor transfers as sets to to hinder creditors within a year of the bankruptcy filing five forty eight allows the trustee to pursue claims for transfers within two years but nothing about our reading of five twenty three is inconsistent with that it simply provides that in addition to those things creditors may pursue fraud claims that where there's a fraudulent transfer against the transfer the transferee and if the transferee ends up in this in a double bankruptcy situation so to speak then at that point five twenty three complements the other provisions with respect to the other discharge bars that address fraud there is inevitably some overlap among these discharge bars partly that's a result of congress's drafting congress chose to use the word fraud in multiple places and so you're going to have overlap as a result of that partly it is a result of a belt and suspenders approach to effectuate the policy of ensuring again that fraudulent debtors don't get away with their fraud are reading however does not lead to any more overlap than respondents reading does either way there's going to be overlap between the false pretenses and false representations type of fraud which respondent thinks a two way is limited to and fiduciary fraud for example under a for if that  our interpretation also gives the congress's amendment additional work to do briefly with respect to a six it's not at all clear that this this conduct would fit within a six which has a higher standard will fall in the wishes injury not just reckless disregard which right about our interpretation of section five twenty three a today the first is that this court has said many times that when congress uses a term that has an established common law meaning court should give it that meaning when it's used in a statute for centuries the term actual fraud is when you use a comma to refer to schemes that are  that word property is transferred with the with the intent to hinder delay or defraud a creditor there's no reason to give that text any different meaning in section five twenty three two a second is that our view is the only thing that the only interpretation that give any meaning to the one nine hundred seventy eight amendment and the third is that our view is consistent with congress's overarching purpose and the bankruptcy code that that just honest creditors give me just as debtors not be permitted to use the code to get rid of their debt the word obtained which just as i was referring to as well as the respondent does respondents adjusted our interpretation doesn't give any meaning to the word obtained if obtained doesn't mean that that a false representation was directed at a creditor but under our view the word obtained actually does two things the first thing it does is the work that this court described as doing in cohen versus de la cruz which is it requires a cause or connection between the fraudulent act and the debtor's acquisition or possession of the property or money but the second thing it does in the transfer context specifically is it sort of screens out the innocent recipient of a fraudulent transfer and so if congress had instead phrase obtained as a result of actual from an arguably arguably that could have brought in an innocent recipient of a five gallon transfer because as a result i would suggest that you focus on the transaction that causes the transfer of property but obtained by really focuses on the action of the recipient and so it really just gets at the wouldn't raise this except the only example other than the misrepresentation that you've come up with is the fraudulent conveyance and what i said after fraudulent conveyance law permits creditors to recover money the debtor has disposed of in a manner similar and then i describe three paragraphs or so what they're thinking of is a transfer or has creditors and what he did well before going into bankruptcy but he knew it was likely to be and solve the transfer or transfer his money to his friends rather than the creditors to a place that it's hard to get at you know to somebody who's going to art now looking at this stack it seems to me that the person whose debt is going to survive bankruptcy is not the transfer is normally fraudulent conveyance l permitted his bankruptcy judge to claw back the money but that's not what you're talking about you're talking about the transfer and you're saying here the transfer fees participation in the transfer roars effort his credit is something that also survives and at that point i ask of all the bad things people can do that might survive why in heaven's name do they pick on this one in respect of the transfer rate i mean after all maybe the transferee robbed a bank i mean there are all kinds of bad things that might survive and dogg so it was so something's wrong with my analysis as you understand it and to debt or one debt or one transfers his property to a friend if the friend with the intent to defraud his creditor if the friend shares that intent then the state or some federal law gives the creditor a cause of action to when if you're outside the time limits that are covered by five forty eight or seven twenty seven the transfers wouldn't it's because the transfer of the recipient is the person who ends up with the money or the property rights or the second overarching purpose of the bankruptcy code is to let creditors get their money back when they can and so it makes sense that congress would have wanted to give maybe a stronger remedy against the person who actually has the stuff at the end of the day and so i think that's why our reading is consistent with the purpose of the code in general is the  as an actual fraud for the direct personal benefit of the holder and so there is a game going to have to prove that mr ricks obtained money or property by actual fried in order to prevail in its so how does that work in the bankruptcy case we say just yet can't be discharged but maybe it'll turn out that it could have been depending on how the state law claim goes this would happen if there's an adversarial proceeding in the bankruptcy put in the larger bankruptcy proceeding itself and so instead of having paral and state court that action in the state when the bankruptcy protection was filed and basically all the action is transferred to the bankruptcy court through the bankruptcy court to decide the question under state law yes yes and the bankruptcy court held that it wasn't satisfied in this case because  bankruptcy court viewed those texas laws requiring misrepresentation and also as five twenty three a two as recurring misrepresentation and so i think there there are a lot of things that we need to be sorted out about this the law cause of action i remind i want to say one last thing on correct that anything that would be covered by a four would would also be covered by five twenty three a two way but that's not correct because five twenty three a four does not is not limited to situations in which money or property was obtained by fraud and so it could cover fraud where if  editors from discharging their debts in bankruptcy and so congress used broad words like fraud and instead of sitting down and thinking in trying to think up every different project scheme that people might come up with congress just wanted to be comprehensive and say fraud and use the same word fraud in multiple places that's counsel mr chief justice in may it please the court section five twenty three eight two applies to a specific type of debt a debt for something with which the daughter has fraudulently induced the creditor to part that conclusion follows from the text of the obtains something by inducing detrimental reliance and third because the statute makes clear on its face that it's the creditor who is detrimental reliance has to be induced because section five twenty three a two applies only when th debtor induces the creditor to part with something it does not apply to a debt for receiving money through a fraudulent conveyance that may be a form of fraud it may well be a form of actual fraud but it's not a form of fraud that gives it would be by saying fraudulent conveyance or fraudulent transfer or a fraud that involves intent to delay defraud or him or to hinder a creditor those are the terms that congress uses when it's legislating about fraudulent conveyance which congress has done repeatedly and pervasively for one hundred fifty years if you look at the fraudulent conveyance statutes not a single one of them uses this term actual fraud so this is not a term that associated particularly with the well you have nineteen twenty four massachusetts statute copied from the uniform commercial code which in referring to fraudulent conveyance in section seven uses these words each conveyance made with actual intent as distinguished from intent presumed in law to endure delay or defund present or future creditors is fraudulent sure i grant they did use the word actual intent rather than actual intent to hinder or delay defraud and then they said it is fraudulent that sounds an awful lot like the words actual fraud and to be clear we don't dispute that fraudulent conveyance is a form of actual fraud it's just not a form of actual fraud that falls within the scope of this particular exception because this exception says more than just the words actual fraud it says that you have to have a debt for money property services or credit to the extent obtained by false pretenses false representation l a actual friend who the forty thousand dollars which the friend knew was owed to the creditor of the transfer or has obtained money money through it is a debt she owes the debt she now owes the debt to the credit tours of the transfer or that she has the forty thousand knowing that it's wrongly convicted so she now owes the debt to the creditors and her debt was obtained by actual fraud i don't think it was because because she didn't use the fraud to obtain the money and this gets back to what you were talking about when you were kind of giving the hypothetical the fraud in a fraudulent conveyance is the first debtor concealing or misrepresenting the nature of the conveyance to the credit it doesn't say limit or we're not limited to fraudulent conveyance as here you want to read the stage and save something like the money obtained from the innocent party in the first instance by and that this is a big but fraud can continue through it through a whole inducement the fraudulent inducement it does not have to be direct it's not our position that you know unless the misstatement is made expressly to the creditor the debt doesn't count you can have you know a misstatement that you cause to be made that the statute actually uses that language causing a misrepresentation to be made that the victim at the end of the creditor ultimately relies upon so we're not saying there has to be a direct relationship here i'm totally confused because i think i was following you up until th ok all right i was following you up to when you said that it has to be at that you up tainted by fraud from the person whether i agree with you or not that's a different issue because i'm not sure that you fully answered judge this prior but i don't understand where the inducement comes into this one why did you can commit fraud against a person directly in a variety of different ways that don't require a misrepresentation we know that actual fraud doesn't as a matter of fact require a misrepresentation well as far as i can tell and petitioner hasn't suggested otherwise there's really only two forms of fraud here there's misrepresentation or fraudulent conveyance they really haven't pointed to anything else so you know the question i think really is is fraudulent conveyance supposed to be in this statute and in this particular statute i think fraudulent conveyance sticks out like a sore thumb where you just said you're contesting that fraudulent conveyance is a form of actual fraud is that right when it's done with intent the necessary intent to make it actual fraud but yes that's right so now this language i mean the language to seems a lot more simple than you're making it because you add inducement to the language you add from the creditor to the language but the language doesn't say any of those things it just says is there a debt and we know that there is a debt here the debt is from money the language says well what has to be true of that money it has to be obtained by actual fraud and here the money the allegation is was obtained by fraudulent concealment so whether or not the creditor has been induced and whether or not the money has come from the creditor seems to be irrelevant under this very simple statutory phrase i think that there's two two problems with that in our view first i don't agree that the fraud is how you obtain the money you obtained money and by doing so help someone else commit a fraud on their creditor but you did not use fraud to obtain the money in a fraudulent conveyance you were been a participant in a fraud on someone else i think even every thought out every conspiracy theory there exist i mean if you're helping someone by accepting the money you're committing a crime right but this statute says more it says that you have transfer obtains the money through the transfer or that decides to give them the money through of their original and can via the fraud occurs on the back end because of the transfer there is then fraud when the debtor effectively you know either conceals the transaction that's the fraud or conceals the true nature of the transaction what about mr ponzi cause who in fact had nothing to do with any of the misrepresentations but knowing the entire truth says ponzi my friend when you get those bags of cash hide them under my bed all right now he himself has not in fact lied to anybody or made any misrepresentations he's part of the big scheme and i take it we would say that money under the bed has been obtained by actual fraud house and not by him oh you know i mean i'm not quite sure in your hypothetical where you know there was i mean you know the residence in dozens of cases were people do have misrepresentations there's no doubt there's a misrepresentation in this thing but after all not every participant in the great scheme himself lauds sure but those people i would think would you would expect to have fall example something that doesn't fall within a to aiding and abetting somebody else's fraud so that they say that this is one of the ways in which this statute you know they have to give some theories as to what nero's this statute so that it doesn't completely swallow the additional fraud provisions that congress has added here and that's part of their theory is that you know you do have to have used the fraud to obtain it yourself but i think that part of it is that you can't just look at the term actual fraud in isolation just as the other side agrees that you can't look at the term false representation in isolation because they assume that false representation means fraudulent misrepresentation that's not what the statute says and that's not what false representation means a common law a common law false representation includes negligent misrepresentation and innocent receptions and if you look at the restatement in one thousand nine hundred six it expressly says that so does prosser so they're agreeing that you can't just take these terms and pluck them out of the statu and say oh what did it mean a common law and that's the end of the analysis the question is what are these to her i mean in this statute and when you look at this statute congress put the term actual fraud next to a bunch of terms that by their nature speak of inducement but it would be a very strange thing ms murphy if i agreed with you if i were congress and i said i want to make it really clear that this should be only intentional false pretenses and false representation gazillion ways to do that but starting with the simple one saying intentional false pretenses and an intentional false representation the one thing i wouldn't do i think is to say actual fraud because actual fraud is not synonymous with with intent actual fraud refers to the conduct that's done with a certain kind of intent and that conduct as you just said includes more than was representation  false pretenses so i wouldn't use a term that had to do with conduct just to state a mens rea a requirement so here's why and two responses as to why i don't think it's actually that unusual in this context mean first of all this isn't a theory that we concocted after the fact the sponsors of the bill when they introduced this legislation on the house and senate floor both of the key sponsors said what subsection a was intend to do and i quote it was intended to codify current case law e g neil de klerk interpret ng fraud as actual or intentional fraud rather than implied brought that they have that case right that case is actually a case about a fraudulent conveyance it's not a case about a false representation so they said look at this case it's a case about a fraudulent conveyance that suggests that there's more fraud in the world than just misrepresentations and we want to make clear that that's got that that's supposed to be a part of this that's ignoring the second half of what the sponsor said because they didn't say we intend this to codified and you'll be clerk period and you'll be clear didn't hold that fraudulent conveyance was something that comes within the scope of the statute it held that the fraudulent conveyance there did not come within the analogous to the mcnally case where this court also had the disjunctive or before it in interpreting the mail fraud statute and in that case the court it was a very similar situation where you had a statute that was on the books you had decisions from this court interpret in that statute and then congress added to the statute language that was mirroring the language of this court's cases and in that circumstance the court said you know what we have to look at that language in light of the fact that they took it from our cases and here if you look at the cases that they took this language from they are cases that use actual fraud to distinguish intentional fraud from constructive flood they are not cases that use actual fraud to say oh here's what kind of fraud counts under the statute fraudulent conveyance in fact the only cases that happened to involve fraudulent conveyance and the term actual fraud are cases where the court held that the debt did not fall within the many places in the us code where an item that comes at the end of or later in a list is used to inform the meaning of the word before it and if you look at neil v clarke itself that's exactly the reasoning the court employed there the reason the court concluded that the only kind of fraud that counted was intentional fraud was because the next item in the list was embezzlement and the court said because embezzling requires intent we're going to infer from that term that fraud requires intent as well so the basic principle that adding language to a statute can inform and limit the words that come before it is nothing that extraordinary it seems you have me an example in common parlance not in the us code where someone would speak along the lines you're saying the statute is written sure there is an example in a statutory construction book of the phrase cats dogs or domestic ated animals when you're thinking about that phrase domesticated animals is the one that gives tells you cats doesn't include lions and tigers and it's given in the context of that is not an area and says you know i will treat these three types of animals it's limiting the one that comes before it i think another phrase that it came across was highways bridges and public sidewalks and public sidewalks is what tells you that bridges doesn't include the one in my backyard so the third term can be a term that informs the meaning now here and i don't think you have to conclude that that's the only thing actual fraud achieves in this statute in order to accept our reading of the statute actual fraud in this statute but the concept of misrepresentation doesn't have to be complete with the concept of false representation what you can essentially view actual fraud as doing is putting a thumb on the scale of the broadest conception of misrepresentation possible even if that's broader than the common law tort of false misrepresentation so one thing that some courts have said when looking at this statute is that it's not clear that false representation reached future looking statements about whether i intend to perform in the future and some courts have said well you know we don't need to resolve that debate anymore because now that the statute says actual fraud that's good enough to tell us that the kinds of misrepresentations that come within the scope of this statute include any kind of misrepresentation that induces the creditor to part with something you know technically have qualified as false representation at common law so i think that there's plenty of ways for this term to do work without having it kind of put this sore thumb into the statute of fraudulent conveyance which is just nothing like the rest of the terms  this statute it's nothing like false statements false representations false financial statements all of those types of conduct that this statute has always covered involve inducing the creditor to part with something and that's what differentiates a two from the eighteen other exceptions in the statute this is not the intentional fraud provision there's plenty of other provisions in the statute that cover forms of intentional fraud some of them by directly using the word fraud others like a six by covering intentional injuries to property interests so it's not as if you need to put this remedy into a two in order to ensure that if you really do have intentional fraud in the receipt of a fraudulent conveyance there will be a means of having a debt that's non dischargeable so i don't know why you'd kind of strained to get it in here where it seems like such a poor fit and the other thing that i think is worth keeping note of is that congress has legislated quite specifically on fraudulent conveyance for one hundred fifty years and there are two things that you can know repeatedly when congress does so first of all it uses particular language of  of fraudulent conveyance that talks about a fraudulent conveyance or a fraudulent transfer or transfer made with intent to injure or hinder delay or defraud a creditor but the other thing is that the remedies congress has created for fraudulent c are not creditor specific they are instead consistent with the basic principle of equitable distribution under seven twenty seven eight two you have a complete bar to discharge which benefits everybody because no debtor gets a discharge under five forty eight a one and the other provisions that allow the trustee to void transactions the money comes back to the estate and then gets distributed equitably to all creditors here instead you have a creditor w basically jumping the line and saying we should get all of this money even though within the context of the chrysalis bankruptcy the trustee did not see fit to try to avoid these transactions and there was no attempt by the trustee to avoid transactions in this bankruptcy either so you end up with a remedy that is really nothing like the ones that congress has offered when it is actually legislating clearly on the topic of fraudulent i don't know that that moves me that much the set mean that get to keep one quick creditor has an editor has the ability so he said or try and get the trustee to void the transaction and the trustee can void the next transaction on down the line as well the statutory and powers include you know if if the recipient then fraudulently conveys away the property you keep undoing the transfers until you ultimately get at the property so there's plenty of ability for the trustee to get at the property without resorting to this now we're not saying that there can never be a creditor specific remedy for the receipt of a fraudulent conveyance if say you have a trustee who has that debt against the recipient i think the right thing for them to do is go use the subsection a six exception which allows an exception for a willful malicious injury to the property interests of another and courts have every court that's looked at that question has said that a six is an appropriate place for this kind of debt to be subject excepted from discharge so you've got certainty that injury will result there's a bit of dispute below and in the court of appeals about whether an object of substantial certainty that harm will result is sufficient or you need a subjective substantial certainty i'm not sure at the end of the day that ever is an outcome determinative distinction but for this case it makes no difference at all because the fifth circuit is the circuit that applies the broader object of test and applying that object of test here the fifth circuit concluded as did the two courts below that these transfers were not made with intent to injure the petitioner and were not even made with substantial certainty that injury to that you were pretty soft and i'm still bankruptcy i quite right that her husband's trustee could have clawed it back before but he didn't and somehow it went through her bankruptcy and if it survives somebody can get it and maybe the fair thing to do is to do what you do with environmental cases where you have a bunch of people who are victims and they divided up his group quite right that all that all of the creditors who might have shared in the jewels are the victims the creditors of the transfer  but so what what i mean how does that how does that help you with your basic argument it just is a different argument that says that this particular creditor shouldn't get all of it well i think it's actually kind of true in every fraudulent conveyance case because typically the real also true in every misrepresentation case if it survives bankrupt not it or thought no it's absolutely not true in a misrepresentation case the misrepresentation was made to the creditor so the creditor the debt the time of the creditors trying to get the money for is directly related to inducing that creditor to part with the money so it goes on perhaps a thousand he lied to a thousand people well then they're a child of victims and here we have let's say a thousand victims all those creditors didn't get the money they should have got i mean it's the same problem is i don't think it is because in that context you have a creditor specific injury and a creditor specific remedy and i think you need that too in the fraudulent conveyance context so if for instance you know the j belonged to one of their creditors then they're going to go use a six and get the jewels back they're not going to a problem a six is available for that intentional injury on their property interest so you don't need it over here where you have a very different statute that  focused on this concept of inducement and i would note you know every single one of this court's cases that involved a two has always had a debtor who is using fraud to induce the creditor to part with something that's the way this statute had been understood up until the seven circuits decision came along and kind of had this new idea that you could get at fraudulent conveyance through this statute before that it was pretty commonly understood that what the two was about the differentiated it from other provisions was that it was about fraudulent inducement and that's the ultimate problem here they may have a debt they may have a debt that even involves actual fraud but they don't have a debt or anything with which petitioner was ever fraudulent lee induced to part resulting in my client obtaining anything by the kind of fraud that counts under five sec section five twenty three two and there are no further question just dogs and cats surely that office will also treat guinea pigs and hamsters and so the domesticated animals phrase does have something in common with dogs and cats just as fraudulent transfers has something in common with false pretenses and false representations these are all schemes to cheat creditors but by adding or actual fraud congress was expanding upon the preexisting terms expanding upon dogs and cats to cover something additional respondent does not have any theory for what congress was doing through this language to expand upon the previous terms with respect to false representation courts had unanimously interpreted false representations to refer to the toward of the seat in his brief respondent equates false representations with the tort of deceit even if false representations might have been understood as something else adding or actual fraud would not narrow false representations to exclude unintentional unintentional representation would at best simply show that you could also have a discharge bar for intentional misrepresentation with respect to neil neil has to be understood in light of what was it issue at the in that case the the fundamental premise of neil was that some forms of fraudulent transfers are fraud under the predecessor of section five twenty three a two way and so the only reason that the court drew a line there between intentional and unintentional participation was on the premise that if the participation had been intentional that would have been fraught with respect to the statutory text here nothing about the statute talks about inducing a creditor to part with anything it simply talks about obtaining money by fraud and for the reasons that i explained earlier a transferee commits fraud and there incurs a new debt for which he is liable if he knowingly participates in a fraudulent transfer ms murphy made the point that there suggests that there is something anomalous about allowing creditors to pursue a fraudulent transfer remedy for the benefit of an individual creditor there's nothing anomalous about that state fraudulent transfer laws exist outside of bankruptcy and so before the bankruptcy state takes effect it is essentially a free for all were creditors can pursue their rights under state fraudulent transfer loss and we treat we treat in our veterinarian clinic six doesn't solve this problem if a six simply covered any intentional wrong it would simply subsume all of the discharge bars any intentional misrepresentation would fall within a six a six has to be given a narrower construction in order to differentiate it from the other bars moreover a six doesn't apply in chapter thirteen and particularly in two thousand and five when congress reformed chapter thirteen to crack down on fraud it did not mean to allow the sort of scheme that went on in this case or the sort of fraudulent transfer that justice prior hypothesized to to a to lead to a distribution limiting the actual frauds to just fraudulent conveyance is are there other deceptive schemes that you would include there are i think the heartland the usage of actual fraud at common law most commonly it did refer to fraudulent transfers to hinder creditors there were mansion there were also other types of conveyances conveyances to defeated forcing spouses interest for example the devastated in neal to diminish an estate we also give an example in our brief of under the influence these are also forms of actual fraud but the heartland of it is fraudulent conveyance thank you counsel the case is submitted