contend that the court erred in dismissing plaintiff's claims with prejudice before giving the benefit of the ruling that highlighted certain deficiencies that the court found in plaintiff complete sale of all of the hotels it was a real estate investment trust their business was owning operating in managing hotels they sold the hotels they terminate all their employees ok but just i want to make sure i understand whether you're contesting this place ability of the charter in this case because if i look at the the definition of a subsequent transaction it appears to include and i'm quoting any liquidation event pursu the company's certificate of incorporation and you would agree that essentially the charter then is and its definition of what is not a liquidation should be considered by us yes it's it's definition which that yes not be excluded then from being a liquidation because i was it that you plausibly allege i should say a defacto liquidation if in fact we have to kind of take the sale of assets out of the equation i think the sale plus the other factors like i said they they terminated all their employees they ceased doing business under their charter as managing operating owning hotels they distributed or they paid debt did that all happen within the  purchase period i don't think it had to happen the person period it is it that the way the contract is worded it says that there has to be one contract a binding agreement entered into in the purchase period the subsequent transaction describes a broader sense in that it says a subsequent transaction is one or more events conditions transactions contracts agreements or any other occurrences so the the the contract at the beginning what it says before the one year anniversary of the stock pers agreement defendants directly or indirectly entered into a binding to agreement in a subsequent transaction so the binding agreement can be one part of a larger event which could be many other contracts or transactions which is what happened here they entered into the ark transaction to sell you know ninety six out of the i believe hundred hotels or one hundred out of a hundred down and then terminate all their employees and started winding down the company it wasn't a simultaneous it doesn't say the subsequent transaction has to close within the one year period what we make though of the again under the additional purchase price provision i'm directing you to a two forty six of the record i don't believe that's the political provision it talks about the payment doesn't matter when the payment is paid there is there are two provisions and the the part that talks about well let me just be clear about this if you and i've you got in front of you i don't i'm looking at the additional purchase price provision in the last sentence of that it's a it's in no event shell any additional purchase price or other consideration of any kind be do or payable in respect of any transaction or other event that is consummated on or after the end of the payment period and my question is why isn't it reasonable to look at that to say well to the extent that you're complaining about later transactions or events they're not supposed to be part of this but i believe that the one year anniversary provision that we're talking about has  talks about that if the one contract is entered into part of the one year anniversary is directly or provides for shareholder consideration to be paid period it doesn't it doesn't speak to the it doesn't speak to a closing it speaks to just it says entered into a contract to whether there was a binding agreement during the period it does speaks of whether there was a binding agreement during a one binding agreement in a subsequent transaction and  this is an agreement the arc transaction that subsequently changed all that right it hotels were called out i believe there was a due diligence period and hotels were dropped but it was a binding agreement and again we were focused on the effect of the liquidation everything was being liquidated they sold ninety six percent of the hotels they sold it up sell one hundred percent of  hotels our transaction was a binding agreement that was entered into before these entered into in may before the august deadline and it had the effect of a liquidation because as soon as they entered into that contract they bench shut down the business and started  this second amended complaint in the proposed third amended complaint as i understand that you just allege facts about the memorandum of understanding but that memorandum understanding was not binding  so would not have triggered the additional purchase price you know when it was not binding we good faith in fair dealing claim is based upon the fact that was entered into just outside within a week or so of the august period and that it was intentionally labeled nonbinding in an effort to avoid the payment provision i mean it's jeopardy from the arc transaction triggering event it my understanding is that you're now arguing for the first time on appeal that grace  violated it's an implied duty of good faith and fair dealing by intentionally delaying entering into a binding settlement until the year passed why should we on appeal give you a second by  effectively a liquidation how can you prevail i think if we didn't go to the good faith and fair dealing argument on the settlement agreement with the class in that that should or should be considered a a another a second contract within the same period the morning your honour's is the court sharon ellis for defendants apple e's i think the court has honed in on the fact that the crux of the dispute here really turns on whether or not that there is an argument that the transaction or our transaction as it sometimes referred to was in fact a binding agreement to pay stockholm consideration and i think conclude the conclusion is  not again as a as you noted the planets argue that the ark transaction had the effect of the liquidation triggering the liquidation payment under preference under the amended charter so you have to go to the amended charter the amended charter says in discussing the liquidation preference you need a voluntary or involuntary liquidation and a voluntary or involuntary liquidation shall not include a sale or transfer of all or substantially all the corporation's assets and of course the purpose of that car about which is a pretty common car about in charters involving preferred shareholders is so that preferred chair holders cannot challenge the board's freedom to sell its assets or for example enter into a merger  so an agreement to sell assets and i think we have agreement here alone cannot bind the corporation to dissolve thus there is no liquidation under the amended charter effective voluntary involuntary or otherwise we think this is dispositive and you don't need to go any further and the invocation of post transaction events that playing to a want to add to the fourth complaint really cannot help because the issue there is not whether or not the company under took actions leading to the winding up of its affairs the issue was whether or not the arc transaction itself bound grace to take actions that compelled payment of the liquidation preference as a result and not pursuant to any other course of action permitted under the amended charter and the answer has to be plainly no and that's established in the fact that the by the fact that the agreement to sell the assets was conditional it was impossible impossible for grace to have planned or even or and certainly not committed at the time of the transaction let alone by itself indeed that a which was a conditional agreement was amended in nov twenty fourth teen it carved out ten hotels which gray still owned when the deal closed ten months later in march of two thousand and fifteen that it was later amended doesn't mean that the first version wasn't binding no it certainly was a binding agreement it what it was not was a binding agreement to wind down to liquidate such that it would trigger the additional purchase the payment of a liquidation off the friend  searches the additional purchase price provision required entered into a and i'm quoting it a binding agreement that provides for one or more payments of stockholder consideration it doesn't seem to say at houses that the binding agreement has to say hey this is an agreement to liquidate here your honor what the additional purchase price provision says and i think it's important to note that it is item two in the language of the additional parch provision so it's either you make a payment in exchange for a stockholder share or you enter into a binding agreement that is going to require one or more such payments of stockholder consideration in respect of a preferred share  to the record and in response to their most in in their opposition to our motion to dismiss that not only did grace end up retaining ten hotels it also retained four hundred forty seven million dollars worth of equity in trust and was in direct owners and in direct ownership interest with rights of property in the event of a default so the idea that somehow within the one year payment period before august nine that there was a binding plan to liquidate such that that there was additional purchase price provision would be triggered by a liquidation pro friends makes no sense it also makes no sense because of course the company did pursue another course in two thousand and sixteen it merged with its subsidiaries pursuant to a shareholder vote which was a perfectly permissible course of action under the amended charter  so the idea of the allegations of subsequent sales of those ten hotels that there was a subsequent retirement adat later down the road that there was some distribution of monies it's really of no matter unless what plaint is ultimately do establish that the plaintiffs that the company the defendants had a binding obligation that was triggered within the one year payment period to liquidate and pay the preference as a result of the ark transaction and these allegations do not get anywhere close simple to amend the complaint to refer to the final binding settlement rather than the memorandum of understanding that that would fail on its face your honor for the following reason the final stipulation of settlement the binding stipulations of settlement was entered into outside the one year payment period so if the m o you actually fails for two reasons it fails because it wasn't an agreement it was an entered into within the one year payment period and even if it had been even if we accept plaintiff's allegations of some intentional delay that it would still in any event have been it would have been a non it was a non binding agreement to it could triggered the additional purchase price provision in i think actually the m r u argument is pretty simple defendants owed no duty under the contract to enter into any transactions during the one year period was no duty imposed by the contract to somehow undertake some kind of effort to get an agreement done within the one year period and the fact that there was a temporal limitation made  plain that both parties understood something could happen after the one year period including such a settlement which is specifically refer to what i would say your place and no you would stipulation of settlement yes why would there and fourteen there was no so that so if you were if the complaint is amended to refer to the binding stipulation of settlement it will fail because it's outside the one year period i mean it gets t question of whether it's plausible that parties waited two months to enter into the binding agreement only because they wanted the agreement to be well outside your one year window i understand  except that for purposes of considering a motion to dismiss it we are going to accept plaintiff's allegation that there was some undue delay here because that was intentional but even in that event it doesn't matter the law in new york is quite clear the duty of good faith cannot be used to create an independent obligation beyond the contract and that is the phoenix case that we cite in our papers and this is exactly what pains us are attempting to do here to impose an obligation into the contract that does not exist requiring the parties to attempt to enter into it within the one year period and that is simply that simply fails under new york law the parties obligations are defined by the contract and the plaintiff can point to no provision in the contract with which plaint defendants did not comply ask about the law clerk issue and i certainly your honor  counsel about that yet but i do have a question about whether it was no to your phone that the judge's law clerk was working on the case in which if i was involved honor i personally was not and this is not in the record i personally was unaware all right so we did not recognize the clarke but i will tell you i often walk into courtrooms where i see former summer associates and i see them in the law school worked for the firm yes had been a summer white immediately after leaving the clerkship apparently and the facts are a bit hazy because there was no wonder lying inquiry or hearing starts to work with the firm and if for purposes of looking at the standard under section four fifty five a and we look at kind of what the appearance is here should there be a concern there i don't think so your honor of the facts in the record i think are not uncommon we have a law clerk who works for a major new york law firm left a law firm went to clerk for a judge sitting in the southern district of new york completed its clerkship and returned after completing his clerkship to the associated wouldn't there be a fair inference from just what we know here that his intent at all the time and perhaps the phones intent of all the time was for him to continue working for the phone that soon as he left it looks like this law clerk has an allegiance to this particular firm which he's participating in the case i'm not sure i agree but i also don't agree that that's the inquiry here first of all if i may i just want to make that this is a case with respect to the to the clerk issue where the appellants are asking you to vacate a judgment that you are in the process of reviewing to novell so that they can obtain a dyno overview i'm aware of the parker case and right and so we're already on the harmless you mean prior to at what point in time your honor when does the record show the clerk one clerk had agreed to read to the firm following which at some point the record shows that the clerk did in fact return to the firm on october three but that's it yes so obviously yes obviously there was an agreement in place at some point the florida accepted the offer for sure there's the record show when that occurred the record inference that most law clerks leave their summer employment with an understanding whether official or unofficial that they are welcome to return and come back and have conversations about that when they so long so long as they are having those having disclosed that with the their their judge now of course we send the clerks off to clerk for the judicial officer and we expect  that they may discuss how what the how that's going to be managed in chambers and they are managed appropriately and chambers and we start with the proposition and i think you need to as well for purposes of considering this issue the judges are presumed to be impartial and the plaintiffs themselves do not suggest that judge daniels himself was impartial the issue here is specifically whether or not the fact that a law clerk worked on a case and later joined the firm posts clerkship impacted that presumed impartiality and and to return to your question judge meyer i think the answer has to be no for the very reasons that judge forrest articulated in in her review  situation an objective observer or not believe that a law clerks employment history affected a district court's handling of the case particularly here where the judge was personally and significantly involved there were multiple conferences there was extensive oral argument the transcript shows the decision tracks the judge's personal comments at argument but we don't know what conversations occurred before before them and i'm not saying that they did how they did it again focusing without any suggestion that there's bad faith what a reasonable person would draw from the conclusion and i'm not sure a reasonable person would say well the judge asked a lot of questions during an argument that must mean that the judge was not influenced by the clerk's views and guidance on what's a pretty technical case well i would note as the panel i'm sure knows as is that the code of conduct for judicial employees does not forbid a clerk from working on a case involving a pastor or a future law firm rather the code states that the clerk should bring that to the court's attention and if a law firm with which accords been employed or is a obtains future employment appears  in the matter again the management of that situation is left to the courts discretion and i would urge the mere fact that a former summer associate worked on a matter and later associated with the firm should sent a letter a learning the clerk that we had the court and opposing counsel that we had hired his former law firm if that was a trigger for q s all inquiry i think we would be running very directly into the concern that  noted about the use of the use of a clear of a clutch of employment history opportunistically and i do not think that or i would urge the court that this is without more in the record that this is not a road we should travel thank you on the clerk issue with respect to whether or not there is anything in the record that shows when the offer was extended and accepted we made an inquiry we try to be respectful we got the notice that the clerk who was on had substantively and personally you know worked on the case went to work for solving crime while we sent a letter saying when did this happen and we try to be respectful to get information judge daniels denied that request after he recused himself so we're never allowed to get any information from anybody to determine you know when the information was known by whom and when that offer was accepted counsel credo cited to judge force in saying that you know the  there is no evidence that mr crowd loves participation in the case as a clerk affect the court well that's not the test the test is the appearance to the to the reasonable person i believe one court said the man on the street standard and would it in fact are cause somebody to question the integrity of the court and i believe that's the whole case the fifth circuit where they went and they said we cannot know what happened behind the scenes we clean say that we were to determine that of interest i think that's one of the that's one the factory believes the parker case that lays out the three factors i believe that's the first one is the risk of harm to the to the plaintiffs and in this case and i believe that that court you know that that factored obviously way against us but again i don't you know that the technicality in which judge daniel said that we feel deplete the de facto liquidation factors not that the  contract as written did not apply to the facts in the case it wasn't a merit based decision instead it was you did not hit these pleading requirements of a delaware case involving you know in our case we did tennessee corporation soon on a new york contract and the delaware de facto were in fact to exercising or did novo review here and find that there was nowhere to interpret the contract that basically i don't think there would be and i may not be but it but probably to me the first factor seems to be the controlling factor of the three and parker