court i'm here today after a long and winding road we started the bankruptcy cordon we moved out to appeal it to the district court now we're here before you and this panel as well familiar with warner and warners history as well as what warner stands for and what factors this court and all course and looking at professional fee applications are supposed to look at when determining whether or not those fees should in fact be paid or not today we're going to look at the course of the six months of hearings on the fee application and the lengthy period afterwards that this court to issue its warner opinion i will also admit that the bank judge did give some credence to word or at least a name it is a palace position that it was a name only because when this court looks at the evidence in the record from six months of test from a seven days of link the testimony that there is in fact evidence to warrant the compensation of at least some of mr her as these now mr where is work actually want to take a step back point is that you agree that the bankruptcy court and below considered it under pros next and then under the later law so we don't have a legal dispute here in terms of well he wins on the tested were that's probably why i have the pleasure of visiting with you today and but but as this court is aware the warner factors that we now look at is said to determine whether or not a fee up with cation should be paid is whether or not there was a probability of success at the time the professional services were rendered second whether the reasonable cost of pursuing pursuing that course of action third what services a reasonable professional would have performed for whether the services could have performed could have been performed by a trustee and fit the potential benefit to the estate and so those those five factors were not really developed and the court's opinion below as you did the other side of the understand may not be talking my five overall eight days but it's still eight days on the application and so how can it be that within the record of eight days on either one of these approaches grows tax or warner the record is and there you follow me one way or another me is hard for me to back them that the questions weren't asked or all these exhibits and so judge or the district court but we're not so it was longer some evidence on each of these factors to support what the district court and the bankruptcy judge did how do we have to we don't get involved seems to me your hon there's if there's evidence on both sides of all five factors that we have to well your honor there is an evidence on the other side there is an evidence regarding the probability of the success at the time my client prepared the confidential information memorandum or the data side or partner vetted witnesses that it potential purchasers or the communications with the purchasers or the various efforts in the administration of the estate there isn't anything controversial in that you are the only witness that controverted mr herrera was that's hurley who represented one only one of the secured creditors and in fact in the briefing before the court the majority of the briefing focuses on hurley enterprises there's very little contesting to the dish on sale of the twenty seven million dollars and mr herrera's as these associated with that or the general bankruptcy in investment banking advise that was given during the bankruptcy proceeding now i will admit that there is s about the detail oriented nature of the briefing and whether or not they were sufficient detail there is substantial argument regarding whether or not the billing was considering any us and there is substantial briefing on the disclosure issue that we discussed at the briefing but as far as controverted evidence judge owen of the probability of the success of those tasks or the whether or not those costs were reasonable or whether or not the service was a reasonable of the time they were performed or whether it could have been performed by the trustee there is no evidence against that there is no evidence contest state that mr herrera needed to prepare a confidential information memorandum there is no evidence contesting that he needed to to do due diligence to identify potential purchasers there is no evidence contesting that he in fact did that there is evidence could testing whether or not the secured creditor hurley enterprises was pleased with having to credit it but your honor that's the wrong focus the focus should be on whether or not there was a to discern because he didn't include the participants on the phone call it's difficult to discern you know what this the cia was about right i think that's how i read the bankruptcy courts opinion now apple we will come here and tell you there is no evidence of anything but as judge point out there is eight days of testimony about all that mr herrera did at the end of the day is this a lesson learned is a lesson on how an investment banker should probably take a good primer and how we attorneys are expected what that lesser fee should be and i'm happy to direct the court specifically in the record but in my reply brief on pages five and six there are bullet points with specific sites of testimony evidencing what mr did by way of example research an initial information gathering process to gather information to market hurley and dish on and to prepare the confidential information memoranda there are four lines of references to that record to substantiate that task so we had three more judges so we have five judges to deal with what basically is a dollars and cents proposition which i'm not minimizing the import but to say that after eight they were at the hearing delve and said so trying to get a grasp on you know what is it the relief you really want to do over on the on this i know you argue that the warning factors warn applied to record setting but i mean is that your main argument you're making to us to convince us to we review this record we're going to conclude the warning factors were improperly applied here go back to their your honor my bottom of the ninth game seven of the world series last pitch is abuse its discretion in coming to that judgment and deriving that judgment and determining that judgment then this court can't reverse and remain in a room what what's the abuse is gross but he's a discretion is still is his failure to properly follow warren and looking at whether or not the tasks my client committed on behalf of the state were reasonably likely to benefit the estate and your honour's i want to make it very clear by all accounts this was a successful bankruptcy this was a plan this is a plan that was adopted and it was a plan that was confirmed and it was a caused the bankruptcy to occur and it's because that contentiousness that it lasted as long as it did and you know what i'm saying is that when you look at what my client was hired to do with the rules with the engagement letter and when you look at what my client performs he performs the services that were contemplated by the against the latter and there is evidence to support that as it is referenced at the prevailing pages five and six and the bankruptcy court did not look at those tasks to asking and examine and evaluate whether those tasks when concept when they were served when they were render were reasonably likely to benefit the estate the court operated from a position of sympathy for the secured creditors and from a position of looking at whether or not mr i've see about  court operated from position of a results oriented position and it's because of that they were asking the court to look at whether or not warner was in fact properly applied in reverse and remand so that we can get all of the fees properly determines under warner honor he did testify that he prepared a critical information confidential information and eight he talked about the how critical it was however he never introduced this critical work product into evidence so the bankruptcy court had nothing to look at to see what actually he did how much work went into it the contacts list was actually brought into evidence later in the case to try to see who he actually benefit in that situation your honor buckhorn was a company that purchased dition disposal at the auction and it ended up purchasing an option for twenty seven million dollars however buckhorn before the bankruptcy even started had offered the additions thirty million dollars to buy their company this is a three million dollar net loss after we've gone through this whole bankruptcy experience so under that under that situation it was not of a that there there might be purchases out there willing to pay more than buck or well that was i believe offered testimony by opponents at the application to employ he actually i believe they were proffered testified that he thought hurley would start within four months and he thought he'd be valued at fifty to fifty five million dollars when we know the actual result because mr and her as the appellant's lack of effort actually harmful actions on the cell process dollars than it would take longer to sell the reserve results were actually flipped so in this case mr herrera could not only prove what actual services he provided he didn't also show their recently likely to benefit the estate at the time linder the bankruptcy court did an extraordinary thing in this situation even though his course decision and warner had not yet been decided judged by this court was considering the standard involved so he anticipated this standard and he applied it perspectively in advance so our position is to answer judge stewart's question this is a factual dispute and eight days of hearing mr her i have very little direct speed the rest of the cross examination what were the questions trying to figure out what he was doing and the reason it was supposed all as judge own pointed out in his decision when he made his credibility findings mr herrera was very invasive answering straightforward questions he would often hedge his answers and he he could not articulate why he did certain things or provide more detail certainly the bankruptcy court made a credibility finding based upon many days of testimony and our position is that as the trial court he had the ability to observe live and to listen to the appellants testimony and judge that credibility and so we'd say this is a fact situation not an improper application of the law also  guesses and actually for the court to undertake an extensive investigation as to the fees and the services that were performed which this court's decision in right every enjoy line requires that the court  it's also going to address a misstatement by the opponents that indicated there's actually a few application pending before the bankruptcy court for his confirmation fees there actually any different situation for the opponents as already been received i believe this court's opinion in stan's dictates that if a man's not going to produce a different result then there's really nothing for this court to do and that's that's our position honors america to the point you said the plane to render it was some poor piece of critical evidence or something that didn't a confidential information memorandum and mr herrera testified that this was a core work product that he base all of the marketing efforts on it's basically it's my understanding is they have like a marketing the talks about the companies and provides information to prospective purchasers like marketing materials and he testified how critical it was how important it was yet he listed on his exhibit was he never introduced into evidence so judge graham addressed this in his opinion is like i don't even know what this is because the result yes he did not i mean that's seems like a danger to make that conclusion especially i guess the result of success because of the opponents are for its base excessive the bankruptcy case had a lot to do with the secured creditors who believes each of my clients were owed thirty million dollars unsecured notes those notes are secured by the stock of each subsidiary dish disposal and hurley and the prizes and they actually grilling fish relinquish part of their secured claims so that unsecured creditors will get paid in full via a joint plan and that was a term of that was negotiated with the paid in full my aunt my client the hurleys had actually credit bid to get their their company back one of them up but one of them was successful the first auction successful the first auction because terry dish and corner secured creditor he actually credit bid as a qualified better to drive up bach or to drive up the price buckhorn actually started the bidding at twelve million dollars if terry dition had not credit bid dition disposal would have sold looked at it prospectively and he did but it's ten pages of his opinion showing how he looked at it in a perspective approach however he also said i think just recognize this in your concurring opinion in werner that basically results don't matter it still matters the results that you obtain from your services and also still matters how a professional does his job judged them was mindful of that it appears that the appellant's just wanted to be paid for just simply being there and it matters how you do your job and what the results are is not you know his time injuries were so vague lacking detail and they were wrong to many tasks your honor i'm not saying that he was dishonest however there was a definite question with the bankruptcy court about whether these time your honor yes mr herrera was working on an hourly basis he was not working for on a percentage other they had if the company sold for i think more than thirty million dollars he could receive a percentage after that but that situation didn't occur so he was just working on an hourly basis benefited the opposition as he went through the motions but he did not benefit the estate from this perspective at the time he was doing the services for instance denied is this case is there any possibility that this could go through some sort of mediation process to five the middle ground this is outside the record your honor but to answer your question there have been discussions in the past however they have not been all gone through the court process no your honor a judge down does not favor mediation and the parties engaged in a formal discussion sit circuits process i don't know if my clients would be agreeable to that if at this juncture because of how far this on this document this marketing piece and all and so i take it assuming that kind of process that document or someone can was never listed in the pretrial order etc etc so he was not in any way part so we're parties are required by the local rules to father exhibit and witness lies usually within two or three days before the hearing that was done mr herrera only listed pleadings his fee application exhibits to his feet application which were his only have certain items listed in the record and challenge some of the record designations by the opponents however the district court decided no he was going to let everything in and so the entire record of the bankruptcy court all the transcripts everything has been made a part of this record but it's it seems like at least at the time of this the agreement was rendered into everybody thought that would benefit the story i mean you can't say that there was no hope burden in the actual outcome which still matters there were necessitate the denial of all of his species at the time that he was employed yes everyone was very hopeful that the companies would be sold making money during this whole process which the subsidiaries were operated by my client as their former companies that they were never paid for shah was a benefit or not and while i think that is an important question the test for whether or not that confidential information memorandum should be compensated is when he prepared it was it reasonably likely to be provide confidential information memorandum is not a by not coming to us that is the million dollar question why not why or why not what i will tell you is what's in the record and the bankruptcy court even identified it as the penny and there was a spreadsheet listing the acquisition candidates for leading the witness and the judge warned him on the record it's in the record you probably saw a gesture when you saw it when you read the record and warned trial counsel that if you don't stop waiting i'm going to allow you to ask questions everything that's different you got a judge i know where you're going with this that was a second appeal so when we designated the record as the appellant and this was me designated the record for what i wanted the district court and ultimately this court to review i designated the items that i thought the court needed for a complete record of the posture of the case in the context of the case opposing counsel of all the motions to strike i think like eighty items i don't hold me to that but substantial number of the items that i designated and i see them over my hapless answer this question judge both we had a briefing on the issue and judge joan granted their motion to strike limiting my appellate record to twenty or thirty items with an appeal judge ellison and judge ellison looked at it and saw how in the appellate judges opinion of bankruptcy judge opinion he clearly looked at items that were not admitted into the record he looked at the application to employ he looked at a spreadsheet of candidates for of acquisition he looked at spreadsheet so actually it lists up initial letters sent to acquisition candidates the non disclosure confidentiality agreements elicit all these items that were formally admitted and so that is what the facts that we have and the record that we have to correct yes your honor it's appellants position that the court below didn't evaluate or examined the warner factors with the evidence and the record we don't an issue in the briefing or otherwise that your client was disallowed through his direct testimony or otherwise from putting forth evidence which would support we're basically looking at it in that context if we conclude that the bankruptcy court properly applied the warning factors you acknowledge you lose on appeal your honor if this court finds that the bankruptcy court did look at warner and look at the evidence in the record even with a finding that he was less than credible not incredible but less than credible he gained some weight gave some weight to the eight days of testimony and if this court finds that through that eight days of testimony even giving some way that the bankruptcy court did in fact look at whether or not those sentences were reasonably likely to benefit the estate they were reasonably charge they were the right services and then you find that the bankruptcy court did all of that ten dollars was there one was question was there it seemed to me there was evidence that he went back and changed the read it your honor and when you look at and at my opening brave pages sixteen through seventeen i went by month by month of the invoice says and show what they enter n v at was so the first short period of time and the final other than what was submitted client go back and say can i please get another chance alone or during the hearing or in any point no we weren't aware of what judge about his objections were during that the hearing right during the six months of the testimony we were aware of what judge  position was now did my client in response to the sometimes badgering difficult line of cross examination say hey just let me read you it no he did on your honor now one last thing please because you did bring that we have as appellant sought mediation for all of the seas for the those that were closed confirmation amply confirmation and it has repeatedly been for a few years and so while that is something that we have sought to try to avoid our fees it has been confused and it's appellants position that it's interviews because if your creditors have a vested interest in contesting this because that four million dollar carve out that pays for all of the fees for debtors counsel and all the professionals in this