good afternoon my name is richard gaul i represent s c property holdings l l c as successor by merger to vision bank may please the court counsel th circuit in directv vs but held that while a summary judgment affidavit kanan say it is based on personal knowledge there is no requirement for a set of magic words like based on personal knowledge rather personal knowledge may be reasonably inferred they sed on the affianced position in the company the nature of the facts sworn in as i said given their position braces river the th circuit looking to thirty six as an analogy recognize that discovery of course in corporations and entities comes from natural persons who can speak for a corporation such as a vice president as we have here that's why thirty b six allows it into the office or to speak or on information available to the int and does not mandate knowledge now why would that be this is the simple rationale in this day and age perhaps in all days and ages company's employees come and go officers come and go over a period of time corporations speak through natural persons and they come and go obviously that's the fight that's what the th circuit is is held as well if you look at cutting underwater the th circuit reiterated that personal knowledge may be inferred from the facts stated by an officer citing an official title alone can be enough to indicate a basis of knowledge and personal knowledge does not require contemporaneous knowledge and that's horse truth and then into t or corporate said that rule and policy in the th circuit makes common sense if a corporate representative had to have contemporaneous knowledge i daresay most corporations would be out of luck given the mobility of officers and employees that would not make sense here the bankruptcy court below where we argued partial summary judgment part of the case actually went on the trial was all talk about that in a minute but here we're talking about what was excluded on partial summary judgment the bankruptcy court did not follow that th circuit precedent and ultimately rejected an affidavit by s c property holdings bice president may refer to it that is s c ph to save time here in response to the motion for partial some reach and like i said the bankruptcy court rejected that affidavit because the magic words personal knowledge were not there while the th circuit said that's not necessary and can be inferred from the position notary sworn under oath that she was the vice president of s c ph that she had reviewed the affidavits by the movements that she had based it on loan documents security agreements and other documents after review of collection efforts by s c property holdings and significantly after resigning this is so important that s c property holdings with respect to accounts receivable collections at issue these were livingston parish accounts receivable collections that the bank as a proper killings had is collateral significantly they had paid to the bank had paid three happening not according not according to cutting underwater because why the court said that contemporaneous knowledge is not necessary to have personal knowledge we know that corporate entity is constantly have officers and employees go back and review records look at records so that they can speak for the company why because companies are are abstract creations by human beings and they can only speak through people and so if people leave then under thirty six swore in her affidavit that the collateral those a r s those collections from livingston parish by the way these collections were related to some collections received after a hurricane the into t it issue here was a disaster recovery company and the debtor in the bankruptcy case our position is effected the transfer of those collections ultimately outside of the entity where they would have been as the property holdings collateral what miss corbett said in her affidavit on behalf of the entity was several things one they were our collateral based on the loan documents that those collections were to be significantly held in trust under the loan documents that's what the loan documents say that were taxed her af the very significantly she said s e property holdings as a vice president stated se property holdings did not consent to the use of that collateral now she also indicated there was a two thousand and twelve letter which may be mentioned by the other side that i want to bring up there was a letter sent by essex property holdings and two thousand and twelve where it was stated that s c property holdings did not consent to their use of the collateral but this is very very fairly important that tw twelve letter was reminding the greens that there was not consent in response to the greens request to use that collateral i think about that if they're right that they already had consent to use the collections why did the greens ask for permission so you see the two thousand and twelve letter was not like some st statement that you could use that alone document said that this was in response to their request to use them you see why would they be asking if they truly could already use them and importantly they indicate in their response which we took great issue with that the two thousand and twelve letter indicate that they said which is not correct that the letter said there was no further consent to use that letter does not say that my able colleague indicated that in the response but that is not what the letter says nowhere does it say a further consent it says we do not consent in response to your request it goes on to say we will not make further advances under the loan that's wholly different from what they're saying that may have been a mistake on the other side that i just think it's out now again why in the world would se property holders have paid three million dollars in attorneys fees to go and get those livingston parish collections which was their collateral unless they intended to get them unless they intended not to have them used in some other way banks typically don't do that they paved attorneys fees in order to go get collections because they want to apply them ultimately is the balance you see so it would make little sense for them to have paid those fees unless they intended to get them now let me give a little bit of backdrop here quickly this ultimately arose from an adversary proceeding in a bankruptcy case and twenty three a six which is when there is willful injury to the in this case the banks collateral or to the bank itself you're allowed to bring those actions when what happens bankruptcy law is like this and i regularly practice in bankruptcy and so that's my able colleague this is what this is the long bankruptcy is for the for the honest but unfortunate debtor if they've  aged in fraud if they've engaged in conduct that would result in willful injury or injury then they don't get a discharge as to that particular critter and that's what the case was about below in which the court entered partial summary judgment i have in the t towards se property holdings now that may be true that he has that and he said that and it appears to be true and if that's the case insufficient willfulness to show now as i said some of the issues actually went to trial the judge ultimately had a trial on many fewer issues because he had not allowed these issues to go to trial that we're talking about partial summary judgment and ultimately found not under start ability under twenty three dollars related to some funds that were transferred to pay mr green's account but it was a it was a very small judgment because the collections issue was thrown out i was on partial summary judgment based on this affidavit issue right now the bankruptcy judges our position should not have rejected the affidavit because no magic words or look wired in knowledge can be in as i said before the bankruptcy judge let me say this also made comments about the affidavit there was a comment that it was artfully word now all i have to say about that is that sounds like way credibility and the shortstop case from the th circuit that we cited said you can't wait credibility you can't wait at the summary judgment stage of course you can't weigh evidence at all and not and finally let me just say quickly with respect to affidavit filed by the other side and so far st of all we don't believe they showed any evidence that we consented to the use of this collateral but in so far as there's a dispute that's for a trial not to be weighted summary judgment now there's another issue i need to talk about quickly the judge also had rejected the affidavit because it judge indicated that yes the property holdings was a new company judge willis got kind of goes to the point you making but this is important in england judge jolly said that the new entity in a merger succeeds to the rights and liabilities and responsibilities of the old company and we all it's the new company subsumes into the old company the good the bad the ugly goes from into new code lock stock and barrel so when essie property holdings merged vision bank merged into as the property holdings all of that information all of that knowledge went with it right which is different from an asset purchase that's a completely different situation that you know to pay to use a golf term is kind of a chip shot i mean the judge got that just plain wrong frankly the other side doesn't really address it i don't think in any real way and so on that ground for loading the bankruptcy judge partial bankruptcy judges partial summary judgment could be reversed i see that i only have a couple minutes one final point i want to talk about there's a charge or order issue here this is another issue setting aside the affidavit for saying that the judge granted partial summary judgment with respect to a charging charging order is where it a district where in this case a united states district judge charges the interests of you know in this case mr green below there were two hundred and twenty five thousand dollars at issue based on this charge and the charging order covered a company called green zones l l c it was a was a real estate holding company in south alabama ok that into to real estate holding company soon after the charging order was interviewed had two hundred and twenty five thousand dollars in earnings that went to mr green's childhood friend in panama i'm not talking about panama city i'm talking about paramount down in panama canal pound went overseas based on what was stated to be a loan now that charging order was issued related to a twenty six million dollars judgment that the late judge james brady in the middle district of louisiana had provided to mark karr and so we go to charge that interest now thank you judge here to see you know he said that that order that charging order wasn't broad enough to cover those sorts of paints because the words constructive dividends was used but the judge did use the word distribute top ball and it was based on very broad state law this federal to be distributed could be distributed and for that reason also the bankruptcy judge got it i see that my time is up five percent five minutes to please the court i'll take that afternoon your honest michael crawford law firm title porter brooks and phillips in baton rouge for apple e lawrence grey i certainly hope that i take far less than twenty minutes   judge died of the bankruptcy court in baton rouge looked at this affidavit precisely the way he should have  gall is probably correct that that companies can rely on officers they come and go and sometimes you can reasonably infer knowledge but what judge died did and what i submit that would be appropriate for you to do today is to actually look at the affidavit that se property holdings presented in an effort to defeat are well supported summary judgment property hold and that affidavit was by jennifer corbett who purported be a vice president of the bank before i forget to say this i want to say that this whole issue of ancestor and titles success or merger which in any vision bank was as he probably holdings we're not taking issue with that judge dodd didn't eat that as a red hair meister as attested to in the affidavit of mr green and also with respect to this two thousand and twelve letter was actually the person at the bank that was dealing with this loan and with the request to  continue servicing the loan he's nowhere to be sent miss corbett on the other hand is unable in her affidavit to attest that she had any knowledge involvement of any kind with respect to the slum ok that's number one number two she can't even  attest to being with the back during the relevant time period which pretty much runs somewhat into two thousand and eleven but primarily was two thousand and ten ok i don't know whether she was with the bank or not but her affidavit did mention it seems kind of important to me whereas mr boehm just now it goes on further mr goh may be right i don't know that may not be fatal i don't know if it's fatal or not but it's not helpful keep in mind some are just standard requires the nonmoving party to come up with some to challenge what the moving party his sit in this case the affidavit submitted by mr green of the office manager for edi cheryl that affidavit states very plainly and it's not contradicted that the bank required weekly reports on the use of bills sources and uses of cash so that the borrowing base could be established for the line of credit ellison's affidavit also contains an that during this time period when this money was coming in the door from lived in pairs before ultimately fame of letters from parish had a falling out that's not before this court but we were supposed to get about twenty five million more in waiting to get it ok so mr gault started off his top talking about the honest but unfortunate death i would submit to you that if there avar was an honest but actually still drawing down on their line of credit availability that's what judge dodd relied on it was a course of conduct on a performing loan for a business that was in business totally out of bounds again where's mr ball meister mr ball mushers nowhere to be found with respect to these weekly reports is it logical to conclude that a bank with twenty million dollars plus low was completely in the dark on collection efforts we have an affidavit saying they would get a report every week being sent to mr bo meister not miss let's talk about the matter in two thousand and twelve and this was really the kicker for judge dodd he wouldn't weigh the credibility of witnesses he primarily looked at m like the consent to do business you know that was clearly cut off in two thousand and twelve applied two years ms allison testified essentially share know anything about anything other then in two thousand and twelve we were going to loan them any more money well this money was collected in two thousand nine to two thousand and ten while the company was still in business so you can reasonably and far as judge todd did as judge dick did at the district court level that cheryl  excuse me that jennifer corbett's affidavit did nothing to rebut or warrant the trial of what was put forth by the grains now with respect briefly to the so really getting back to the bankruptcy angle on this if there was consent and knowledge which there affidavit really can't talk to if there was consent and knowledge of the bank then how could it be willful and malicious for i e d to pay their employees to pay insurance fuel vendors taxes i mean that's what they were with respect to the low for a company that was a real estate investment company they had two hundred and twenty five thousand dollars in the back they made a loan for a real estate development project in panama instead of making distributions to its members as judge doug correctly noted holding a charging order does not in bold and  creditor to force a distribution it's just there to catch him if they come and our get this judge done the that money could against a member of an l l c the charging order not done before the charging water enter by a court essentially say any distribution fifty thousand dollars to laurence green after you know from this bank account it would have gone to se property hold exactly it works that way but it's not as sure because it's it's a somewhat passive remedy your honor in other words you have to wait for there to be a distribution to a member before it has any force and effect you can't compel and judge dodd noted that in his in his decision so they could have given that money to the church it could have stayed in the bank account or they could have made an investment in a company from panama which is what happened they keep right now is there is not a scintilla of evidence that was presented by se property holdings that that loan was fraudulent or to signed in some been one payments made yes it's not you know it's not current but there have been payments made and there was nothing absolutely nothing presented by s c property holdings to defeat summary judgment on that issue other than legal argument say and it smells fishy and that's not and up you know i don't i don't know what the supreme court when it said it has to be more than a metaphysical doubt has sided in my brave judge dodd relied on it as well i'm not sure what a metaphysical doubt is but i don't think s c property holdings met it because they didn't present anything to defeat summary judgment and for those reasons unless your honour's have additional by sions submit to you that the decisions of both lower courts was were that's correct and that summary judgment the grant  affidavit i have it here i have quite marked up as you can see it's chock full of facts the other side at the my friend indicated a moment ago that there was nothing in here regarding a dispute about the ability to use those receivables well miss corbett vice president sworn under oath says as he ph did not consent to the request she she goes on to talk about the three million dollars that essie property holdings paid to go out and collect those receivables so there would be something to apply to against the judgment this large judgment banks loan money on the promise they'll be repaid and the bank document said that the receivables were to be held in trust they didn't even deny that and her affidavit is perfectly fine and you can reasonably infer from the facts that she states given the fact that she's a bice crossan of an intimacy that these are the facts that's what the law is in the th circuit because it makes sense and i'm not going to repeat that earlier this mysterious question about m twelve let me say this the two thousand and twelve letter was again a response to their requests to be able to use the receivables why would they ask if they thought they had consent mr barr meisters not a mystery that letter was written have the person who was there way back when signed the affidavit when they're not if they're not there they've gone to another part of the bank or they've gone to and they're not part of that entity anymore then you get a vice president who can look at the documents just like thirty b six makes perfect sense when the judge did not take that affidavit indic to account it created a reversible error because now another thing i heard affidavits that he said that they indeed i'm sorry that my colleague indicates created a disputed fact ok well we don't agree that it created a disputed but fact but even if he's right that it did create a r able colleague said exactly how a charge more works but let me say this significantly the indication was i didn't say this earlier but by the way all of these facts are to be applied in the light most favorable to the potential dividends and distributions of that into d and it says this judge said you know judge died said that this must have been written by a new judge this was written by a judge had been on the bench for thirteen years a federal district judge said distributions are to be made with respect to any transferable interest listing for us the amount in the time and then also that the amounts that become due or are to that they are to account for disputed fact why are we waiting that it at summary judgment why was that thrown out so what should happen here what should happen here is that the rest of the trial and take place the judge found disputed let us go back and just try the rest of the case and if there's to be weight of credibility and weight of the evidence then let us and were simply asking to to have the case reversed and remanded back to have a trial to have our day in court